Health Care FSA for Reinstated LOA Employees

This document outlines the BEACON process for the Health Care Flexible Spending Account (HC FSA) for employees returning from an unpaid Leave of Absence (LOA). The NCFlex rule is that the employee must restart their HC FSA upon return from an unpaid LOA but they have a choice to restart any other plans if the break is longer than 30 days.

According to the NC Flex Administration Manual (see reference page 19 below), the employee has several options. Our standard practice at BEST to ensure the plan is restarted will be option 2(a) below. BEST will automatically reenroll the employee at the prorated annual amount and reduced the annual amount by the unpaid LOA periods. For example, the employee’s LOA was unpaid starting in February and then returned to work on April 16th. BEST will restart the HC FSA effective May 1st and reduce the employee’s annual amount by three months (February – April). The employee is responsible to pay AON on a post tax basis for this period if they have any claims during the unpaid LOA period that they desire reimbursement.

The employee can elect option 2(b). The employee should only select this option if they did not make post-tax contributions and would still like their annual amount to be maintained at the original election (see example below). They can reenroll for their full annual amount by using the Return from Leave adjustment reason in Employee Self Service (ESS) or by sending BEST an enrollment form. The employee’s enrollment in ESS will override the enrollment BEST entered.

As option #1 says below, if the employee has been making post-tax contributions during the unpaid LOA period, they must reenroll in the same annual election. Even if the employee was making post-tax contributions, in BEACON we must reduce the amount entered in the system for the unpaid period in order to get the correct monthly deduction. Therefore, we will still prorate (option 2b) the annual amount in BEACON for the unpaid LOA period. AON will set the employee’s annual contribution in their system to the employee’s original annual amount so that the employee can file claims up to the original amount.

Please let me know if you have any questions about this process.

Ref: 2009 NC Flex HBR Manual page 19

• Health Care Flexible Spending Account Election (HCFSA) – Upon returning from an unpaid leave, participants must re-enroll in the HCFSA.

1. If HCFSA coverage continued during the LOA by the employee making post-tax contribution they must re-enroll for annual election, which was in place prior to the unpaid leave or request a change based on a qualified status change.
   
   
2. If HCFSA coverage was dropped during the LOA the employee has two options:
   1. Prorate: Resume coverage at the same monthly election, which will result in a reduced annual maximum
   2. Reinstate: Reinstate coverage at the original annual election and make-up unpaid contributions

Example: Employee elects $1,200 annual HCFSA and contributes $100 per month. On April 1st the employee goes out on a 3 month LOA and does not continue HCFSA coverage. Upon return employee can elect:

3. Prorate: Have $900 reinstated ($1,200 minus $300 in missed contributions) monthly contributions remain $100.
4. Reinstate: Have $1,200 reinstated with $150 monthly contributions ($100 original contribution plus $50 to make up $300 in missed contributions ($300 divided by six remaining months 6 (July – December) equals $50)

Note: Claims incurred during the LOA under option (a) and (b) will not be eligible for reimbursement since coverage was terminated.

Extended STD and Health Insurance

We have noticed agencies advising employees differently about their State Health Plan who are on Extended Short Term Disability (STD) with less than 5 years. Some agencies are allowing the employees to continue paying the premiums to agency (BEACON) and some are not. As you are aware, employees on Extended STD with more than 5 years of contributory service have their health plan premiums paid by the Retirement System. However employees with less than 5 years of service, the Retirement System does not pay for their health insurance. We contacted the Retirement System for guidance on their process for employees with less than 5 years and they advised that they offer COBRA to these employees.

Going forward, BEACON’s standard for employees on Extended STD with less than 5 years is to not allow the health plan to continue through your agency group account (BEACON) and to let the employee pick up COBRA through the Retirement System. We will continue to accept anyone currently on Extended STD and sending premium payments to BEACON. Any new Extended STD employees will have their health plan terminated in BEACON and the employees will be required to enroll in COBRA.

Revised: 05/08/2009

01/22/2008

Savings Plan Enrollment

Enrolling in a 401(K), 401(K) Roth or 457 Defer Compensation Savings Plan just became easier under BEACON. Employees, including New Hires, have three methods to complete their initial enrollment or make changes to their contribution amount. Employees can either complete their enrollment/change by:

• Calling the vendor’s Member Service Center,
• Logging onto the vendor’s website using your unique identifier,
  • Prudential 401(k), 401(k) Roth and 457 plan- You can create your unique identifier directly on their website. (available to New Hires in February)
• Completing the vendor’s paper enrollment form and sending it directly to the vendor. Exception - One-time deferral forms are sent directly to BEST. Forms are available on the vendor’s websites.

Address Changes

Employees changing their address no longer need to complete the NC Flex or State Health Plan address change form. Employees can change their address on Employee Self Service or with their Human Resource Office. Once the address is changed in the system, the State Health Plan receives this change the next day and the NC Flex vendors the following Monday through an electronic interface file. Address changes with Agency specific benefits plans will still need to be completed by paper or by the previous method used prior to Beacon.

Beneficiary Information

The BEACON system is only displaying employee’s beneficiary information for NC Flex AD&D and NC Flex Life Insurance plans. At the initial benefits enrollment load, employee’s beneficiaries were not included. However, employee’s beneficiary information that is currently on file with the benefits vendor is still being maintained. Employees can now take this opportunity to update or add their beneficiaries to these plans by using Employee Self Service.

Note: Beneficiaries for the State Retirement Plan are maintained directly with the Retirement System. Beneficiaries for the 401(K) and 457 Savings Plans are maintained directly with those respective vendors.

Verifying Benefits Conversion Data

What to check when viewing Employee Self Service?

1. Check to ensure that you are enrolled in the proper State Health Plan.
2. Check to ensure that you are enrolled in all the proper NC Flex Plans.
3. Verify that your proper dependents are assigned to the appropriate State Health Plan and/or NC Flex Plans.
4. Verify your dependent’s name, date of birth, gender and social security number.
5. Beneficiaries for the NC Flex AD&D and Life Insurance Plans were not initially loaded, so there will be no beneficiaries information displayed. Please take the opportunity to update your beneficiary information through Employee Self Service (ESS) at this time.
   1. If required to contribute to retirement system, verify your enrollment. Beneficiaries for the State Retirement are maintained with the Retirement System.
6. If enrolled in the NC Flex Health Care and Dependent Day Care Spending Accounts, please verify your annual contribution to ensure they are correct.
7. If enrolled in the 401K, 401K Roth and/or your 457 Savings Plans, verify your contribution to ensure that they are correct.
8. Agency specific after-tax plans are not viewed through ESS and can be verify directly with your Agency.

How do I correct something that is wrong?

1. If your dependent’s name, date of birth, gender and/or social security number is incorrect, make the necessary corrections through ESS.
2. If listed dependents are incorrect or dependents are not enrolled to the correct benefit plan, please contact BEST Shared Services for assistance.
3. If your benefits information is incorrect, i.e. enrolled in the incorrect coverage level, please contact BEST Shared Service for assistance.