The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 contained a number of provisions that affected the State Health Benefits Program (SHBP) and its participating employers. The SHBP implemented several actions during 1997 and 1998 to comply with the requirements of HIPAA. These actions included:

At the request of the State Health Benefits Commission (Commission), Buck Consultants has conducted an analysis of current mental health coverage under the Traditional Plan and NJ PLUS. They have outlined several mental health plan design alternatives that would be compliant with HIPAA requirements. The Commission will evaluate these alternatives for possible implementation in a future plan year. Since the mental health limitations currently in effect are detailed in the law governing the SHBP, a change in plan design may require legislative action.

A mental health parity exemption must be filed each plan year if a group plan is not HIPAA compliant. The Commission has voted to file an exemption for 1999. Therefore, mental health benefits will remain unchanged through 1999. Since HIPAA has a continuing notification requirement, a revised compliance notice reflecting this exemption from federal mental health parity requirements is attached for your use with newly enrolling employees and family members. You should send it at the same time you send the initial notice of COBRA rights.

A brief refresher on HIPAA is also attached for your information. 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 return your call on the next business day.

encl.

FEDERAL HEALTH INSURANCE ACTS OF 1996

Three pieces of federal legislation were enacted in 1996 that established several requirements to group health plans and insured health products. These were the Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act. HIPAA included the reporting requirements covering all three pieces of legislation and is therefore used to refer to all three acts. The requirements of the legislation and SHBP status on each requirement are show below:

FEDERAL REQUIREMENT	SHBP STATUS
Issue Certificates of Coverage to all employees and or dependents who lose coverage.	Participating employers provided (August 1997) sample certificate to use to meet this requirement.
Limit restrictions of coverage for pre-existing conditions.	All SHBP plans exceed this requirement since they have no pre-existing condition restrictions.
Offer a special enrollment period toindividuals who meet certain conditions, i.e., an employee or employee's dependent, who declined coverage because of other medical coverage, must have an opportunity for special enrollment should the other coverage end.	All SHBP plans will comply with this HIPAA requirement for employees and family members.
Eliminate discrimination against participants and beneficiaries based on health status.	All SHBP plans comply with this requirement. (Note: the SHBP "actively at work" requirement is waived only for employees not at work due to illness).
Provide a minimum level of hospital coverage for newborns and mothers.	All SHBP plans meet this requirement.
Provide parity in mental health benefits	All SHBP HMO plans meet this requirement. The SHBP has exempted the Traditional Plan and NJ PLUS for 1998 and 1999 from mental health parity - different limits continue to exist for these plans.
Provide annual notice to covered members of any plan provisions not incompliance with HIPAA requirements.	Participating employers provided (December 1998 and December 1999) sample certificate to use to meet this requirement.

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Notice to State Health Benefits Program Participants about Compliance with Federal Health Insurance Requirements

This notice is being provided to inform you about State Health Benefits Program (SHBP) conformance with federal health insurance regulations.

The Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act, federal laws enacted in 1996, contain a number of provisions that have affected the SHBP since January, 1998. HIPAA required all group health plans to implement the following provisions that are contained in the three federal laws:

#2 - Offer a special enrollment period to employees and dependents who do not enroll in the plan when initially eligible because they have other coverage, and who subsequently lose that coverage;

#3 - Eliminate discrimination against participants and beneficiaries based on health status;

#4 - Provide a minimum level of hospital coverage for newborns and mothers, generally 48 hours for a vaginal delivery and 96 hours for a cesarean delivery; and

#5 - Provide parity in mental health benefits, that is, any dollar limitations applied to mental health treatment cannot be lower than those on medical and surgical benefits.

Since January 1, 1998,

The SHBP has conducted a study to review the design of mental health benefits in the Traditional Plan and NJ PLUS. Several alternatives have been proposed, which the Commission will evaluate for possible implementation in future plan years.

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The State Health Benefits Program (SHBP) Open Enrollment period for local employees will begin on March 1, 1999, and end on March 31, 1999. Completed employer certified applications must arrive at the Health Benefits Bureau no later than April 9, 1999. All changes to coverage made during Open Enrollment will be effective on July 1, 1999.

The State Health Benefits Commission will finalize rates for July 1, 1999 later this month. We will send you a chart of the approved rates and plan information in mid February.

Three revised SHBP publications will be available to your employees during this Open Enrollment. A description of the publications and projected delivery dates follow:

A revised 1999 NJ PLUS Physician and Hospital Directory will be shipped in mid to late February. Initially, you will receive ten copies of this directory. You may order additional copies of the NJ PLUS Physician and Hospital Directory using the Request for Open Enrollment Support Form at enclosure 1.

Revised SHBP Plan Comparison Summary charts will be mailed to you by the end of February. You will be supplied sufficient copies for all of your SHBP participating employees.

A special Open Enrollment issue of the Health Capsule will be provided to you in the same shipment with the plan comparison chart mentioned above for distribution to your employees. This newsletter will provide information of practical use to your employees about the SHBP and Open Enrollment. It will include updates on any health plan name, service area, and benefit changes. It will also include important information about the federal HIPAA regulations.

The Division of Pensions and Benefits is available to support your Open Enrollment program. If you are having a health fair for your employees, a representative from Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ) or the Division of Pensions and Benefits, on behalf of the SHBP, can attend and answer questions regarding the Traditional Plan, NJ PLUS and the HMOs.

If you wish to schedule educational presentations for your employees about the various plans available through the SHBP, that request can also be accommodated. You would have to provide a suitable room and a minimum of 10-15 employees for each session. Each session will last about 50 minutes. Use the Request for Open Enrollment Support Form attached as enclosure 1 to schedule your health fair or educational seminars. This form may be mailed or faxed to the address/number listed on the form. You may also contact your assigned Horizon BCBSNJ Account Manager to schedule your request. To facilitate scheduling and maximize your chances of our fulfilling your request, please submit your request as soon as possible.

We will be conducting regional seminars for employer benefits administrators during February. The seminars will provide an update on SHBP plan changes that have recently occurred, and an explanation of the new rates effective July 1999. A registration form listing seminar dates is attached as enclosure 2. Directions to the seminar sites are provided as enclosures 3a through 3e.

A 1999 SHBP Open Enrollment Milestone Chart that lists key events and dates is attached as enclosure 4. Separate this enclosure and use it to monitor the tasks you must accomplish and the receipt of materials we have promised in this letter.

If you have any questions about the Open Enrollment or the information in this letter, please call the Division of Pensions and Benefits' Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next work day.

Enclosures

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February 8, 1999

HIP Health Plan of New Jersey is being dissolved effective the close of business of March 31, 1999. Therefore, a Special Open Enrollment for employees enrolled in HIP will begin immediately. Properly completed New Jersey State Health Benefits Program applications, certified by the employer, must be at the Health Benefits Bureau no later than March 5, 1999 to ensure enrollment in the new health plan by the date HIP coverage ends. The effective date of plan changes made during the Special Open Enrollment will be based on the date of receipt of the applications at the Division. Applications received by February 19 will be effective on March 13. Applications received by March 5 will effective on March 27, 1999. Applications received after March 5, 1999 will still be processed, however, since HIP will be dissolved on March 31, 1999, a late plan change may result in a delay in new coverage.

If our records reflect coverage in HIP by any employees in your payroll location, a list of those employees is attached. Special Open Enrollment Applications should not be held until the end of the Open Enrollment, but should be submitted as received with the attached cover sheet. They should not be mixed with applications for the 1999 Open Enrollment, new employees, or regular coverage changes.

The Special Open Enrollment will follow normal Open Enrollment rules. That is, eligible employees may add dependents in addition to changing plans. The Special Open Enrollment is restricted, however, to medical plans only. Information provided for the 1998 Annual Open Enrollment is still valid for this Special Open Enrollment. Employees who wish to see if their current physician participates in other SHBP managed care plans should check the Unified Provider Directory at the following address on the Internet:

http://www.state.nj.us/treasury/pensions/shbp.htm

An employee who changes plans during this Special HIP Open Enrollment may also participate in the regular 1999 Open Enrollment.

Please do not allow new employees to enroll in HIP Health Plan of NJ. If a new employee has recently elected HIP and the coverage has not yet started, contact us to arrange replacement coverage.

If you have any questions, please contact Client Services at (609) 292-7524.

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February 8, 1999

HIP Health Plan of New Jersey is being dissolved effective the close of business on March 31, 1999. Therefore, a Special Open Enrollment for employees enrolled in HIP will begin immediately. Properly completed New Jersey State Health Benefits Program applications, certified by the employer, must be at the Health Benefits Bureau no later than March 15, 1999 to ensure enrollment in the new health plan by April 1, 1999 when HIP coverage ends. Applications received after March 15, 1999 will still be processed, however, since HIP will be dissolved on March 31, 1999, a late plan change may result in a delay in new coverage.

If our records reflect coverage in HIP by any of your employees, a list of those employees is attached. Special Open Enrollment Applications should not be held until the end of the Open Enrollment, but should be submitted as received with the attached cover sheet. They should not be mixed with applications for the 1999 Open Enrollment, new employees, or regular coverage changes.

The Special Open Enrollment will follow normal Open Enrollment rules. That is, eligible employees may add dependents in addition to changing plans. The Special Open Enrollment is restricted, however, to medical plans only. Information provided for the 1998 Annual Open Enrollment is still valid for this Special Open Enrollment. Employees who wish to see if their current physician participates in other SHBP managed care plans should check the Unified Provider Directory at the following address on the Internet:

http://www.state.nj.us/treasury/pensions/shbp.htm

An employee who changes plans during this Special Open Enrollment may also participate in the regular 1999 Open Enrollment.

