Employer Bulletin

All State Agencies
Vol. 22, State H
September 30, 2005

News on Life Insurance Premium Rates; ERA Open Enrollment; 2006 ERA Administrative Fees

State Group Life Insurance Premium Rates Unchanged in 2006

State employee and employer Group Life Insurance premium rates for all coverage levels will continue at current levels in 2006 as a result of steady claims experience. Life insurance rates in effect through 2006 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 2006 plan year is October 10 through November 18, 2005. Contact Bill Aye at (608) 829-0435 if your agency does not receive enrollment booklets by October 3 or if you need more booklets or forms.

Employees may enroll in the ERA program for plan year 2006, either by dialing the Interactive Voice Response (IVR) System toll free, 1-800-847-8253 or going through the Department’s Internet site, 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 2006.

Employees newly hired in late 2005 and enrolling in a 2005 ERA account during the open enrollment period must use a paper enrollment form and clearly indicate that the enrollment is for the 2005 plan year. These employees must also use a paper enrollment form to enroll for the 2006 plan year. All new hire paper enrollment forms should be mailed or faxed to:

FBMC
Attn. Enrollment Processing
P. O. Box 1878
Tallahassee, FL 32302
FAX: 1-850-425-6220,
Attn: Enrollment Processing

Employees may change their 2006 ERA elections at any time during the open enrollment period using the IVR or Internet systems. After November 18, 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 2006 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: 1-850-425-6220, Attn: C. Sculley

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.

2006 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 2006. 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.

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.

New ERA Program Grace Period

The IRS recently issued Treasury Notice 2005-42, which permits plans to offer a “grace period” following the end of each plan year. Starting with the 2005 plan year, medical expenses for services provided through March 15, 2006, may be reimbursed with funds remaining from 2005 plan year. However, any unused amounts from the prior plan year that are not used for expenses incurred by March 15 remain subject to the “use it or lose it” rule and will be forfeited. This grace period rule applies only to Medical Expense Accounts. Expenses reimbursed through a Dependent Day Care Account must still be incurred by December 31. The deadline (or run-out period) for filing both medical expense and dependent care claims incurred during the plan year, as well as medical expenses incurred during the grace period, will be April 15, 2006.

New ERA Plan Coverage Start and End Dates

Beginning in January 2006 the ERA plan coverage start and end dates will be changed to make them more consistent with other benefit plans offered to state employees.

The coverage effective date for ERA mid-year enrollments and election changes due to change in status events is the first day of the month that begins on or after the date the employer receives the enrollment form. For example, if a new employee’s enrollment form is received on September 29, coverage will start on October 1. The first deduction will be on the first available paycheck. Even though coverage will always start on the first of a month, it’s important to let the employee know how many payrolls are left in the plan year so that they can accurately calculate the per-paycheck deduction.

ERA coverage end date for employees who terminate employment will be the end of the month from which the last ERA deduction was taken. Example: If an employee’s last check from which an ERA deduction was taken is dated May 12, coverage will end on May 31.

For more information about the fee structure or ERA program administration, contact Marcia Blumer at (608) 266-2640 or marcia.blumer@etf.state.wi.us.