Certifying Officer Letters

October 30, 1998

TO: Certifying Officers
Public Employees' Retirement System

FROM: Margaret M. McMahon
Director

SUBJECT: EMPLOYEE CONTRIBUTION RATES FOR GROUP LIFE INSURANCE

The Contributory Insurance rate for the Public Employees’ Retirement System (PERS) will change from 0.55% to 0.50% of salary effective January 1999. This rate change is the result of an accumulation of reserves in the plan due to good group experience and the return on investment of the existing reserves.

The contributory insurance rate of 0.40% for members of the Teachers’ Pension and Annuity Fund (TPAF) remains unchanged for 1999.

As a reminder, the pension contribution reduction for PERS and TPAF from 5% to 4.5% of salary remains in effect through calendar year 1999.

Please take the necessary actions to adjust your payroll systems. If you have any questions, please call (609) 292-7524.

August 14, 1998

TO: State Biweekly Benefits Administrators
State University and College Benefits Administrators
Palisades Interstate Parkway Commission Benefits Administrator
State Human Resource Directors

FROM: Margaret M. McMahon, Director

SUBJECT: OCTOBER OPEN ENROLLMENT FOR 1999 NEW JERSEY STATE EMPLOYEES TAX SAVINGS PROGRAM (Tax$ave '99)

The Annual Open Enrollment for the calendar year 1999 New Jersey State Employees Tax Savings Program (Tax$ave '99) will be conducted from October 1 through November 2, 1998. Employees of the State, state universities and colleges, and the Palisades Interstate Parkway Commission who are eligible for participation in the New Jersey State Health Benefits Program may participate in Tax$ave. Tax$ave consists of three components:

The Premium Option Plan (POP); and
Two Flexible Spending Accounts (FSA's):
1. Unreimbursed Medical Spending Account (UMSA); and
2. Dependent Care Spending Account (DCSA).

Tax$ave offers eligible employees a unique opportunity to increase their available income by reducing their federal tax liability. Each year eligible employees must review their personal financial circumstances and decide if they wish to participate or not. Open enrollment offers employees the opportunity to conduct this review and then act on their decision. Participation in Tax$ave in 1998 does not carry over automatically into 1999. Employees must enroll again to participate in a FSA for calendar year 1999. Employees who do not wish to participate in POP in 1999 must file a POP Declination Form and return it to their benefits administrator by November 2. This letter provides information on the open enrollment for Tax$ave '99 and identifies the publications and support available to assist you in explaining this important benefit program to your employees.

Please do your utmost 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 would join if they were aware of this beneficial tax saving program.

The enclosed Open Enrollment Milestones chart lists the critical dates of the Tax$ave '99 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.

We will conduct 90 minute Tax$ave '99 orientation workshops for employer benefits administrators in Newark on September 10, Sewell on September 15, and Trenton on September 16, 1998. The workshops will include the information in this letter, an overview of the three components of Tax$ave, instructions on the use of our Internet site to educate employees, and a question and answer period. Representatives of the Division of Pensions and Benefits and the Family Security Insurance Agency, Inc. (FSIA), the company contracted to administer the Tax$ave Flexible Spending Accounts for the State, will participate in the workshops. Reservations are required for all workshop locations. Please see the enclosed Tax$ave '99 Employer Workshops orientation schedule and reservation instructions.

We will officially announce the open enrollment to employees paid through Centralized Payroll with their September 18 paycheck. There will be a message on their pay stub and three payroll inserts. The inserts are:

A Tax$ave '99 Newsletter that will announce the open enrollment, outline the components of the program with emphasis on its tax saving advantages, and identify the November 2, 1998 deadline for submission of all election materials. A copy of the newsletter is enclosed;
A FSA pamphlet that will describe the UMSA and DCSA plans. This pamphlet will be similar to the one provided employees in the 1998 plan year open enrollment; and
A POP pamphlet that will explain the advantages and disadvantages of participation. A copy of the POP pamphlet is enclosed.

The other open enrollment materials you will need are the POP declination form and FSA Election Kits. We will send you a supply of the declination forms, a copy of which is attached. A supply of FSA Election Kits will be sent directly to benefits administrators, upon request, by the FSIA for distribution to those employees who request them. The FSA Election Kits from the 1998 open enrollment may still be used for the 1999 open enrollment.

We will provide colleges, universities, and the Palisades Interstate Parkway Commission sufficient copies of the Tax$ave '99 Newsletter and the POP pamphlet for all eligible employees. The FSIA will provide sufficient copies of the FSA pamphlet for distribution to all of your eligible employees. We will also provide a new POP Declination Form you can reproduce.