Please do not allow new employees to enroll in HIP Health Plan of NJ. If a new employee has recently elected HIP and the coverage has not yet started, contact us to arrange replacement coverage.

If you have any questions, please contact Client Services at (609) 292-7524.

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February 19, 1999

Enclosed you will find approved rates and plan information that will assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

In addition to benefit changes to the health plans offered by the SHBP since the last Open Enrollment, there have been changes to some of the plan names, service coverage areas, and general contact information. The following list provides important changes since the last plan year.

• Exception: For NJ PLUS members with a separate prescription drug card plan that does not cover drugs used for an approved In Vitro Fertilization (IVF) program, NJ PLUS will continue to cover the necessary IVF drugs.

• Traditional Plan, Plan #002, Beginning July 1, 1999, employees who are members of the Traditional Plan and have access to a separate prescription drug plan through their employer will no longer be able to submit prescription drug copayment amounts to Horizon Blue Cross Blue Shield of New Jersey for reimbursement through major medical benefits.
  Traditional Plan members whose employer does not offer a separate prescription drug plan are not affected by this change. They will continue to receive reimbursement for prescription drug costs under their Traditional Plan's major medical benefits.

  Exception: For Traditional Plan members with a separate prescription drug card plan that does not cover drugs used for an approved In Vitro Fertilization (IVF) program, the Traditional Plan will continue to cover the necessary IVF drugs.

• HMO Blue, HMO #010, has changed its name to Horizon HMO.

• HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.

• Prudential HealthCare, HMO #017, may be purchased by Aetna/US Healthcare, HMO #019. Specific details on the sale are yet to be worked out and a final date for the acquisition is undetermined. Prudential HealthCare will remain a separate plan within the SHBP until further notice.

• Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.

• CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.

• Oxford Health Plan, HMO #028, no longer services Pennsylvania. As of January 1, 1999, the vendor for Oxford's prescription drug benefits changed to Diversified Pharmaceutical Services, Inc. Oxford members whose employer does not offer a separate prescription drug plan and receive their prescription drug benefits through the HMO can call Diversified's customer service line at 1-800-417-8172 for help with questions regarding their prescription drug benefits.

• NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 1, 1999.

• First Option Health Plan, HMO #034, changed its name to Physicians Health Services.

In addition, there have been the following changes to the State Prescription Drug Program for the July 1999 plan year:

• Mail order - the mail order component of the State Prescription Drug Program will continue, but will reinstate a $5 copayment for name brand drugs and a $1 copayment for generic drugs that has been waived for the past few years. This still represents a savings equivalent to two copayments for a 90 day supply.

  The above information is current as of the date of this letter. The special Open Enrollment edition of the Health Capsule newsletter will provide more details of plan changes indicated above. You will be notified of any future changes that affect your employees.

  The new SHBP rates for local employer groups, effective July 1, 1999, are enclosed. The rate changes, reflected in the summary chart below, compare favorably nationwide. Increases of similar type plans industry wide range from 1% to 4% higher than SHBP increases.

     
  PERCENTAGE OF RATE CHANGE FOR PLAN YEAR EFFECTIVE JULY 1, 1999 

  PLAN	ACTIVE EMPLOYEES
  	Drug Coverage Included in Medical Plan	No Drug Coverage in Medical Plan
  NJ PLUS	+8.0%	+5.0%
  Traditional Plan	+9.5%	+7.5%
  Horizon HMO, #010	+3.8%	+1.2%
  Prudential HealthCare HMO, #017	+9.2%	+7.5%
  Aetna/US Healthcare, #019	+6.0%	+4.5%
  CIGNA HealthCare, #020	-5.0%	-5.0%

  PERCENTAGE OF RATE CHANGE FOR PLAN YEAR EFFECTIVE JULY 1, 1999 
  

  PLAN	ACTIVE EMPLOYEES
  	Drug Coverage Included in Medical Plan	No Drug Coverage in Medical Plan
  Oxford Health Plan, #028	+7.9%	+7.9%
  AmeriHealth HMO Plan, #033	+9.2%	+5.3%
  Physicians Health Services, #034	+6.8%	+4.6%
  University Health Plans, Inc, #036	+9.0%	+8.2%
  State Prescription Plan	NA	+13.9%

  We have included rate charts for employees with and without prescription drug coverage. Rate charts for retirees will be sent in March as we have not yet completed action on the Medicare HMO rates. In addition, we have enclosed a chart showing the available SHBP medical plans with contact information and a chart providing contact names for arranging a Health Fair at your location.

  During the first week of March, you will receive your initial ten copies of the NJ PLUS Physician and Hospital Directory, and sufficient copies of the SHBP Plan Comparison Summary chart and the Health Capsule newsletter for distribution to all of your employees.

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

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February 23, 1999

 

The Public Employees Retirement System (PERS) Board of Trustees recently adopted N.J.A.C. 17:2-2.6. This rule clarifies the eligibility requirements for enrollment into the PERS of professors and instructors employed on a temporary, provisional or adjunct basis at public institutions of higher education. In accordance with the rule, a professor or instructor not employed in a regularly appointed teaching or administrative staff position, civil service position, or regularly budgeted positions will be eligible for enrollment in PERS if (s)he

A professor or instructor who teaches courses which provide no academic credit and vary in length from the normal school term will not be eligible for enrollment, or service and salary credit on the basis of those courses.

Employees meeting the criteria for enrollment should be enrolled in the PERS. Employees not meeting the criteria for enrollment should not be enrolled in the PERS. Contributions that may have been made from employees not eligible for membership based upon this rule should discontinue as of April 1, 1999. Any contributions made and service earned will not be taken away for those already credited for such service. If PERS membership becomes inactive because of the application of this rule, the membership of those with less than ten years of service credit will expire in two years in accordance with system rules, unless the member obtains employment that meets eligibility requirements.

If you have any questions, please call Client Services at (609) 292-7524.

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March 3, 1999

Enclosed you will find rates and plan information that will help you assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

In addition to benefit changes to the health plans offered by the SHBP since the last Open Enrollment, there have been changes to some of the plan names, service coverage areas, and general contact information. The following list provides important changes since the last plan year.

• Beginning July 1, 1999, State employees who are members of the NJ PLUS will no longer be able to submit prescription drug copayment amounts for reimbursement through NJ PLUS.

• Traditional Plan, Plan #002 - Beginning July 1, 1999, State employees who are members of the Traditional Plan will no longer be able to submit prescription drug copayment amounts for reimbursement through major medical benefits.
• HMO Blue, HMO #010, has changed its name to Horizon HMO.
• HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.
• Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.
• CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut, and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.
• Oxford Health Plan, HMO #028, no longer services Pennsylvania.
• NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, State monthly employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 1, 1999.
• First Option Health Plan, HMO #034, changed its name to Physicians Health Services and expanded its service areas to include all of Connecticut as well as Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester counties of New York.

The following changes have been made to the State Prescription Drug Program for the plan year beginning July 1999.

• In addition, the following change to the State Dental Program is effective for the plan year beginning July 1999.

• Two DPO plans will not be continued for the new plan year - Dental Group of New Jersey, Inc., DPO #314 and John D. Kernan, DMD, DPO #318. Employees enrolled in either of these plans must select a new dental plan during the Open Enrollment or they will be without dental coverage after July 1, 1999.
• Managed Dental Choice, DPO #317, has changed its name to Horizon Dental Choice.

The new SHBP rates for State employer groups, effective July 1, 1999, are enclosed. The rate changes, reflected in the summary chart below, compare favorably nationwide. Increases of similar type plans industry wide range from 1% to 4% higher than our SHBP increases.

During the first week of March, you will receive your initial ten copies of the NJ PLUS Physician and Hospital Directory. You may order more directories using the enclosed Request for Open Enrollment Support form. Participating provider information for all SHBP plans is available in the Unified Provider Directory through our SHBP homepage at: http://www.state.nj.us/treasury/pensions/shbp.htm

Sufficient copies of the SHBP Plan Comparison Summary chart and the Open Enrollment issue of the Health Capsule newsletter, will be shipped to your location approximately March 15. Please distribute these informative publications to all participating SHBP members. State employees paid through the State's Centralized Payroll Unit will receive these publications with their March 19 pay checks. An Open Enrollment announcement flyer providing a list of medical and dental plans and their costs has been prepared and enclosed. This generic flyer for State employees not paid through Centralized Payroll is a master copy and may be reproduced to meet your needs. In addition, if we provided you with a tailored flyer for your location last year, we have included a copy for your reference - Do not use this flyer. At your request, we will again tailor this flyer for 1999 Open Enrollment. Contact Kathy Coates, no later than March 19, by telephone at (609) 633-1462, or Fax (609) 633-9590, with the information you require on your flyer, e.g. date of first deduction, number of pay periods over which the deductions are taken, when and to whom applications must be submitted. We will provide you with a customized master copy for you to reproduce.

