|
Certifying
Officer Letters 2004
| Subject |
Date |
| Report
of Contributions, 4th Quarter 2004 (October 1st to December
31st) Autonomous State College/University/State Employers |
December
2004 | Report
of Contributions, 4th Quarter 2004 (October 1st to December
31st)
Teachers' Pension and Annuity Fund, Public Employees'
Retirement System & Police and Firemen's Retirement System |
December
2004 | Report
of Salary Change Instructions - Public
Employees' Retirement System
(Non-Boards of Education) Police and Firemen's
Retirement System |
December
2004 | | Teacher
Mentoring |
November
2004 | | Public
Employees Retirement System - Change to Member Pension Rate - January 2005 |
November
2004 | | Extension
of the Employee Dental Plans to Local Government and Education Employers |
October 2004 |
| Transmittal
Electronic Payment System (TEPS) (SHBP) |
September
2004 | | State
Health Benefits Program - Participating Local Government Employers |
September
2004 | | State
Health Benefits Program Participating Local Education Employers |
September
2004 | | SHBP
Open Enrollment 2004 - State Biweekly Employers |
September
2004 | | SHBP
Open Enrollment 2004 - State Monthly Employers |
September
2004 | | SHBP
Open Enrollment 2004 - Part-Time Employees |
September
2004 | Open
Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2005)
State Department Human Resource Directors
State Biweekly Payroll Locations
Benefits Administrators |
August 2004 |
Open
Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2005)
State University and College Benefits Administrators
State Monthly Benefits
Administrators |
August 2004 |
SHBP
Open Enrollment 2004
|
August 2004 |
| Employer
Liability for Annual Pension Contribution- PFRS |
August 2004 |
| Employer
Liability for Annual Pension Contribution- PERS |
August 2004 |
Employer
Liability for Early Retirement Incentive 1 & 2 Programs - TPAF
|
August 2004 |
| Transmittal
Electronic Payment System (TEPS) |
July 2004 |
| Retirement
Applications and Other Forms Available on Our Web Site | July
2004 | | New
Enrollment Application for PERS and TPAF Members and Revised Designation
of Beneficiary form | July
2004 | SHBP
Application for Active Employees
Benefits Administrators, SHBP Local Government
Employer Group Benefits
Administrators, SHBP Local Education Employer Group | June
2004 | | SHBP
Application for Active Employees Benefits Administrators, SHBP State Biweekly
and Employer Group Benefits Administrators, SHBP State Monthly Employer Group | June
2004 | | PERS
State Rate Increase July 2004 - Clarification - Change To Effective Date Of
Member Pension Rates - Public Employees' Retirement System |
May 2004 |
| Domestic
Partnership Act: SHBP Implications — SHBP Local Employer Group | May
2004 | | Domestic
Partnership Act: Health Benefits Implications - SHBP State Monthly Employer
Group | May
2004 | | Domestic
Partnership Act: Health Benefits Implications - SHBP State Biweekly Employer
Group | May
2004 | | Domestic
Partnership Act: Pension Implications - Local
Certifying Officers, Public
Employees' Retirement System, Teachers'
Pension and Annuity Fund, Police and Firemen's Retirement System |
May 2004 |
| The
Domestic Partnership Act: Pension Implications - State Certifying Officers,
Public Employees' Retirement
System, Teachers' Pension
and Annuity Fund, Police
and Firemen's Retirement System, State
Police Retirement System, Judicial Retirement System |
May 2004 |
| Report
of Contributions, First Quarter 2004 (January 1st to March 31st)
- Local Employees |
March 2004 |
| Report
of Contributions, 1st Quarter 2004 - State Colleges and Universities |
March 2004 |
| Postsecondary
Vocational-Technical School Instructors |
March 2004 |
| New
Contracts Awarded for the Alternate Benefit Program and the Additional Contributions
Tax-Sheltered Program |
February
2004 | | New
State Transportation Benefit |
January 2004 |
| | |
| |
December
2004 | TO: |
Certifying Officer
Autonomous
State College/University/State Employers | | FROM: |
John D. Megariotis
Deputy Director, Finance | | SUBJECT: | Report
of Contributions, 4th Quarter 2004
(October 1st to
December 31st) | Chapter
113 Salary Limits Under
Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine
member contributions and benefits,for
the State-administered pension systems listed below, may not exceed the compensation
limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation
(salary) limitation is adjusted annually, based upon cost of living increases.
The compensation limitation for 2005 will be $210,000. In
other words, under the provisions of the Internal Revenue Code, Section 401(a)(17),
for the "qualified" defined benefit plans listed below [401(a)(2)],
the current federal ceiling on pensionable salary ($205,000 in 2004) applies to
the base salaries of members of these pension plans. Salary earned by a member
in excess of this amount is not pensionable; that is, it may not be used in determining
member contributions and benefits. Change
To Member Contribution Pension Rates - Teachers' Pension And Annuity Fund Effective
the first payday on or after January 1, 2005, the Teachers' Pension and Annuity
Fund (TPAF) member contribution rate will return to the normal rate of 5%. Retroactive
increases paid on or after January 1, 2005 should be deducted at 5% including
any portion of the retroactive salary that covered a period prior to January 1,
2005. Change
To Member Contribution Pension Rates - Public Employees' Retirement System Chapter
415, P.L. 1999 reduced the pension rate for members of the Public Employees' Retirement
System from 4.5% to 3%. Effective the first payday on or after July 1, 2004,
the Public Employees' Retirement System (State Employees) member contribution
rate returned to the normal rate of 5%. The
previous reduction in the member rate for the PERS was authorized by statute and
was based on the existence of surplus pension assets in the retirement system.
However, also per statute when there are no longer surplus pension assets, the
member rate for PERS will return to the normal rate of 5% Retroactive
increases paid on or after July 1, 2004, should be deducted at 5%, including any
portion of the retroactive salary that covered a period prior to July 1, 2004. Your
4th quarter 2004 Report of Contributions file, applicable to the Teachers'
Pension and Annuity Fund, Public Employees' Retirement System, and Police and
Firemen's Retirement System, is due on or before January 10, 2005. Your final
December 2004 contribution remittance, which represents the pension and contributory
insurance deductions due for the balance of the quarter, should be made through
the Transmittal Electronic Payments System (TEPS). The portion of the remittance
for total pension deductions should reflect the sum of normal pension contributions,
back deductions, loan payments, and arrears/purchase deductions. Your TEPS remittance
is also due by January 10, 2005. With
the Report of Contributions file, you must complete and return the Transmittal
Summary form for the 4th quarter 2004. This document is used to assist
your office and this Division in reconciling your transmittal remittances to the
quarterly Report. The Control and Certification form must also accompany your
quarterly tape Report. This is essential as it attests to the accuracy and validity
of the submitted documentation. If
your quarterly Report and total contributions are not received in a timely manner,
we cannot update the pension accounts of your employees. This may adversely affect
any claim for benefits, including loan applications, filed by your employees.
Also, any delay affects our scheduling in posting contributions to all members'
accounts as well as the mailing of Reports of Contributions for the following
quarter. A tape Report of Contributions will be considered received when it is
submitted in an acceptable format, passes all data processing edits, and can be
used to update members' accounts. Interest will be assessed, as prescribed by
statute and administrative code, when monthly transmittal remittances and the
quarterly Report of Contributions are not received within fifteen days of the
due dates. SACT
Tax-Sheltered Annuity - Remittance Of 403(b) Contributions Chapter
247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be
transmitted and credited within five business days from the pay date. Members
of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund
and Police and Firemen's Retirement System in the Supplemental Annuity (SACT)
Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted
to the Division of Pensions and Benefits within the timeframes prescribed by law.
Contributions for these members will be made through the Transmittal Electronic
Payments System (TEPS). Please
note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted
prior to the processing of your report of contributions. If the full contribution
is not submitted, it may be necessary to refund any supplemental annuity contributions
sent in for the quarter. This could adversely affect your employees' retirement
savings. Reporting
Actual Salaries For Part-Time Employees (Rule Change N.J.A.C. 17:2-4.7) The
Public Employees' Retirement System's Board of Trustees adopted a rule change
for N.J.A.C. 17:2-4.7, that became 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
enrollment criteria for part-time hourly, on-call, and per diem employees remains
unchanged. 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. If the member does not make $1,500 in the current calendar year, and
is not expected to make $1,500 in the following year, that employee is no longer
eligible for the retirement system. TEPS
- Transmittal Shortage Payments The
Division sends transmittal shortage statements when the sum of the transmittal
remittances does not equal the due figure on the quarterly Report of Contributions.
Transmittal shortage statement payments can only be paid through TEPS. Checks
received for payment of transmittal shortages will be returned. If you have questions
related to TEPS, contact the TEPS Helpline at
(888) 835-3345 or FAX your
inquiries to the Audit/Billing Section at (609) 633-1708. Changing
Banking Information For TEPS Notice
of Changes for TEPS should be submitted to the Division of Pensions and Benefits
on or after the date that the new checking account becomes effective.
Every Notice of Change is verified to ensure that the Division has the correct
banking information. This normally takes 12 to 15 days. Statements
Of Overages/Shortages Overage
and shortage statements, which affect a member's Annuity Savings Fund, identify
whether or not the pension contributions are subject to the 414(h) provision.
These statements should be reviewed to determine when adjustments are required
to your payroll records in calculating year-to-date mandatory pension contributions
under 414(h). Please note that all member shortages are to be paid by separate
check. Do not remit through TEPS. Should
you have any questions or need assistance in completing the Report, please telephone
Peter Groffie at (609) 984-4807. Enclosures:
Transmittal Summary for 4th Quarter 2004
Control and Certification
Form
December
2004
| TO: |
Certifying Officer: Teachers'
Pension and Annuity Fund, Public Employees' Retirement System & Police and
Firemen's Retirement System | | FROM: |
John D. Megariotis
Deputy
Director, Finance | | SUBJECT: | Report
of Contributions, 4th Quarter 2004 (October 1st to December
31st) | This
memorandum has pertinent information concerning the completion of your Report
of Contributions (ROC). Please read this memorandum before you make any changes
to the ROC. Chapter
113 Salary Limits Under
Chapter 113, P.L. 1997, the amount of compensation (salary) used to determine
member contributions and benefits, for
the State-administered pension systems listed below, may not exceed the compensation
limitation of section 401(a)(17) of the federal Internal Revenue Code. This compensation
(salary) limitation is adjusted annually, based upon cost of living increases.
The compensation limitation for 2005 will be $210,000. In
other words, under the provisions of the Internal Revenue Code, Section 401(a)(17),
for the "qualified" defined benefit plans listed below [401(a)(2)],
the current federal ceiling on pensionable salary ($205,000 in 2004) applies to
the base salaries of members of these pension plans. Salary earned by a member
in excess of this amount is not pensionable; that is, it may not be used in determining
member contributions and benefits. Change
To Member Contribution Pension Rates - Public Employees' Retirement System - Local
Government Employers Effective
January 1, 2005, the Public Employees' Retirement System (PERS) member contribution
rate for local government employees will return to the normal rate of 5%. As
a result employee pension contributions for retroactive salary increases paid
on or after January 1, 2005, should be calculated at the rate of 5%, including
any portion of the retroactive salary that covered a period prior to January 1,
2005. Member Rates
Remain Unchanged For 4th Quarter 2004 - Chapter 415, P.L. 1999 reduced
the pension rate for members of the Public Employees' Retirement System (PERS)
from 4.5% to 3%. The pension rate for calendar year 2004 will remain at 3% for
PERS local government employees. Change
To Member Contribution Pension Rates - Teachers' Pension And Annuity Fund - Local
Government Employers Effective
January 1, 2004, the Teachers' Pension and Annuity Fund (TPAF) member contribution
rate for local government employees returned to the normal rate of 5%.
As a result employee pension contributions for retroactive salary increases paid
on or after January 1, 2004, should be calculated at the rate of 5%, including
any portion of the retroactive salary that covered a period prior to January 1,
2004. TEPS
Please note that
the only payments that should be submitted through TEPS are for monthly transmittal
and appropriation payments. Employee shortages are not to be submitted through
TEPS. Effective
July 30, 2004, you were able to access TEPS through the Internet instead of calling
in your payments. In addition to making payments on-line, you can cancel payments
on-line providing that you make the cancellation before the 5:30 pm cut off time.
On-line inquiries in which you can view and print a history of your payments are
also available. Log on to www.payments-govonesolutions.com/njpen.
Once you have logged on to TEPS, enter your location number and current password,
the same password you are using with the telephone application. You will find
a user
friendly program that will guide you through the payment, inquiry or
payment cancellation processes. The Division will still receive your payments
the next business day, as long as you enter your payment on-line before the 5:30
pm cut off
time. The
fax number and address that you use to submit the Employer Authorization Forms
to the Division of Pensions and Benefits has been changed. The Employer Authorization
Form must be faxed to (720) 332-0039 or mailed to State of
New Jersey, Department
of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650-9581.
Deadline For
Filing All
ROCs must be postmarked by January 10, 2005, to be considered timely filed. It
must be noted that these deadlines are established to provide for the timely updating
of member accounts each quarter. In order to accomplish this goal for the over
300,000 members of the retirement plans, we rely on you, our participating employers,
to report pension information to us by the 10th calendar day of the
month following the end of the calendar quarter. In return, your employees' accounts
are updated with the most recent pension information, which in turn may be used
to process benefit claims by those same employees or their beneficiaries. In
recent years more and more employers have been delivering their ROCs to us later
and later. However, we have extended the courtesy of holding open the reporting
period to accommodate this late receipt of information so as to not adversely
impact the employees. We must now notify you that this courtesy may no longer
be extended because it conflicts with our goal to provide timely benefit processing
to other retirement plan members whose employers submit their ROCs by the prescribed
due date. We will continue to accept your ROCs beyond the 10th of
each calendar quarter but we will not guarantee that your employees' pension accounts
will be updated or benefits processed within the time period they would expect.
That may result in your employees not receiving service credit as earned,
loans when submitted or retirement benefits immediately following termination
of employment. When
you receive your quarterly ROC, you should review it immediately. If you
think you will have a problem in meeting the filing deadline, or if there is anything
you do not understand, contact the Audit/Billing Section at (609) 292-3630.