The FSIA is scheduling regional educational seminars that are open to all eligible employees. The FSIA will also be available to provide educational seminars of about 60 minutes duration (including Q & A) at your workplace to interested employees. These have proven to be very successful educational tools and we strongly encourage you to make them available to your employees. Please see the enclosed request form for dates, times, and locations or to schedule a FSIA representative.

In addition to announcing the open enrollment to employees paid through Centralized Payroll with their September 18 paycheck, we will provide reminder messages about the Tax$ave '99 Open Enrollment to those employees through pay stub messages on October 2 and October 16. A copy of the text of these messages is enclosed. We encourage colleges and universities to provide their employees with similar reminders.

If employees want to pay federal income and Social Security taxes on the salary used to pay their medical and dental premiums in 1999, they must complete a POP form declining the federal tax break they could receive. We will tell employees to obtain the forms from you. We will be instructing employees to return the POP Declination Forms to benefits administrators by November 2, 1998, who must then forward them to payroll. State Biweekly employee POP Declination Forms must reach Centralized Payroll by November 6, 1998. Colleges, universities, and the Palisades Interstate Parkway Commission need to identify their own filing deadlines for POP based on their own payroll schedules.

We will also instruct employees to mail FSA Election Applications directly to the FSIA. All Election Forms must be postmarked no later than November 2, 1998 to be accepted. Those postmarked after November 2, 1998, will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.

Employees enrolled in either the UMSA or DCSA plans for the 1998 calendar year and who wish to continue participation in 1999, may reenroll over the phone by calling the FSIA's automated voice response unit at 1-800-224-4426. The FSIA will inform current participating employees of this opportunity through a direct mailing in September.

New this year is the ability to enroll or reenroll over the Internet. Go to the Tax$ave site and follow the simple directions.

You may access further information on Tax$ave through the Division of Pensions and Benefits Tax$ave Internet home page.

If you have any questions about Tax$ave or the open enrollment, call the FSIA at 1-800-224-4426. To reserve seats at the Tax$ave '99 Employer Orientation and schedule the FSIA to conduct seminars for your employees, please follow the instructions on the enclosures. Your involvement in this open enrollment is the key to the presentation of this valuable benefit program to State employees.

Enclosures:
Open Enrollment Milestones
Tax$ave '99 Employer Workshops
Tax$ave '99 Newsletter
The Premium Option Plan 1999
Declination of POP for Plan Year 1999
Request for Tax$ave '99 Employee Seminars
Tax$ave '99 Open Enrollment Reminder Check Messages

August 13, 1998

TO: All SHBP Benefits Administrators

FROM: Janice F. Nelson,
Assistant Director, State Health Benefits Program

SUBJECT: SHBP COBRA Program Change

The State Health Benefits Program (SHBP) has changed a provision of its COBRA Program as a result of a recent Supreme Court decision, Geissal v. Moore Medical Corporation. This decision states that an employer cannot deny heath care continuation rights to a qualified beneficiary because the beneficiary is covered under Medicare or another group health plan at the time of electing COBRA coverage. The SHBP has already implemented this change and is no longer rejecting applications for COBRA coverage because of other coverage.

New forms and publications needed for employers to implement this program change are enclosed. They include the following:

A revised initial COBRA Notice that employers mail to newly enrolled employees and their covered family members; (NOTE: this federally mandated initial COBRA Notice and the Notice to Employees about Federal Health Insurance Requirements should be mailed as attachments to the employer letter entitled Notification of Health Benefits Rights Under Federal Law. We sent you these last two mentioned items in January 1998);
A supply of COBRA event Notices and COBRA Applications (State, local/educational);
A copy of Instructions (State, local/educational) for the benefits administrator on how to complete the COBRA event Notice and Instructions to eligible beneficiaries on how to complete the COBRA Application;
A copy of Fact Sheet #25, Employer Responsibilities Under COBRA;
A copy of Fact Sheet #26, Health Benefits Options Upon Termination of Employment;
A copy of Fact Sheet # 30, The Continuation of New Jersey State Health Benefits Program Insurance Under COBRA; and
A set of current COBRA rates in effect since July 1, 1998.

Please recycle all obsolete initial COBRA Notices, specific COBRA Notices, Applications, and Instructions and replace them with the ones enclosed. Use of the obsolete publications will mislead qualified beneficiaries as to their COBRA rights under the federal law. Other Division publications that include information about COBRA, such as The Pensions and Benefits Administration Manual and the SHBP Medical Plans Information Handbook, will be revised in the future.

If you have specific questions, call Client Services at (609) 292-7524. Or call our Employer Hotline at (609) 777-1082, leave a detailed message and a counselor will return your call.

