CERTIFYING OFFICER LETTERS 2005

CERTIFYING OFFICER LETTERS FROM OTHER YEARS

December 2005

Notice to Delinquent Report of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion. As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting. I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State's public employees.

Reporting and Payment Information

Your 4th quarter 2005 tape ROC applicable to the Teachers' Pension and Annuity Fund, Public Employees' Retirement System, and Police and Firemen's Retirement System is due by January 10, 2006. Your December 2005 transmittal remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (TEPS). The portion of the remittance for total pension deductions should reflect the sum of normal pension contributions, back deductions, loan payments, and arrears/purchase deductions. Your TEPS remittance is also due by January 10, 2006.

With the tape ROC, you must complete and return the Transmittal Summary form for the 4th quarter 2005. This document is used to assist your office and this Division in reconciling your transmittal remittances to the quarterly ROC. The Control and Certification form must also accompany your quarterly tape ROC. This is essential as it attests to the accuracy and validity of the submitted documentation.

If your quarterly ROC and total contributions are not received in a timely manner, we cannot update the pension accounts of your employees. This may adversely affect any claim for benefits, including loan applications, filed by your employees. Also, any delay affects our scheduling in posting contributions to all members' accounts as well as the mailing of ROC for the following quarter. A tape ROC will be considered received when it is submitted in an acceptable format, passes all data processing edits, and can be used to update members' accounts. Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly ROC are not received within fifteen days of the due dates.

SACT Tax-Sheltered Annuity - Remittance Of 403(b) Contributions

Chapter 247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be transmitted and credited within five business days from the pay date.

Members of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund and Police and Firemen's Retirement System in the Supplemental Annuity (SACT) Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted to the Division of Pensions and Benefits within the timeframes prescribed by law. Contributions for these members will be made through the Transmittal Electronic Payments System (TEPS).

Please note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted prior to the processing of your ROC. If the full contribution is not submitted, it may be necessary to refund any supplemental annuity contributions sent in for the quarter. This could adversely affect your employees' retirement savings.

TEPS - Transmittal Shortage Payments

The Division sends transmittal shortage statements when the sum of the transmittal remittances does not equal the due figure on the quarterly ROC. Transmittal shortage statement payments can only be paid through TEPS. Checks received for payment of transmittal shortages will be returned. If you have questions related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries to the Audit/Billing Section at (609) 633-1708.

Changing Banking Information For TEPS

Notice of Changes for TEPS should be submitted to the Division of Pensions and Benefits on or after the date that the new checking account becomes effective. Every Notice of Change is verified to ensure that the Division has the correct banking information. This normally takes 12- to 15-days.

Statements of Overages / Shortages

Overage and shortage statements, which affect a member's Annuity Savings Fund, identify whether or not the pension contributions are subject to the 414(h) provision. These statements should be reviewed to determine when adjustments are required to your payroll records in calculating year-to-date mandatory pension contributions under 414(h). Please note that all member shortages are to be paid by separate check. Do not remit through TEPS.

Chapter 113 Salary Limits

Under Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine member contributions and benefits, for the State-administered pension systems, may not exceed the compensation limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation (salary) limitation is adjusted annually, based upon cost of living increases. The federal ceiling for 2005 is $210,000.

In other words, under the provisions of the Internal Revenue Code, Section 401(a)(17), for "qualified" defined benefit plans {IRC § 401(a)(2)}, the current federal ceiling on pensionable salary applies to the base salaries of members of these pension plans. Salary earned by a member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits.

Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

December, 2005

This memorandum has pertinent information concerning the completion of your Report of Contributions (ROC).  Please read this memorandum before you make any changes to the ROC.

Reports of Salary Change (NEW)

The Division of Pensions and Benefits is no longer sending our reports of salary change as has been our past practice. Now that the majority of employers are reporting through the web, (I ROC), we are asking that you use the report of contributions to submit these salary changes for the next quarter. Should you need a paper report of salary change please call (609) 292-3630.

Notice to Delinquent Report of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly ROC in a timely fashion.  As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting.  I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State's public employees.

TEPS

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and appropriation payments. Employee shortages are not to be submitted through TEPS.

Effective July 30, 2004, you were able to access TEPS through the Internet instead of calling in your payments.  In addition to making payments on-line, you can cancel payments on-line providing that you make the cancellation before the 5:30 pm cut off time.  On-line inquiries in which you can view and print a history of your payments are also available. Log on to www.payments-govonesolutions.com/njpen.  Once you have logged on to TEPS, enter your location number and current password, the same password you are using with the telephone application.  You will find a user friendly program that will guide you through the payment, inquiry or payment cancellation processes.  The Division will still receive your payments the next business day, as long as you enter your payment on-line before the 5:30 pm cut off time.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits has been changed.  The Employer Authorization Form must be faxed to (720) 332-0039 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581 Trenton, NJ 08650-9581.

Deadline for Filing

All ROCs must be postmarked by January 10, 2005 to be considered timely filed.

It must be noted that these deadlines are established to provide for the timely updating of member accounts each quarter.  In order to accomplish this goal for the over 300,000 members of the retirement plans, we rely on you, our participating employers, to report pension information to us by the 10^th calendar day of the month following the end of the calendar quarter.  In return, your employees' accounts are updated with the most recent pension information, which in turn may be used to process benefit claims by those same employees or their beneficiaries.

In recent years more and more employers have been delivering their ROCs to us well after the established due date.  However, we have extended the courtesy of holding open the reporting period to accommodate this late receipt of information so as to not adversely impact the employees.  We must now notify you that this courtesy may no longer be extended because it conflicts with our goal to provide timely benefit processing to other retirement plan members whose employers submit their ROCs by the prescribed due date.  We will continue to accept your ROCs beyond the 10^th of each calendar quarter but we will not guarantee that your employees' pension accounts will be updated or benefits processed within the time period they would expect.  That may result in your employees not receiving service credit as earned, loans when submitted or retirement benefits immediately following termination of employment.

When you receive your quarterly ROC, you should review it immediately.  If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630.  Normally, reporting inquiries can be resolved with a telephone call.  If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

Chapter 113 Salary Limits

Under Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine member contributions and benefits, for the State-administered pension systems, may not exceed the compensation limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation (salary) limitation is adjusted annually, based upon cost of living increases. The federal ceiling for 2005 is $210,000.

In other words, under the provisions of the Internal Revenue Code, Section 401(a)(17), for "qualified" defined benefit plans {IRC § 401(a)(2)}, the current federal ceiling on pensionable salary applies to the base salaries of members of these pension plans. Salary earned by a member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits.

Should you have any questions or need assistance in completing the ROC, please telephone us at (609) 292-3630.

November 2005

In-network NJ PLUS benefits are currently available to State Health Benefits Program (SHBP) NJ PLUS members through the Blue Cross and Blue Shield of Delaware provider network. Blue Cross and Blue Shield of Delaware has made a decision to discontinue their network offerings in Delaware. Although SHBP members may continue enrollment in NJ PLUS, the in-network benefit will no longer be available in Delaware.

Beginning January 2006, the following options will be available to SHBP members in Delaware:

• Traditional Plan*
• Aetna HMO
• Amerihealth HMO
• Cigna Healthcare HMO
• NJ PLUS (out-of-network only)

*Certain State employees are prohibited from enrolling in the Traditional Plan as determined by Union Contract.

For a more detailed description of the SHBP plan options, please access the Division of Pensions and Benefits Internet site at www.state.nj.us/treasury/pensions/shbp.htm On that site your employees can visit the Unified Provider Directory which provides information about all participating physicians and will provide you with information on the HMOs in which their current physician may participate. The Division's Internet site also contains a comparison chart illustrating the differences among all available SHBP health plans.

If any of your employee need to make a change, please have them complete a NJ State Health Benefits Program Application. The SHBP open enrollment period is being extended for NJ PLUS members who use Delaware Primary Care Physicians. The completed applications must be returned to the SHBP by December 1, 2005. If a plan change is not reported by December 1, 2005, the NJ PLUS coverage will continue with out-of-network benefits only and a new NJ PLUS identification card will be issued.

Coverage changes will be effective January 1, 2006 for all state monthly and local employers. For State employees paid through the State's Centralized Payroll Unit, the effective date will be January 7, 2006.

If you have questions concerning this announcement, please contact Horizon Blue Cross Blue Shield at 1-800-414-SHBP (7427) or the Division of Pensions and Benefits at 609-292-7524.