Normally, reporting inquiries can be resolved with a telephone call. If other
arrangements need to be made to assist you in the completion of your ROC, the
sooner you communicate that fact to the Division the better for everyone involved. TOP
5 REPORTING AND PAYMENT ERRORS - Number
5 - Changing Banking Information for TEPS
Banking changes for TEPS should
be submitted to the Division of Pensions and Benefits through the Employer Authorization
Form on or after the date that the new checking account becomes effective. Please
note that the fax number and address previously used has changed. The Employer
Authorization form must be faxed to (720) 332-0039 or mailed to State of New Jersey,
Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton,
NJ 08650-9581.
- Number
4 - Explain all changes
Please make all necessary corrections to the ROC
before you return it to the Division of Pensions and Benefits. Verify that all
changes are explained, the ROC is added correctly, and the totals agree with the
sum of the transmittal remittances.
- Number
3 - Reporting partial months of service
- Number
2 - Incorrect page and grand totals
- And,
the number 1, most common reporting error is - Changes to employee contribution
amounts for penny differences resulting from rounding
Should
you have any questions or need assistance in completing the ROC, please telephone
us at (609) 292-3630. Enclosures:
Quarterly Report of Contributions
Transmittal Summary for 4th Quarter 2004
Return Envelope
December 2004
| To: |
Certifying Officer
Public
Employees' Retirement System (Non-Boards of Education)
Police and Firemen's
Retirement System | | From: |
John D. Megariotis
Assistant
Director, Finance | | Subject: | Report
of Salary Change Instructions | The
enclosed Report of Salary Change lists those members projected on your fourth
quarter 2004 Report of Contributions. The list shows the membership number, member's
name, payment plan (10/12 month), and provides space to insert the
base salary
to be projected on the quarterly Report of Contributions for the first calendar
quarter of 2005. Do
not add any members (i.e., new enrollments, transfers, employees returning from
leave of absence) or reflect any name changes to this report. You
should insert only the member's quarterly base salary, rounded to
the nearest dollar for January, February, and March of 2005; this amount will
be projected on the quarterly Report of Contributions for the first quarter of
2005. For example, if a member is paid over 12 months and has an annual salary
of $25,642, you should show a salary of $6,411 to be projected for the first quarter
2005. Project
only three full months of contractual base salary even if an employee will be
on leave of absence or terminating employment. It has been our experience that
employers reporting one or two months of salary on the Report of Salary Change
have the correct base salary and contributions on the next quarterly Report of
Contributions, but the months of service column is not changed to reflect the
correct service credit. (A projection for the 3rd quarter to a 10
month member is the only situation when the salary projection would not be for
3 full months of base salary.) There
is sometimes a delay in a municipality adopting its new budget, and although salary
changes are effective January 1st, the retroactive increase is not
paid until the second quarter. Under these circumstances, it is suggested that
you forward the Report of Salary Change for the second quarter to this Division
before May 15th with the new quarterly base salary for the second quarter
plus the retroactive increase covering the first quarter. This should
be one combined figure. In this case, you must denote on the first page of
the projection sheet that this is a second quarter salary projection.
In addition, you should request a Report of Salary Change for the third quarter
to insert the quarterly base salaries for the third quarter Report of Contributions.
If you follow this procedure, it will avoid numerous changes on your Report of
Contributions, because the Division will project salaries and deductions for each
quarter. The
Division will furnish a Report of Salary Change for any quarter upon request.
To avoid delays in submitting your Report of Contributions, it is recommended
that you use the Report of Salary Change, rather than column 1 of the Report,
whenever you have numerous salary projections. To process a Report of Salary
Change, it must be returned to the Division of Pensions and Benefits by the 15th
of the second month of a calendar quarter for the salaries to be projected for
that quarter. To
project the salaries on your first quarter 2005 Report of Contributions, the changes
must be received no later thanFebruary 15th. In
Summary: - Project
only 3 months of base salary (plus retroactive salary adjustments, if applicable)
-
Do not add members
-
Do not make name changes
-
Make no entry if the member's
salary did not change from last quarter's reported salary
-
Return the report of salary
change by February 15th.
| TO:
| Local
Government Certifying Officer
Public Employee’s Retirement System |
| FROM:
| John
D. Megariotis
Deputy Director, Finance | | SUBJECT: | PUBLIC
EMPLOYEES’ RETIREMENT SYSTEM - Change to Member Pension Rate - January 2005
| Effective
January 1, 2005, the member contribution rate will return to the normal rate of
5% for local government employees enrolled in the PERS. The
previous reduction in the member rate for the PERS was authorized by statute and
was based on the existence of surplus pension assets in the retirement system.
However, also per statute, when there are no longer surplus pension assets, the
member rate for PERS w ill return to the normal rate of 5%. Since excess
assets no longer exist in the PERS for local government members, please be sure
to deduct the 5% rate for base salary reported on or after January 1, 2005. Retroactive
increases in base salary paid on or after January 1, 2005, must have corresponding
pension contributions deducted at the 5% rate; including any portion of the retroac
tive salary that covered a period prior to January 1, 2005.
November
29, 2004
| TO: |
Chief School Administrators
Charter School Lead Persons
County Superintendents |
| FROM: | Richard
C. Ten Eyck, Assistant Commissioner
Division of Educational Programs and Assessment |
| SUBJECT: | Teacher
Mentoring | Recent
changes in the state licensing regulations allowed districts to use retired teachers
and administrators to serve as mentors for new teachers. We have recently received
information from the Division of Pensions and Benefits that such employment could
violate the earnings threshold established in statute for the Teachers' Pensions
and Annuity Fund (TPAF). This violation could jeopardize either their earnings
or benefits and result in a requirement to make restitution to the state for any
pension payments made during the employment period.
The
following are the statutory citations that govern the TPAF enrollment:
N.J.S.A. 18A:66-4 - Membership
No person in employment,
office or position, for which the annual salary or remuneration is fixed at less
that $500 shall be eligible to become a member of the retirement systems. This
means anyone making $500 or more must become a member. N.J.S.A.
17:3-2.1 - Enrollment Eligibility (a)
Any person appointed by the State, local board of education, or charter school
to a position listed in the definition of "teacher" found in N.J.S.A.
18A:66-2(p) or as a regular full-time or part-time employee in position that meets
the following conditions shall be required to become a member of the Fund effective
as of the date of their employment: - The
position requires a valid certificate issued by the State Board of Education and
the person employed holds this valid certificate;
- The
position is covered by Social Security; and
- The
salary for the position is $500 or more within a year.
The
stipend for mentoring is $550 for traditional route provisional teacher mentors
and $1000 for alternate route provisional teacher mentors. The Division of Pensions
and Benefits has advised the Department of Education that all retired mentor teachers
making more that $499 would fall under the definition in the statute.
If you have further questions on the mentoring pension issues, please contact
Dr. Jay Doolan, Director, Office of Academic and Professional Standards at 609-984-5322.
For all other questions involving the use of retired teachers and administrators
in schools, please contact: Mindy
Smith-Sopko
Legislative/Legal Affairs Unit
Division of Pensions and Benefits
Department of the Treasury
P.O. Box 295
Trenton, NJ 08625-0295
October 2004
| TO: |
State Health Benefits Program Local Government and Education Employers |
| FROM: | Florence
J. Sheppard
Deputy Director, Benefits Operations |
| SUBJECT: | Extension
of the Employee Dental Plans to Local Government and Education Employers |
The State Health
Benefits Commission has authorized the extension of the Employee Dental Plans
to State Health Benefits Program (SHBP) participating employers effective January
1, 2005. Local government and education employers that offer SHBP medical plan
coverage to their employees may now offer the same dental plans to their employees
that are currently offered to active State employees. Participating SHBP employers
may adopt the Employee Dental Plans for their active employees and their dependents
by filing the attached resolution with the Division of Pensions and Benefits,
State Health Benefits Bureau. Employers
with less than 250 employees must file a completed resolution to participate in
the Employee Dental Plans at least 75 days prior to the effective date of coverage.
Employers with 250 or more employees must file at least 90 days prior to the desired
effective date of coverage. Employers electing to participate must remain in
the Employee Dental Plans for at least 12 consecutive months. If
you elect to participate in the Employee Dental Plans, your employees will have
a choice between two types of dental plans: -
the Dental Expense Plan; or
-
a Dental Plan Organization (DPO).
Dental
Expense Plan The
Dental Expense Plan is a traditional indemnity, fee-for-service plan administered
by Aetna Dental that reimburses covered services provided by any dental provider
licensed to practice at a percentage of reasonable and customary fees. There
is a $50 per person annual deductible, maximum of $150 per family, which must
be met before reimbursements are made. The deductible is waived for diagnostic,
preventive, and orthodontic services. The plan covers preventive, basic restorative,
and major restorative services at different levels and orthodontic services are
eligible only up to a limited amount. The Dental Expense Plan has a passive network
of dentists who have agreed to accept a discounted fee for services. If an employee
uses a network provider, the fee for the service will generally be lower than
that charged by an out-of-network dentist so the employee's costs will be lower.
The plan is described in greater detail in the enclosed Fact
Sheet #37, SHBP Employee Dental Plans. Dental
Plan Organizations (DPOs) DPOs
contract with a network of providers for dental services and employees enrolling
in these plans must use providers participating with the DPO to receive coverage.
As long as the employee uses a DPO dentist, diagnostic and preventive services
are covered in full. Most other eligible expenses require a copayment. Orthodontic
treatment is covered for both children and adults. For more information on DPOs,
refer to the enclosed Fact Sheet #37, SHBP Employee
Dental Plans. The
State Health Benefits Commission currently contracts with 10 DPOs as follows:
|
Aetna DMO |
Flagship Health Systems, Inc. | |
Atlantic Southern Dental
(Benecare) |
Fortis Benefits DentalCare | |
CIGNA Dental Health |
Group Dental Health Administrators
| |
Community Dental Associates |
Healthplex | |
Dental Group of New Jersey, Inc. |
Horizon Dental Choice | Employee
Dental Plans Member Handbook The
SHBP publishes a handbook detailing the dental plan benefits. A newly revised
SHBP Employee Dental Plans Member Handbook
- that includes benefits to local government and education employees - will be
available to enrolled members in January 2005. Prior to publication, employers
and employees may consult the current State Group Dental Program Member Handbook
which describes benefits that are identical to the 2005 plan year benefits with
the following exceptions: -
Procedures for oral evaluations and cleanings for the SHBP Dental Plans will change.
Diagnostic oral evaluations can be performed up to two times per calendar year;
X-rays can be made for two series of up to four films per calendar year; preventative
dental cleanings can be performed two times in a calendar year; and two fluoride
treatments can be performed per calendar year for eligible dependent children
under 19 years of age.
-
Effective for the 2005 plan year, Unity Dental Plan Organization will no longer
be offered under the SHBP Employee Dental Plans.
The
member handbook is available for viewing online from a link at the SHBP home page:
www.state.nj.us/treasury/pensions/shbp.htm Employer
Participation in the Employee Dental Plans The
rules established by the State Health Benefits Commission for participation in
the Employee Dental Plans are generally the same as for the SHBP medical plans
with the following exceptions. -
An employee who terminates dental coverage does not have a right of conversion
to non-group coverage.
-
Duplicate coverage within the Employee Dental Plans is not permitted; an individual
may be covered as an employee or as a dependent but not as both an employee and
a dependent. Dependent children may only be covered by one parent.
-
An employee must participate in their chosen dental plan for a minimum of 12 consecutive
months.
-
There is no premium delay of 30 or 60 days of the employer premium charges for
the Employee Dental Plans.
Employee
Dental Plans Cost The
Employee Dental Plans are being offered to local employers at the same rates the
State pays. If over the next few years there appears to be a significant difference
in the utilization of the State group verses the local employer group, separate
rates will be developed. A rate chart for calendar year 2005 is attached. If
a participating local employer does not pay 100 percent of the cost of coverage
in the Employee Dental Plans, the employee's share of the cost may be determined
by a formula different from that used to determine their cost for medical coverage,
provided that the employee's share of the cost for dental coverage is not more
than 50 percent. For employee contribution purposes only, the DPO rates are
calculated in aggregate, that is, the employee contribution for DPO coverage is
the same regardless of the DPO selected. The State Health Benefits Commission
determines DPO premium rates based upon the value of services provided. Plans
of higher value receive higher premiums. The use of a DPO composite rate prevents
adverse selection by employees against the better performing (and more expensive)
plans. The 50 percent maximum employee contribution and the DPO composite rate
are provided in the attached rate chart. Retiree
Dental Expense Plan The
State Health Benefits Commission will also offer a Retiree Dental Expense Plan
to State and Local SHBP retirees effective January 1, 2005. All retirees eligible
for enrollment in the SHBP will be offered an opportunity to enroll in this new
dental coverage. Generally, retirees will be enrolled on a retiree-pay-all basis,
although participating employers may elect to pay all or a portion of the cost
of post-retirement dental coverage for eligible retirees. Information about this
plan is available in Fact Sheet #73, Retiree Dental
Expense Plan, which is available on our Web site at: www.state.nj.us/treasury/pensions For
More Information General
information about the SHBP Dental Plans can be found on the SHBP Web site at:
www.state.nj.us/treasury/pensions/shbp.htm If you
have specific questions about the plans, employers can call the Employer Hotline
at (609) 292-5353 (select option 1 when prompted for the Dental Plan mailbox),
or e-mail the Division of Pensions and Benefits at: pensions.nj@treas.state.nj.us
Enclosures
September
2004
| TO: | Certifying
Officers
NJ State Health Benefits Program |
| FROM: | John
D. Megariotis
Deputy Director of Finance |
| SUBJECT: | Transmittal
Electronic Payment System (TEPS) | We
are very pleased to announce that we have enhanced the Transmittal Electronic
Payment System (TEPS) so you may remit your State Health Benefits (SHBP) payments
electronically. The Active Employer and Retired Employer Group payments, if applicable,
can be processed by using the Internet or placing a toll free telephone call.