The Division of Pensions and Benefits is available to support your Open Enrollment program. If you are having a health fair for your employees, a representative from Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ), on behalf of the SHBP, or from the Division of Pensions and Benefits, can attend and answer questions regarding the Traditional Plan, NJ PLUS, and the HMOs. Lists of all the SHBP medical and dental plans with their service areas and telephone numbers are enclosed for your use in identifying and contacting HMOs and DPOs to attend your health fair. If you wish to schedule educational presentations for your employees about the various plans available through the SHBP, that request can also be accommodated. You must provide a suitable room and a minimum of 10-15 employees for each session. Each session will last about 50 minutes. Use the enclosed Request for Open Enrollment Support form to schedule your health fair or educational seminars. This form may be mailed or faxed to the address/number listed on the form. You may also contact your assigned Horizon BCBSNJ Account Manager to schedule your request. To facilitate scheduling and maximize your chances of having your request fulfilled, please submit your request as soon as possible.

We will be conducting seminars for benefits administrators on March 16 in Trenton (State Police Museum - West Trenton) and on March 18 in Newark (Horizon BCBSNJ Auditorium). The seminars will provide an update on the new rates for premium sharing effective July 1, 1999, and SHBP medical and dental plan changes that have occurred since the last open enrollment. A registration form listing seminar dates is attached. Directions to the seminar sites are enclosed.

A 1999 SHBP Open Enrollment Milestone Chart that lists key events and dates is attached. Use this chart to monitor the tasks you must accomplish and the receipt of the materials we have promised in this letter.

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

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March 3, 1999

The State Health Benefits Program (SHBP) Open Enrollment period for State biweekly employees will begin on April 1, 1999, and end on April 30, 1999. Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than May 5, 1999. Open enrollment applications should not be sent with other applications submitted at the same time. Also, a member's medical and dental applications should be sent together to facilitate processing. All changes to coverage made during this Open Enrollment period will be effective on July 3, 1999 with any required deductions taken beginning with pay period 14 (pay check of June 25, 1999).

Enclosed you will find rates and plan information that will help you assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

In addition to benefit changes to the health plans offered by the SHBP since the last Open Enrollment, there have been changes to some of the plan names, service coverage areas, and general contact information. The following list provides important changes since the last plan year.

• Beginning July 1, 1999, State employees who are members of the NJ PLUS will no longer be able to submit prescription drug copayment amounts for reimbursement through NJ PLUS.

• Traditional Plan, Plan #002 - Beginning July 1, 1999, State employees who are members of the Traditional Plan will no longer be able to submit prescription drug copayment amounts for reimbursement through major medical benefits.

• HMO Blue, HMO #010, has changed its name to Horizon HMO.

• HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.

• Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.

• CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut, and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.

• Oxford Health Plan, HMO #028, no longer services Pennsylvania.

• NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, State biweekly employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 3, 1999.

• First Option Health Plan, HMO #034, changed its name to Physicians Health Services and expanded its service areas to include all of Connecticut as well as Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester counties of New York.

The following changes have been made to the State Prescription Drug Program for the plan year beginning July 1999.

• Mail order - the mail order component of the State Prescription Drug Program will continue, but the $5 copayment for name brand drugs and a $1 copayment for generic drugs will be reinstated. This still represents a savings equivalent to two copayments for a 90 day supply.

In addition, the following change to the State Dental Program is effective for the plan year beginning July 1999.

March 15, 1999

The Division of Pensions and Benefits is considering changing a rule concerning the reporting of salary for part-time hourly employees enrolled in the Public Employees' Retirement System (PERS) and would like to get your input on whether you would like to see this rule changed. The Division has received comments from many employers and employees on this subject. Employers are concerned about problems with estimating the annual salary and employees have complained about not having their benefit calculated on actual salary. Please complete the enclosed survey on this issue and return it to our office by March 31, 1999. You may return the survey by mail or fax it to us at (609) 396-9784.

Currently, employers are asked to estimate the annual salary that a part-time hourly employee will receive, divide that into even monthly amounts, and report that salary on each quarterly report. The advantage to this method is that the salary and pension deductions remain constant from month to month, thereby requiring no changes to the quarterly report of salary and contributions when the employee's hours vary.

The proposed change to this rule would require employers to report the actual base salary paid to the employee. This would eliminate the guesswork of estimating the hours of work and annual salary while simplifying payroll procedures since deductions would be based on actual salary. It would also eliminate any requirement to manage the hours worked in any given quarter to approximate the estimate. At the same time, however, it would require the employer to adjust the quarterly report each time to reflect the change in salary, pension contribution and contributory life insurance contribution since the last quarter. Benefits would be calculated on actual salary paid, as many employees have requested, rather than estimated salary.

Please note that this change would affect part-time hourly employees only. All other employees would continue to be reported as they have in the past. If you have any questions regarding the survey, please contact the Division's Audit/Billing Section at (609) 984-4808.

enclosure

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TO: Benefits Managers, SHBP Participating Local Employers Benefits Managers, SHBP Participating Educational Employers

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

DATE: April 15, 1999

SUBJECT: Legislation Change: SHBP Participating Employer Payment of Post-Retirement Medical Costs

Governor Whitman recently signed into law, Chapter 48, P.L. 1999. This law changes the rules of the State Health Benefits Program (SHBP) regarding a participating employer's payment of medical coverage for its retirees. Chapter 48 provides considerable flexibility to employers to manage their post-retirement medical costs and brings SHBP eligibility standards for employer paid coverage into alignment with local government laws. The new law essentially does the following:

It gives an employer greater flexibility in defining which employees qualify for post retirement medical benefits by using the age and service requirements of the local government laws (NJSA 40A:10-23).

It allows an employer to negotiate payment obligations for post-retirement medical coverage.

It is important to note that Chapter 48 applies only to post-retirement medical coverage. It does not allow the SHBP participating employer to negotiate payment obligations for coverage of its active employees.

The attached set of Questions and Answers (Qs & As) describe the new law and its impact on SHBP rules regarding employer payment of post-retirement medical coverage. The Chapter 48 Resolution form, required by the law and described in the Qs & As, is available upon request.

If you have any questions after reading the Qs & As, you may write us at the address above, Email us at "pensions.nj@treas.state.nj.us", or call the SHBP Employer Hotline at (609) 777-1082. Leave your name, location, telephone number, and question and a staff member will get back to you.

attachment

Chapter 48, P.L. 1999 Questions and Answers

General

1. Q - What is Chapter 48, P.L. 1999?

A - Chapter 48, P.L. 1999 is a new law that changes the State Health Benefits Program (SHBP) rules applicable to the eligibility requirements and payment of SHBP premiums for retirees. It is applicable to public employers other than the State, State colleges and universities, the Palisades Interstate Parkway Commission, and the New Jersey Commerce and Economic Growth Commission.

2. Q - What did the old law require?

A - The old SHBP law, known as Chapter 88, required participating employers to treat all their retirees in a uniform manner. It stated that if the employer wanted to pay for retiree health coverage, they had to pay for the full cost of the coverage and reimburse full Part B Medicare premiums for all their eligible retirees and their covered dependents. This included all past as well as future retirees. An eligible retiree was one who retired with 25 or more years of service credit in a state or locally administered public retirement system or with a disability retirement. All 25 years of service did not have to be with the employer of the retiring employee. The employer had the option of providing coverage to surviving spouses of "free" retirees. To pay for retiree coverage, the employer filed a Chapter 88 Resolution with the SHBP.

3. Q - What changes were made to SHBP rules?

A - The new law essentially does two things. First, it gives an employer greater flexibility in defining which employees qualify for post-retirement medical benefits by using the age and service requirements of the local government laws (NJSA 40A:10-23 - described below). Second, it allows an employer to negotiate payment obligations for post-retirement medical coverage.

The New Rules

Eligibility

4. Q - What are the qualifications for employer-paid post-retirement medical coverage under NJSA 40A:10-23?

A - NJSA 40A:10-23 gives the employer the discretion, under uniform conditions, to assume the cost of post-retirement medical coverage for employees (and their dependents) who have: retired on a disability pension; and/or retired with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period as established by the employer; or retired upon or after the attainment of age 65 or more with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period as established by the employer; or retired upon or after the attainment of age 62 or more with at least 15 years of service with the employer.
(Note: The period of time a county law enforcement officer has been employed by any county or municipal police department, sheriff's department or county prosecutor's office, may be counted cumulatively as service with the employer for the purpose of qualifying for payment of health insurance premiums by the county.)

5. Q - If the employer establishes the age requirement of 65 for payment of post-retirement medical benefits, does that mean the employee cannot retire until age 65 to qualify for the employer paid coverage?

A - Yes, if the employee retires before reaching age 65, the employee would not be eligible for the employer paid coverage.

6. Q - If the employer adopts the provision of age 62 and 15 years of service with the employer, does that mean the employee cannot retire until age 62 to qualify for the employer paid coverage?

A - Yes, if the employee retires before reaching age 62, the employee would not be eligible for the employer paid coverage.

7. Q - Does this law affect employees of the State, State colleges and universities or TPAF members?

A - Generally, no. However, it does allow school boards and county colleges participating in the SHBP to pay for retirees aged 62 with 15 years of service that they could not pay for under the old law.

Contributions - Payment for Coverage

8. Q - Must the employer pay the full cost of coverage of its retirees under this law?

A - No, for employees covered under a negotiated (union/bargaining) agreement, the employer may negotiate any level of payment, ranging from none to all, of the retired coverage and the Part B Medicare premiums. See question #13 for employees not covered under a negotiated agreement.

9. Q - Does the new law require the employer to pay the cost of coverage for an eligible retiree's dependents?

A - No, it does not require it.

10 - Must the employer pay for the coverage of an employee who otherwise meets the criteria established by the employer, but who retires on a deferred retirement?

A - No, Chapter 48 specifically excludes from eligibility any employee who retires on a deferred retirement.