September, 2005

Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

September 2005

September 6, 2005

RATES FOR 2006

The State Health Benefits Commission has approved new health, dental, and prescription drug plan rates for the 2006 plan year. These rates are based upon the recommendation of the Commission's actuarial consultant, Aon Consulting. Since the SHBP self-funds most of its plans, the claims experience used in projecting 2006 costs are based upon the actual claims experience of the group. As of January 2006, all SHBP plans will be self-funded.

Effective January 7, 2006, SHBP plan rates for the State Active Group, will see the following percentage of increase:

PREMIUM SHARING

The premium share arrangements remain unchanged. For those employees subject to premium sharing:

• There is no premium cost to any employee who enrolls in NJ PLUS.
• Employees will pay 5% of the premium cost if enrolled in an HMO.
• Employees will pay 25% of the premium cost if eligible and enrolled in the Traditional Plan.

These percentages apply regardless of salary level or date of hire.

MEDICAL AND PRESCRIPTION DRUG PLAN CHANGES

The plan changes that will affect the majority of employees are as follows:

• Employees in State law enforcement bargaining units (most Fraternal Order of Police units and all State Police units - including non-aligned officers) are no longer eligible to participate in the SHBP Traditional Plan effective July 1, 2005 (July 9, 2005 for State employees paid through the State's Centralized Payroll Unit). In addition, the closure of the Traditional Plan also applies to Fraternal Order of Police retirees and State Police retirees (including non-aligned officers) who retire after July 1, 2005, regardless of their years of service credit.
  
  
• Employers should also remember that new State employees hired on or after July 1, 2003 and eligible for enrollment in the SHBP, are not eligible for coverage under the SHBP Traditional Plan. Ineligible employees include State employees as determined by union contract and all non-aligned State employees as provided under Chapter 119, P.L. 2003.

  Employees who are not eligible for the Traditional Plan can choose from among the six other plans offered by the SHBP such as NJ PLUS or one of the five HMOs: Aetna, AmeriHealth, CIGNA HealthCare, Health Net, and Oxford.

• Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment. Similarly, if an employee is enrolling an eligible domestic partner as a dependent, a copy of the NJ Certificate of Domestic Partnership is required at the time of enrollment. To ensure that the documentation submitted is properly matched to the employee's record, the Health Benefits Bureau is requesting that employers provide the employee's Social Security number on the copy of the marriage/partnership documentation.

DENTAL PLAN INFORMATION

• Employee Dental Plans Update - Oral Evaluations and cleanings were changed for administrative ease of processing claims for all dental plans. These changes were effective January 1, 2005, and should result in fewer claim denials.
  
  
• Diagnostic - Oral evaluations can be performed up to two times per calendar year. X-Rays can be made for two series of up to four films per calendar year;
  
  
• Preventive- Dental cleanings can be performed two times in a calendar year; and
  
  
• Fluoride - Two treatments can be performed per calendar year for eligible dependent children under 19 years of age.

Formerly, these benefits were available on a one-time basis every six months.

• Dental Plan Note - Employees must maintain enrollment in a dental plan choice for a minimum of 12 months before they are permitted to change plans. Therefore, if an employee was not enrolled in a dental plan as of January 1, 2005, they cannot make a dental plan change during this open enrollment period.
  
  
• Retiree Dental Expense Plan - The Retiree Dental Expense Plan, administered for the SHBP by Aetna Dental, is now available to all retirees when they enroll under the medical plans in the SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense Plan is responsible for paying the full cost of their coverage. A description of the plan and a chart outlining the benefits of the Retiree Dental Expense Plan is available in Fact Sheet #73, Retiree Dental Expense Plan Adobe PDF (38K), which can be found on our Web site at: www.state.nj.us/treasury/pensions

RETIREE PRESCRIPTION DRUG PLAN INFORMATION

In accordance with the provisions of the Retiree Prescription Drug Plan under NJ PLUS and the Traditional Plan, effective January 1, 2006, retail pharmacy copayments for a 30-day supply will increase to $8 for generic drugs; $16 for preferred brand name drugs; and $33 for all other brand name prescription drugs. The mail order copayments for a 90-day supply will increase to $8 for generic drugs, $25 for preferred brand name drugs, and $41 for all other brand name prescription drugs. At the time of this writing, the out-of-pocket maximum for the 2006 plan year was yet to be determined by the State Health Benefits Commission. Please visit: www.state.nj.us/treasury/pensions/shbp.htm for an update when it becomes available.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

MILESTONES - Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS - Enclosed you will find rate charts for your use, as well as a sample open enrollment announcement flier that provides a list of medical and dental plans and the premium sharing costs for your employees. This flier is designed to assist your employees in making informed decisions concerning their health care coverage during this open enrollment period.

On September 23, the open enrollment announcement flier will be distributed with paychecks to all employees paid through the State's Centralized Payroll Unit.

HEALTH CAPSULE - The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection. A sample is enclosed for your review.

On September 23, the Health Capsule newsletter will be distributed with paychecks to all employees paid through the State's Centralized Payroll Unit.

HEALTH PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS - As a result of last year's expansion of the SHBP Dental Plans to local government and educational employers, the Health Benefits Bureau has two separate applications: one application is for enrolling into the health plans (including prescription drug coverage) and the other application is for enrolling into the Employee Dental Plans. The health and dental applications are available for download from the SHBP home page at: www.state.nj.us/treasury/ pensions/shbp.htm

HEALTH PLAN COMPARISON SUMMARY CHARTS - Due to the difference in SHBP benefits for State Active employees, Local/Educational Active employees, and all retirees, the SHBP has developed two different Plan Comparison Summary charts - One for State Active employees and one for Local/Educational Active employees and all retirees (State and Local/Educational). The comparison chart for State Active employees is currently being printed and copies will be shipped to employers for the start of the open enrollment period.

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP Summary Program Description has been revised for the 2006 plan year. The booklet is currently being printed and copies will be shipped to employers for the start of the SHBP Open Enrollment Period. The SPD will also be available for viewing over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm

PLAN HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS, the Employee Prescription Drug Plan, and the SHBP Dental Plans were revised for the 2005 plan year. Please continue to use these editions of the handbooks for the 2006 plan year.

ONLINE INFORMATION

The SHBP's plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Web-based presentations on the SHBP Open Enrollment Period will also be available for both employers and employees during the open enrollment period. Once open enrollment begins you will find the link on the SHBP home page.

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

TAX$AVE

The State Employees' Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 - October 31, 2005). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP. Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. See the Tax$ave Open Enrollment materials for more information.

Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year. Therefore, no coverage level changes can be made which result in a change in the amount of an employee's health and/or dental plan deduction unless a Qualifying Event has occurred.

Unreimbursed Medical Claim Period Extended - Any balance remaining in a Tax$ave Unreimbursed Medical Spending Account as of December 31, can now be used for eligible expenses incurred from January 1 through March 15 of the following year. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain covered services and avoid forfeiting unused funds. See the Tax$ave Open Enrollment announcement letter or the Tax$ave 2006 newsletter for details.

Tax$ave and Domestic Partners - SHBP members need to be aware of the possible federal tax implications of adding a domestic partner to SHBP benefits. Since the federal tax code does not view domestic partners in the same manner as spouses, an employer may have to treat the domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the domestic partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 - Dependents for more details.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

September 6, 2005

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2005 and end on October 31, 2005. All changes to coverage made during this open enrollment will be effective on January 1, 2006 for employees of State universities, State colleges, and State authorities.

Completed employer-certified health benefit and/or dental applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 7, 2005.

In keeping with its current policy, the SHBP will not provide health fairs during this year's open enrollment period.

RATES FOR 2006

The State Health Benefits Commission has approved new health, dental, and prescription drug plan rates for the 2006 plan year. These rates are based upon the recommendation of the Commission's actuarial consultant, Aon Consulting. Since the SHBP self-funds most of its plans, the claims experience used in projecting 2006 costs are based upon the actual claims experience of the group. As of January 2006, all SHBP plans will be self-funded.

Effective January 1, 2006, SHBP plan rates for the State Monthly Active Group, will see the following percentage of increase:

PREMIUM SHARING

The premium share arrangements remain unchanged. For those employees subject to premium sharing:

• There is no premium cost to any employee who enrolls in NJ PLUS.
• Employees will pay 5% of the premium cost if enrolled in an HMO.
• Employees will pay 25% of the premium cost if eligible and enrolled in the Traditional Plan.

These percentages apply regardless of salary level or date of hire.

MEDICAL AND PRESCRIPTION DRUG PLAN CHANGES

The plan changes that will affect the majority of employees are as follows:

• Employees in State law enforcement bargaining units (most Fraternal Order of Police units* and all State Police units - including non-aligned officers) are no longer eligible to participate in the SHBP Traditional Plan effective July 1, 2005. In addition, the closure of the Traditional Plan also applies to Fraternal Order of Police retirees and State Police retirees (including non-aligned officers) who retire after July 1, 2005, regardless of their years of service credit.
  