All
employers' remittances must be made through the TEPS program beginning December
27, 2004. After this date, paper checks will not be accepted. TEPS is a safe
and efficient system that allows you to authorize payments from your bank account
to the Division of Pension and Benefits. - Convenient
and Easy-To-Use: You can make your SHBP payments using the Internet or the
telephone seven days a week. Each payment method will prompt you for the required
information.
- Free
of Charge: No more need to issue checks or incur mailing costs, ultimately
reducing your time and cost on this monthly task. There is no charge by the State
of New Jersey, Division of pensions and Benefits for using TEPS. Your bank may
charge you an incidental fee to process these transactions.
- Increased
Control: A payment is made only when you authorize it through one of the payment
methods. You will have maximum use of your funds with the added benefit of ensuring
on-time payments. You also have the capability to inquire, cancel or research
a payment.
- Increased
Reliability: Once you have completed the payment through one of the payment
methods, you will receive a reference number as your proof of payment. The Division
will receive your payment the next business day, as long as you enter your payment
before the 5:30 p.m. cut off time.
To
implement this system for SHBP, employer must complete the attached Employer Authorization
Form for each employer identification number. Be sure to follow the instructions
and attach an original voided blank bank check and return the completed document
in the enclosed envelope. The Employer Authorization Form is also available on
the Division's Web site. If you have Acrobat Reader version 4.0 or higher, the
form can be completed on line an printed. All forms must be signed by the Certifying
Officer and dated. You must submit your form with a voided check to P.O. Box 9581,
Trenton, NJ 08650-9581 or you may fax the form and voided check to (720) 332-0039.
Please allow fourteen to twenty-one days for the enrollment process. When this
is complete, you will receive a Welcome Packet that contains a welcome letter,
a temporary password, and easy instructions on how to use the TEPS System. For
the Internet payment method, the TEPS Web site has a user friendly program that
will guide you through the payment, inquiry, or payment cancellation processes. If
you have any questions about the enrollment process, please contact Customer Service
at the TEPS Helpline at (888)-835-3345 between 9:00 a.m. and 7:00 p.m. We appreciate
your cooperation in complying with the new procedure. Thank you for your participation.
September 14, 2004
| TO: | State
Health Benefits Program Participating Local Government Employers |
| FROM: |
Florence J. Sheppard
Deputy Director, Benefits Operations | | SUBJECT: | SHBP
Open Enrollment 2004 - Local Government Employers | The
State Health Benefits Program (SHBP) Open Enrollment Period for local government
employees will begin on October 1, 2004 and end on November 1, 2004. All
changes to coverage made during this open enrollment will be effective on January
1, 2005. Completed
employer-certified health benefit and/or dental applications should be forwarded
to the Health Benefits Bureau as soon as they are received from employees. The
last day that certified applications may arrive at the Health Benefits Bureau
to be effective for the start of the new plan year is November 8, 2004. In
keeping with its current policy, the SHBP will not provide health fairs during
this year's open enrollment period. RATES
FOR 2005 The
State Health Benefits Commission has approved new health and prescription drug
plan rates for the 2005 plan year. These rates are based upon the recommendation
of the Commission's actuarial consultant, Milliman USA. Since the SHBP self-funds
most of its plans, the claims experience used in projecting 2005 costs are based
upon the actual claims experience of the group. Health
benefit costs for many employer-sponsored plans continued to experience double
digit increases in 2004, although there are signs of moderation. For the SHBP,
we are pleased to report that favorable claims experience for 2003 and 2004 has
helped to produce medical plan rate increases for the 2005 plan year that are
somewhat lower than emerging trends. For the Employee Prescription Drug Plan,
although emerging trends continue in the double digits, increases were suppressed
by a large number of highly utilized drugs coming off patent, going generic or
over-the-counter, resulting in a rate increase for the Plan of only 8.4%. Many
industry experts predict that health care costs will begin to moderate over the
next few years due to some restraint in hospital costs and stabilization of drug
costs, but caution that double digit rate increases remain a possibility for many
employer-sponsored health plans. Effective
January 1, 2005, SHBP plan rates for the Local Government Active Group will see
the following aggregate percentage of increase:
| |
NJ PLUS |
Traditional Plan |
HMO Plans
(Composite
Change) | Employee
Prescription Drug Plan | |
Local Government Employers
with Separate Rx Coverage |
7.0% |
7.1% |
0.4% |
8.4% |
| Local
Government Employers without Separate Rx Coverage |
10.0% |
9.9% |
4.4% |
N/A |
MEDICAL
AND PRESCRIPTION DRUG PLAN CHANGES - Prescription
Mail Service Option Under NJ PLUS and the Traditional Plan - Effective January
1, 2005, a mail order service is available in the Employee Prescription Drug Reimbursement
Plan offered to local active, full-time employees and their dependents (and COBRA
participants) enrolled in NJ PLUS or the Traditional Plan who do not have a separate
prescription drug plan through their employer. The Employee Prescription Drug
Reimbursement Plan is administered by Horizon Blue Cross Blue Shield of New Jersey
through AdvancePCS, a Caremark Company. The mail order service will allow members
to obtain maintenance prescriptions by mail from AdvanceRx.com, the mail service
pharmacy owned and operated by AdvancePCS.
DENTAL
PLAN INFORMATION - Employee
Dental Plans Expansion - The State Health Benefits Commission has authorized
the extension of dental coverage to SHBP participating local employers effective
January 1, 2005. Participating SHBP local employers may adopt the SHBP Employee
Dental Plans for their active employees and eligible dependents by filing the
appropriate resolution to participate with the State Health Benefits Bureau. The
Employee Dental Plans include the Dental Expense Plan and several Dental Plan
Organizations. An employer must agree to participate in the Employee Dental Plans
for 12 consecutive months and an employee who enrolls in a dental plan must participate
in their chosen plan for a minimum of 12 consecutive months. A separate mailing
is being prepared that will describe the dental plan offering in detail. Employers
and employees can also see Fact Sheet
#37, SHBP Employee Dental Plans, for a description of the plans and
a chart outlining the benefits.
- New
Retiree Dental Expense Plan - A new Retiree Dental Expense Plan, administered
for the SHBP by Aetna Dental, will become effective January 1, 2005. The Plan
is available to all retirees eligible to enroll under the medical plans in the
SHBP Retired Group. Generally, retirees who enroll in the Retiree Dental Expense
Plan are responsible for paying the full cost of their coverage. Beginning January
1, 2005, when an employee becomes eligible for medical plan coverage under the
SHBP Retired Group, their SHBP offering letter will include information on enrolling
under the Retiree Dental Expense Plan. This will be a one-time offering at time
of retirement or when first eligible for SHBP Retired Group enrollment. All retirees
who are currently receiving (or are eligible to receive) benefits under the SHBP
Retired Group (including those that waived SHBP benefits because they have coverage
under a public employer group plan from a spouse or their own employment) will
be offered an opportunity to enroll in the Retiree Dental Expense Plan during
a special open enrollment period. This special open enrollment period will be
held from October 1, 2004 through March 31, 2005. Communications will be mailed
directly to these retirees.
A
description of the plan and a chart outlining the benefits of the new Retiree
Dental Expense Plan is available in Fact
Sheet #73, Retiree Dental Expense Plan, which can be found on our Web
site at: www.state.nj.us/treasury/pensions RETIREE
PRESCRIPTION DRUG PLAN INFORMATION In
accordance with the provisions of the pilot Retiree Prescription Drug Plan under
NJ PLUS and the Traditional Plan, effective January 1, 2005, retail pharmacy copayments
for a 30-day supply will increase to $7 for generic drugs; $14 for preferred brand
name drugs; and $29 for all other brand name prescription drugs. The mail order
copayments for a 90-day supply will increase to $7 for generic drugs, $21 for
preferred brand name drugs, and $36 for all other brand name prescription drugs.
The out-of-pocket maximum will increase to $552. OPEN
ENROLLMENT INFORMATIONAL MATERIALS MILESTONES
- Enclosed is a milestone chart
that lists the critical dates of the open enrollment period and outlines the efforts
being made to educate employees. Please use this chart as a checklist to guide
your activities during open enrollment. RATE
CHARTS - Enclosed you will find approved
rates for SHBP health and prescription drug plans. We have included rate charts
for employers with and without prescription drug coverage. The listed rates are
effective January 1, 2005 through December 31, 2005. HEALTH
CAPSULE - The Health Capsule
newsletter announces the SHBP Open Enrollment Period to employees and presents
important information and changes that may affect their benefit selection. A
sample is enclosed for your review. The newsletters are scheduled for delivery
to Local employers in mid-September. Please distribute them to your employees
prior to the start of the open enrollment period. HEALTH
PLAN CONTACTS - Also included in this mailing is a listing of marketing
contacts for the various health and dental plans. Use these contacts to obtain
provider directories or other plan specific literature. (These telephone numbers
are not for member services. Please do not give these telephone
numbers to your employees.) NEW
HEALTH PLAN APPLICATIONS - Enclosed you will find a copy of the most current
application for SHBP health plans (including prescription drug coverage).
The application is also available for download from the SHBP home page. For this
open enrollment period, the Health Benefits Bureau will continue to accept employer-certified
changes to SHBP plans on either this newly revised application or the former Local
Employer Group application. Note:
A separate application is used for enrollment in the SHBP Employee Dental Plans,
and will be forwarded to those employers who adopt the plan. HEALTH
PLAN COMPARISON CHARTS - The SHBP Plan Comparison Chart for Local Government/Educational
Active Employees and All Retirees is currently being printed and copies will be
shipped to employers for the start of the open enrollment period. SUMMARY
PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP Summary
Program Description has been revised for the 2005 plan year. The booklet
is currently being printed and copies will be shipped to employers for the start
of the SHBP Open Enrollment Period. The SPD is also available for viewing over
the Internet at: www.state.nj.us/treasury/pensions/shbp.htm PLAN
HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS,
the Employee Prescription Drug Plan, and the SHBP Dental Plans are being revised
for the 2005 plan year. New editions will be available in January 2005 for plan
enrollees. ONLINE
INFORMATION The
SHBP's plan comparisons, member handbooks, newsletters, and rate information are
available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
Web-based
presentations on the SHBP Open Enrollment Period will also be available for both
employers and employees during the open enrollment period. Once open enrollment
begins you will find the link on the SHBP home page. Participating
provider information for all SHBP medical plans is available in the Unified
Provider Directory (UPD). The UPD is an online service that provides a comprehensive
listing of health care providers and facilities that deliver their services through
one or more of the SHBP's health care plans. Updated monthly, you can access
the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
ADDITIONAL
INFORMATION If
you have any questions about the SHBP Open Enrollment Period or the information
in this letter, please contact our Office of Client Services at (609) 292-5353,
and select option #2 on the phone. When prompted, leave a message and a representative
will return your call. Thank
you for your assistance in making the SHBP Open Enrollment Period a success for
your employees. Enclosure:
September
14, 2004
| TO: | State
Health Benefits Program Participating Local Education Employers |
| FROM: |
Florence J. Sheppard
Deputy Director, Benefits Operations | | SUBJECT: | SHBP
Open Enrollment 2004 - Local Education Employers | The
State Health Benefits Program (SHBP) Open Enrollment Period for local Board of
Education employees will begin on October 1, 2004 and end on November 1, 2004.
All changes to coverage made during this open enrollment will be effective on
January 1, 2005. Completed
employer-certified health benefit and/or dental applications should be forwarded
to the Health Benefits Bureau as soon as they are received from employees. The
last day that certified applications may arrive at the Health Benefits Bureau
to be effective for the start of the new plan year is November 8, 2004. In
keeping with its current policy, the SHBP will not provide health fairs during
this year's open enrollment period. RATES
FOR 2005 The
State Health Benefits Commission has approved new health and prescription drug
plan rates for the 2005 plan year. These rates are based upon the recommendation
of the Commission's actuarial consultant, Milliman USA. Since the SHBP self-funds
most of its plans, the claims experience used in projecting 2005 costs are based
upon the actual claims experience of the group. Health
benefit costs for many employer-sponsored plans continued to experience double
digit increases in 2004, although there are signs of moderation. For the SHBP,
we are pleased to report that favorable claims experience for 2003 and 2004 has
helped to produce medical plan rate increases for the 2005 plan year that are
somewhat lower than emerging trends. For the Employee Prescription Drug Plan,
although emerging trends continue in the double digits, increases were suppressed
by a large number of highly utilized drugs coming off patent, going generic or
over-the-counter, resulting in a rate increase for the Plan of only 8.4%. Many
industry experts predict that health care costs will begin to moderate over the
next few years due to some restraint in hospital costs and stabilization of drug
costs, but caution that double digit rate increases remain a possibility for many
employer-sponsored health plans. Effective
January 1, 2005, SHBP plan rates for the Local Education Active Group will see
the following aggregate percentage of increase:
| |
NJ PLUS |
Traditional
Plan | HMO
Plans
(Composite Change) |
Employee
Prescription Drug Plan | |
Local Education Employers
with Separate Rx Coverage |
5.9% |
11.0% |
0.4% |
8.4% |
| Local
Education Employers without Separate Rx Coverage |
3.9% |
8.1% |
4.4% |
N/A |
MEDICAL
AND PRESCRIPTION DRUG PLAN CHANGES - Prescription
Mail Service Option Under NJ PLUS and the Traditional Plan - Effective January
1, 2005, a mail order service is available in the Employee Prescription Drug Reimbursement
Plan offered to local active, full-time employees and their dependents (and COBRA
participants) enrolled in NJ PLUS or the Traditional Plan who do not have a separate
prescription drug plan through their employer. The Employee Prescription Drug
Reimbursement Plan is administered by Horizon Blue Cross Blue Shield of New Jersey
through AdvancePCS, a Caremark Company. The mail order service will allow members
to obtain maintenance prescriptions by mail from AdvanceRx.com, the mail service
pharmacy owned and operated by AdvancePCS.