June 8, 1998

TO: State Biweekly Payroll Benefits Administrators

FROM: State Health Benefits Program

SUBJECT: New Dental Expense Plan Identification Cards

Employees currently enrolled in the State Dental Expense Plan (the traditional dental indemnity plan administered by Prudential) are receiving new dental plan identification cards that will allow them to access the new discounted network of dental providers called the Prudential Dental Organization (PDO). Using network providers allows employees to take advantage of discounted services which will reduce their out-of-pocket expenses. The coinsurance, 20% not paid by Prudential, will be applied to discounted charges and there will be no charges in excess of reasonable and customary allowances.

All State employees currently enrolled in the Dental Expense Plan should be receiving these new Dental Expense Plan identification cards. Although information about this new benefit was provided in the dental flyer distributed for open enrollment, employees might be confused as to why they are receiving these new cards. Please explain that they are still enrolled in the Dental Expense Plan and that this is purely an enhancement to the dental plan. For more information, refer them to Fact Sheet # 37, State Employee Group Dental Program (4/98), or page 13 of the new State Employee Group Dental Program booklet, both of which are available through the Pensions and Benefits Home page on the Internet. Employees may also call Prudential at 1-800-282-0555 for more information about the network.

Since the cards now being mailed are based on current enrollments, employees who transferred out of the Dental Expense Plan during open enrollment will also receive a card. It can be used until their new plan enrollment takes effect on July 4, 1998.

New Prudential Claims Office: Prudential's claim service location serving the State's Dental Expense Plan has changed. Claims will now be paid through an office located in Albany, New York. A new dental claim form reflecting the new address and telephone number has been developed. A copy is attached; you will receive a supply of these new forms. Until you receive the new forms, the old forms are still usable as claims received in the old claims center will be forwarded appropriately.

The information described above is available on our Internet Home Page at the following address (URL): http://www.state.nj.us/treasury/pensions

If you have specific questions, call Client Services at (609) 292-7254. Or call our Employer Hotline at (609) 777-1082, leave a detailed message and a counselor will return your call.

March 19, 1998

TO: Department Human Resource Directors
State Biweekly Payroll Benefits Administrators
State College and University Human Resource Directors
State Monthly Benefits Administrators

FROM: Janice F. Nelson
Assistant Director, SHBP

SUBJECT: State Employee Group Dental Plan Open Enrollment Information

This letter provides information concerning changes in the State Employee Group Dental Program approved by the State Health Benefits Commission for the 1998 annual open enrollment. The open enrollment runs from April 1 through April 30 with the coverages/changeseffective July 4 for employees paid through the State's Centralized Payroll Unit and July 1 for all others.

CIGNA DPO Added
All current dental carriers are continuing their participation in the State Employee Group Dental Program this year. One Dental Provider Organization (DPO), CIGNA Dental Healthcare (DPO #5) is rejoining the Program effective July 1. CIGNA will provide services to our members throughout New Jersey and in the counties of New York and Pennsylvania that are adjacent to New Jersey. The member services telephone number for information about CIGNA DPO is 1-800-367-1037. Callers can use this number to identify participating dentists in their zip code area through a Voice Response Unit and have a list faxed to them. The marketing representative for CIGNA Dental, for invitations to health fairs, is Marsha Robinson at 973-660-4031., who also represents CIGNA HMO. One call will get you representatives from both the DPO and HMO plans at your health fairs.

This addition of CIGNA to the Program occurred after the open enrollment publications were printed. Therefore, none of those materials prepared by the Division includes this information. A message about the availability of CIGNA DPO will be placed on the April 3rd pay stubs of employees paid through the State's Centralized Payroll Unit. A copy of that message is attached. Employers should use whatever opportunities are available to them to inform employees of this newly added plan.

DPO Program Changes
Changes have been made to the DPO program. The SHBP has required more comprehensive reporting, grievance, and quality control requirements that should improve the service provided our members participating in the DPO program. Additionally, the copayment schedule for the DPOs for basic and major services has been revisupdated. Copayments had not been changed since the Pprogram's inception with the result that dental providers have been reluctant to service our members because they feel inadequately compensated. Two DPOs left our Program last year and others indicated they might leave primarily because of the outdated copayment schedule. The new copayments structure addresses these inadequacies and increases the compensation dental providers receive directly from the member. This should cause dental providers to be more willing to service our members. A comparison of our program with other programs is illustrates that our members still have the best DPO Program available.