  *Note: This provision does not apply to Fraternal Order of Police employees/retirees of Rutgers University, the University of Medicine and Dentistry of New Jersey (UMDNJ), or the New Jersey Institute of Technology (NJIT).
  
  
• Employers should also remember that new State employees hired on or after July 1, 2003 and eligible for enrollment in the SHBP, are not eligible for coverage under the SHBP Traditional Plan. Ineligible employees include State employees as determined by union contract and all non-aligned State employees as provided under Chapter 119, P.L. 2003.
  
  Employees who are not eligible for the Traditional Plan can choose from among the six other plans offered by the SHBP such as NJ PLUS or one of the five HMOs: Aetna, AmeriHealth, CIGNA HealthCare, Health Net, and Oxford.
  
  
• Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment. Similarly, if an employee is enrolling an eligible domestic partner as a dependent, a copy of the NJ Certificate of Domestic Partnership is required at the time of enrollment. To ensure that the documentation submitted is properly matched to the employee's record, the Health Benefits Bureau is requesting that employers provide the employee's Social Security number on the copy of the marriage/partnership documentation.

DENTAL PLAN INFORMATION

• Employee Dental Plans Update - Oral Evaluations and cleanings were changed for administrative ease of processing claims for all dental plans. These changes were effective January 1, 2005, and should result in fewer claim denials.
  
  
  • Diagnostic - Oral evaluations can be performed up to two times per calendar year. X-Rays can be made for two series of up to four films per calendar year;
    
    
  • Preventive - Dental cleanings can be performed two times in a calendar year; and
    
    
  • Fluoride - Two treatments can be performed per calendar year for eligible dependent children under 19 years of age.
    
    Formerly, these benefits were available on a one-time basis every six months.
    
    
• Dental Plan Note - Employees must maintain enrollment in a dental plan choice for a minimum of 12 months before they are permitted to change plans. Therefore, if an employee was not enrolled in a dental plan as of January 1, 2005, they cannot make a dental plan change during this open enrollment period.
  
  
• Retiree Dental Expense Plan - The Retiree Dental Expense Plan, administered for the SHBP by Aetna Dental, is now available to all retirees when they enroll under the medical plans in the SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense Plan is responsible for paying the full cost of their coverage. A description of the plan and a chart outlining the benefits of the Retiree Dental Expense Plan is available in Fact Sheet #73, Retiree Dental Expense Plan, Adobe PDF (38K) which can be found on our Web site at: www.state.nj.us/treasury/pensions

RETIREE PRESCRIPTION DRUG PLAN INFORMATION

In accordance with the provisions of the Retiree Prescription Drug Plan under NJ PLUS and the Traditional Plan, effective January 1, 2006, retail pharmacy copayments for a 30-day supply will increase to $8 for generic drugs; $16 for preferred brand name drugs; and $33 for all other brand name prescription drugs. The mail order copayments for a 90-day supply will increase to $8 for generic drugs, $25 for preferred brand name drugs, and $41 for all other brand name prescription drugs. At the time of this writing, the out-of-pocket maximum for the 2006 plan year was yet to be determined by the State Health Benefits Commission. Please visit: www.state.nj.us/treasury/pensions/shbp.htm for an update when it becomes available.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

MILESTONES - Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS - Enclosed you will find rate charts for your use, as well as sample open enrollment announcement fliers that provide a list of medical and dental plans and the premium sharing costs for State employees. These fliers are master copies that can be reproduced for distribution to your employees. The fliers are provided for three different payroll schedules (Monthly, 24 Pay Periods, and 26 Pay Periods). Choose the flier that corresponds to your payroll schedule.

These rate fliers are designed to assist your employees in making informed decisions concerning their health and dental care. Please distribute them to your employees prior to the start of the Open Enrollment.

HEALTH CAPSULE - The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection. A sample is enclosed for your review. The newsletters are scheduled for delivery to monthly employers in mid-September. Please distribute them to your employees prior to the start of the open enrollment.

HEALTH PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS - As a result of last year's expansion of the SHBP Dental Plans to local government and educational employers, the Health Benefits Bureau has two separate applications: one application is for enrolling into the health plans (including prescription drug coverage) and the other application is for enrolling into the Employee Dental Plans. The health and dental applications are available for download from the SHBP home page at: www.state.nj.us/treasury/ pensions/shbp.htm

HEALTH PLAN COMPARISON SUMMARY CHARTS - Due to the difference in SHBP benefits for State Active employees, Local/Educational Active employees, and all retirees, the SHBP has developed two different Plan Comparison Summary charts - One for State Active employees and one for Local/Educational Active employees and all retirees (State and Local/Educational). The comparison chart for State Active employees is currently being printed and copies will be shipped to employers for the start of the open enrollment period.

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP Summary Program Description has been revised for the 2006 plan year. The booklet is currently being printed and copies will be shipped to employers for the start of the SHBP Open Enrollment Period. The SPD is also available for viewing over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm

PLAN HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS, the Employee Prescription Drug Plan, and the SHBP Dental Plans were revised for the 2005 plan year. Please continue to use these editions of the handbooks for the 2006 plan year.

ONLINE INFORMATION

The SHBP's plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Web-based presentations on the SHBP Open Enrollment Period will also be available for both employers and employees during the open enrollment period. Once open enrollment begins you will find the link on the SHBP home page.

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

TAX$AVE

The State Employees' Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 - October 31, 2005). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP. Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. See the Tax$ave Open Enrollment materials for more information.

Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year. Therefore, no coverage level changes can be made which result in a change in the amount of an employee's health and/or dental plan deduction unless a Qualifying Event has occurred.

Unreimbursed Medical Claim Period Extended - Any balance remaining in a Tax$ave Unreimbursed Medical Spending Account as of December 31, can now be used for eligible expenses incurred from January 1 through March 15 of the following year. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain covered services and avoid forfeiting unused funds. See the Tax$ave Open Enrollment announcement letter or the Tax$ave 2006 newsletter for details.

Tax$ave and Domestic Partners - SHBP members need to be aware of the possible federal tax implications of adding a domestic partner to SHBP benefits. Since the federal tax code does not view domestic partners in the same manner as spouses, an employer may have to treat the domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the domestic partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 - Dependents for more details.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

September 6, 2005

The State Health Benefits Program (SHBP) Open Enrollment Period for local government employees will begin on October 1, 2005 and end on October 31, 2005. All changes to coverage made during this open enrollment will be effective on January 1, 2006.

Completed employer-certified health benefit and/or dental applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 7, 2005.

In keeping with its current policy, the SHBP will not provide health fairs during this year's open enrollment period.

RATES FOR 2006

The State Health Benefits Commission has approved new health and prescription drug plan rates for the 2006 plan year. These rates are based upon the recommendation of the Commission's actuarial consultant, Aon Consulting. Since the SHBP self-funds most of its plans, the claims experience used in projecting 2006 costs are based upon the actual claims experience of the group.

Effective January 1, 2006, SHBP plan rates for the Local Government Active Group will see the following percentage of increase:

MEDICAL AND PRESCRIPTION DRUG PLAN CHANGES

• Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment. Similarly, if an employee is enrolling an eligible domestic partner as a dependent, a copy of the NJ Certificate of Domestic Partnership is required at the time of enrollment. To ensure that the documentation submitted is properly matched to the employee's record, the Health Benefits Bureau is requesting that employers provide the employee's Social Security number on the copy of the marriage/partnership documentation.

DENTAL PLAN INFORMATION

• Employee Dental Plans - The SHBP Employee Dental Plans are now available to participating local employers who adopt this benefit for their active employees and eligible dependents. Employers and employees should see Fact Sheet #37, SHBP Employee Dental Plans Adobe PDF (44K), for a description of the plans and a chart outlining the benefits.
  