DENTAL
PLAN INFORMATION - Employee
Dental Plans Expansion - The State Health Benefits Commission has authorized
the extension of dental coverage to SHBP participating local employers effective
January 1, 2005. Participating SHBP local employers may adopt the SHBP Employee
Dental Plans for their active employees and eligible dependents by filing the
appropriate resolution to participate with the State Health Benefits Bureau. The
Employee Dental Plans include the Dental Expense Plan and several Dental Plan
Organizations. An employer must agree to participate in the Employee Dental Plans
for 12 consecutive months and an employee who enrolls in a dental plan must participate
in their chosen plan for a minimum of 12 consecutive months. A separate mailing
is being prepared that will describe the dental plan offering in detail. Employers
and employees can also see Fact Sheet #37, SHBP Employee Dental Plans,
for a description of the plans and a chart outlining the benefits.
- New
Retiree Dental Expense Plan - A new Retiree Dental Expense Plan, administered
for the SHBP by Aetna Dental, will become effective January 1, 2005. The Plan
is available to all retirees eligible to enroll under the medical plans in the
SHBP Retired Group. Generally, retirees who enroll in the Retiree Dental Expense
Plan are responsible for paying the full cost of their coverage. Beginning January
1, 2005, when an employee becomes eligible for medical plan coverage under the
SHBP Retired Group, their SHBP offering letter will include information on enrolling
under the Retiree Dental Expense Plan. This will be a one-time offering at time
of retirement or when first eligible for SHBP Retired Group enrollment. All retirees
who are currently receiving (or are eligible to receive) benefits under the SHBP
Retired Group (including those that waived SHBP benefits because they have coverage
under a public employer group plan from a spouse or their own employment) will
be offered an opportunity to enroll in the Retiree Dental Expense Plan during
a special open enrollment period. This special open enrollment period will be
held from October 1, 2004 through March 31, 2005. Communications will be mailed
directly to these retirees.
A
description of the plan and a chart outlining the benefits of the new Retiree
Dental Expense Plan is available in Fact
Sheet #73, Retiree Dental Expense Plan, which can be found on our Web
site at: www.state.nj.us/treasury/pensions RETIREE
PRESCRIPTION DRUG PLAN INFORMATION In
accordance with the provisions of the pilot Retiree Prescription Drug Plan under
NJ PLUS and the Traditional Plan, effective January 1, 2005, retail pharmacy copayments
for a 30-day supply will increase to $7 for generic drugs; $14 for preferred brand
name drugs; and $29 for all other brand name prescription drugs. The mail order
copayments for a 90-day supply will increase to $7 for generic drugs, $21 for
preferred brand name drugs, and $36 for all other brand name prescription drugs.
The out-of-pocket maximum will increase to $552. OPEN
ENROLLMENT INFORMATIONAL MATERIALS MILESTONES
- Enclosed is a milestone chart
that lists the critical dates of the open enrollment period and outlines the efforts
being made to educate employees. Please use this chart as a checklist to guide
your activities during open enrollment. RATE
CHARTS - Enclosed you will find approved
rates for SHBP health and prescription drug plans. We have included rate charts
for employers with and without prescription drug coverage. The listed rates are
effective January 1, 2005 through December 31, 2005. HEALTH
CAPSULE - The Health Capsule
newsletter announces the SHBP Open Enrollment Period to employees and presents
important information and changes that may affect their benefit selection. A
sample is enclosed for your review. The newsletters are scheduled for delivery
to Local employers in mid-September. Please distribute them to your employees
prior to the start of the open enrollment period. HEALTH
PLAN CONTACTS - Also included in this mailing is a listing of marketing
contacts for the various health and dental plans. Use these contacts to obtain
provider directories or other plan specific literature. (These telephone numbers
are not for member services. Please do not give these telephone
numbers to your employees.) NEW
HEALTH PLAN APPLICATIONS - Enclosed you will find a copy of the most current
application for SHBP health plans (including prescription drug coverage).
The application is also available for download from the SHBP home page. For this
open enrollment period, the Health Benefits Bureau will continue to accept employer-certified
changes to SHBP plans on either this newly revised application or the former Local
Employer Group application. Note:
A separate application is used for enrollment in the SHBP Employee Dental Plans,
and will be forwarded to those employers who adopt the plan. HEALTH
PLAN COMPARISON CHARTS - The SHBP Plan Comparison Chart for Local Government/Educational
Active Employees and All Retirees is currently being printed and copies will be
shipped to employers for the start of the open enrollment period. SUMMARY
PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP
Summary Program Description has been revised for the 2005 plan year. The
booklet is currently being printed and copies will be shipped to employers for
the start of the SHBP Open Enrollment Period. The SPD is also available for viewing
over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm PLAN
HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS,
the Employee Prescription Drug Plan, and the SHBP Dental Plans are being revised
for the 2005 plan year. New editions will be available in January 2005 for plan
enrollees. ONLINE
INFORMATION The
SHBP's plan comparisons, member handbooks, newsletters, and rate information are
available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
Web-based presentations
on the SHBP Open Enrollment Period will also be available for both employers and
employees during the open enrollment period. Once open enrollment begins you
will find the link on the SHBP home page. Participating
provider information for all SHBP medical plans is available in the Unified
Provider Directory (UPD). The UPD is an online service that provides a comprehensive
listing of health care providers and facilities that deliver their services through
one or more of the SHBP's health care plans. Updated monthly, you can access
the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
ADDITIONAL
INFORMATION If
you have any questions about the SHBP Open Enrollment Period or the information
in this letter, please contact our Office of Client Services at (609) 292-5353,
and select option #2 on the phone. When prompted, leave a message and a representative
will return your call. Thank
you for your assistance in making the SHBP Open Enrollment Period a success for
your employees. Enclosure:
September 10, 2004
| TO: |
State Departmental Human
Resource Directors
State Biweekly Human Resources Representatives |
| FROM: | Florence
J. Sheppard
Deputy Director, Benefits Operations |
| SUBJECT: | SHBP
Open Enrollment 2004 - State Biweekly Employers | The
State Health Benefits Program (SHBP) Open Enrollment period for all State employees
will begin on October 1, 2004 and end on November 1, 2004. All changes
to coverage made during this open enrollment will be effective on December 25,
2004 for State biweekly employees paid through the State Centralized Payroll Unit. Completed
employer-certified health benefit and/or dental applications should be forwarded
to the Health Benefits Bureau as soon as they are received from employees. The
last day that certified applications may arrive at the Health Benefits Bureau
to be effective for the start of the new plan year is November 8, 2004. In
keeping with its current policy, the SHBP will not provide health fairs during
this year's open enrollment period. RATES
FOR 2005 The
State Health Benefits Commission has approved new health, dental, and prescription
drug plan rates for the 2005 plan year. These rates are based upon the recommendation
of the Commission's actuarial consultant, Milliman USA. Since the SHBP self-funds
most of its plans, the claims experience used in projecting 2005 costs are based
upon the actual claims experience of the group. As
a result of contract negotiations and the fiscal year 2005 Budget Appropriations
Act, SHBP medical plan deductibles and copayments and prescription drug copayments
will be changing for a large majority of State employees. Rates differ depending
on whether an employee is affected by these plan changes. Effective
December 25, 2004, SHBP plan rates for the State Active Group, (those with plan
changes and those without) will see the following aggregate percentage of increase:
| PLAN
TYPE |
RATE INCREASE
(Aggregate percentage) | |
NJ PLUS |
(with plan changes)
(no plan changes) |
3.0% 6.0% |
| Traditional
Plan | (with
plan changes)
(no plan changes) | 5.3% 8.6% |
| HMO
Plans |
(with plan changes)
(no plan changes) |
1.2% 3.8% |
| Prescription
Drug Plan | (with
plan changes)
(no plan changes) |
0.5% 9.8% |
| Dental
Provider Organization (DPO) Plans |
5.5% |
| Dental
Expense Plan | 7.9% |
PREMIUM
SHARING The
premium share arrangements remain unchanged. For those employees subject to premium
sharing: -
There is no premium cost to any employee who enrolls in NJ PLUS.
-
Employees will pay 5% of the premium cost if enrolled in an HMO.
-
Employees will pay 25% of the premium cost if enrolled in the Traditional Plan.
These
percentages apply regardless of salary level or date of hire. MEDICAL
AND PRESCRIPTION DRUG PLAN CHANGES The
plan changes that will affect the majority of employees are as follows:
- For the Traditional Plan,
the annual deductible will be increasing from $100 per person to $250 per person
effective January 1, 2005
as follows:
| Single |
$250 |
| Member
& Spouse/ Domestic Partner |
$250 per person |
| Parent
& Child(ren) | $250
for employee and $250 in aggregate for child(ren)1 |
| Family |
$250 for employee and $250
in aggregate for all other family members1 | 1The
total combined deductible for dependents adds up to $250 per year.
- For NJ PLUS and all HMOs
(Aetna, AmeriHealth, CIGNA, Health Net, and Oxford), the copayment for primary
doctor visits and visits to a specialist will increase from $5 to $10 as of December
25, 2004 for State employees paid through the State's Centralized Payroll Unit.
- The copayments
for the Employee Prescription Drug Plan will also be increasing as of December
25, 2004. For each 30-day supply received at a retail pharmacy, the copayments
will increase from $1 to $3 for generic drugs and from $5 to $10 for brand name
prescription drugs. Mail order copayments for up to a 90-day supply will increase
from $1 to $5 for generic drugs and $5 to $15 for brand name prescription drugs.
These
changes will go into effect for employees covered by collective bargaining agreements,
where the agreements provide for or adopt such changes, and all non-aligned employees.
Employees in collective bargaining units who have not agreed to or adopted these
changes will not be affected until such time as the majority representative agrees
to them, or they are made part of a final and binding interest arbitration award.
As of this printing, employees of the Executive Branch of the State covered under
State labor agreements with the State Police Troopers, Sergeants, and Lieutenants
bargaining units and five non-State Police law enforcement bargaining units will
not be affected by the changes. DENTAL
PLAN INFORMATION - Unity
Dental Plan Organization - The State Health Benefits Commission did not renew
the State's contract with Unity DPO, therefore, Unity Dental will no longer
be offered under the Employee Dental Plans. Employees enrolled in this dental
plan must transfer to another dental plan offered during this open enrollment
period. Failure to choose another dental plan will result in the employee no
longer having dental coverage after December 24, 2004. Current enrollees in the
Unity Dental Plan will be receiving communication that will provide more information
on their dental plan choices and the impact on services currently in progress.
The following services will be continued to conclusion through a Unity Dental
Plan professional if an employee or dependent was already in treatment on December
24, 2004: services for a crown or restoration for which a tooth was prepared;
an appliance or modification of an appliance for which an impression was taken;
root canal therapy for which the pulp chamber was opened; orthodontic treatment
that began prior to the termination date of December 24, 2004. Services shall
be provided at no additional cost to the employee, except for any copayment or
portion of copayment that has not yet been paid.
If
you have employees enrolled in Unity Dental plan you will receive a listing from
the SHBP to assist you in identifying employees who must submit a new dental enrollment
application to make a plan change. - Employee
Dental Plans Update - Oral Evaluations and cleanings have been changed for
administrative ease of processing claims for all dental plans. These changes
are effective January 1, 2005, and should result in fewer claim denials.
- Diagnostic
- Oral evaluations can be performed up to two times per calendar year. X-Rays
can be made for two series of up to four films per calendar year;
-
Preventive - Dental cleanings can be performed two times in a calendar year; and
-
Fluoride - Two treatments can be performed per calendar year for eligible dependent
children under 19 years of age.
Formerly,
these benefits were available on a one-time basis every six months.
- Dental Plan Note -
Employees must maintain enrollment in a dental plan choice for a minimum of
12 months before they are permitted to change plans. Therefore, if an employee
was not enrolled in a dental plan as of January 1, 2004, they cannot make a dental
plan change during this open enrollment period (exception made for Unity Dental
Plan).
- New
Retiree Dental Expense Plan - A new Retiree Dental Expense Plan, administered
for the SHBP by Aetna Dental, will become effective January 1, 2005. The Plan
is available to all State retirees eligible to enroll under the medical plans
in the SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense
Plan is responsible for paying the full cost of their coverage. Beginning January
1, 2005, when a State employee becomes eligible for medical plan coverage under
the SHBP Retired Group, their SHBP offering letter will include information on
enrolling under the Retiree Dental Expense Plan. This will be a one-time offering
at time of retirement or when first eligible for SHBP Retired Group enrollment.
For all those state employees that are currently retired and are receiving (or
are eligible to receive) benefits under the SHBP Retired Group (including those
that waived SHBP benefits because they have coverage under a public employer group
plan from a spouse or their own employment) will be offered an opportunity to
enroll in the Retiree Dental Expense Plan during a special open enrollment period.
This special open enrollment period will be held from October 1, 2004 through
March 31, 2005. Communications will be mailed directly to these State retirees.
A
description of the plan and a chart outlining the benefits of the new Retiree
Dental Expense Plan is available in Fact
Sheet #73, Retiree Dental Expense Plan, which can be found on our Web
site at: www.state.nj.us/treasury/pensions RETIREE
PRESCRIPTION DRUG PLAN INFORMATION In
accordance with the provisions of the pilot Retiree Prescription Drug Plan under
NJ PLUS and the Traditional Plan, effective January 1, 2005, retail pharmacy copayments
for a 30-day supply will increase to $7 for generic drugs; $14 for preferred brand
name drugs; and $29 for all other brand name prescription drugs. The mail order
copayments for a 90-day supply will increase to $7 for generic drugs, $21 for
preferred brand name drugs, and $36 for all other brand name prescription drugs.
The out-of-pocket maximum will increase to $552. OPEN
ENROLLMENT INFORMATIONAL MATERIALS MILESTONES
- Enclosed is a milestone chart
that lists the critical dates of the open enrollment period and outlines the efforts
being made to educate employees. Please use this chart as a checklist to guide
your activities during open enrollment. RATE
CHARTS - Enclosed you will find rate
charts for your use, as well as a sample open enrollment announcement flier
that provides a list of medical and dental plans and the premium sharing costs
for your employees. This flier is designed to assist your employees in making
informed decisions concerning their health care coverage during this open enrollment
period. State
employees paid through the State's Centralized Payroll Unit are being provided
with the open enrollment announcement flier with their September 24 paychecks.