11. Q - Can the employer establish different coverage thresholds for different groups of employees and negotiate different payment amounts?

A - Yes.

12. Q - How can an employer change its post retirement medical payment obligations in the future?

A - The employer can do this by changing the NJSA 40A:10-23 qualifying criteria or by negotiating a different payment arrangement with the bargaining units representing its employees. A new Chapter 48 Resolution would have to be submitted to the SHBP. However, any employee who met the qualifying criteria under the old resolution while it was still in effect would be grandfathered. That is, the employee would be able to retire under the provisions of the old Chapter 48 Resolution.

Employees Not Covered By Bargaining Agreements

13. Q - What can employers provide for a non-aligned employee, i.e. an employee not represented by a union or bargaining unit?

A - The qualifying requirements of NJSA 40A:10-23 also apply to non-aligned employees. The employer can establish, at its discretion under uniform conditions, any level of payment (from zero to full) for an eligible non-aligned employee. However, if the employee is within the same community of interest group as other employees represented by a union, the employer must provide the same benefit to the non-aligned employee as is provided to the union represented employees.

Chapter 48's Relationship to Chapter 88

14. Q - Does a participating employer that has previously adopted the provisions of Chapter 88 have to do anything?

A - No, the employer satisfied with the arrangements under Chapter 88 does not have to do anything. The SHBP will assume that no action on the employer's part signifies its intent to continue the existing program. The SHBP will continue to bill the employer for the cost of its retirees in the normal manner.

A - Yes, by filing a Chapter 48 Resolution with the SHBP. The changes will apply only to future retirees not already qualified under Chapter 88 when the new resolution takes effect.

16. Q - If a Chapter 88 employer changes its payment arrangement for future retirees, who is "grandfathered" under the law?

A - Retirees currently covered by the Chapter 88 employer and any active employee with 25 years of service as of the effective date of the Chapter 48 Resolution are "grandfathered" under the law. That is, regardless of when these employees retire, the employer must pay the full costs of their retired coverage, including the Part B Medicare premium, as was required under Chapter 88.

17. Q - Will an employer that withdrew from the SHBP, after its adoption of Chapter 88, be bound by the provisions of Chapter 88 if it elects to reenter the SHBP?

A - The employer will have to notify the SHBP of its post retirement medical payment obligations when it enrolls by filing a Chapter 48 resolution.

Administration

18. Q - How will the SHBP administer the payment arrangements under Chapter 48 that the employer has committed to make?

A - The retiree will pay the full cost of coverage, either through a deduction from the retirement allowance or monthly billing (if the allowance will not cover the cost). The employer will reimburse the retiree in accordance with the contractual agreement it has established. The Health Benefits Bureau will provide the employer with a monthly alphabetical listing of its enrolled retirees it can use to make its reimbursements. The listing will include the name, social security number, date of birth, medical plan, level of coverage, and cost of coverage for each retiree as well as total enrollment counts in each medical plan.

19. Q - Why can't the SHBP bill the employer for its portion of the coverage and the retiree for his share?

A - With a large number of participating employers and the possibility of a wide variety of payment arrangements for each employer, the administrative burden is not supportable at this time.

Adopting Chapter 48, P.L. 1999

20. Q - How does a SHBP participating employer take advantage of this law (or pay for retirees under the provisions of this law)?

A - The employer must file a Chapter 48 Resolution with the SHBP. The Chapter 48 Resolution is available from the Health Benefits Bureau.

Other

21. Q - Does this Act allow a local employer participating in the SHBP to negotiate payment obligations for its active employee coverage?

A - No, it does not. The changes in this law only address post-retirement medical coverage. Local employers must pay the full cost of coverage for active employees. They have always had the ability to determine/negotiate who pays for dependent coverage of their employees on a uniform basis.

22. Q - Does this law affect employers not participating in the SHBP?

A - No. The law only applies to public employers participating in the SHBP other than the State and State colleges and universities.

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April 1999

TO:	Certifying Officers Public Employees' Retirement System Teachers' Pension and Annuity Fund Police and Firemen's Retirement System State Police Retirement System
FROM:	John D. Megariotis Assistant Director, Financial Services
SUBJECT:	Employer Contributions and Workers' Compensation

 

 

 

 

The section of the New Jersey Administrative Code (NJAC 17:1-4.39) addressing the obligation of employers to remit pension contributions on behalf of employees with a workers' compensation award was recently amended. The revised rule clarifies the employer's responsibilities in this area. This memorandum explains those responsibilities.

There is a distinction drawn between temporary and permanent disability benefits paid by workers' compensation. The employer is always responsible for payment of the employee's pension contributions when the employee is receiving temporary disability benefits under workers' compensation without pay. The contribution is based on the salary the employee was receiving immediately before the receipt of workers' compensation benefits.

When an employee's award of permanent disability benefits under workers' compensation begins, the employer is responsible to continue to pay the employee's pension contributions if the following two conditions exist:

Important Note: the employee will have to file for a disability retirement and meet the total and permanent disability criteria of the retirement system before he/she can receive a retirement allowance based on a disability retirement. Being in receipt of a workers' compensation award does not guarantee qualification for a disability retirement.

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The employer would not be responsible for remitting employee pension contributions for an employee with a permanent disability workers' compensation award if any of the following conditions exist:

If the employer ceases remitting contributions because the employee has voluntarily resigned from employment or the employee was terminated for reasons unrelated to the workers' compensation award, the employer must notify the Division of Pensions and Benefits by correcting the quarterly Report of Contributions. In accordance with normal policy, if the correction covers prior period adjustments, a detailed letter should be sent to the Audit/Billing Section. In either event, you should attach appropriate supporting documentation, such as the workers' compensation award, letter of resignation, and/or termination agreement.

On a separate, but related subject, employee contributions are required to keep PERS Contributory Group Life Insurance (GLI) in effect while the employer is responsible for paying the employee's pension contribution for the member receiving periodic workers' compensation benefits. The employer is responsible for notifying the employee that these GLI contributions must be remitted, in advance, directly to the pension fund. The employer may, at its discretion, make arrangements to collect contributory GLI premiums from the employee and remit and report them in the normal manner. Failure to make these payments will result in the termination of the contributory GLI.

If you have questions regarding the employer's responsibility for a member's pension contributions while on workers' compensation, please contact the Audit/Billing Section at (609) 777-0888.

 

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May 14, 1999

The Telecommunications Unit of the Division of Pensions and Benefits will be closed on Friday, May 21st. Over the past few months we have been working with Lucent Technology to develop a telephone system that better meets the needs of our membership. The implementation of this system will occur after business on Thursday, May 20th. We will be testing the system to ensure that it is up and running for normal business on Monday, May 24th.

The Automated Information System at (609) 777-1777 will still be operational on Friday. You will be able to obtain member account and loan information for your employees as normal. We are providing a telephone number to be used in the event of an emergency (such as reporting a death of a member). The telephone number is (609) 292-9816. Non-emergencies should be deferred until Monday, May 24th or you may e-mail us at: Pension.nj@treas.state.nj.us

The conversion to the new telephone system will be phased in over several weeks. A description of the new system is attached for your information. Information brochures you can provide to your employees on how to use the system to the best advantage will be provided in the near future.

The Division of Pensions and Benefits receives thousands of telephone calls every day. The only feasible way to handle these calls is through the use of automated telephone systems so the Division established a Client Services call center several years ago. This call center includes an Automatic Call Distribution (ACD) system, a Voice Response Unit (VRU) (our Automatic Information System), and the Benefits Information Library (BIL). These systems have allowed the Division to receive and process an extraordinarily large number of calls every year. However, they are old and have reached the limit of their capacity. The old BIL and the five applications on the old VRU have been very successful, but they have only a one way link with the ACD (out). The ACD has worked well but it operates on a first in first out approach with the call going to the next available agent, regardless of the needs of the customer or the skills of the agent. Additionally, the number of calls has been increasing significantly while the staff level has remained essentially steady or even been slightly reduced. As a result, busy signals are frequent and hold times are long.

Skills based routing so calls will go to the agent most qualified to address the subject area identified by the caller. This will also facilitate the efficient addition of functional experts from operational areas to the phones during peak call periods because of our ability to match calls to agent expertise. A VRU linked to the ACD so a caller can "surf" the VRU and, perhaps, answer his own question while waiting to talk to an agent. If still on line when his turn comes, the agent will handle the call. More functionality on the VRU to handle more calls without involving an agent. We will be adding an interactive "what if" capability to the loan program so members can adjust the loan or payment amount and get information on costs and payback periods. We will also add other applications so members can get deferred compensation and SACT balances and retirees can obtain check information without having to talk with an agent. The capability of identifying our callers so we can give priority to more important calls (e.g., callers reporting deaths and employers). A Fax on Demand capability that will allow clients to have short publications and forms faxed to them from a catalog list without the involvement of staff. Computer- telephony integration (CTI) that will allow for more efficient identification of callers and speedier telephone calls. The callers account screen will transfer with the call to the customer service agent. Programmed callback of employers who will be able to leave voice messages when hold times are long.