  
• Retiree Dental Expense Plan - The Retiree Dental Expense Plan, administered for the SHBP by Aetna Dental, is now available to all retirees when they enroll under the medical plans in the SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense Plan is responsible for paying the full cost of their coverage. A description of the plan and a chart outlining the benefits of the Retiree Dental Expense Plan is available in Fact Sheet #73, Retiree Dental Expense Plan Adobe PDF (38K), which can be found on our Web site at: www.state.nj.us/treasury/pensions

RETIREE PRESCRIPTION DRUG PLAN INFORMATION

In accordance with the provisions of the Retiree Prescription Drug Plan under NJ PLUS and the Traditional Plan, effective January 1, 2006, retail pharmacy copayments for a 30-day supply will increase to $8 for generic drugs; $16 for preferred brand name drugs; and $33 for all other brand name prescription drugs. The mail order copayments for a 90-day supply will increase to $8 for generic drugs, $25 for preferred brand name drugs, and $41 for all other brand name prescription drugs. At the time of this writing, the out-of-pocket maximum for the 2006 plan year was yet to be determined by the State Health Benefits Commission. Please visit: www.state.nj.us/treasury/pensions/shbp.htm for an update when it becomes available.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

MILESTONES - Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS - Enclosed you will find approved rates for SHBP health and prescription drug plans. We have included rate charts for employers with and without prescription drug coverage. The listed rates are effective January 1, 2006 through December 31, 2006.

HEALTH CAPSULE - The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection. A sample is enclosed for your review. The newsletters are scheduled for delivery to Local employers in mid-September. Please distribute them to your employees prior to the start of the open enrollment period.

HEALTH PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS - As a result of last year's expansion of the SHBP Dental Plans to local government and educational employers, the Health Benefits Bureau has two separate applications: one application is for enrolling into the health plans (including prescription drug coverage if provided) and the other application is for enrolling into the Employee Dental Plans (if provided). The health and dental applications are available for download from the SHBP home page at: www.state.nj.us/treasury/ pensions/shbp.htm

HEALTH PLAN COMPARISON SUMMARY CHARTS - SHBP Plan Comparison Summary charts for Local/Educational Active employees and all retirees are currently being printed and copies will be shipped to local employers for the start of the open enrollment period.

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP Summary Program Description has been revised for the 2006 plan year. The booklet is currently being printed and copies will be shipped to employers for the start of the SHBP Open Enrollment Period. The SPD is also available for viewing over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm

PLAN HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS, the Employee Prescription Drug Plan, and the SHBP Dental Plans were revised for the 2005 plan year. Please continue to use these editions of the handbooks for the 2006 plan year.

ONLINE INFORMATION

The SHBP's plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Web-based presentations on the SHBP Open Enrollment Period will also be available for both employers and employees during the open enrollment period. Once open enrollment begins you will find the link on the SHBP home page.

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

September 6, 2005

The State Health Benefits Program (SHBP) Open Enrollment Period for local Board of Education employees will begin on October 1, 2005 and end on October 31, 2005. All changes to coverage made during this open enrollment will be effective on January 1, 2006.

Completed employer-certified health benefit and/or dental applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 7, 2005.

In keeping with its current policy, the SHBP will not provide health fairs during this year's open enrollment period.

RATES FOR 2006

The State Health Benefits Commission has approved new health and prescription drug plan rates for the 2006 plan year. These rates are based upon the recommendation of the Commission's actuarial consultant, Aon Consulting. Since the SHBP self-funds most of its plans, the claims experience used in projecting 2006 costs are based upon the actual claims experience of the group.

Effective January 1, 2006, SHBP plan rates for the Local Education Active Group will see the following percentage of increase:

MEDICAL AND PRESCRIPTION DRUG PLAN CHANGES

• Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment. Similarly, if an employee is enrolling an eligible domestic partner as a dependent, a copy of the NJ Certificate of Domestic Partnership is required at the time of enrollment. To ensure that the documentation submitted is properly matched to the employee's record, the Health Benefits Bureau is requesting that employers provide the employee's Social Security number on the copy of the marriage/partnership documentation.

DENTAL PLAN INFORMATION

• Employee Dental Plans - The SHBP Employee Dental Plans are now available to participating local employers who adopt this benefit for their active employees and eligible dependents. Employers and employees should see Fact Sheet #37, SHBP Employee Dental Plans Adobe PDF (44K), for a description of the plans and a chart outlining the benefits.
  
  
• Retiree Dental Expense Plan - The Retiree Dental Expense Plan, administered for the SHBP by Aetna Dental, is now available to all retirees when they enroll under the medical plans in the SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense Plan is responsible for paying the full cost of their coverage. A description of the plan and a chart outlining the benefits of the Retiree Dental Expense Plan is available in Fact Sheet #73, Retiree Dental Expense Plan Adobe PDF (38K), which can be found on our Web site at: www.state.nj.us/treasury/pensions

RETIREE PRESCRIPTION DRUG PLAN INFORMATION

In accordance with the provisions of the Retiree Prescription Drug Plan under NJ PLUS and the Traditional Plan, effective January 1, 2006, retail pharmacy copayments for a 30-day supply will increase to $8 for generic drugs; $16 for preferred brand name drugs; and $33 for all other brand name prescription drugs. The mail order copayments for a 90-day supply will increase to $8 for generic drugs, $25 for preferred brand name drugs, and $41 for all other brand name prescription drugs. At the time of this writing, the out-of-pocket maximum for the 2006 plan year was yet to be determined by the State Health Benefits Commission. Please visit: www.state.nj.us/treasury/pensions/shbp.htm for an update when it becomes available.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

MILESTONES - Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS - Enclosed you will find approved rates for SHBP health and prescription drug plans. We have included rate charts for employers with and without prescription drug coverage. The listed rates are effective January 1, 2006 through December 31, 2006.

HEALTH CAPSULE - The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection. A sample is enclosed for your review. The newsletters are scheduled for delivery to Local employers in mid-September. Please distribute them to your employees prior to the start of the open enrollment period.

HEALTH PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS - As a result of last year's expansion of the SHBP Dental Plans to local government and educational employers, the Health Benefits Bureau has two separate applications: one application is for enrolling into the health plans (including prescription drug coverage if provided) and the other application is for enrolling into the Employee Dental Plans (if provided). The health and dental applications are available for download from the SHBP home page at: www.state.nj.us/treasury/ pensions/shbp.htm

HEALTH PLAN COMPARISON SUMMARY CHARTS - SHBP Plan Comparison Summary charts for Local/Educational Active employees and all retirees are currently being printed and copies will be shipped to local employers for the start of the open enrollment period.

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP Summary Program Description has been revised for the 2006 plan year. The booklet is currently being printed and copies will be shipped to employers for the start of the SHBP Open Enrollment Period. The SPD is also available for viewing over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm

PLAN HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS, the Employee Prescription Drug Plan, and the SHBP Dental Plans were revised for the 2005 plan year. Please continue to use these editions of the handbooks for the 2006 plan year.

ONLINE INFORMATION
The SHBP's plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Web-based presentations on the SHBP Open Enrollment Period will also be available for both employers and employees during the open enrollment period. Once open enrollment begins you will find the link on the SHBP home page.

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

August 22, 2005

SHBP employers should not retain the services of an actuary or any other professional for the purpose of attempting to apply for the Medicare Part D subsidy. The SHBP will handle all administrative, compliance, and communications matters, including those with the Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for administering Medicare.

The design of the SHBP plans available to all Medicare retirees will more than meet Medicare Part D actuarial equivalency requirements and members will receive a Medicare Part D Certificate of Creditable Coverage from the SHBP this fall. From the retirees' perspective, there will be little or no change in their SHBP prescription drug coverage in 2006 as a result of Medicare Part D. Medicare retirees who pay for the cost of their SHBP coverage will participate in the Medicare Part D savings available to the SHBP, which will be reflected in their 2006 rates. SHBP retirees should not apply for Medicare Part D coverage under any of the new non-SHBP programs that will begin marketing in October 2005.

Additional information will be added to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions/shbp.htm as it becomes available.

August 15, 2005

The annual open enrollment for the calendar year 2006 New Jersey State Employees Tax Savings Program (Tax$ave 2006) will be conducted from October 1 through October 31, 2005. Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

About Tax$ave

Tax$ave consists of three components:

1. The Premium Option Plan (POP);
2. The Unreimbursed Medical Spending Account (UMSA); and
3. The Dependent Care Spending Account (DCSA).

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not. Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Note: Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.
See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41K), for details.

Premium Option Plan

Enrollment in the Premium Option Plan is automatic. This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability. If an employee does not wish to take advantage of the Premium Option Plan in 2006 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form.

Flexible Spending Accounts

The Unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending Account (DCSA) are also referred to as Flexible Spending Accounts (FSA's). Listed below are some of the benefits of FSA participation.

• New! - Extended Claim Period. Employees enrolled in the Unreimbursed Medical Spending Account now have until March 15 of the following year to incur eligible expenses for the current plan year. Any balance remaining in an UMSA as of December 31, can be used for eligible expenses incurred from January 1 through March 15 of the following year. For example, if there are leftover 2005 funds, those dollars will be used first for any expenses, then 2006 funds will be used once the 2005 dollars are exhausted. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain covered services and avoid forfeiting unused funds.
  