HEALTH CAPSULE
- The Health Capsule newsletter
announces the SHBP Open Enrollment Period to employees and presents important
information and changes that may affect their benefit selection. A sample is
enclosed for your review. On
September 24, the Health Capsule newsletter and open enrollment flier will
be distributed with paychecks to all employees paid through the State's Centralized
Payroll Unit. HEALTH
PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts
for the various health and dental
plans. Use these contacts to obtain provider directories or other plan specific
literature. (These telephone numbers are not for member services. Please
do not give these telephone numbers to your employees.) NEW
HEALTH AND DENTAL PLAN APPLICATIONS - For administrative purposes resulting
from the expansion of the SHBP Dental Plans to local government and educational
employers, the Health Benefits Bureau has returned to the use of separate applications
for health plans (including prescription drug coverage) and the Employee Dental
Plans. The revised applications are enclosed and are also available for download
from the SHBP home page. For this open enrollment period, the Health Benefits
Bureau will continue to accept employer-certified changes to SHBP plans on either
the new separate health/prescription drug and dental applications or the former
combined applications. HEALTH
PLAN COMPARISON CHARTS - Due to the difference in SHBP benefits for
State Active employees, Local/Educational Active employees and all retirees, the
SHBP has developed two different Comparison Charts - One for State Active employees
and one for Local/Educational Active employees and all retirees (State or Local/Educational).
The comparison chart for State Active employees is currently being printed and
copies will be shipped to employers for the start of the open enrollment period. SUMMARY
PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP
Summary Program Description has been revised for the 2005 plan year. The
booklet is currently being printed and copies will be shipped to employers for
the start of the SHBP Open Enrollment Period. The SPD is also available for viewing
over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm PLAN
HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS,
the Employee Prescription Drug Plan, and the SHBP Dental Plans are being revised
for the 2005 plan year. New editions will be available in January 2005 for plan
enrollees. ONLINE
INFORMATION The
SHBP's plan comparisons, member handbooks, newsletters, and rate information are
available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
Web-based presentations
on the SHBP Open Enrollment Period will also be available for both employers and
employees during the open enrollment period. Once open enrollment begins you
will find the link on the SHBP home page. Participating
provider information for all SHBP medical plans is available in the Unified Provider
Directory (UPD). The UPD is an online service that provides a comprehensive listing
of health care providers and facilities that deliver their services through one
or more of the SHBP's health care plans. Updated monthly, you can access the
UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
TAX$AVE The
State Employees' Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent
with the SHBP Open Enrollment Period (October 1 - November 1, 2004). Tax$ave is
a benefit program available to full-time State employees who are eligible for
the SHBP. Tax$ave can save your employees tax money by paying health and dental
benefit premiums and eligible unreimbursed medical and/or dependent care expenses
from before-tax dollars. See the Tax$ave Open Enrollment materials for more information.
Internal Revenue
Service (IRS) rules require that for an employee covered by the Premium Option
Plan, payroll deductions for health and dental plan benefits remain the same for
the entire plan year. Therefore, no coverage level changes can be made which
result in a change in the amount of an employee's health and/or dental plan deduction
unless a Qualifying Event has occurred. Tax$ave
and Domestic Partners - SHBP members need to be aware of the possible federal
tax implications of adding a domestic partner to SHBP benefits. Since the federal
tax code does not view domestic partners in the same manner as spouses, an employer
may have to treat the domestic partner SHBP benefit as taxable to the employee
and withhold federal income, Social Security, and Medicare taxes on its value.
Similarly, since the domestic partner's coverage is a federally taxable benefit,
an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax
payments for the cost of a domestic partner's coverage. Pre-tax dollars may still
be used to pay for the employee's portion of the cost of his or her own and dependent
children's coverage. If an employee wants to claim a federal tax dependency exemption
for a domestic partner, he or she should contact the Internal Revenue Service
or see IRS Tax Topic 354 - Dependents for more details. ADDITIONAL
INFORMATION If
you have any questions about the SHBP Open Enrollment Period or the information
in this letter, please contact our Office of Client Services at (609) 292-5353,
and select option #2 on the phone. When prompted, leave a message and a representative
will return your call. Thank
you for your assistance in making the SHBP Open Enrollment Period a success for
your employees. Enclosure:
| TO: | State
Monthly Human Resources Representatives |
| FROM: |
Florence J. Sheppard
Deputy Director, Benefits Operations |
| SUBJECT: | SHBP
Open Enrollment 2004 - State Monthly Employers | The
State Health Benefits Program (SHBP) Open Enrollment period for all State employees
will begin on October 1, 2004 and end on November 1, 2004. All changes
to coverage made during this open enrollment will be effective on January 1, 2005
for employees of State universities, State colleges, and State authorities. Completed
employer-certified health benefit and/or dental applications should be forwarded
to the Health Benefits Bureau as soon as they are received from employees. The
last day that certified applications may arrive at the Health Benefits Bureau
to be effective for the start of the new plan year is November 8, 2004. In
keeping with its current policy, the SHBP will not provide health fairs during
this year's open enrollment period. RATES
FOR 2005 The
State Health Benefits Commission has approved new health, dental, and prescription
drug plan rates for the 2005 plan year. These rates are based upon the recommendation
of the Commission's actuarial consultant, Milliman USA. Since the SHBP self-funds
most of its plans, the claims experience used in projecting 2005 costs are based
upon the actual claims experience of the group. As
a result of contract negotiations and the fiscal year 2005 Budget Appropriations
Act, SHBP medical plan deductibles and copayments and prescription drug copayments
will be changing for a large majority of State employees. Rates differ depending
on whether an employee is affected by these plan changes. Effective
January 1, 2005, SHBP plan rates for the State Monthly Active Group, (those with
plan changes and those without) will see the following aggregate percentage of
increase:
| PLAN
TYPE |
RATE INCREASE
(Aggregate percentage) | |
NJ PLUS |
(with plan
changes)
(no plan changes) |
3.0% 6.0% |
| Traditional
Plan | (with
plan changes) (no
plan changes) | 5.3% 8.6% |
| HMO
Plans | (with
plan changes)
(no plan changes) |
1.2% 3.8% |
| Prescription
Drug Plan | (with
plan changes)
(no plan changes) |
0.5% 9.8% |
| Dental
Provider Organization (DPO) Plans |
5.5% |
| Dental
Expense Plan | 7.9% |
PREMIUM
SHARING The
premium share arrangements remain unchanged. For those employees subject to premium
sharing: -
There is no premium cost to any employee who enrolls in NJ PLUS.
-
Employees will pay 5% of the premium cost if enrolled in an HMO.
-
Employees will pay 25% of the premium cost if enrolled in the Traditional Plan.
These
percentages apply regardless of salary level or date of hire. MEDICAL
AND PRESCRIPTION DRUG PLAN CHANGES The
plan changes that will affect the majority of employees are as follows:
- For the Traditional Plan,
the annual deductible will be increasing from $100 per person to $250 per person
effective January 1, 2005 as follows:
| Single |
$250 |
| Member
& Spouse/ Domestic Partner |
$250 per person |
| Parent
& Child(ren) | $250
for employee and $250 in aggregate for child(ren)1 |
| Family |
$250 for employee and $250
in aggregate for all other family members1 | 1The
total combined deductible for dependents adds up to $250 per year.
- For NJ PLUS and all HMOs
(Aetna, AmeriHealth, CIGNA, Health Net, and Oxford), the copayment for primary
doctor visits and visits to a specialist will increase from $5 to $10 as of January
1, 2005 for employees of State universities, State colleges, and State authorities.
- The copayments
for the Employee Prescription Drug Plan will also be increasing as of January
1, 2005. For each 30-day supply received at a retail pharmacy, the copayments
will increase from $1 to $3 for generic drugs and from $5 to $10 for brand name
prescription drugs. Mail order copayments for up to a 90-day supply will increase
from $1 to $5 for generic drugs and $5 to $15 for brand name prescription drugs.
These
changes will go into effect for employees covered by collective bargaining agreements,
where the agreements provide for or adopt such changes, and all non-aligned employees.
Employees in collective bargaining units who have not agreed to or adopted these
changes will not be affected until such time as the majority representative agrees
to them, or they are made part of a final and binding interest arbitration award.
As of this printing, employees of the Executive Branch of the State covered under
State labor agreements with the State Police Troopers, Sergeants, and Lieutenants
bargaining units and five non-State Police law enforcement bargaining units will
not be affected by the changes. DENTAL
PLAN INFORMATION - Unity
Dental Plan Organization - The State Health Benefits Commission did not renew
the State's contract with Unity DPO, therefore, Unity Dental will no longer
be offered under the Employee Dental Plans. Employees enrolled in this dental
plan must transfer to another dental plan offered during this open enrollment
period. Failure to choose another dental plan will result in the employee no
longer having dental coverage after December 31, 2004. Current enrollees in the
Unity Dental Plan will be receiving communication that will provide more information
on their dental plan choices and the impact on services currently in progress.
The following services will be continued to conclusion through a Unity Dental
Plan professional if an employee or dependent was already in treatment on December
31, 2004: services for a crown or restoration for which a tooth was prepared;
an appliance or modification of an appliance for which an impression was taken;
root canal therapy for which the pulp chamber was opened; orthodontic treatment
that began prior to the termination date of December 31, 2004. Services shall
be provided at no additional cost to the employee, except for any copayment or
portion of copayment that has not yet been paid.
If
you have employees enrolled in Unity Dental plan you will receive a listing from
the SHBP to assist you in identifying employees who must submit a new dental enrollment
application to make a plan change. - Employee
Dental Plans Update - Oral Evaluations and cleanings have been changed for
administrative ease of processing claims for all dental plans. These changes
are effective January 1, 2005, and should result in fewer claim denials.
- Diagnostic
- Oral evaluations can be performed up to two times per calendar year. X-Rays
can be made for two series of up to four films per calendar year;
-
Preventive - Dental cleanings can be performed two times in a calendar year; and
- ·Fluoride
- Two treatments can be performed per calendar year for eligible dependent children
under 19 years of age.
Formerly,
these benefits were available on a one-time basis every six months.
- Dental Plan Note -
Employees must maintain enrollment in a dental plan choice for a minimum of
12 months before they are permitted to change plans. Therefore, if an employee
was not enrolled in a dental plan as of January 1, 2004, they cannot make a dental
plan change during this open enrollment period (exception made for Unity Dental
Plan).
- New
Retiree Dental Expense Plan - A new Retiree Dental Expense Plan, administered
for the SHBP by Aetna Dental, will become effective January 1, 2005. The Plan
is available to all retirees eligible to enroll under the medical plans in the
SHBP Retired Group. Any retiree who enrolls in the Retiree Dental Expense Plan
is responsible for paying the full cost of their coverage. Beginning January
1, 2005, when an employee becomes eligible for medical plan coverage under the
SHBP Retired Group, their SHBP offering letter will include information on enrolling
under the Retiree Dental Expense Plan. This will be a one-time offering at time
of retirement or when first eligible for SHBP Retired Group enrollment. All retirees
who are receiving (or are eligible to receive) benefits under the SHBP Retired
Group (including those that waived SHBP benefits because they have coverage under
a public employer group plan from a spouse or their own employment) will be offered
an opportunity to enroll in the Retiree Dental Expense Plan during a special open
enrollment period. This special open enrollment period will be held from October
1, 2004 through March 31, 2005. Communications will be mailed directly to these
retirees.
A
description of the plan and a chart outlining the benefits of the new Retiree
Dental Expense Plan is available in Fact
Sheet #73, Retiree Dental Expense Plan, which can be found on our Web
site at: www.state.nj.us/treasury/pensions RETIREE
PRESCRIPTION DRUG PLAN INFORMATION In
accordance with the provisions of the pilot Retiree Prescription Drug Plan under
NJ PLUS and the Traditional Plan, effective January 1, 2005, retail pharmacy copayments
for a 30-day supply will increase to $7 for generic drugs; $14 for preferred brand
name drugs; and $29 for all other brand name prescription drugs. The mail order
copayments for a 90-day supply will increase to $7 for generic drugs, $21 for
preferred brand name drugs, and $36 for all other brand name prescription drugs.
The out-of-pocket maximum will increase to $552. OPEN
ENROLLMENT INFORMATIONAL MATERIALS MILESTONES
- Enclosed is a milestone chart
that lists the critical dates of the open enrollment period and outlines the efforts
being made to educate employees. Please use this chart as a checklist to guide
your activities during open enrollment. RATE
CHARTS - Enclosed you will find rate
charts for your use, as well as sample open enrollment announcement fliers
that provide a list of medical and dental plans and the premium sharing costs
for State employees. These fliers are master copies that can be reproduced for
distribution to your employees. The fliers are provided for three different payroll
schedules (Monthly, 24 Pay Periods, and 26 Pay Periods). Choose the flier that
corresponds to your payroll schedule. These
rate fliers are designed to assist your employees in making informed decisions
concerning their health and dental care. Please distribute them to your employees
prior to the start of the Open Enrollment. HEALTH
CAPSULE - The Health Capsule
newsletter announces the SHBP Open Enrollment Period to employees and presents
important information and changes that may affect their benefit selection. A
sample is enclosed for your review. The newsletters are scheduled for delivery
to monthly employers in mid-September. Please distribute them to your employees
prior to the start of the open enrollment. HEALTH
PLAN CONTACTS - Also included in this mailing is a listing of marketing contacts
for the various health and dental
plans. Use these contacts to obtain provider directories or other plan specific
literature. (These telephone numbers are not for member services. Please
do not give these telephone numbers to your employees.) NEW
HEALTH AND DENTAL PLAN APPLICATIONS - For administrative purposes resulting
from the expansion of the SHBP Dental Plans to local government and educational
employers, the Health Benefits Bureau has returned to the use of separate applications
for health plans (including prescription drug coverage) and the Employee Dental
Plans. The revised applications are enclosed and are also available for download
from the SHBP home page. For this open enrollment period, the Health Benefits
Bureau will continue to accept employer-certified changes to SHBP plans on either
the new separate health/prescription drug and dental applications or the former
combined applications. HEALTH
PLAN COMPARISON CHARTS - Due to the difference in SHBP benefits for
State Active employees, Local/Educational Active employees and all retirees, the
SHBP has developed two different Comparison Charts - One for State Active employees
and one for Local/Educational Active employees and all retirees (State or Local/Educational).