Provider Network Added to the Dental Expense Plan
A new feature is also being added to the Dental Expense Plan. A provider network will be added to the Dental Expense Plan which will operate much like the P.A.C.E. network in the medical program's Traditional Plan. The member is under no obligation to use the network of providers. The network, called the Prudential Dental Organization, will consist of dentists under contract to the plan who agree to provide dental services at a discounted rate. Since the total cost of a service is less with a network dentist, the member's 20 percent coinsurance will be less if the memberthey uses the network. We hope to have this service it will be in place by May 1. Prior to the effective date of this service we will provide you with information about the participating providers in the network, and send you a written description detailing how the network will operate.

New State Employee Group Dental Program Handbook
As a result of the changes to both the Dental Expense Plan and the DPOs, we are printing a new State Employee Group Dental Program Handbook, which we hope to have in your hands in early April for distribution to your employees. We will send you a pre-production copy later this month for your information and reference. The new State Employee Group Dental Program Handbook will also be available on the SHBP Home Page on the Internet (http://www.state.nj.us/treasury/pensions/shbp.htm). We are also updating Fact Sheet #37, State Employee Group Dental Program, which provides a summary of the benefits in the Dental Expense Plan and the DPOs.

Dental Rates
The dental rates for FY99 have been approved by the State Health Benefits Commission. The new rates represent a three percent increase for the DPOs and a nine percent increase for the Dental Expense Plan. A rate chart is attached.

No Prescription Drug Coverage Through HMOs
In an unrelated matter, several HMOs have published marketing materials for this open enrollment period that provide incorrect information regarding prescription drug coverage available in the coverage they provide to State employees. HMO plans available to active employees of the State do not contain any prescription drug coverage because active employees have drug coverage under the State Prescription Drug Plan. These HMO plans do, however, provide prescription drug coverage for State retirees because retirees do not have drug coverage under the State Prescription Drug Plan.

If you have any questions, please call Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next work day.

attachments

State Employee Group Dental Program Open Enrollment Information

February 1998

TO: Participating Local Employers

FROM: Janice F. Nelson
Assistant Director,
State Health Benefits Program

SUBJECT: SHBP Local Group Plan and Rate Actions

This letter summarizes the actions concerning HMO plan changes and rates taken by the State Health Benefits Commission on January 30, 1998. My letter to you in December 1997 described rate actions taken by the Commission regarding the Traditional Plan, NJ PLUS, and the State Prescription Drug plan.

The Commission took the following actions:

HMOs Rates With and Without Drugs. The Commission voted to have each HMO offer plans with and without prescription drug coverage. The HMO plans with prescription drug coverage will be offered to active employees of local employers who offer no separate prescription drug plan and to all retirees. The HMO plans without prescription drug coverage will be offered to active employees of local employers who offer a separate prescription drug plan. This decision ensures all employees and retirees have adequate prescription drug coverage, reduces coverage redundancy, reduces costs for employers who offer a separate prescription plan, and gives employees and retirees who need drug coverage a broader selection of medical plans than they had previously. Local group rates for HMOs without drug coverage showed a slight increase, somewhat below national trends. Local group rates for HMOs with drug coverage showed greater increases, primarily because of the cost of adding the prescription drug coverage. HMO rates for retirees increased, also primarily because of the cost of adding the prescription drug coverage.

HMO Standards. The Commission adopted a set of minimum operating and coverage standards for managed care plans to ensure an adequate level of care is available to members. This also makes participating HMOs more uniform,

thereby easing member choice between plans. A summary description of the new standards is included in the Health Capsule and the State Health Benefits Program Plan Comparison Summary, which will be sent you later this month.

Plan Changes (effective on July 1, 1998). QualMed HMO will no longer provide coverage to SHBP participants. Prudential Healthcare HMO will reduce its service area to New Jersey and will no longer provide coverage in New York, Pennsylvania, or Connecticut. Physicians Healthcare Plan will be merged with HMO Blue (through acquisition). Ten HMOs will therefore be available to employees during the upcoming open enrollment.

NOTE: All QualMed members and Prudential Healthcare HMO members who live outside New Jersey will have to change their coverage during the open enrollment. Failure to do so will result in their having no coverage beginning July 1, 1998. Prudential Healthcare HMO members who live in New Jersey but have a Primary Care Provider located outside NJ will have to contact Prudential to select a new Primary Care Provider or switch plans during the open enrollment. Members of Physicians Healthcare Plan will be automatically transferred to HMO Blue unless they change their coverage during the open enrollment.

We have enclosed for your use SHBP rate charts for employees, with and without drugs, and a rate chart for retirees, with drugs. We will send you informational materials concerning the HMO plan changes and minimum standards discussed above for distribution to your employees later this month. These materials will include sufficient copies for all your employees of the open enrollment edition of the Health Capsule and the State Health Benefits Program Plan Comparison Summary.