TO:	Benefits Managers, SHBP Participating Local Employers Benefits Managers, SHBP Participating Educational Employers
FROM:	Margaret M. McMahon Director
DATE:	June 15, 1999
SUBJECT:	State Health Benefits Program Premium Holiday

June 17, 1999

TO:	Certifying Officers
FROM:	William H. Kale Assistant Director, Client Services
SUBJECT:	Exclusion from Social Security Coverage of Students

TO:	Certifying Officers
FROM:	Margaret M. McMahon Director
SUBJECT:	CHAPTER 132, P.L. 1999: Carrying Loans into Retirement

To:	Certifying Officer Public Employees' Retirement System Teachers' Pension and Annuity Fund Police and Firemen's Retirement System
From:	John D. Megariotis Assistant Director - Financial Division of Pensions and Benefits
Subject:	Enhancement to the Transmittal Electronic Payment System (TEPS)

• Step 6 of the ARU script (page 7) will prompt for making a monthly transmittal payment; making a transmittal shortage payment; or to performing a cancellation, inquiry or password change.
  
  
• Password changes are now made through a TEPS operator (refer to step 6 on page 7).

• Reference numbers for payment transactions have increased from 6 digits to 8 and 9 digits (refer to Proof of Payment on page 2).

• The transmittal shortage statement notice number and the applicable quarter and year are required entries when making a transmittal shortage payment (Items 3 and 4 on page 4 and Steps 9 and 11 on page 8).

• Transmittal shortage statements prior to the 4th quarter 1998 have a 8-digit statement number. Enter only the last 4 digits when making payment for one of these statements (Item 4 on page 4).

• Direct the TEPS Employer Authorization Forms to:
  Division of Pensions and Benefits
  PO Box 295
  Trenton, NJ 08625-0295
  or FAX to (609) 633-1696 or (609) 633-1708.

Transmittal shortage statement payments can only be paid through TEPS effective September 1, 1999. Please do not submit checks for transmittal shortages after that date as they will be returned.

If you have questions related to the TEPS system, please contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries to the Audit/Billing Section of the Division of Pensions and Benefits at (609) 633-1708.

Thank you.

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August 30, 1999

The Annual Open Enrollment for the calendar year 2000 New Jersey State Employees Tax Savings Program (Tax$ave 2000) will be conducted from October 1 through November 5, 1999. Employees of the State, state universities and colleges, Palisades Interstate Parkway Commission, and the NJ Commerce and Economic Growth Commission, who are eligible for participation in the New Jersey State Health Benefits Program, may participate in Tax$ave. Tax$ave consists of three components:

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 1999 does not carry over automatically into 2000. Employees must enroll again to participate in an FSA for calendar year 2000. Employees who do not wish to take advantage of POP in 2000 must file a Declination of Premium Option Plan (POP) for Plan Year 2000 and return it to their benefits administrator by November 5. This letter provides information on the Open Enrollment for Tax$ave 2000 and identifies the publications and support available to assist you in explaining this important benefit program to your employees.

Please do your best 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 made aware and understood the value of this beneficial tax saving program.

The enclosed Open Enrollment Milestones chart lists the critical dates of the Tax$ave 2000 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 a 90-minute Tax$ave 2000 orientation workshop in Trenton on September 22, 1999 for benefits administrators. The workshop will include the information in this letter, an overview of the three components of Tax$ave, instructions on the use of our Internet site to educate employees, and a question and answer period. A representative of the Division of Pensions and Benefits and Horizon Healthcare Insurance Agency, Inc. (Horizon), the company contracted to administer the Tax$ave Flexible Spending Accounts for the State, will participate in the workshop. Reservations are required for the Trenton workshop to be held at the Division of Pensions and Benefits. Please see the enclosed Tax$ave 2000 Employer Workshop orientation flyer with reservation instructions.

We will officially announce the open enrollment to employees paid through Centralized Payroll with a September 17th paycheck message. Along with their October 1 paycheck, there will be a message on their pay stub and three payroll inserts. The inserts are:

• The other open enrollment materials you will need are the Declination of Premium Option Plan (POP) for Plan Year 2000 form and the FSA Election Kits. The Division will send you a minimal supply of the declination forms, a sample of which is attached and can be copied. A new FSA Election Kit for 2000 will be sent, along with a request form for additional kits, directly to benefits administrators by Horizon, for distribution to those employees who request them. The FSA Election Kits from the 1999 open enrollment may still be used for the 2000 open enrollment.

Colleges, universities, Palisades Interstate Parkway Commission, and the NJ Commerce and Economic Growth Commission will be provided with sufficient copies of the Tax$ave 2000 Open Enrollment News and the Premium Option Plan 2000 pamphlet for all eligible employees. Horizon will provide sufficient copies of the FSA pamphlet for distribution to all of your eligible employees. We will also provide a new Declination of Premium Option Plan (POP) for Plan Year 2000 form you can reproduce.

Upon request, Horizon will 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 to schedule a Horizon representative.

In addition to announcing the open enrollment to employees paid through Centralized Payroll with their September 17th and October 1 paychecks, we will provide reminder messages about the Tax$ave 2000 Open Enrollment to those employees through pay stub messages on October 15 and October 29. 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 2000, 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 Declination of Premium Option Plan (POP) for Plan Year 2000 forms to benefits administrators by November 5, 1999. Benefits administrators must then forward declination forms to payroll. State Biweekly employee POP declination forms must reach Centralized Payroll by November 23, 1999. Colleges, universities, Palisades Interstate Parkway Commission, and the NJ Commerce and Economic Growth 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 Horizon. All Election Forms must be postmarked no later than November 5, 1999 to be accepted. Those postmarked after November 5, 1999 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.

In addition, employees may either enroll or reenroll in the UMSA or DCSA plans for the 2000 calendar year over the phone by calling Horizon's automated voice response unit at 1-800-224-4426. This is a great opportunity to quickly and easily go through the process of new or repeat enrollment. Horizon will inform current participating employees of this opportunity through a direct mailing in September.

Again this year employees have the ability to enroll or reenroll over the Internet. Go to the Horizon webpage through a link from the Division of Pensions and Benefits' Tax$ave Internet page and follow the simple directions.

Horizon requests that by September 13, 1999, colleges, universities, Palisades Interstate Parkway Commission, and the NJ Commerce and Economic Growth Commission provide them with a file of eligible employees for Tax$ave (eligible as of 9/10/99) to enable electronic enrollment availability. These employers having questions regarding the file should contact Horizon directly.

Remember, you may access further information on Tax$ave through the Division of Pensions and Benefits Tax$ave Internet page.

If you have any questions about Tax$ave 2000 or the open enrollment, call the Horizon Healthcare Insurance Agency, Inc. at 1-800-224-4426. To reserve seats at the Tax$ave 2000 Employer Orientation and schedule Horizon 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. We appreciate your cooperation.

Enclosures:

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September 1999

FROM:	Kathleen Coates Supervisor, Publications and Benefits Education
SUBJECT:	Tax$ave 2000 Open Enrollment Promotional Pieces

As indicated in our memorandum of August 30, 1999, the Annual Open Enrollment for Tax$ave 2000 will be conducted from October 1 through November 5, 1999.

We will officially announce the open enrollment to employees paid by Centralized Payroll with their October 1 paycheck. There will be a message on their paystub and three payroll inserts:

Enclosed you will find copies of The Premium Option Plan 2000 pamphlet for distribution to all eligible employees. In addition we have enclosed a few copies of the Declination of Premium Option Plan (POP) For Plan Year 2000. This form may be reproduced as necessary. You may also download copies of the declination form on the Pensions and Benefits Tax$ave site on the Internet. Our address is http://www.state.nj.us/treasury/pensions

If you have any questions about Tax$ave 2000 or the open enrollment, call Horizon at 1-800-224-4426. We appreciate your involvement in this open enrollment. Your assistance will make this benefit program successful.

Enclosures:

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September 1999

As indicated in our memorandum of August 30, 1999, the Annual Open Enrollment for Tax$ave 2000 will be conducted from October 1 through November 5, 1999.

We will officially announce the open enrollment to employees paid by Centralized Payroll with their October 1 paycheck. There will be a message on their paystub and three payroll inserts:

If you have any questions about Tax$ave 2000 or the open enrollment, call Horizon Healthcare Agency Inc. at 1-800-224-4426. We appreciate your involvement in this open enrollment. Your assistance will make this benefit program successful.

Enclosures: POP Declination forms

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OPEN ENROLLMENT MILESTONES

DATE	EVENT
August 30	Initial Tax$ave announcement to State employers.
September 1	Begin making reservations to attend the Tax$ave 2000 employer workshops in Trenton on 9/22/99. Begin scheduling Horizon Healthcare representatives to conduct employee educational sessions at your work site.
September 13	Colleges, Universities, Palisades & Commerce Commission provide file of eligible employees for Tax$ave as of 9/10/99 to Horizon to enable electronic enrollment availability.
September 17	Initial paycheck message announcement on Tax$ave 2000 Open Enrollment to employees paid through the State's Centralized Payroll Unit.
September 22	Tax$ave 2000 Employer Orientation sessions in Trenton.
October 1	Horizon Healthcare direct mailing to current FSA enrollees reminding them they must reenroll to continue participation in tax year 2000. Official Open Enrollment announcement to employees paid through the State's Centralized Payroll Unit. Payroll inserts will include Tax$ave 2000 Newsletter, POP and FSA pamphlets. In addition, there will be a paycheck message. (Colleges, Universities, Palisades and Commerce Commission should also distribute payroll inserts.
October 1-31	Tax$ave 2000 employee educational sessions at work locations upon request.
October 1-November 5	Tax$ave 2000 Open Enrollment period.
October 15	Paycheck message reminder for employees paid through the State's Centralized Payroll Unit. (Colleges, Universities, Palisades and Commerce Commission should also remind employees.)
October 29	Paycheck message reminder for employees paid through the State's Centralized Payroll Unit. (Colleges, Universities, Palisades and Commerce Commission should also remind employees.)
November 5	FSA Election Form postmarked date for enrollment in UMSA and/or DCSA. Last day to enroll through Horizon Healthcare's automated voice response unit or website.
November 23	POP Declination Forms due at Centralized Payroll. (Colleges, Universities, Palisades and Commerce Commission establish own date.)
January 1, 2000	2000 Plan Year starts.
January 7, 2000	First deductions for 2000 Plan Year for employees paid through Centralized Payroll. (Colleges, Universities, Palisades and Commerce Commission should begin deductions with their first pay period in 2000.)