  
• Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical Spending Account. Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable. "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. Amounts paid for medicines and drugs are expenditures for medical care, but expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible. For more information about expenses that are eligible under Unreimbursed Medical Spending Accounts and Dependent Care Spending Accounts, please visit the Horizon Healthcare Web site through the link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm
  
  
• Tax$ave Unreimbursed Medical Spending Accounts feature the BennyTM Card, a special MasterCard® that draws on the value of the employee's annual UMSA election amount, making the UMSA easier to use. Each time an employee uses Benny to pay for a qualified health care expense at a health care provider or business that accepts MasterCard, the amount of the qualified purchase is transferred from the UMSA automatically - eliminating the need to lay out cash at the time of purchase and file for a reimbursement. Once issued, the Benny Card is good for five years and should not be thrown away at the end of the plan year. Any new UMSA election amount will be automatically available through an existing Benny Card account at the start of the 2006 plan year.

Unlike the POP or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2005 does not carry over automatically into 2006. Employees must enroll again to participate in an FSA for calendar year 2006.

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts: mail, telephone, and Internet. The Tax$ave publications will provide the following instructions to employees:

• Mail: FSA Election Applications must be mailed directly to Horizon Healthcare by the employee. All election forms must be postmarked no later than October 31, 2005, to be accepted. Those postmarked after October 31, 2005 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.
  
  
• Telephone: Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2006 over the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426. This is a great opportunity to quickly and easily go through the process of a new or repeat enrollment. Horizon will inform current participating employees of this opportunity through a direct mailing in September. The deadline for enrollment by telephone is midnight, October 31, 2005.
  
  
• Internet: Again this year employees have the ability to enroll (or reenroll) over the Internet. Go to the Horizon Healthcare Web page through a link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the simple directions. The deadline for enrollment over the Internet is midnight, October 31, 2005.

Tax$ave and Domestic Partners

Under the New Jersey Domestic Partnership Act, State employees are now able to add a same-sex domestic partner to their health and dental insurance coverage. However, before any premiums that the employee pays for the domestic partner coverage can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the domestic partner must be able to qualify as a "tax dependent" of the employee for federal tax filing purposes under IRC Section 152. Similarly, the domestic partner must qualify as the employee's federal tax dependent before an out-of-pocket medical expense incurred by the domestic partner can be reimbursed under the Unreimbursed Medical Spending Account.

If the domestic partner is not a "qualified tax dependent" of the employee, any premium deductions made for the domestic partner's coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the domestic partner's medical expenses. See IRS Tax Topic 354 - Dependents for additional information on dependent status for federal tax purposes. Additional information regarding the Domestic Partnership Act can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K), which is available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

Employee Seminars  

Upon request, Horizon Healthcare will provide Tax$ave educational seminars, at your workplace, for interested employees. The seminars are about 60 minutes in duration and includes time for questions and answers. These seminars have proven to be very successful educational tools and we strongly encourage you to make one available to your employees. Please see the enclosed request form to schedule a seminar with a Horizon Healthcare representative (please note that we ask for a minimum of 25 employees).

Tax$ave Support Materials

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees. Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them. We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program.

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2006 Annual Open Enrollment and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during the open enrollment.

Anouncement of the open enrollment to employees paid through Centralized Payroll will be made in a September 9 paycheck message that will be accompanied by three payroll inserts. These inserts are:

• The Tax$ave 2006 Open Enrollment News that announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2005 deadline for submission of all election materials;
  
  
• An FSA pamphlet that describes the Unreimbursed Medical Spending Account (UMSA) and the Dependent Care Spending Account (DCSA); and
  
  
• The Premium Option Plan 2006 pamphlet that explains the advantages and disadvantages of participation.

The September 23 paychecks will carry another Tax$ave 2006 Open Enrollment announcement message and "reminder messages" will be provided to employees through paycheck messages on October 7 and October 21 (a final November 4 paycheck message will address the Commuter Tax$ave Program). The text of these check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

The other open enrollment materials you will need are the FSA Election Kits and the Declination of Premium Option Plan (POP) for Plan Year 2006 form.

• FSA Election Kits for 2006 will be sent directly to benefits administrators by Horizon Healthcare, along with a request form for additional kits. Please provide the FSA Election Kits to those employees who request them.
  
  
• This letter includes a minimal supply of the declination forms. These can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. (Note: do not distribute POP Declination forms to employees unless they ask for one.) If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2006, they must complete a POP form declining the federal tax break they could receive. Employees should request these forms from you. We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2005. Benefits administrators must then forward declination forms to Centralized Payroll by November 10, 2005.

We appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. If you have any questions about Tax$ave 2006 or the open enrollment, call Horizon Healthcare at 1-800-224-4426, or visit the Division of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm

Enclosures:
Request for Tax$ave 2006 Employee Seminars
Tax$ave 2006 Open Enrollment Milestones
Open Enrollment Check Messages
Tax$ave 2006 Open Enrollment News
The Premium Option Plan 2006 Pamphlet
Tax$ave Pamphlet - Savings You Can Bank On
Declination of Premium Option Plan (POP) for Plan Year 2006

August 15, 2005

The annual open enrollment for the calendar year 2006 New Jersey State Employees Tax Savings Program (Tax$ave 2006) will be conducted from October 1 through October 31, 2005. Full-time employees of the State, State authorities, State universities, and State colleges who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

About Tax$ave

Tax$ave consists of three components:

1. The Premium Option Plan (POP);
   
   
2. The Unreimbursed Medical Spending Account (UMSA); and
   
   
3. The Dependent Care Spending Account (DCSA).

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not. Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Note: Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.
See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41K), for details.

Premium Option Plan

Enrollment in the Premium Option Plan is automatic. This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability. If an employee does not wish to take advantage of the Premium Option Plan in 2006 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form.

Flexible Spending Accounts
The Unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending Account (DCSA) are also referred to as Flexible Spending Accounts (FSA's). Listed below are some of the benefits of FSA participation.

• New! - Extended Claim Period. Employees enrolled in the Unreimbursed Medical Spending Account now have until March 15 of the following year to incur eligible expenses for the current plan year. Any balance remaining in an UMSA as of December 31, can be used for eligible expenses incurred from January 1 through March 15 of the following year. For example, if there are leftover 2005 funds, those dollars will be used first for any expenses, then 2006 funds will be used once the 2005 dollars are exhausted. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain covered services and avoid forfeiting unused funds.
  
  
• Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical Spending Account. Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable. "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. Amounts paid for medicines and drugs are expenditures for medical care, but expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible. For more information about expenses that are eligible under Unreimbursed Medical Spending Accounts and Dependent Care Spending Accounts, please visit the Horizon Healthcare Web site through the link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm
  
  
• Tax$ave Unreimbursed Medical Spending Accounts feature the BennyTM Card, a special MasterCard® that draws on the value of the employee's annual UMSA election amount, making the UMSA easier to use. Each time an employee uses Benny to pay for a qualified health care expense at a health care provider or business that accepts MasterCard, the amount of the qualified purchase is transferred from the UMSA automatically - eliminating the need to lay out cash at the time of purchase and file for a reimbursement. Once issued, the Benny Card is good for five years and should not be thrown away at the end of the plan year. Any new UMSA election amount will be automatically available through an existing Benny Card account at the start of the 2006 plan year.

Unlike the POP or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2005 does not carry over automatically into 2006. Employees must enroll again to participate in an FSA for calendar year 2006.

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts: mail, telephone, and Internet. The Tax$ave publications will provide the following instructions to employees:

• Mail: FSA Election Applications must be mailed directly to Horizon Healthcare by the employee. All election forms must be postmarked no later than October 31, 2005, to be accepted. Those postmarked after October 31, 2005 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.
  
  
• Telephone: Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2006 over the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426. This is a great opportunity to quickly and easily go through the process of a new or repeat enrollment. Horizon will inform current participating employees of this opportunity through a direct mailing in September. The deadline for enrollment by telephone is midnight, October 31, 2005.
  
  
• Internet: Again this year employees have the ability to enroll (or reenroll) over the Internet. Go to the Horizon Healthcare Web page through a link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the simple directions. The deadline for enrollment over the Internet is midnight, October 31, 2005.

Tax$ave and Domestic Partners

Under the New Jersey Domestic Partnership Act, State employees are now able to add a same-sex domestic partner to their health and dental insurance coverage. However, before any premiums that the employee pays for the domestic partner coverage can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the domestic partner must be able to qualify as a "tax dependent" of the employee for federal tax filing purposes under IRC Section 152. Similarly, the domestic partner must qualify as the employee's federal tax dependent before an out-of-pocket medical expense incurred by the domestic partner can be reimbursed under the Unreimbursed Medical Spending Account.

