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Employers

Employer Bulletin

State Employers
Vol. 20, State F
October 21, 2003

2004 Life Insurance Rates and Employee Reimbursement Accounts Program

2004 Employee Reimbursement Accounts (ERA) Program Administrative Fees

The administrative fee for the Employee Reimbursement Accounts (ERA) Program will increase to $.60 per state health insurance contract per month for plan year 2004. Agencies should report the total fee (number of contracts x $0.60) via the State Health Insurance Summary (ET-1608) form. This change is effective with the health summary report due December 20, 2003 for January 2004 coverage.

Even if an agency has no employees enrolled in the medical expense or dependent care reimbursement portions of the ERA program, the agency is still responsible for its share of ERA administrative costs. For most state agencies, employer FICA savings due to pre-tax funding of premiums, which remain in agency fringe benefit lines, will more than offset ERA fees.

The administrative expenses incurred by the ERA program are funded through three sources: account forfeitures, interest income, and fees contributed by each state agency. At the end of 2003, the surplus available for program administration is expected to be slightly below the target balance of $100,000. A fee of $.60 per health contract per month will maintain the reserve balance at approximately the current level. The actual ending balance is somewhat affected by the rate of interest earned on the account balance and the level of forfeitures.

For more information about the fee structure or ERA program administration, contact Marcia Blumer at (608) 266-2640 or e-mail: marcia.blumer@etf.state.wi.us. If you have questions about reporting and transmitting the fee with the State Health Insurance Summary (ET-1608) form, contact Ron Diehl, Division of Employer Services at (608) 266-2737 or ron.diehl@etf.state.wi.us.

Some Over-the-Counter Drugs Are Now Reimbursable Through the Employee Reimbursement Accounts (ERA) Program

A recent IRS ruling has expanded the use of ERA Medical Expense Reimbursement Account funds to reimbursement of certain Over-the-Counter (OTC) drugs. This ruling was effective October 1, 2003 for OTC drugs such as allergy medicines, cold medicines, pain relievers, and antacids. Other OTC drugs and supplies used to treat medical conditions such as antibiotics, antifungals, antidiarrheals, bandages, etc. are also included in this ruling. The drug or medical supply must be purchased for use by the ERA participant or their spouse/dependent(s) to treat a specific medical condition. Products that are used to maintain general health such as vitamins and herbal supplements continue to be ineligible for reimbursement.

To be reimbursed for OTC drugs, participants must complete the ERA Reimbursement Request Form and attach receipt(s) which show the name of the drug, the date it was purchased, and the cost.

The Employee Reimbursement Accounts open enrollment period for the 2004 plan year goes from October 6 through November 21, 2003. The 2004 ERA Enrollment Booklet was printed prior to this ruling; therefore, it does not include this change. However, the 2004 ERA booklet on DETF's internet site has been revised to include OTC drugs as eligible for reimbursement.

More ERA program information, including a more comprehensive list of reimbursable OTC drugs and supplies and ERA Reimbursement Request Forms, can be found on the Department of Employee Trust Funds Internet site at http://etf.wi.gov. Just click on the "Benefit Programs" button to view the ERA menu.

For more information about qualified expenses or other program information, contact Fringe Benefits Management Company at 1-800-342-8017.

Wisconsin Public Employers Group Life Insurance Program Premium Rates to Decrease in 2004

The claims experience for state employees insured under the Wisconsin Public Employers Group Life Insurance Program has continued to show improvement over the past several years. The three-year overall claims result for the period 2000 through 2002 was the best three-year result ever. Because of the continued favorable claims experience, the employee premium rates will decrease for basic, supplemental, and additional insurance in the 40 through 69 age groups.

The employer share of the premium will remain at 63% of the employee premium for basic coverage and 35% of employee premium for supplemental coverage.

The State spouse and dependent insurance has also experienced favorable claims experience which will allow spouse and dependent insurance premiums to decrease from $2.50/month to $2.00/month for each unit of coverage. The coverage for each unit will remain at $10,000 for a spouse and $5,000 for each dependent.

Effective March 1, 2004, the rates for State employees will be as follows:

Basic and Supplemental Insurance

   

Monthly Premium Rate

   

per $1,000 of Insurance

Age

 

Current

 

2004

Under 30

  $.05   $.05

30-34

  .05   .05

35-39

  .05   .05

40-44

  .08   .07

45-49

  .12   .11

50-54

  .20   .18

55-59

  .32   .28

60-64

  .40   .38

65-69

  .55   .50

 

Additional Insurance

   

Monthly Premium Rate

   

per $1,000 of Insurance

Age

 

Current

 

2004

Under 30

  $.06   $.06

30-34

  .07   .07

35-39

  .07   .07

40-44

  .11   .09

45-49

  .16   .15

50-54

  .27   .24

55-59

  .43   .38

60-64

  .54   .51

65-69

  .74   .68

 

Over-Age-70 Additional Insurance

   

Monthly Premium Rate

   

Per $1,000 of Insurance

         

Age

 

Current

 

2004

70

  $1.05   $1.00

71

  1.20   1.15

72

  1.35   1.25

73

  1.55   1.45

74

  1.75   1.60

75

  1.95   1.80

76

  2.15   1.95

77

  2.35   2.15

78

  2.65   2.45

79

  2.95   2.75

80

  3.25   3.10

81

  3.55   3.40

82

  3.85   3.70

83

  4.30   4.10

84

  4.75   4.50

85

  5.20   4.90

86

  5.65   5.30

87

  6.10   5.70

88

  6.75   6.35

89

  7.40   7.00

 

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