Employer Bulletin

State Employers
Vol. 21, State C
October 18, 2004

News on Life Insurance Premium Rates; ERA Open Enrollment; 2005 ERA Administrative Fees

State Group Life Insurance Premium Rates Unchanged in 2005

State employee and employer premium rates for all coverage levels will continue at current levels in 2005. Historically, claims experience has shown steady improvement for state employees insured under the Wisconsin Public Employers Group Life Insurance Program. Although recent claims experience was higher than expected, actuarial analysis indicates that the experience reflects a fluctuation rather than a fundamental deterioration of the mortality of the plan.

Life insurance rates in effect through 2005 for state employees are:

Monthly Premium Rate per $1,000 of Insurance

Spouse and Dependent Coverage
$2.00 per unit of coverage

State Employer Premium Contribution Rates
The state contribution rate will continue to be 63% of the employee contributions for Basic insurance and 35% of the employee premium contributions for Supplemental Insurance coverage.

ERA Open Enrollment

The Employee Reimbursement Accounts (ERA) program open enrollment period for the 2005 plan year is October 11 through November 12, 2004. Contact Bill Aye at (608) 829-0435 if your agency has not received enrollment booklets or if you need more booklets or forms.

Employees not currently enrolled in the ERA program may enroll for plan year 2005 either by telephone (IVR system,1-800-847-8253) or on the Internet (http://etf.wi.gov ). Current ERA program participants must reenroll for medical expense and/or dependent care accounts in order to participate in plan year 2005.

Employees newly hired in late 2004 and enrolling in a 2004 ERA account during the open enrollment period must clearly indicate that the enrollment is for the 2004 plan year. These enrollments (plan year 2004) must be made on paper, not through the telephone or on the Internet. These employees wishing to also participate in plan year 2005 must complete a paper enrollment form. All new hire paper enrollment forms should be mailed to:

FBMC
Attn. Enrollment Processing
P. O. Box 1878
Tallahassee, FL 32302.

Employees may change their 2005 ERA elections at any time during the open enrollment period using the IVR or Internet systems. After November 12, all requests to enroll or change ERA enrollment elections must be in writing, as follows:

• Employee must write a letter of appeal, explaining the need for an enrollment change or why they were unable to enroll during the enrollment period.
• Employee must include a completed enrollment form (provided by employer) for the 2005 Plan Year.
• Fax or mail the appeal request (letter and enrollment form) to FBMC.

  Wisconsin Appeals Committee
  Fringe Benefits Management Company
  Attn: C Sculley/Client Services
  PO Box 1878
  Tallahassee, Fl 32302
  FAX: Attn: C Sculley at 1-850-425-6220

FBMC reviews appeals on a weekly basis and will notify employees of the appeal decision. Payroll offices will also be notified of approved enrollments. Employees may have double payroll deductions at the beginning of the plan year for enrollment requests approved after the payroll cutoff date for the first January check.

Please do not refer employees to the local FBMC phone number. Employees having questions about the ERA program or needing enrollment assistance should be directed to call FBMC Customer Service at 1-800-342-8017, from 6:00 a.m. to 9:00 p.m. Monday through Friday.

2005 Employee Reimbursement Accounts (ERA) Program Administrative Fees

The administrative fee for the Employee Reimbursement Accounts (ERA) Program will remain at $.60 per state health insurance contract per month for plan year 2005. Agencies should report the total fee (number of contracts x $0.60) via the State Health Insurance Summary (ET-1608) form.

State agencies remain responsible for ERA administrative costs even when an agency has no employees enrolled in the medical expense or dependent care reimbursement portions of the ERA program. For most state agencies, employer FICA savings due to pre-tax funding of premiums, which remain in agency fringe benefit lines, 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 2004, the surplus available for program administration is expected to be slightly above the target balance of $120,000. A fee of $.60 per health contract per month will maintain the reserve balance at approximately the current level. The actual ending balance is 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. Questions about reporting and transmitting the fee with the State Health Insurance Summary (ET-1608) form should be directed to Ron Diehl, Division of Trust Finance & Employer Services at (608) 266-2737 or ron.diehl@etf.state.wi.us.