If the domestic partner is not a "qualified tax dependent" of the employee, any premium deductions made for the domestic partner's coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the domestic partner's medical expenses. See IRS Tax Topic 354 - Dependents for additional information on dependent status for federal tax purposes. Additional information regarding the Domestic Partnership Act can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K), which is available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

Employee Seminars

Upon request, Horizon Healthcare will provide Tax$ave educational seminars, at your workplace, for interested employees. The seminars are about 60 minutes in duration and includes time for questions and answers. These seminars have proven to be very successful educational tools and we strongly encourage you to make one available to your employees. Please see the enclosed request form to schedule a seminar with a Horizon Healthcare representative (please note that we ask for a minimum of 25 employees).

Tax$ave Support Materials

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees. Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them. We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program.

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2006 Annual Open Enrollment and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during the open enrollment.

The Division will also provide State Monthly employers, State Universities, and State Colleges with sufficient copies of the Tax$ave 2006 Open Enrollment News and the Premium Option Plan 2006 pamphlet for all eligible employees. Horizon Healthcare will provide sufficient copies of the FSA pamphlet for distribution to all of your eligible employees.

• The Tax$ave 2006 Open Enrollment News announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2005 deadline for submission of all election materials.
  
  
• The Premium Option Plan 2006 pamphlet explains the advantages and disadvantages of participation.
  
  
• The FSA pamphlet describes the Unreimbursed Medical Spending Account (UMSA) and the Dependent Care Spending Account (DCSA).

These publications will be shipped to employers early in September and you should distribute them to your employees before the Open Enrollment start date on October 1, 2005. Preview copies of these publications are enclosed with this letter.

We also encourage you to provide your employees with reminders of the Tax$ave Open Enrollment to ensure they don't allow this opportunity to slip by without action.

The other open enrollment materials you will need are the FSA Election Kits and the Declination of Premium Option Plan (POP) for Plan Year 2006 form.

• FSA Election Kits for 2006 will be sent directly to benefits administrators by Horizon Healthcare, along with a request form for additional kits. Please provide the FSA Election Kits to those employees who request them.
  
  
• This letter includes a minimal supply of the declination forms. These can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. (Note: do not distribute POP Declination forms to employees unless they ask for one.) If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2006, they must complete a POP form declining the federal tax break they could receive. Employees should request these forms from you. We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2005. Benefits administrators must then forward declination forms to the appropriate representative in their payroll department.

We appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. If you have any questions about Tax$ave 2006 or the open enrollment, call Horizon Healthcare at 1-800-224-4426, or visit the Division of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm

Enclosures:
Request for Tax$ave 2006 Employee Seminars
Tax$ave 2006 Open Enrollment Milestones
Tax$ave 2006 Open Enrollment News
The Premium Option Plan 2006 Pamphlet
Tax$ave Pamphlet - Savings You Can Bank On
Declination of Premium Option Plan (POP) for Plan Year 2006

June 2005

This memorandum has pertinent information concerning the completion of your Report of Contributions (ROC).  Please read this memorandum before you make any changes to the ROC.

Notice To Delinquent Report Of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly ROC in a timely fashion.  As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting.  I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State's public employees.

Changes To Member Contribution Pension Rates - Public Employees' Retirement System - Local Government Employers

Effective January 1, 2005 the Public Employees' Retirement System (PERS) member contribution rate for local government employees returnedto the normal rate of 5%. As a result employee pension contributions for retroactive salary increases paid on or after January 1, 2005 should be calculated at the rate of 5%, including any portion of the retroactive salary that covered a period prior to January 1, 2005.

TEPS

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and appropriation payments. Employee shortages are not to be submitted through TEPS.

Effective July 30, 2004, you were able to access TEPS through the Internet instead of calling in your payments.  In addition to making payments on-line, you can cancel payments on-line providing that you make the cancellation before the 5:30 pm cut off time.  On-line inquiries in which you can view and print a history of your payments are also available. Log on to www.payments-govonesolutions.com/njpen.  Once you have logged on to TEPS, enter your location number and current password, the same password you are using with the telephone application.  You will find a user friendly program that will guide you through the payment, inquiry or payment cancellation processes.  The Division will still receive your payments the next business day, as long as you enter your payment on-line before the 5:30 pm cut off time.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits has been changed.  The Employer Authorization Form must be faxed to (720) 332-0039 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650-9581.

Deadline For Filing

All ROCs must be postmarked by July 10, 2005, to be considered timely filed.

It must be noted that these deadlines are established to provide for the timely updating of member accounts each quarter.  In order to accomplish this goal for the over 300,000 members of the retirement plans, we rely on you, our participating employers, to report pension information to us by the 10^th calendar day of the month following the end of the calendar quarter.  In return, your employees' accounts are updated with the most recent pension information, which in turn may be used to process benefit claims by those same employees or their beneficiaries.

In recent years more and more employers have been delivering their ROCs to us later and later.  However, we have extended the courtesy of holding open the reporting period to accommodate this late receipt of information so as to not adversely impact the employees.  We must now notify you that this courtesy may no longer be extended because it conflicts with our goal to provide timely benefit processing to other retirement plan members whose employers submit their ROCs by the prescribed due date.  We will continue to accept your ROCs beyond the 10^th of each calendar quarter but we will not guarantee that your employees' pension accounts will be updated or benefits processed within the time period they would expect.  That may result in your employees not receiving service credit as earned, loans when submitted or retirement benefits immediately following termination of employment.

When you receive your quarterly ROC, you should review it immediately.  If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630.  Normally, reporting inquiries can be resolved with a telephone call.  If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

Chapter 113 Salary Limits

Under Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine member contributions and benefits, for the State-administered pension systems, may not exceed the compensation limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation (salary) limitation is adjusted annually, based upon cost of living increases. The federal ceiling for 2005 is $210,000.

In other words, under the provisions of the Internal Revenue Code, Section 401(a)(17), for "qualified" defined benefit plans {IRC § 401(a)(2)}, the current federal ceiling on pensionable salary applies to the base salaries of members of these pension plans. Salary earned by a member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits.

TOP 5 REPORTING AND PAYMENT ERRORS

Number 5 - Changes to Base Salary

It is important to review the salary shown in column 6 and verify that it correctly reflects the member's base salary for the quarter.  If the salary shown is not correct, draw a line through it and write the correct salary above it.  Pension Contributions, Contributory Insurance, SACT, and Tax-Sheltered Annuity deductions must be changed to reflect amounts due on the new salary.

If your employees received a salary increase that is retroactive to a prior quarter, change column 6 to reflect the COMBINED TOTAL of:

(a) the new base salary for the quarter, plus,

(b) the additional base salary for the retroactive period.

The new quarterly base salary should be written in column 1 of the ROC.  This salary will be projected in column 6 of your next quarterly ROC.  This will eliminate the need to make numerous changes on your 4th quarter ROC.  Also, in the "Remarks Column" of the current ROC you should indicate that the members had a salary increase and the effective date.

Number 4 - Changing Banking Information for TEPS

Banking changes for TEPS should be submitted to the Division of Pensions and Benefits through the Employer Authorization Form on or after the date that the new checking account becomes effective.  Please note that the fax number and address previously used has changed.  The Employer Authorization form must be faxed to (720) 332-0039 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650-9581.

Number 3 - Explain all changes

Please make all necessary corrections to the ROC before you return it to the Division of Pensions and Benefits.  Verify that all changes are explained, the ROC is added correctly, and the totals agree with the sum of the transmittal remittances.

Number 2 - Reporting partial months of service

Number 1 - Changes to employee contribution amounts for penny differences resulting from rounding

Should you have any questions or need assistance in completing the ROC, please telephone us at (609) 292-3630.

NOTICE: The following letter applies to State Monthly employers (State authorities and State Colleges and Universities) that have contracts with the Fraternal Order of Police. However, it does not apply to Rutgers, UMDNJ, and NJIT.

April 26, 2005

In March you were notified that as a result of collective negotiations, all State employee Fraternal Order of Police (FOP) bargaining units, except those at Rutgers, UMDNJ, and NJIT, have agreed that participation in the State Health Benefits Program's Traditional Plan will no longer be available to employees effective July 1, 2005 (July 9, 2005 for employees paid through the State's Centralized Payroll Unit). At the time of the March memorandum we were awaiting legal advice regarding the closure of the Traditional Plan and its impact on non-aligned personnel and employees that retire after July 1, 2005.