The comparison chart for State Active employees is currently being printed and
copies will be shipped to employers for the start of the open enrollment period. SUMMARY
PROGRAM DESCRIPTION (SPD) BOOKLET - The SHBP
Summary Program Description has been revised for the 2005 plan year. The
booklet is currently being printed and copies will be shipped to employers for
the start of the SHBP Open Enrollment Period. The SPD is also available for viewing
over the Internet at: www.state.nj.us/treasury/pensions/shbp.htm PLAN
HANDBOOKS - The SHBP's member handbooks for the Traditional Plan, NJ PLUS,
the Employee Prescription Drug Plan, and the SHBP Dental Plans are being revised
for the 2005 plan year. New editions will be available in January 2005 for plan
enrollees. ONLINE
INFORMATION The
SHBP's plan comparisons, member handbooks, newsletters, and rate information are
available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
Web-based presentations
on the SHBP Open Enrollment Period will also be available for both employers and
employees during the open enrollment period. Once open enrollment begins you
will find the link on the SHBP home page. Participating
provider information for all SHBP medical plans is available in the Unified Provider
Directory (UPD). The UPD is an online service that provides a comprehensive listing
of health care providers and facilities that deliver their services through one
or more of the SHBP's health care plans. Updated monthly, you can access the
UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
TAX$AVE The
State Employees' Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent
with the SHBP Open Enrollment Period (October 1 - November 1, 2004). Tax$ave is
a benefit program available to full-time State employees who are eligible for
the SHBP. Tax$ave can save your employees tax money by paying health and dental
benefit premiums and eligible unreimbursed medical and/or dependent care expenses
from before-tax dollars. See the Tax$ave Open Enrollment materials for more information.
Internal Revenue
Service (IRS) rules require that for an employee covered by the Premium Option
Plan, payroll deductions for health and dental plan benefits remain the same for
the entire plan year. Therefore, no coverage level changes can be made which
result in a change in the amount of an employee's health and/or dental plan deduction
unless a Qualifying Event has occurred. Tax$ave
and Domestic Partners - SHBP members need to be aware of the possible federal
tax implications of adding a domestic partner to SHBP benefits. Since the federal
tax code does not view domestic partners in the same manner as spouses, an employer
may have to treat the domestic partner SHBP benefit as taxable to the employee
and withhold federal income, Social Security, and Medicare taxes on its value.
Similarly, since the domestic partner's coverage is a federally taxable benefit,
an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax
payments for the cost of a domestic partner's coverage. Pre-tax dollars may still
be used to pay for the employee's portion of the cost of his or her own and dependent
children's coverage. If an employee wants to claim a federal tax dependency exemption
for a domestic partner, he or she should contact the Internal Revenue Service
or see IRS Tax Topic 354 - Dependents for more details. ADDITIONAL
INFORMATION If
you have any questions about the SHBP Open Enrollment Period or the information
in this letter, please contact our Office of Client Services at (609) 292-5353,
and select option #2 on the phone. When prompted, leave a message and a representative
will return your call. Thank
you for your assistance in making the SHBP Open Enrollment Period a success for
your employees. Enclosure:
September 22, 2004
| TO: | State
Biweekly Benefits Administrators
State Monthly Benefits Administrators
County Community College Benefits Administrators | | FROM: | Christine
M. Servis
Chief, State Health Benefits Bureau | | SUBJECT:
| SHBP
Open Enrollment 2004 - Part-Time Employees | The
State Health Benefits Program (SHBP) Open Enrollment Period for all eligible part-time
employees of the State and part-time faculty at institutions of higher education
will be held from October 1, 2004 through November 1, 2004. These eligible
part-time employees may elect to enroll for benefits under NJ PLUS and the Employee
Prescription Drug Plan if they did not do so when first eligible. They may also
add any eligible dependents they have not previously enrolled. Enrollments or
changes to coverage level made during this open enrollment will be effective on
January 1, 2005 for part-time employees. Completed
employer-certified Part-time Employee Group applications should be forwarded to
the Health Benefits Bureau as soon as they are received from employees. Please
mark these applications with the words, "Open Enrollment", on the top of the application
to assist with processing. The last day that certified applications may arrive
at the Health Benefits Bureau to be effective for the start of the new plan year
is November 8, 2004. New
Copayments for State Part-time Employees as of January 1, 2005
- For NJ PLUS the copayment
for primary doctor visits and visits to a specialist will increase from $5 to
$10.
-
The copayments for the Employee Prescription Drug Plan will also be increasing.
For each 30 day supply received at a retail pharmacy, the copayments will increase
from $1 to $3 for generic drugs and from $5 to $10 for brand name prescription
drugs. Mail order copayments for up to 90-day supply will increase from $1 to
$5 for generic drugs and $5 to $15 for brand name prescription drugs.
NOTE:
There is no increase in copayments for Local part-time employees. RATE
CHARTS - Enclosed you will find Part-time
Active and Part-time
COBRA Group Rates for NJ PLUS and the Employee Prescription Drug Plan. PLAN
HANDBOOKS - The SHBP's member handbooks for the NJ PLUS and the Employee Prescription
Drug Plan are being revised for the 2005 plan year. New editions will be available
in January 2005 for plan enrollees. ONLINE
INFORMATION The
SHBP's member handbooks, newsletters, and rate information are available over
the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
Participating
provider information for NJ PLUS is available in the Unified Provider Directory
(UPD). The UPD is an online service that provides a comprehensive listing of
health care providers and facilities that deliver their services through one or
more of the SHBP's health care plans. Updated monthly, you can access the UPD
through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
ADDITIONAL
INFORMATION If
you have any questions about the SHBP Open Enrollment Period or the information
in this letter, please contact our Office of Client Services at (609) 292-5353,
and select option #2 on the phone. When prompted, leave a message and a representative
will return your call. Thank
you for your assistance in making the SHBP Open Enrollment Period a success for
your employees. Enclosure: 2004
SHBP Part-time Active and COBRA Rates
August 12, 2004
| TO:
| State
Department Human Resource Directors
State Biweekly Payroll Locations Benefits
Administrators | | FROM:
| John
D. Megariotis
Deputy Director, Finance | | SUBJECT:
| Open
Enrollment For The New Jersey State Employees
Tax Savings Program (Tax$ave
2005) | The
annual open enrollment for the calendar year 2005 New Jersey State Employees Tax
Savings Program (Tax$ave 2005) will be conducted from October 1 through November
1, 2004. Full-time employees of the State who are eligible for participation in
the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.
About Tax$ave Tax$ave
consists of three components: - The
Premium Option Plan (POP);
- The
Unreimbursed Medical Spending Account (UMSA); and
- The
Dependent Care Spending Account (DCSA).
Tax$ave
offers eligible employees the opportunity to increase their available income by
reducing their federal tax liability. Each year eligible employees should review
their personal financial circumstances and decide if they wish to participate
or not. Open Enrollment offers employees the opportunity to conduct this review
and then act on their decision. Note:
Tax savings on commuter mass transit and parking expenses are available at any
time as a separate benefit to State employees under the Commuter Tax$ave Program
and are not tied to this open enrollment period. See Fact
Sheet #67, Commuter Tax$ave Program, for details. Premium
Option Plan Enrollment
in the Premium Option Plan is automatic. This saves your employees tax money by
paying health and dental premiums from pre-tax dollars and reducing their tax
liability. If an employee does not wish to take advantage of the Premium Option
Plan in 2005 (and therefore pay more in federal, Social Security, and Medicare
taxes) he or she should file a Declination
of Premium Option Plan (POP) form.
Flexible Spending
Accounts The
Unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending
Account (DCSA) are also referred to as Flexible Spending Accounts (FSAs).
- New! - Over-the-counter
drugs are now eligible for reimbursement in the Unreimbursed Medical Spending
Accounts. The Internal Revenue Service ruled that over-the-counter products/medications
deemed for "medical care" will be considered reimbursable. "Medical
care" includes amounts paid for the diagnosis, cure, mitigation, treatment,
or prevention of disease. Amounts paid for medicines and drugs are expenditures
for medical care, but expenditures that are merely beneficial to the general health
of an individual, such as vitamins and other supplements, are not eligible. For
more information about expenses that are eligible under Unreimbursed Medical Spending
Accounts and Dependent Care Spending Accounts, please visit the Horizon Healthcare
Web site through the link from the Division of Pensions and Benefits' Tax$ave
page at: www.state.nj.us/treasury/pensions/taxsave.htm
- Tax$ave
Unreimbursed Medical Spending Accounts feature the BennyTM Card,
a special MasterCard® that draws on the value of the employee's annual
UMSA election amount, making the UMSA easier to use. Each time an employee uses
Benny to pay for a qualified health care expense at a health care provider
or business that accepts MasterCard, the amount of the qualified purchase is transferred
from the UMSA automatically - eliminating the need to lay out cash at the time
of purchase and file for a reimbursement.
- New!
- FSA Assist is a new service that can help employees estimate how
much they should allocate for the Unreimbursed Medical Spending Account. Employees
simply select their plan and FSA Assist incorporates deductibles, coinsurance,
and copayment amounts, along with other plan elements, into a customized estimate.
Access to FSA Assist is available over the Internet. See the Tax$ave
2005 newsletter for more information on how to access this service.
Unlike
the POP or the plans of the SHBP, prior participation in a Tax$ave FSA in 2004
does not carry over automatically into 2005. Employees must enroll again
to participate in an FSA for calendar year 2005. Employees
have three ways of enrolling in the Tax$ave FSA accounts: mail, telephone, and
Internet. The Tax$ave publications will provide the following instructions to
employees: - Mail:
FSA Election Applications must be mailed directly to Horizon Healthcare
by the employee. All election forms must be postmarked no later than November
1, 2004, to be accepted. Those postmarked after November 1, 2004 will be returned
without action. Benefits offices should not be involved in processing or mailing
FSA Election Applications.
- Telephone:
Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2005 over
the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426.
This is a great opportunity to quickly and easily go through the process of a
new or repeat enrollment. Horizon will inform current participating employees
of this opportunity through a direct mailing in September. The deadline for enrollment
by telephone is midnight, November 1, 2004.
- Internet:
Again this year employees have the ability to enroll (or reenroll) over the Internet.
Go to the Horizon Healthcare Web page through a link from the Division of Pensions
and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm
and follow the simple directions. The deadline for enrollment over the Internet
is midnight, November 1, 2004.
Tax$ave
and Domestic Partners Beginning
July 10, 2004, under the New Jersey Domestic Partnership Act, State employees
were able to add a same-sex domestic partner to their health and dental insurance
coverage. However, before any premiums that the employee pays for the domestic
partner coverage can be made on a pre-tax basis under the Tax$ave Premium Option
Plan, the domestic partner must be able to qualify as a "tax dependent" of the
employee for federal tax filing purposes under IRC Section 152. Similarly,
the domestic partner must qualify as the employee's federal tax dependent before
an out-of-pocket medical expense incurred by the domestic partner can be reimbursed
under the Unreimbursed Medical Spending Account. If
the domestic partner is not a "qualified tax dependent" of the employee,
any premium deductions made for the domestic partner's coverage must be made on
an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot
be used to cover the domestic partner's medical expenses. See IRS Tax Topic
354 - Dependents for additional information on dependent status for
federal tax purposes. Additional information regarding the Domestic Partnership
Act can be found in Fact Sheet #71,
Benefits Under the Domestic Partnership Act, which is available on the
Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions Employee
Seminars Upon
request, Horizon Healthcare will provide Tax$ave educational seminars, at your
workplace, for interested employees. The seminars are about 60 minutes in duration
(including questions and answers). These have proven to be very successful educational
tools and we strongly encourage you to make one available to your employees. Please
see the enclosed request
form to schedule a Horizon Healthcare representative. Tax$ave
Support Materials The
remainder of this letter provides information on the Tax$ave Open Enrollment publications
and support available to assist you in explaining this important benefit program
to your employees. Please do your best to make a concerted effort to inform your
employees of the open enrollment and to educate them on the valuable benefits
that Tax$ave offers them. We believe that more employees will participate in Tax$ave
if they are made aware and understand the value of the tax savings offered by
the program. Enclosed
is the Tax$ave Open Enrollment Milestones
chart that lists the critical dates of the Tax$ave 2005 Annual Open Enrollment
and outlines the efforts being made to educate employees. Please use this chart
as a checklist to guide your activities during the open enrollment. Anouncement
of the open enrollment to employees paid through Centralized Payroll will be made
in a August 27 paycheck
message and again in a September 10 paycheck message that will be accompanied
by three payroll inserts. These inserts are: -
The Tax$ave 2005 Open
Enrollment News that announces the open enrollment, outlines the components
of the program with emphasis on its tax saving advantages, and identifies the
November 1, 2004 deadline for submission of all election materials;
-
An FSA pamphlet that describes the Unreimbursed Medical Spending Account (UMSA)
and the Dependent Care Spending Account (DCSA); and
-
The Premium Option Plan 2005
pamphlet that explains the advantages and disadvantages of participation.
The September
24 paychecks will carry another Tax$ave 2005 Open Enrollment announcement message
and "reminder messages" will be provided to employees through paycheck messages
on October 8 and October 22 (a final November 5 paycheck message will address
the Commuter Tax$ave Program). The text of these check
message announcements and preview copies of the Tax$ave publications are enclosed
with this letter. The
other open enrollment materials you will need are the FSA Election Kits and the
Declination of Premium Option Plan (POP) forms for Plan Year 2005.
- FSA
Election Kits for 2005 will be sent directly to benefits administrators by Horizon
Healthcare, along with a request form for additional kits. Please provide
the FSA Election Kits to those employees who request them.
-
This letter includes a minimal supply of the declination
forms. These can be copied for use by those few employees who do not wish
to participate in the POP and, therefore, pay more in tax. (Note: do not distribute
POP Declination forms to employees unless they ask for one.) If an employee chooses
not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay
more federal income, Social Security, and Medicare taxes on the salary used to
pay their medical and dental premiums in 2005, they must complete a POP form declining
the federal tax break they could receive. Employees should request these forms
from you. We will be instructing employees to return the Declination of Premium
Option Plan (POP) forms to benefits administrators by November 1, 2004. Benefits
administrators must then forward declination forms to Centralized Payroll by November
12, 2004.