Finally, we have enclosed a copy of the New Jersey HMOs: Performance Report produced by the Department of Health and Senior Services. This report card is a tool available to New Jersey residents to assist them in evaluating and selecting a health insurance carrier. Information on how to order more copies is provided in the report. The report is also available on the Internet at the following address:

http://www.state.nj.us/health

If you have questions about the information in this letter, contact Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

attachments

January 1998

TO: Participating SHBP Employers

FROM: Janice F. Nelson
Assistant Director for Health Benefits

SUBJECT: Required Notices To SHBP Enrollees

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 employers group health insurance. State Health Benefits Program (SHBP) participating employers have been providing initial notices for several years concerning the Consolidated Omnibus Budget Reconciliation Act (COBRA) program. To this must now be added an initial notice about the federal Health Insurance and Portability Accounting Act (HIPAA).

The attached documents provide everything you, as an employer, need to comply with the initial notice requirements of both COBRA and HIPAA. Enclosure one is a cover letter forwarding the required notices. You should modify this enclosure to reflect its being mailed from your location to an employee and dependents. 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 second and third enclosures can be used "as is" as attachments to your modified enclosure one. Enclosure two updates and replaces the previous COBRA initial notification provided you. Enclosure three is a new HIPAA notice.

Federal law also 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. The notice at enclosure three will meet this requirement. You will have to mail a copy to all your SHBP enrolled employees to satisfy the requirement to properly notify dependents. Please complete your mailing prior to the annual open enrollment period.

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

enc.

ENCLOSURE 1

(Employer Letterhead)

(Date)

TO (Employee Name) AND FAMILY

(Address)

FROM: (Employer)

SUBJECT: Notification of Health Benefits Rights Under Federal Law

This letter provides information about health benefits that federal law requires your employer to send to you and your family members enrolled under your State Health Benefits Program (SHBP) coverage. Everyone enrolled under your SHBP coverage should read this information. You should keep it for future reference.

The first enclosure concerns the federal program known as Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows you or your covered dependents to extend health benefits coverage under the SHBP employer group plan in certain cases where you would otherwise lose that coverage. See the first enclosure for details about your rights under COBRA.

The second enclosure provides information from several federal laws enacted in 1996. These include the Health Insurance Portability and Accounting Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act. These laws establish certain coverage requirements applicable to most employer health insurance plans. Plans such as the SHBP may exempt themselves from some of these requirements as long as participants of the plan are notified of the exemption. See the second enclosure for details about the health insurance coverage required by these federal laws.

There is nothing that you or your family members have to do as a result of this mailing. The sole purpose is to inform you of your rights under these federal laws and, by doing so, to comply with the notification requirements contained in the laws. If you have any questions concerning this package, you should contact (employer human resource/benefits manager contact information) or the Division of Pensions and Benefits at (609) 292-7524.

The Notice (Form HC-0427-1297) has been revised, click here for the new revised Notice.

December 1997

TO: Participating Local Employers

FROM: Janice F. Nelson
Assistant Director,

State Health Benefits Program

SUBJECT: Local Group Rate Actions

At its December 19, 1997 public meeting, the State Health Benefits Commission established fiscal year rates for the Local Group of the State Health Benefits Program which become effective July 1, 1998. The Commission established rates for the Traditional Plan, NJ PLUS, and the State Prescription Drug Plan. HMO rates will be established in Commission meetings to be scheduled in January 1998. Complete rate charts will be provided to you shortly after the HMO rates are set.

Changes shown apply to all levels of coverage within each plan.

EDUCATION EMPLOYERS

PLAN ACTIVE RATE CHANGE RETIREE RATE CHANGE

Traditional Plan +3.5% +3.5%

NJ PLUS -13.0% No change

State Prescription +13.6% NA
Drug

ALL OTHER EMPLOYERS

PLAN ACTIVE RATE CHANGE RETIREE RATE CHANGE

Traditional Plan +3.5% +3.5%

NJ PLUS -5.0% No change

State Prescription +13.6% NA
Drug

Performance of the SHBP has been relatively good in 1997 compared to similar type plans elsewhere. Survey data and industry trends reflect increases of from 9-11% for Traditional type plans, 5-7% increases for NJ PLUS type plans, and 12-15% increases for prescription plans.

If you have questions, contact Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will call you on the next business day.

TO: Participating SHBP Employers

FROM: Janice F. Nelson
Assistant Director for Health Benefits

SUBJECT: Required Notices To SHBP Enrollees

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