Since our March memorandum, we have confirmed that the closure of the Traditional Plan will apply to all FOP employees covered under the aforementioned contracts who retire after July 1, 2005, regardless of their years of service credit, or the date when 25 years of service was achieved. The Fiscal Year 2006 budget contains language curtailing funding for the Traditional Plan for all affected employees. Anyone who is currently retired and those employees who retire on or before July 1, 2005 will not be affected by this change. The closure of the Traditional Plan will not apply to non-aligned personnel affiliated with these bargaining units.

In order to ensure continuity of health care coverage for all affected employees, a Special Open Enrollment has been authorized. The Special Open Enrollment is being extended to May 13, 2005 to allow affected employees to make a plan change.

All certified enrollment applications must be submitted to the Health Benefits Bureau by May 20, 2005. Please mark these applications as "Special OE" and forward the applications as soon as possible to expedite processing.

We appreciate your assistance and thank you for your anticipated cooperation in this matter. If you have any questions, please do not hesitate to contact the Division of Pensions and Benefits' Office of Client Services at (609) 292-7524.

April 26, 2005

In March you were notified that as a result of collective negotiations, all State Police bargaining units have agreed that participation in the State Health Benefits Program's Traditional Plan will no longer be available to employees effective July 1, 2005 (July 9, 2005). At the time of the March memorandum we were awaiting legal advice regarding the closure of the Traditional Plan and its impact on non-aligned officers and employees that retire after July 1, 2005.

Since our March memorandum, we have confirmed that the closure of the Traditional Plan will also apply to all non-aligned State Police officers and to all State Police officers (including non-aligned officers) who retire after July 1, 2005, regardless of their years of service credit, or the date when 25 years of service was achieved. The Fiscal Year 2006 budget contains language curtailing funding for the Traditional Plan for these employees. Anyone who is currently retired and those employees who retire on or before July 1, 2005 will not be affected by this change.

In order to ensure continuity of health care coverage for all affected employees, a Special Open Enrollment has been authorized. The Special Open Enrollment is being extended to May 13, 2005 to allow affected employees to make a plan change.

All certified enrollment applications must be submitted to the Health Benefits Bureau by May 20, 2005. Please mark these applications as "Special OE" and forward the applications as soon as possible to expedite processing.

We appreciate your assistance and thank you for your anticipated cooperation in this matter. If you have any questions, please do not hesitate to contact the Division of Pensions and Benefits' Office of Client Services at (609) 292-7524.

April 15, 2005

Chapter 246, P.L. 2003, designated the "Domestic Partnership Act", became effective on July 10, 2004. Chapter 246 created a mechanism, through the establishment of domestic partnerships, for New Jersey to recognize and support the adult individuals in this State who share a personal, emotional and committed relationship with another adult.

The law provides that two persons who desire to become domestic partners may execute and file an Affidavit of Domestic Partnership if they meet the requirements set forth in the law. This law accords registered domestic partners rights and responsibilities that reflect the mutually interdependent and supportive nature of domestic partnership relationships and makes certain health and pension benefits available to dependent domestic partners where both persons are of the same sex and therefore unable to enter into a marriage with each other that is recognized by New Jersey law:

Pursuant to advice from the Attorney General's Office, the Division of Pensions and Benefits would like to advise local employers that they may adopt a resolution providing for dependent coverage for domestic partners regardless of whether they participate in the State Health Benefits Program (SHBP).

Because certain retirees from these local employers may be eligible for SHBP coverage at retirement, the Division of Pensions and Benefits is requiring employers who provide dependent coverage for domestic partners, but who do not participate in the SHBP, to complete and mail to the Division a resolution indicating that they provide dependent coverage for domestic partners. A copy of this resolution form Adobe PDF (29K) is included with this letter (and can also be found in the online Employer Pensions and Benefits Administration Manual which is available through the Division's Web site: www.state.nj.us/treasury/pensions)

Please note that Chapter 246 Adobe PDF (428K), at N.J.S.A. 26:8A-11, specifically limits the availability of health benefit and pension benefit provisions of the Domestic Partnership Act to same-sex couples, and does not extend such benefits to those heterosexual couples who are age 62 or older. Therefore, no SHBP coverage in retirement would be offered to heterosexual domestic partners, age 62 or older.

Enclosure:
Resolution Form Adobe PDF (29K)

March 2005

This memorandum has pertinent information concerning the completion of your Report of Contributions (ROC).  Please read this memorandum before you make any changes to the ROC.

NOTICE TO DELINQUENT REPORT OF CONTRIBUTION FILERS

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion.  As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting.  I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State's public employees.

CHANGES TO MEMBER CONTRIBUTION PENSION RATES

Public Employees' Retirement System - Local Government Employers

Effective January 1, 2005 the Public Employees' Retirement System (PERS) member contribution rate for local government employees returned to the normal rate of 5%.  As a result employee pension contributions for retroactive salary increases paid on or after January 1, 2005 should be calculated at the rate of 5%, including any portion of the retroactive salary that covered a period prior to January 1, 2005

TEPS

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and appropriation payments. Employee shortages are not to be submitted through TEPS.

Effective July 30, 2004, you were able to access TEPS through the Internet instead of calling in your payments.  In addition to making payments on-line, you can cancel payments on-line providing that you make the cancellation before the 5:30 pm cut off time.  On-line inquiries in which you can view and print a history of your payments are also available. Log on to www.payments-govonesolutions.com/njpen.  Once you have logged on to TEPS, enter your location number and current password, the same password you are using with the telephone application.  You will find a user friendly program that will guide you through the payment, inquiry or payment cancellation processes.  The Division will still receive your payments the next business day, as long as you enter your payment on-line before the 5:30 pm cut off time.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits has been changed.  The Employer Authorization Form must be faxed to (720) 332-0039 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, 08650-9581.

DEADLINE FOR FILING

All ROCs must be postmarked by April 10, 2005, to be considered timely filed.

It must be noted that these deadlines are established to provide for the timely updating of member accounts each quarter.  In order to accomplish this goal for the over 300,000 members of the retirement plans, we rely on you, our participating employers, to report pension information to us by the 10^th calendar day of the month following the end of the calendar quarter.  In return, your employees' accounts are updated with the most recent pension information, which in turn may be used to process benefit claims by those same employees or their beneficiaries.

In recent years more and more employers have been delivering their ROCs to us later and later.  However, we have extended the courtesy of holding open the reporting period to accommodate this late receipt of information so as to not adversely impact the employees.  We must now notify you that this courtesy may no longer be extended because it conflicts with our goal to provide timely benefit processing to other retirement plan members whose employers submit their ROCs by the prescribed due date.  We will continue to accept your ROCs beyond the 10^th of each calendar quarter but we will not guarantee that your employees' pension accounts will be updated or benefits processed within the time period they would expect.  That may result in your employees not receiving service credit as earned, loans when submitted or retirement benefits immediately following termination of employment.

When you receive your quarterly ROC, you should review it immediately.  If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630.  Normally, reporting inquiries can be resolved with a telephone call.  If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

Chapter 113 Salary Limits

Under Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine member contributions and benefits, for the State-administered pension systems listed below, may not exceed the compensation limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation (salary) limitation is adjusted annually, based upon cost of living increases. The federal ceiling for 2005 will be $210,000.

In other words, under the provisions of the Internal Revenue Code, Section 401(a)(17), for the "qualified" defined benefit plans listed below [401(a)(2)], the current federal ceiling on pensionable salary ($205,000 in 2004) applies to the base salaries of members of these pension plans. Salary earned by a member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits.

TOP 5 REPORTING AND PAYMENT ERRORS

Number 5 - Changes to Base Salary

It is important to review the salary shown in column 6 and verify that it correctly reflects the member's base salary for the quarter.  If the salary shown is not correct, draw a line through it and write the correct salary above it.  Pension Contributions, Contributory Insurance, SACT, and Tax-Sheltered Annuity deductions must be changed to reflect amounts due on the new salary.

If your employees received a salary increase that is retroactive to a prior quarter, change column 6 to reflect the COMBINED TOTAL of:

                                (a) the new base salary for the quarter, plus,

                                (b) the additional base salary for the retroactive period.

The new quarterly base salary should be written in column 1 of the ROC.  This salary will be projected in column 6 of your next quarterly ROC.  This will eliminate the need to make numerous changes on your 4th quarter ROC.  Also, in the "Remarks Column" of the current ROC you should indicate that the members had a salary increase and the effective date.