We
appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is
key to your employees receiving the valuable benefits offered by this program.
If you have any questions about Tax$ave 2005 or the open enrollment, call the
Horizon Healthcare Insurance Agency, Inc. at 1-800-224-4426, or visit the Division
of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm
August 12, 2004
| TO:
|
State University and College Benefits Administrators
State Monthly Benefits
Administrators | | FROM: |
John D. Megariotis
Deputy Director, Finance | | SUBJECT:
| Open
Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2005) |
The annual open
enrollment for the calendar year 2005 New Jersey State Employees Tax Savings Program
(Tax$ave 2005) will be conducted from October 1 thorough November 1, 2004. Full-time
employees of the State, State authorities, State Universities, and State colleges
who are eligible for participation in the New Jersey State Health Benefits Program
(SHBP) may participate in Tax$Ave. About
Tax$ave Tax$ave
consists of three components: - The
Premium Option Plan (POP);
- The
Unreimbursed Medical Spending Account (UMSA); and
- The
Dependent Care Spending Account (DCSA).
Tax$ave
offers eligible employees the opportunity to increase their available income by
reducing their federal tax liability. Each year eligible employees should review
their personal financial circumstances and decide if they wish to participate
or not. Open Enrollment offers employees the opportunity to conduct this review
and then act on their decision. Note:
Tax savings on commuter mass transit and parking expenses are available at any
time as a separate benefit to State employees under the Commuter Tax$ave Program
and are not tied to this open enrollment period. See Fact
Sheet #67, Commuter Tax$ave Program, for details. Premium
Option Plan Enrollment
in the Premium Option Plan is automatic. This saves your employees tax money by
paying health and dental premiums from pre-tax dollars and reducing their tax
liability. If an employee does not wish to take advantage of the Premium Option
Plan in 2005 (and therefore pay more in federal, Social Security, and Medicare
taxes) he or she should file a Declination
of Premium Option Plan (POP)
form. Flexible
Spending Accounts The
unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending
Account (DCSA) are also referred to as Flexible Spending Accounts (FSA's).
- NEW! - Over-the-counter
drugs are now eligible for reimbursement in the unreimbursed Medical Spending
Accounts The Internal Revenue Service ruled that over-the-counter products/medications
deemed for medical care will be considered reimbursable. Medical care includes
amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of
disease. Amounts paid for medicines and drugs are expenditures for medical care,
but expenditures that are merely beneficial to the general health of an individual,
such as vitamins and other supplements, are not eligible. For more information
about expenses that are eligible under unreimbursed Medical Spending Accounts
and Dependent Care Spending Accounts, please visit the Horizon Healthcare Web
site thorough the link from the Division of Pensions and Benefits' Tax$ave page
at: www.state.nj.us/treasury/pensions/taxsave.htm
- Tax$ave
unreimbursed Medical Spending Accounts feature the BennyTM Card,
a special MasterCardp®p that draws on the value of the employee's annual
UMSA election amount, making the UMSA easier to use Each time an employee uses
Benny to pay for a qualified health care expense at a health care provider
or business that accepts MasterCard, the amount of the qualified purchase is transferred
from the UMSA automatically - eliminating the need to lay out cash at the time
of purchase and file for a reimbursement
- New!
- FSA Assist is a new service that can help employees estimate how
much they should allocate for the unreimbursed Medical Spending Account Employees
simply select their plan and FSA Assist incorporates deductibles, coinsurance,
and copayment amounts, along with other plan elements, into a customized estimate.
Access to FSA Assist is available over the Internet. See the Tax$ave 2005
newsletter for more information on how to access this service.
Unlike
the POP or the plans of the SHBP, prior participation in a Tax$ave FSA in 2004
does not carry over automatically into 2005. Employees must enroll again
to participate in an FSA for calendar year 2005. Employees
have three ways of enrolling in the Tax$ave FSA accounts this year: mail, telephone,
and Internet. The Tax$ave publications will provide the following instructions
to employees: - Mail:
FSA Election Applications must be mailed directly to Horizon Healthcare
by the employee. All election forms must be postmarked no later than November
1, 2004, to be accepted. Those postmarked after November 1, 2004 will be returned
without action. Benefits offices should not be involved in processing or mailing
FSA Election Applications.
- Telephone:
Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2005 over
the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426.
This is a great opportunity to quickly and easily go thorough the process of a
new or repeat enrollment. Horizon will inform current participating employees
of this opportunity thorough a direct mailing in September. The deadline for enrollment
by telephone is midnight, November 1, 2004.
- Internet:
Again this year employees have the ability to enroll (or reenroll) over the Internet.
Go to the Horizon Healthcare Web page thorough a link from the Division of Pensions
and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm
and follow the simple directions. The deadline for enrollment over the Internet
is midnight, November 1, 2004.
Tax$ave
and Domestic Partners Beginning
July 10, 2004, under the New Jersey Domestic Partnership Act, State employees
were able to add a same-sex domestic partner to their health and dental insurance
coverage. However, before any premiums that the employee pays for the domestic
partner coverage can be made on a pretax basis under the Tax$ave Premium Option
Plan, the domestic partner must be able to qualify as a "tax dependent" of the
employee for federal tax filing purposes under IRC Section 152. Similarly,
the domestic partner must qualify as the employee's federal tax dependent before
an out-of-pocket medical expense incurred by the domestic partner can be reimbursed
under the unreimbursed Medical Spending Account. If
the domestic partner is not a "qualified tax dependent" of the employee,
any premium deductions made for the domestic partner's coverage must be made on
an after-tax basis and funds in the unreimbursed Medical Spending Account cannot
be used to cover the domestic partner's medical expenses. See IRS Tax Topic
354 - Dependents for additional information on dependent status for
federal tax purposes. Additional information regarding the Domestic Partnership
Act can be found in Fact Sheet #71,
Benefits under the Domestic Partnership Act, which is available on the
Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions Employee
Seminars Upon
request, Horizon Healthcare will provide Tax$ave educational seminars, at your
workplace, for interested employees. The seminars are about 60 minutes in duration
(including questions and answers). These have proven to be very successful educational
tools and we strongly encourage you to make one available to your employees. Please
see the enclosed request
form to schedule a Horizon Healthcare representative. Tax$ave
Support Materials The
remainder of this letter provides information on the Tax$ave Open Enrollment publications
and support available to assist you in explaining this important benefit program
to your employees. Please do your best to make a concerted effort to inform your
employees of the open enrollment and to educate them on the valuable benefits
that Tax$ave offers them. We believe that more employees will participate in Tax$ave
if they are made aware and understand the value of the tax savings offered by
the program. Enclosed
is the Tax$ave Open Enrollment Milestones
chart that lists the critical dates of the Tax$ave 2005 Annual Open Enrollment
and outlines the efforts being made to educate employees. Please use this chart
as a checklist to guide your activities during the open enrollment. The
Division will also provide State Monthly employers, State Universities, and State
Colleges with sufficient copies of the Tax$ave
2005 Open Enrollment News and the Premium Option Plan 2005 pamphlet for all
eligible employees. Horizon Healthcare will provide sufficient copies of the FSA
pamphlet for distribution to all of your eligible employees. -
The Tax$ave 2005 Open
Enrollment News announces the open enrollment, outlines the components of
the program with emphasis on its tax saving advantages, and identifies the November
1, 2004 deadline for submission of all election materials.
-
The Premium Option Plan 2005
pamphlet explains the advantages and disadvantages of participation.
- The FSA
pamphlet describes the unreimbursed Medical Spending Account (MSA) and the Dependent
Care Spending Account (DCSA).
These
publications will be shipped to employers early in September and you should distribute
them to your employees before the Open Enrollment start date on October 1, 2004.
Preview copies of these publications are enclosed with this letter. We
also encourage you to provide your employees with reminders of the Tax$ave Open
Enrollment to ensure they don't allow this opportunity to slip by without action. The
other open enrollment materials you will need are the FSA Election Kits and the
Declination of Premium Option Plan
(POP) forms for Plan Year 2005 form. - FSA
Election Kits for 2005 will be sent directly to benefits administrators by Horizon
Healthcare, along with a request form for additional kits. Please provide
the FSA Election Kits to those employees who request them.
-
This letter includes a minimal supply of the declination
forms. These can be copied for use by those few employees who do not wish
to participate in the POP and, therefore, pay more in tax. (Note: do not distribute
POP Declination forms to employees unless they ask for one.) If an employee chooses
not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay
more federal income, Social Security, and Medicare taxes on the salary used to
pay their medical and dental premiums in 2005, they must complete a POP form declining
the federal tax break they could receive. Employees should request these forms
from you. We will be instructing employees to return the Declination of Premium
Option Plan (POP) forms to benefits administrators by November 1, 2004. Benefits
administrators must then forward declination forms to payroll.
We
appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is
key to your employees receiving the valuable benefits offered by this program.
If you have any questions about Tax$ave 2005 or the open enrollment, call the
Horizon Healthcare Insurance Agency, Inc. at 1-800-224-4426, or visit the Division
of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm
August 12, 2004
| TO: |
State Health Benefits Program
State Biweekly Employers
State Health Benefits Program State Monthly Employers |
| FROM: |
Christine M. Servis
Chief, Health Benefits Bureau | | SUBJECT: |
SHBP Open Enrollment 2004 | The
State Health Benefits Program (SHBP) Open Enrollment period for all employees
will begin on October 1, 2004 and end on November 1, 2004. All changes
to coverage made during this open enrollment will be effective on December 25,
2004, for State Biweekly employees paid through State Centralized Payroll and
January 1, 2005 for all other employees. Enclosed
is a milestone chart that lists the critical dates of the Open Enrollment. Please
use this chart as a checklist to guide your activities during the Open Enrollment. Samples
of this year's SHBP open enrollment materials including rate charts, Health
Capsule newsletters, and contact information for the available plans will
be forwarded to employers under a second mailing early in September. (Distribution
of the SHBP open enrollment materials to employees paid through Centralized Payroll
is scheduled for the September 24 payroll - other employers will receive materials
through mailings in September.) Updated versions of the SHBP's plan comparisons,
newsletters, and rate information will also be available over the Internet at
the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm
when the Open Enrollment begins in October. Completed
employer certified health benefit applications should be forwarded to the Health
Benefits Bureau as soon as they are received from employees. (The last day that
certified applications must arrive at the Health Benefits Bureau to be effective
for the start of the new plan year is November 8, 2004.) As
is previous years, we look forward to and thank you for your continued assistance
in making the Open Enrollment a success for your employees.
MEMORANDUM
| TO: |
Chief Financial Officer
of Participating Local Employers | | FROM: |
Frederick J. Beaver
Director | | DATE: | August,
2004 | | SUBJECT: |
Employer Liability for
Annual Pension Contribution-
Police and Firemen's Retirement System (PFRS) |
Enclosed please
find your PFRS employer pension liability invoice for 2005. The invoice reflects
the impact of Chapter 108, P.L. 2003 that calls for the return of pension contributions
on a phase-in basis. For 2004 20% was billed and now in year two of the phase-in,
your bill reflects a phase-in amount of 40%. The phase-in will continue through
2006, 2007 and 2008 with 60%, 80% and 100% of the actuarially calculated amounts
being due for those years respectively. The
enclosed invoice reflects a Chapter 108, P.L. 2003 phase-in-amount credit that
indicates the amount your location's pension contribution has been reduced for
this year. However, please note that if your location participated in the Early
Retirement Incentive Program 1, the invoice does include this amount, which is
reflected as ERI 1 liability. The
amount due is payable by the statutory payment date of April 1, 2005. If timely
payment is not received, interest, according to statute, must be levied at the
rate of 10% per annum. This
information is being provided to you earlier than normal to assist you with your
budgeting process. Additionally, please note that a new payment process will
be utilized for the 2005 bill. You will be required to make your payment electronically
through the same system used to make your monthly transmittal payments for employee
pension contributions. However, this system will not be available until October.
Therefore, information will be provided to you separately regarding when and how
to use the new system. If
there are any questions regarding this invoice, please call (609) 984-4521, Prompt
1. Thank you.
MEMORANDUM
| TO: |
Chief Financial Officer
of Participating Local Employers | | FROM: |
Frederick J. Beaver
Director | | DATE: | August,
2004 | | SUBJECT: |
Employer Liability for
Annual Pension Contribution-
Public Employees' Retirement System (PERS) |
As a result of the
existence of excess pension assets, your location has not been required to make
normal and accrued liability pension contributions to the Public Employees Retirement
System since 1997. Based on the July 1, 2003 actuarial valuation, which determines
contribution requirements for 2005, there are no longer excess pension assets
available to reduce contribution requirements. Consequently, employer pension
contributions will again be due in 2005. However,
in order to assist local employers with meeting their current budgetary obligations
as well those in coming years, Chapter 108, P.L. 2003 was passed in 2003. This
Law calls for the return of employer pension contributions on a phase-in basis
with 20% of the actuarially calculated amount for 2005 being due and payable.
This approach will continue with 40% of the actuarially calculated amount being
due in 2006, 60% being due in 2007, 80% being due in 2008, until 100% of the actuarially
calculated amount is due in 2009. The
enclosed invoice reflects a Chapter 108, P.L. 2003 phase-in-amount credit that
indicates the amount your location's pension contribution has been reduced for
this year. However, please note that if your location participated in any of
the Early Retirement Incentive Programs, the invoice does include this amount
which is reflected as ERI 1, ERI 2 or ERI 3 liability. The
amount due is payable by the statutory payment date of April 1, 2005. If timely
payment is not received, interest, according to statute, must be levied at the
rate of 10% per annum. This
information is being provided to you earlier than normal to assist you with your
budgeting process. Additionally, please note that a new payment process will
be utilized for the 2005 bill. You will be required to make your payment electronically
through the same system used to make your monthly transmittal payments for employee
pension contributions. However, this system will not be available until October.