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Request for Tax$ave 2000 Employee Seminars


During this year's Open Enrollment for Tax$ave 2000, Horizon Healthcare Insurance Agency, Inc. (Horizon) will be happy to respond to your request for an informational session at your location.
A representative from Horizon will explain the Tax$ave program to your employees and be available to answer any questions or concerns about this beneficial tax savings opportunity.
Please complete the request below and fax it to the Horizon representative listed at the bottom of this form.

Individual Location Meetings - Minimum 25 Employees Per Session
If you have less than 25 interested employees, call Horizon and ask about a conference call!

Employer Name ______________________________________________________________

Requester's Name _____________________________________________________________

Contact Numbers ______________________________________________________________
(Voice) (Fax)

Address _____________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________

Proposed Dates/Times of Employee Seminars (Allow 60 minutes per session) - You must provide an overhead projector.

____________________________________________________________________________

____________________________________________________________________________

____________________________________________________________________________

Fax requests to:
Linda Dubois, Horizon Healthcare Insurance Agency, Inc. at Fax # (973) 274-2215.
Please include directions to the seminar site with your request.

If you have any questions about this request form, call Horizon Healthcare at 1-800-224-4426.

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Tax$ave 2000 Employer Workshop

The Division of Pensions and Benefits and the Horizon Healthcare Insurance Agency, Inc. (Horizon) will conduct workshops for State human resources/benefits administrators responsible for administering the New Jersey State Employee Tax Savings Program (Tax$ave). You may choose to attend any one of the four identical sessions offered in Trenton. The workshops will be scheduled on September 22, 1999 and will last about 90 minutes. We will address the Tax$ave Open Enrollment (time frames, deadlines, available support), a brief overview of the components of Tax$ave, and any questions raised by attendees. Employers will be encouraged to use Horizon's web site, through a link from the Divisions' homepage, to view or download Flexible Spending Account forms and use interactive calculator tools.

Reservations for the workshop are required.

TRENTON WORKSHOPS DATE:   September 22, 1999 LOCATION:   Division of Pensions and Benefits One State Street Square 50 West State Street Report to - 3rd Floor Reception Desk Trenton, NJ SESSION TIMES (Choose One): 9:00 AM 10:30 AM 1:00 PM 2:30 PM RESERVATIONS: Seating is restricted to 30 attendees per session. To request directions and schedule your attendance, call the Division's temporary reservation line at (609) 777-2117. Directions and a map are also available on our web site at: http://state.nj.us/treasury/pensions Tax$ave 2000 Open Enrollment Reminder Check Messages (September 17th paycheck) Division of Pensions and Benefits Tax$ave 2000 Open Enrollment The open enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave) for tax year 2000 will be held from October 1 through November 5, 1999. Tax$ave allows you to reduce your tax liability and thereby save money on any premiums you pay for medical or dental coverage and any unreimbursed expenses for medical, dental and eligible dependent care. Information on Tax$ave will be provided with your next paycheck. (October 1st paycheck) Division of Pensions and Benefits Tax$ave 2000 Open Enrollment - Inserts The open enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave) for tax year 2000 will be held from October 1 through November 5, 1999. This will be your opportunity to save money by using before-tax dollars for any premiums you pay for medical or dental coverage, any unreimbursed expenses for medical, dental and eligible dependent care expenses. In addition to today's paycheck, you should have also received a Tax$ave 2000 Newsletter, a Flexible Spending Account (FSA) pamphlet, and a Premium Option Plan (POP) pamphlet. If you did not receive these documents, contact your benefits administrator. (October 15th paycheck) Division of Pensions and Benefits Tax$ave 2000 - Open Enrollment Just a reminder that the open enrollment for Tax$ave 2000 for tax year 2000 begins on October 1 and runs through November 5, 1999. Flexible Spending Accounts If you wish to participate in the Unreimbursed Medical Spending Account and/or the Dependent Care Spending Account for tax year 2000, you must enroll, or re-enroll, by paper application, telephone, or Internet. Participation in these plans durin/g 1999 does not carry over to the new tax year. Premium Option Plan (POP) To save on taxes and increase your take-home pay by participating in the POP for 2000, you will be automatically enrolled. If you wish to decline to have your dental and/or medical premiums paid with before-tax dollars for 2000, you must complete a declination form for 2000 and submit it to your benefits administrator before November 5, 1999. (October 29th paycheck) Division of Pensions and Benefits Tax$ave 2000 - Last Chance There is only one week left to enroll in Tax$ave 2000 with its Unreimbursed Medical Spending Account and Dependent Care Spending Account programs for tax year 2000! We suggest that you review the Tax$ave 2000 Newsletter, Flexible Spending Account (FSA) pamphlet, and Premium Option Plan (POP) pamphlet you received to determine whether or not these money savings benefits are for you. Further information is available through the Division of Pensions and Benefits homepage at http://www.state.nj.us/treasury/pensions where a link is available to the program administrator's homepage. FSA Election forms must be postmarked or application made over the Internet or telephone no later than November 5, 1999 is you wish to participate during 2000. State Bi-weekly POP Declination State college/university and monthly POP Declination"

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September 1999

TO:	Certifying Officers Teachers' Pension and Annuity Fund
FROM:	Margaret M. McMahon Director
SUBJECT:	New Jersey Teachers' Pension and Annuity Fund Member Handbook

The New Jersey Teachers' Pension and Annuity Fund Member Handbook has been revised to incorporate changes to the retirement system made since the last version was published in 1994 and updated in 1996. The Member Handbook serves as a summary plan description and outlines the rules and regulations governing the plan.

The major areas revised in this 1999 edition of the Member Handbook include:

• New rules regarding types of service credit that may be purchased, eligibility for purchase and provisions for payment;
• Clarification of salary used to calculate a retirement benefit;
• New rules on carrying pension loans into retirement;
• More details on employment after retirement; and
• Clarification of Group Life Insurance coverage and conversion options.

We have enclosed five copies of the new Member Handbook. When you require more, please call the designated employer line for forms and publications, (609) 777-4357, which is available 24 hours a day, 7 days a week. Or email your request to us at pensions.nj@treas.state.nj.us

As changes to the Member Handbook are made to reflect plan changes adopted by the TPAF Board of Trustees, they are posted on the Internet to the Division of Pensions and Benefits Home Page at the following address (URL):

http://www.state.nj.us/treasury/pensions/tpafman.htm.

Please do not hesitate to use this site to search the Member Handbook for answers to questions, or to print out excerpts for distribution or to answer specific employee inquiries. The version of the Handbook on the Internet is the most up-to-date and accurate version available.

We welcome any comments or suggestions for improvement of the Member Handbook that you might have. Please send them to the following address:

Division of Pensions and Benefits
ATTN: Publications and Benefits Education
P. O. Box 295
Trenton, NJ 06825-0295

We appreciate your cooperation in providing updated information to our members. If you have any questions, please call Client Services at (609) 292-7524.

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October 4, 1999

The State Health Benefits Commission adopted a new rule concerning Chapter 330, P.L. 1997 at its meeting on September 29, 1999. Chapter 330 provides health benefits under the State Health Benefits Program (SHBP) to local policemen and firemen who retire after 25 years of service (or on disability) and who do not receive any payment towards retiree health coverage from their employers. The State will pay 80% of the cost of the least expensive statewide plan offered in the SHBP and the retiree will pay the remainder.

The purpose of the rule is to clarify the eligibility requirements for participation in the program. The Division of Pensions and Benefits will be reviewing retired policemen and firemen not currently enrolled to determine their eligibility for benefits under the new Chapter 330 rule. The Division may request from you information necessary for this determination. Eligibility of retired policemen and firemen for benefits under Chapter 330 will depend on the health benefits provided by the employer for retired policemen and firemen as of the effective date of the law, July 1, 1998, as indicated in labor and other employment contracts, and ordinances and resolutions of the employers.

The purpose of Chapter 330 is to provide a "safety net" of health benefits coverage for eligible policemen and firemen who are not receiving payment for such coverage from their employers. It is not intended to alter any existing retiree health care benefits provided by employers on the effective date of the law. Since the eligibility of retirees will be based upon what their employers provided for retiree health care on the effective date of the law, a reduction in the benefits provided by employers after that date would not qualify their retirees for benefits under this law. Conversely, employers increasing health benefits coverage for retirees after the effective date will affect their eligibility for benefits.

Attached is a list of questions and answers for frequently asked and anticipated questions on Chapter 330 and this new rule. You can view the new rule on the Division's Internet web site (http:///www.state.nj.us/treasury/pensions). If you have questions about this new rule, call Client Services at (609) 292-7524.

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DIVISION OF PENSIONS AND BENEFITS

CHAPTER 330, PUBLIC LAWS OF 1997

QUESTIONS AND ANSWERS

September 1999

 Chapter 330 provides health benefits to local police officers and firefighters who retire after 25 years of service (or on a disability) and who do not receive any payment towards retiree health coverage from their employers. The State will pay 80% of the cost of the least expensive statewide plan offered in the State Health Benefits Program and the retiree will pay the remainder. The Division's application of the law has changed based on the adoption of a new rule by the State Health Benefits Commission.