Number 4 - Changing Banking Information for TEPS

Banking changes for TEPS should be submitted to the Division of Pensions and Benefits through the Employer Authorization Form on or after the date that the new checking account becomes effective.  Please note that the fax number and address previously used has changed.  The Employer Authorization form must be faxed to (720) 332-0039 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650-9581

Number 3 - Explain all changes

Please make all necessary corrections to the ROC before you return it to the Division of Pensions and Benefits.  Verify that all changes are explained, the ROC is added correctly, and the totals agree with the sum of the transmittal remittances.

Number 2 - Reporting partial months of service

And, the number 1, most common reporting error is - Changes to employee contribution amounts for penny differences resulting from rounding.

Should you have any questions or need assistance in completing the ROC, please telephone us at (609) 292-3630.

Enclosures:
Quarterly Report of Contributions
Transmittal Summary for 1st Quarter 2005
Return Envelope

NOTICE: The following letter applies to the NJ State Police and those State Monthly employers (State authorities and State Colleges and Universities) that have contracts with the Fraternal Order of Police. However, it does not apply to Rutgers, UMDNJ, and NJIT.

March 30, 2005

As a result of collective negotiations, the State of New Jersey and its law enforcement bargaining units (all Fraternal Order of Police units and all State Police units) have agreed that participation in the State Health Benefits Program's Traditional Plan will no longer be available to all active employees effective July 1, 2005 (July 9, 2005 for State employees paid through the State's Centralized Payroll Unit). The Fiscal Year 2006 budget contains language curtailing funding for the Traditional Plan for all employees covered by these contracts. Funding of the Traditional Plan will continue for employees covered by other contracts. We are awaiting legal advice on the closure of the Traditional Plan and how it will apply to non-aligned officers and to employees that retire after July 1, 2005.

Employees affected by this agreement will be sent a direct mailing (copy enclosed) to advise them of the Traditional Plan's closure. In order to ensure continuity of health care coverage for all affected employees, a Special Open Enrollment has been authorized. This Special Open Enrollment will be conducted during the month of April (April 1 - April 30, 2005) to allow the employees to make plan changes with an effective date of July 9, 2005 for State employees paid through the State's Centralized Payroll Unit and July 1, 2005 for all other State employees.

All certified enrollment applications must be submitted to the Health Benefits Bureau by May 6, 2005. Please mark these applications as "Special OE" and forward the applications as soon as possible to expedite processing.

Enclosed is a list of employees who are enrolled in the Traditional Plan at your location. Please review this list for accuracy and to ensure that all Traditional Plan enrollees have submitted an application to make a plan change.

We appreciate your assistance and thank you for your anticipated cooperation in this matter. If you have any questions, please do not hesitate to contact the Division of Pensions and Benefits' Office of Client Services at (609) 292-7524.

Enclosures

Enclosure 1

NOTICE: The following letter applies to the NJ State Police and those State Monthly employers (State authorities and State Colleges and Universities) that have contracts with the Fraternal Order of Police. However, it does not apply to Rutgers, UMDNJ, and NJIT.

March 30, 2005

As a result of collective negotiations, the State of New Jersey and its law enforcement bargaining units (all Fraternal Order of Police units and all State Police units) have agreed that participation in the State Health Benefits Program's Traditional Plan will no longer be available to all active employees effective July 1, 2005 (July 9, 2005 for State employees paid through the State's Centralized Payroll Unit). The Fiscal Year 2006 budget contains language curtailing funding for the Traditional Plan for all employees covered by these contracts. We are awaiting legal advice on the closure of the Traditional Plan and how it will apply to non-aligned officers and to employees that retire after July 1, 2005.

You have been identified as an employee who is affected by this agreement and this letter is notice to advise you of the Traditional Plan's closure. In order to ensure continuity of your health care coverage, a Special Open Enrollment has been authorized. This Special Open Enrollment will be conducted during the month of April (April 1 - April 30, 2005) to allow you to change from the Traditional Plan to another plan (NJ PLUS or a participating HMO) offered through the State Health Benefits Program (SHBP). A list of available plans and contact information is provided with this notice.

Your application to change plans must be submitted through your Human Resources Representative. The effective date for coverage changes will be:

• July 9, 2005 for State employees paid through the State's Centralized Payroll Unit; and
  
  
• July 1, 2005 for all other State employees.

If you fail to make a plan change during the Special Open Enrollment, you may lose coverage or become responsible for paying the full premium cost of the Traditional Plan.

If you have any questions, please do not hesitate to contact the Division of Pensions and Benefits' Office of Client Services at (609) 292-7524.

Enclosure 2

NEW JERSEY STATE HEALTH BENEFITS PROGRAM
MEDICAL PLANS

SPECIAL OPEN ENROLLMENT
STATE TROOPERS and STATE FOP
April 1 to 30, 2005

February 2005

The Internal Revenue service (IRS) has authorized increases in the maximum allowable tax-free deduction amounts that the State of New Jersey may offer for monthly mass transit and commuter parking expenses through the New Jersey State Employees Commuter Tax Savings Program (Commuter Tax$ave*). 

The Division of Pensions and Benefits is currently notifying State employees paid through the State's Centralized Payroll System of these increases.  We are also asking that you, as a State Monthly employer that participates in Commuter Tax$ave, also make your eligible employees aware of this added benefit.

Enclosed you will find master copies of a letter to State employees announcing the increased deduction amounts.  Please reproduce and distribute this letter to all of your employees who are currently enrolled, or eligible to enroll, in the Commuter Tax$ave Program.

Employees who participate in Commuter Tax$ave and who wish to take advantage of this increase, should adjust their payroll deductions to cover the increased amount by contacting TransitCenter, Inc.-the public nonprofit corporation that administers the program under a contract with the State of New Jersey. Employees can make changes to their benefits using TransitCenter's online management account at www.mytransitchek.com or by calling TransitCenter Customer Service at 1-800-576-1171 Monday - Friday, 9:00 am - 5:00 pm EST.

If any of your employees do not already participate in the Commuter Tax$ave Program, but wish reduce their taxes and save on their mass transit and/or commuter parking expenses, they can enroll in the Commuter Tax$ave Program by contacting TransitCenter using the Internet address or telephone number shown above.

* Commuter Tax$ave is a benefit program authorized by Chapter 162, P.L. 2001 and available under Section 132(f) of the federal Internal Revenue Code.  Commuter Tax$ave allows eligible employees to set aside before-tax dollars to pay for certain mass transit and commuter parking expenses, thereby avoiding federal taxes and saving money.  For additional information see Fact Sheet #67, Commuter Tax$ave Adobe PDF (41K), which is available over the Internet at: www.state.nj.us/treasury/pensions

Enclosure

January 2005

Federal law mandates employers to provide notice of requirements of certain pieces of federal legislation to employees and their dependents upon their enrollment in the employer's group health insurance.  State Health Benefits Program (SHBP) participating employers must provide an initial notice concerning the Consolidated Omnibus Budget Reconciliation Act (COBRA) program and a notice about the federal Health Insurance and Portability Accounting Act's (HIPAA) privacy requirements.

The attached documents provide everything you, as an employer, need to comply with the notice requirements of both COBRA and HIPAA. 

Enclosure one * is a cover letter forwarding the required notices.  You should modify this letter to reflect its being mailed from your location to the employee and dependents and include it with a copy of enclosure two* (this consists of the initial COBRA notification marked Important Notice and a copy of Fact Sheet #30, Continuation of New Jersey State Health Benefits Program Insurance Under COBRA Adobe PDF (39K).  NOTE: To meet federal requirements, the letter must be addressed to the "Employee and Family", it must be mailed (first class mail is sufficient), and a copy must be retained to prove compliance. 

The remaining enclosures address the federal Health Insurance and Portability Accounting Act (HIPAA).  Federal law requires that all enrollees - employees and dependents - in employer provided health plans be notified annually of HIPAA requirements and how the employer's plan compares with them.  Enclosure three* (Notice to State Health Benefits Program Participants About Compliance with Federal Health Insurance Requirements) will meet this requirement.  Each year you are required to mail a copy to all of your SHBP enrolled employees in order to satisfy the requirement for proper annual notification of dependents. 

Enclosure four* Adobe PDF (33K) is the updated SHBP Notice of Privacy Practices.  A copy of the privacy practices should be mailed along with the enclosures mentioned above, or given to new employees when they enroll in any SHBP plan.

Enclosure five* Adobe PDF (40K) is the Certificate of Group Health Plan Coverage which you may use to provide an employee or dependent whose SHBP coverage is ending with evidence of their prior health coverage in the SHBP.

Questions about this memorandum should be directed to the SHBP Employer Hotline at (609) 777-1082.  Leave a message and a staff member will return your call within one business day.

Last update: January 6, 2010