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October 1999

The Governor has signed Chapter 247, PL 1999 (formerly Assembly Bill #2023) into law with an effective date of November 15, 1999. This bill requires 403(b) salary reductions from an employee to be transmitted and credited to the employees' account within five business days from the pay date.

In order to comply with this legislation, the Division of Pensions and Benefits has made the following changes to the reporting guidelines:

The Alternate Benefit Program's Employer Contribution Report will remain a monthly reporting and reimbursement schedule.

Members of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund and/or the Police and Firemen's Retirement System participating in the Supplemental Annuity Collective 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 this law. Contributions for these members will be made through the Transmittal Electronic Payment System (TEPS).

If have any questions regarding this matter, please contact James Jefferson at (609) 292-2914.

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October 1999

 

To:	Certifying Officer Public Employees' Retirement System - Boards of Education Teachers' Pension and Annuity Fund
From:	John D. Megariotis Assistant Director, Finance
Subject:	Chapter 247, PL 1999 - Remittance of 403(b) Contributions

The Governor has signed Chapter 247, PL 1999 (formerly Assembly Bill #2023) into law with an effective date of November 15, 1999. This bill requires 403(b) salary reductions on behalf of an employee to be transmitted and credited within five business days from the pay date.

Employees of local boards of education may participate in the SACT 403(b) program or a 403(b) plan administered by their employer. This new law impacts both arrangements.

Members of the Public Employees' Retirement System and Teachers' Pension and Annuity Fund 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. Contribution for these members will be made through the Transmittal Electronic Payment System (TEPS).

If you have any questions regarding this matter, please contact Fred Polio at (609) 292-2623.

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November 15, 1999

TO:	Certifying Officers, State Of New Jersey
FROM:	Enrollment And Purchase Bureau
SUBJECT:	Membership Survey

In order to assist you in the pension enrollment process, the enclosed report has been prepared for your location that lists those employees who have not had pension deductions for the past 18 months. Please review the status of these employees and determine if they should be enrolled in pension. Some individuals on the list may be retired from other pension systems and would be ineligible to participate in another State-administered retirement system.

If you determine that an employee is eligible for pension participation, please submit an enrollment application. If an enrollment application has been submitted for an eligible employee, please disregard this notice. There is no need to return this list to the Division of Pensions and Benefits. This survey was prepared strictly for informational purposes and to provide you with an opportunity to review pension eligibility for your employees.

If you should have specific questions regarding eligibility, please contact Client Services at (609) 292-7524.

Enclosure

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MEMORANDUM

TO:	Certifying Officers: Public Employees' Retirement System Teachers' Pension and Annuity Fund Police and Firemen's Retirement System Alternate Benefit Program
FROM:	John D. Megariotis Assistant Director, Finance
DATE:	November 1999
SUBJECT:	Pension Compensation and SACT Contribution Limits for Calendar Year 2000

Chapter 113, P.L. 1997 provides that the annual compensation on which employer and employee contributions and benefits may be based cannot exceed the annual compensation limit set by the Internal Revenue's Code section 401(a)(17). The Commissioner of the IRS indexes the limit for inflation each calendar year once the accumulated increases exceed $10,000. The federal limit for calendar year 1999 was $160,000.

For calendar year 2000, the limit has been increased to $170,000.

This limit does not apply when a member of the retirement system meets the following two conditions:

If you have employees who were enrolled prior to July 1996 and will reach or exceed the pensionable compensation limit, you should complete the employer intent package if you have not already done so. This will tell us if you wish to grandfather employees hired before July 1996 who exceed the annual compensation limit. Please contact Henry Matwiejewicz at (609) 984-0574 to receive the package.

In addition, each year the Internal Revenue Service (IRS) adjusts dollar amount thresholds under the federal tax code based on changes in the consumer price index (CPI). One area the IRS considers annually is retirement plan maximum deferral amounts. The IRS has announced that the maximum elective deferral limit for section 403(b) tax sheltered annuity plans (including the Supplemental Annuity Collective Trust of New Jersey Tax Shelter Program) will increase from $10,000 to $10,500 per year because of increases in the CPI.

New Jersey State Law still limits a participant's annual contributions to the Supplemental Annuity Collective Trust of New Jersey (SACT) to 10% of base salary. Therefore, the maximum a SACT / Tax Shelter participant may contribute during 2000 will be 10% of base salary or $10,500, whichever is less. Your employees wishing to defer the maximum allowable amount in 2000, but whose current authorized salary reduction percentage will not allow them to reach that maximum, should complete a SACT Change of Contribution Rate Request form and a Salary Reduction Agreement. These forms must be submitted, through your Human Resource representative, to the NJ Division of Pensions and Benefits. Your Human Resource office may obtain a supply of these forms by calling the SACT office at (609) 292-3440.

For more details on the changes in pension plan limits, look on the IRS Web site (www.irs.gov) under "IRS Newsstand" and then click on "News Releases and Fact Sheets." Look for IR-1999-80, headlined: "Pension Plan Limitations For Tax Year 2000."

If you have any questions concerning this matter, please contact Marge Budzinski at (609) 292-3440.

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November 1999

To: State Health Benefits Program Participating Employers

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

Subject: Health Insurance Portability and Accountability Act (HIPAA) Update

The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 contained a number of provisions that affected the State Health Benefits Program (SHBP) and its participating employers. The SHBP implemented several actions during 1997 and 1998 to comply with the requirements of HIPAA. These actions included:
· establishing procedures to provide departing employees with certificates of coverage for use with their next health carrier;
· amending SHBP rules to comply with HIPAA coverage requirements;
· filing exemptions for 1998 and 1999 to the provisions of mental health parity in accordance with HIPAA procedures for the Traditional Plan and NJ PLUS; and
· providing employers with a required notice of compliance with HIPAA to be distributed to all employees and their family members upon enrollment.
At the request of the State Health Benefits Commission (Commission), Buck Consultants conducted an analysis of current mental health coverage under the Traditional Plan and NJ PLUS. They have outlined several mental health plan design alternatives that would be compliant with HIPAA requirements. The Commission has evaluated these alternatives for possible implementation in a future plan year. Since the mental health limitations currently in effect are detailed in the law governing the SHBP, a change in plan design would require legislative action.

A mental health parity exemption must be filed each plan year if a group plan is not HIPAA compliant. The Commission has voted to file an exemption for 2000. Therefore, mental health benefits will remain unchanged through 2000 unless the statute governing the SHBP is amended. Since HIPAA has a continuing notification requirement, a revised compliance notice reflecting this exemption from federal mental health parity requirements is attached for your use with newly enrolling employees and family members. You should send it at the same time you send the initial notice of COBRA rights.

A brief refresher on HIPAA is also attached for your information. If you have questions, contact Client Services at (609) 292-7524 or call the Employer's SHBP Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

FEDERAL HEALTH INSURANCE ACTS OF 1996

Three pieces of federal legislation were enacted in 1996 that established several requirements to group health plans and insured health products. These were the Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act. HIPAA included the reporting requirements covering all three pieces of legislation and is therefore used to refer to all three acts. The requirements of the legislation and SHBP status on each requirement are show below:

FEDERAL REQUIREMENT	SHBP STATUS
Issue Certificates of Coverage to all employees and or dependents who lose coverage.	Participating employers were provided (August 1997) a sample certificate to use to meet this requirement.
Limit restrictions of coverage for pre-existing conditions.	All SHBP plans exceed this requirement since they have no pre-existing condition restrictions.
Offer a special enrollment period to individuals who meet certain conditions, i.e., an employee or employee's dependent, who declined coverage because of other medical coverage, must have an opportunity for special enrollment should the other coverage end.	All SHBP plans comply with this HIPAA requirement for employees and family members.
Eliminate discrimination against participants and beneficiaries based on health status.	All SHBP plans comply with this requirement. (Note: the SHBP "actively at work" requirement is waived only for employees not at work due to illness).
Provide a minimum level of hospital coverage for newborns and mothers	All SHBP plans meet this requirement.
Provide parity in mental health benefits	All SHBP HMO plans meet this requirement. The SHBP has exempted the Traditional Plan and NJ PLUS for 2000 from mental health parity - different limits continue to exist for these plans.
Provide annual notice to covered members of any plan provisions not in compliance with HIPAA requirements.	A sample certificate to use to meet this requirement is enclosed.

 

HB-0364-1199

Notice to State Health Benefits Program Participants about Compliance with Federal Health Insurance Requirements

This notice is being provided to inform you about State Health Benefits Program (SHBP) conformance with federal health insurance regulations.

The Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act, federal laws enacted in 1996, contain a number of provisions that have affected the SHBP since January, 1998. HIPAA required all group health plans to implement the following provisions that are contained in the three federal laws:

#1 - Limit the use of pre-existing condition restrictions to a maximum of twelve months;
#2 - Offer a special enrollment period to employees and dependents who do not enroll in the plan when initially eligible because they have other coverage, and who subsequently lose that coverage;
#3 - Eliminate discrimination against participants and beneficiaries based on health status;
#4 - Provide a minimum level of hospital coverage for newborns and mothers, generally 48 hours for a vaginal delivery and 96 hours for a cesarean delivery; and and
#5 - Provide parity in mental health benefits., that is, any dollar limitations applied to mental health treatment cannot be lower than those on medical and surgical benefits.

Since January 1, 1998, Since aall SHBP plans have met or exceeded HIPAA requirements #1 through #4 above. SHBP HMOs also have complied with requirement #5 above. The State Health Benefits Commission filed exemptions from HIPAA compliance on mental health parity (requirement #5) for 1998 and 1999 for the Traditional Plan and NJ PLUS, as self-insured, non-federal governmental plans are permitted to do. The Commission has voted to continue that exemption through 2000. As a result, the mental health limits for the Traditional Plan and NJ PLUS that are described in the New Jersey State Health Benefits Program Medical Plans Information Handbook will remain in effect throughout 2000.

The SHBP has conducted a study to review the design of mental health benefits in the Traditional Plan and NJ PLUS. Several alternatives have been proposed, which the Commission will evaluate for possible implementation in future plan years.

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December 22, 1999

To:	Certifying Office Boards of Education Teachers' Pension and Annuity Fund
From:	William H. Kale Assistant Director, Client Services
Subject:	Application of New Rule: N.J.A.C. 17:3-2.6 Ineligible Positions; Interim Appointment to Boards of Education

The Teachers' Pension and Annuity Fund Board of Trustees adopted the new rule N.J.A.C. 17:3-2.6; Ineligible Positions; Interim Appointment to Boards of Education, effective December 20, 1999, which provides that:

Any person retired from the Teachers' Pension and Annuity Fund who is temporarily appointed to any position listed in N.J.A.C. 17:3-2.1 or the functional equivalent thereof shall be ineligible for enrollment in the retirement system if the total time for all interim appointments with one board of education does not exceed six months. If the total time for all the interim appointments with one board of education exceeds six months, the individual shall be declared an employee for pension purposes and shall be enrolled in the Fund effective the first day of the seventh month of service.

Boards of Education with interim appointees will have six months from the effective date of the rule to either hire permanent employees for those positions or reenroll the interim appointees into the Teachers' Pension and Annuity Fund. The enrollment date would be July 1, 2000.

For interim appointments made after the effective date of the rule, the retiree must either end employment within the six month period defined by the rule or must reenroll with an effective date of the first day of the seventh month of employment.

Multiple interim appointments with the same employer would be combined when calculating the six months. Retirees may change employers and work for periods of no more than six months with each different employer.

If you have any questions regarding the application of this new rule, please contact the Client Services Bureau at (609) 292-7524.

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December 1999

TO:	All County, Municipal, and Board or Education SHBP Benefits Administrators
FROM:	Janice F. Nelson, Assistant Director, State Health Benefits Program
SUBJECT:	SHBP COBRA Program Change

 

 

 

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires that an employer must offer employees, and/or their covered dependents, the opportunity to temporarily extend their group health insurance coverage in certain instances where coverage under the plan would otherwise end. Earlier this year, the Internal Revenue Service (IRS) issued two sets of long-awaited regulations that incorporate statutory changes and many of the judicial interpretations of COBRA over the years.
The new IRS regulations have resulted in two changes, effective January 1, 2000, to the State Health Benefits Program's (SHBP) administration of COBRA coverage.
The first change sets new rules for the relationship between COBRA and the federal and State Family Leave Acts. Currently, leave taken under the federal and/or State Family Leave Act is subtracted from a member's COBRA eligibility period. After January 1, 2000, the time a member spends on federal or State family leave will not count as part of the COBRA eligibility period.
The second change now offers qualified COBRA beneficiaries the same rights to coverage at Open Enrollment as are available to active employees. This means that any former employee or dependent who elected to enroll under COBRA is able to enroll in any SHBP medical coverage and, if offered by the employer, State prescription drug coverage during the SHBP Open Enrollment period regardless of whether they elected to enroll for the coverage when he or she went into COBRA. This affords a COBRA enrollee the same opportunity to enroll for benefits during the SHBP Open Enrollment period as an active employee. However, any time of non-participation in the benefit is counted toward the maximum COBRA coverage period.
All COBRA enrollees will receive Open Enrollment information, mailed directly to the address on file with the SHBP, prior to the SHBP Open Enrollment period in March. Members may also request information by writing to the COBRA Administrator, Division of Pensions and Benefits, Health Benefits Bureau, PO Box 299, Trenton, NJ 08625-0299.

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December 1999

TO:	All State SHBP Benefits Administrators
FROM:	Janice F. Nelson, Assistant Director, State Health Benefits Program
SUBJECT:	SHBP COBRA Program Change

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires that an employer must offer employees, and/or their covered dependents, the opportunity to temporarily extend their group health insurance coverage in certain instances where coverage under the plan would otherwise end. Earlier this year, the Internal Revenue Service (IRS) issued two sets of long-awaited regulations that incorporate statutory changes and many of the judicial interpretations of COBRA over the years.
The new IRS regulations have resulted in two changes, effective January 1, 2000, to the State Health Benefits Program's (SHBP) administration of COBRA coverage.
The first change sets new rules for the relationship between COBRA and the federal and State Family Leave Acts. Currently, leave taken under the federal and/or State Family Leave Act is subtracted from a member's COBRA eligibility period. After January 1, 2000, the time a member spends on federal or State family leave will not count as part of the COBRA eligibility period.
The second change now offers qualified COBRA beneficiaries the same rights to coverage at Open Enrollment as are available to active employees. This means that any former employee or dependent who elected to enroll under COBRA is able to enroll in any SHBP medical coverage, State prescription drug, dental, or vision coverage during the SHBP Open Enrollment period regardless of whether they elected to enroll for the coverage when he or she went into COBRA. This affords a COBRA enrollee the same opportunity to enroll for benefits during the SHBP Open Enrollment period as an active employee. However, any time of non-participation in the benefit is counted toward the maximum COBRA coverage period.
All COBRA enrollees will receive Open Enrollment information, mailed directly to the address on file with the SHBP, prior to the SHBP Open Enrollment period in April. Members may also request information by writing to the COBRA Administrator, Division of Pensions and Benefits, Health Benefits Bureau, PO Box 299, Trenton, NJ 08625-0299.

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MEMORANDUM

To:	Certifying Officers Public Employees' Retirement System
From:	John D. Megariotis Assistant Director, Financial
Subject:	Rule Change for NJAC 17:2-4.7, Reporting Actual Salary for Part-Time Employees
Date:	December 1999

The Public Employees' Retirement System's Board of Trustees at its November 17th meeting adopted a rule change for NJAC 17:2-4.7, that will become effective on January 1, 2000. The amendment requires reporting districts to use the actual creditable salary earned by employees, and not estimated salary, for part-time hourly, on-call and per diem employees.

The new rule eliminates much of the guesswork that has been, but should not be, involved in the reporting of salaries. The rule ensures that pension contributions are based on actual earnings and service, not an estimate of earnings. Perhaps more importantly, it is fairer to members in that they get what they earned, i.e., both in the sense of a pension benefit as well as their regular paychecks. Your employees do not lose any portion of their check paying pension contributions for hours not worked and salary not earned when they worked fewer hours than estimated.

The enrollment criteria for part-time hourly, per diem, and on-call employees remains unchanged. Hourly and per diem employees should be enrolled after 12 months of continuous employment, as long as the employees meet all other eligibility criteria. On-call, as needed employees who work an average of 10 days per month or 100 days per year for 10 month employees, 120 days per year for 12-month employees, are eligible for enrollment, as long as all other eligibility criteria are met. However, once membership is established, an employee must only meet the $1,500 minimum salary regulation to continue membership; the number of hours worked in a month or a year is no longer applicable. This provides greater equity in granting service credit. A member is entitled to a month of service as long as the actual creditable salary being reported exceeds the monthly minimum for enrollment. In other words, when a 10-month member has a monthly reportable salary exceeding $150 (one tenth of $1,500), the member should be reported for that month. Similarly, $125 (one twelfth of $1,500) is the minimum monthly reportable salary for a 12-month member. However, if the member does not make the minimum monthly salary no contributions or salary should be reported.

This rule change has some impact on completing the quarterly Report of Contributions. Since the Report is prepared prior to the close of a calendar quarter, it is impossible to project the salaries for these employees onto your quarterly Report. Whenever the quarterly actual creditable salary differs from the prior quarter, you must correct the base salary and corresponding deductions for pension and contributory life insurance premiums, if applicable. The Division realizes that this will increase the work involved in completing the quarterly Report. However, keep in mind that you no longer need to spend time calculating the estimated salaries. This is in addition to the merits of the rule providing deductions from actual earnings instead of educated guesses, and providing the member's with retirement benefits computed on what the employee earned.

It may facilitate the completion of your quarterly Report for the Division of Pensions and Benefits to list your part time, on call and per diem members on a separate bureau. To have the members on your Report listed separately, please send your written request to:

Robert Morley
Audit/Billing Section
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

With your request, include a listing of the members to be put on the separate bureau. This listing must provide the member's membership number, last name and first name. In lieu of a manually prepared list, you can identify the members by sending a copy of your most recently filed quarterly Report and highlight the members for the separate bureau.

As a related matter, you may recall that the Division of Pensions and Benefits sent out a survey last March seeking your opinion as to whether part-time, on call and per diem employees should be reported on actual or estimated base salary. The survey results favored reporting on actual creditable salary. Over one-half of the reporting districts responded to the survey. I would like to take this opportunity to thank you for your participation. Your input was very meaningful in assisting us with this rule change.

If you have any questions regarding this matter, please contact the Audit/Billing Section at (609) 292-3630.