Therefore, information will be provided to you separately regarding when and how
to use the new system. If
there are any questions regarding this invoice, please call (609) 984-4521, Prompt
1. Thank you.
MEMORANDUM
| TO: |
Chief Financial Officers
of Participating Local Employers | | FROM: | Frederick
J. Beaver
Director | | DATE: | August,
2004 | | SUBJECT: |
Employer Liability for
Early Retirement Incentive 1 & 2 Programs -
Teachers' Pension and Annuity
Fund | Enclosed
is an Invoice to cover your employer accrued liability to the Teachers' Pension
and Annuity Fund for the Early Retirement Incentive
1 & 2 Programs (ERI
1 & 2). This
invoice is payable by the statutory payment date of April 1, 2005. If timely
payment is not received, interest, according to statute, must be levied at the
rate of 10% per annum. This
information is being provided to you earlier than normal to assist you with your
budgeting process. Additionally, please note that a new payment process will
be utilized for the 2005 bill. You will be required to make your payment electronically
through the same system used to make your monthly transmittal payments for employee
pension contributions. However, this system will not be available until October.
Therefore, information will be provided to you separately regarding when and how
to use the new system. If
there are any questions regarding this invoice, please call (609) 984-4521, Prompt
1. Thank you.
July 2004
| TO: |
Certifying Officers
Teachers' Pension and Annuity Fund, Public Employees'
Retirement System and Police and Firemen's Retirement |
| FROM: |
John D. Megariotis Deputy
Director of Finance | | SUBJECT: | Transmittal
Electronic Payment System (TEPS) | We
are excited to announce that the Transmittal Electronic Payment System (TEPS)
is enhanced to accept your monthly transmittal payments and payments for transmittal
shortages through the INTERNET. Starting July 30, 2004, you may choose
to access TEPS through the Internet instead of calling in your payments. In addition
to making payments on-line, you can cancel payments on-line providing that you
make the cancellation before the 5:30 pm cut off time. On-line inquiries in which
you can view and print a history of your payments are also available. To
start using TEPS through the Internet, log on to www.payments-govonesolutions.com/njpen.
Once you have logged on to TEPS, enter your location number and current password,
the same password you are using with the telephone application. You will find
a user friendly program that will guide you through the payment, inquiry or payment
cancellation processes. The Division will still receive your payments the next
business day, as long as you enter your payment on-line before the 5:30 pm cut
off time. In the
upcoming year, we will be making more enhancements to TEPS. You will be able
to use TEPS to pay for your Annual Employer Appropriation bill, Delayed Enrollment
bills and Interest on Delinquent Reports and Monthly Transmittals bills. For
employers who participate in the NJ State Health Benefits Program (SHBP), we will
be expanding TEPS to allow payment of premiums for active employees and retirees,
if applicable. We will mail TEPS Enrollment Authorization Forms at a later date
for this purpose. Once the employer is successfully enrolled and confirmed, you
will have the ability to use the TEPS Internet Payment system for your SHBP payments. We
encourage you to use TEPS on the Internet. It will save you time, cut operating
costs and ensure the accuracy of your payments by giving you the ability to view
the payments as you enter them on-line. If
you have any questions about the Internet payment option, please contact Customer
Service at the TEPS Helpline at 1-888-835-3345 between 9:00 a.m. and 7:00 p.m.
July 13, 2004
| TO: | Certifying
Officers
New Jersey State-Administered Retirement Systems |
| FROM: | William
H. Kale, Assistant Director, Client Services | | SUBJECT: | Retirement
Applications and Other Forms Available on Our Web Site | The
Division of Pensions and Benefits has made several recent changes to its Web site
to help members find downloadable forms. Retirement
Applications for all of the State-administered defined benefit retirement systems
are now available for download from our main Web site. The applications are in
Adobe PDF format and include: - "Regular"
versions of the applications that can be printed out and filled in by hand;
- In most
cases, "Fill-in online and Print" versions that can be completed* on
your PC; and
- Both
"Regular" and "Fill-in" versions* of the Certification of Service and Final
Salary forms.
The
retirement applications and certifications also include active links that take
members to the corresponding instruction pages if help is needed when completing
the forms. A
link to the retirement application index page is now on the Division's home page
(at: www.state.nj.us/treasury/pensions
under "Quick Links") and on our "Forms
and Publications" page that can be reached from a link in the "Resources"
section of our home page. Links are also provided to the on the index page to
appropriate fact sheets for members who are just seeking retirement information. *Note
that "Fill-in" applications and certifications can be filled in online but cannot
yet be submitted online - both types of application require printing, a signature,
and mailing to the Division. We are working on developing forms that can be submitted
electronically, but we are several months away from attaining that capability.
Additional links to the forms
most commonly requested by our members are also now located on our "Forms
and Publications" page. Please inform your employees about these online
resources. Employers
should also note that links to the forms employers need for the administration
of all retirement systems, Deferred Compensation, SACT, and the State Health Benefits
Program remain available in the "Forms Index" of the Employer Pension and Benefits
Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions/epbam/index.htm We
thank you for using our Web site and these online services.
July 2004
| TO: | Certifying
Officers
New Jersey
State-administered Retirement Systems | | FROM: |
Janice C. Curtin
Assistant
Director | | SUBJECT: | New
Enrollment Application for PERS and TPAF Members and
Revised Designation
of Beneficiary form | The
Division of Pensions and Benefits has revised the following forms:
- the ENROLLMENT
APPLICATION for the Public Employees' Retirement System (PERS) and
Teachers' Pension and Annuity Fund (TPAF) members; and
-
the DESIGNATION OF BENEFICIARY form
for all members.
A
brief description of the changes is provided below. ENROLLMENT
APPLICATION for PERS and TPAF members The
PERS and TPAF enrollment applications have been combined into a unified Enrollment
Application. The new pension Enrollment Application should
be used when enrolling an employee into either the PERS or TPAF. Please note
the following: The
employee completes the section entitled Applicant Information
on the front and the Designation of Beneficiary data on the reverse
side. The employer
(Human Resources Representative or Certifying Officer) completes all other
requested information. The
Enrollment Applicationmust be submitted on a timely basis; otherwise,
late employer liability may be assessed. If the employee is unable to designate
a beneficiary at the time of enrollment, the application should be submitted and
the employee's estate will be designated as the beneficiary until the Division
receives a Designation of Beneficiaryform naming a specific beneficiary. DESIGNATION
OF BENEFICIARY form for all members of State-administered pension
funds
The
process to change the beneficiary designated to receive pension and life insurance
benefits upon a member's death has been made easier. The Designation of
Beneficiary form, used by all members to designate or change their beneficiary,
no longer requires notarization and includes additional instructions and tips
for completing the form, and answers too frequently asked questions. For
additional information on completing the Designation of Beneficiaryform
and details on how to specify special provisions when nominating a beneficiary,
such as a trust or a minor, electing unequal distributions or definite dollar
amounts, see Fact Sheet #68,
Designating a Beneficiary. This Fact Sheet can be viewed on our Web
site at www.state.nj.us/treasury/pensions/epbam/support/factindex.htm Attached
you will find copies of these new publications. You can photocopy the attachments
or print additional copies from the online Employer Pensions and Benefits Administrative
Manual at www.state.nj.us/treasury/pensions/epbam/index.htm
You can also bulk order copies through the Employer Forms Hotline at (609) 777-4357.
Please recycle any remaining copies of the previous PERS and TPAF Enrollment Applications
or Designation of Beneficiary forms. If
you have any questions regarding these new publications, e-mail us at pensions.nj@treas.state.nj.us
or contact the Office of Client Services at (609) 292-7524. Attachments
Enrollment Application
Designation
of Beneficiary
Fact
Sheet #68
June 14, 2004
| TO:
| Benefits
Administrators, SHBP Local Government Employer Group Benefits
Administrators, SHBP Local Education Employer Group |
| FROM:
|
Christine Servis
Chief, Health Benefits Bureau | | SUBJECT:
| SHBP
Application for Active Employees | The
State Health Benefits Program (SHBP) has revised the health benefit enrollment
application for local active employees to allow for the addition of same-sex domestic
partners to SHBP coverage. This new application (form number HA-0709-0704)
replaces the previous active employee application (HA-0068). You may begin using
this new application immediately. However, domestic partners cannot be added
to coverage until the later of August 1, 2004 or your governing body choosing
by resolution to extend domestic partner health benefits to its employees.
Please also note these
other changes to the application and/or its processing:
- Do not complete this
form just to change your Primary Care Physician (PCP). If a member only wants
to make a change to their PCP, the member should contact the medical plan directly.
Toll-free telephone numbers for SHBP plans are found in the SHBP
Summary Program Description and on the SHBP
Plan Comparison Chart.
- Do
not complete this form just to change your address. If a member only wants
to make a change to their address, the member should contact the Division of Pensions
and Benefits - Office of Client Services at (609) 292-7524 and request a change
of their SHBP address information.
- A
Primary Care Physician ID Number must be given for the member's PCP and the
PCPs of all dependents enrolling in NJ PLUS or an HMO plan. The SHBP can no longer
accept a physician's name as identification for enrollment. If a PCP ID Number
is not listed, the member will get a "must select PCP letter" from the
plan and in-network services may not be covered. PCP ID Numbers can be obtained
by contacting the health plan directly, the doctor's office, or through the Unified
Provider Directory found on the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
- Certifying
Officers should note the responsibilities that have been added to the instructions
for the "Employer Certification". By verifying and certifying the requested information,
employers can help prevent delays in the enrollment of their employees.
- Members
who wish to enroll a domestic partner must submit a photocopy of their Certificate
of Domestic Partnership along with this application. The employer's governing
body must also have chosen by resolution to extend domestic partner health benefits
to its employees.
- As
of July 1, 2004 we are requesting a photocopy of a marriage certificate for
new enrollees who are including a spouse as a dependent or for current enrollees
who are adding a new dependent spouse.
A
copy of the new application is enclosed and can be reproduced for use by your
employees. The application is also available for printing from the forms index
of the online Employer Pension and Benefits Administration Manual (EPBAM) at:
www.state.nj.us/treasury/pensions /epbam/support/formsindex.htm
Enclosure
June
14, 2004
| TO:
| Benefits Administrators,
SHBP State Biweekly
Employer Group Benefits Administrators, SHBP State Monthly
Employer Group | | FROM: | Christine
Servis
Chief, Health
Benefits Bureau | | SUBJECT:
| SHBP
Application for Active Employees | The
State Health Benefits Program (SHBP) has revised the health benefit enrollment
application for State active employees. This new application (form number HA-0711-0704)
combines medical, prescription drug, and dental plan enrollment into a single
form, replacing the previous medical/prescription application (HA-0068) and the
separate dental application (HD-0081)*. You may begin using this new application
immediately. However, please note that the domestic partner provisions are not
effective until July 10, 2004. *This
application is also revised from the sample initially sent with the letters of
May 2004 describing benefits under the Domestic Partnership Act. Please
also note these other changes to the application and/or its processing:
- Do not complete this
form just to change a Primary Care Physician (PCP) or dentist. If a member
only wants to make a change to their PCP or dentist, the member should contact
the medical or dental plan directly. Toll-free telephone numbers for SHBP plans
are found in the SHBP Summary Program
Description and on the SHBP
Plan Comparison Chart.
- Do
not complete this form just to change your address. If a member only wants
to make a change to their address, the member should contact the Division of Pensions
and Benefits - Office of Client Services at
(609) 292-7524 and request a
change of their SHBP address information.
- A
Primary Care Physician ID Number must be given for the member's PCP and the
PCPs of all dependents enrolling in NJ PLUS or an HMO plan. The SHBP can no longer
accept a physician's name as identification for enrollment. If a PCP ID Number
is not listed, the member will get a "must select PCP letter" from the
plan and in-network services may not be covered. PCP ID Numbers can be obtained
by contacting the health plan directly, the doctor's office, or through the Unified
Provider Directory found on the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm
- Certifying
Officers should note the responsibilities that have been added to the instructions
for the "Employer Certification". By verifying and certifying the requested information,
employers can help prevent delays in the enrollment of their employees.
- Members
who wish to enroll a domestic partner - after July 10, 2004 - must submit
a photocopy of their Certificate of Domestic Partnership along with this
application.
- As
of July 1, 2004 we are requesting a photocopy of a marriage certificate for
new enrollees who are including a spouse as a dependent or for current enrollees
who are adding a new dependent spouse.
A
copy of the new application is enclosed and can be reproduced for use by your
employees. The application is also available for printing from the forms index
of the online Employer Pension and Benefits Administration Manual (EPBAM) at:
www.state.nj.us/treasury/pensions /epbam/support/formsindex.htm
Enclosure
May 10, 2004
| TO: | Certifying
Officer State and Autonomous State College/University
|
| FROM: | John
D. Megariotis
Deputy
Director, Finance
| | SUBJECT: | PERS
State Rate Increase July 2004
Clarification - Change To Effective Date Of
Member Pension Rates - Public Employees' Retirement System |
Chapter 415, P.L.
1999 reduced the pension rate for members of the Public Employees' Retirement
System from 4.5% to 3%. Effective PAY PERIOD #15, the period from 6/26/04
- 7/9/04, the Public Employees' Retirement System (State Employees) member contributions
rate will return to the normal rate of 5%. The
previous reduction in the member rate for the PERS was authorized by statute and
was based on the existence of surplus pension assets in the retirement system.
However, also per statute when there are no longer surplus pension assets, the
member rate for PERS will return to the normal rate of 5%. Retroactive
increases paid on or after July 16, 2004 pay date should be deducted at 5%, including
any portion of the retroactive salary that covered a period prior to July 10,
2004. Prior direction
from this office indicated that the change in rate was to take effect with the
first payday of July 2004.
May 13, 2004
| TO: | Benefits
Administrators, SHBP Local Employer Group
|
| FROM: | Florence
J. Sheppard
Deputy
Director, Benefits Operations | | SUBJECT: | Domestic
Partnership Act: SHBP Implications | Chapter
246, P.L. 2003 the Domestic Partnership Act, is effective on July 10, 2004. This
law establishes the rights and responsibilities of domestic partners in the State
of New Jersey and also extends certain health and pension benefits to same-sex
domestic partners of State employees. Chapter 246 allows local government
and education entities participating in the State Health Benefits Program (SHBP)
to extend these same benefits to same-sex domestic partners of their employees
by resolution of their governing body. This letter describes the:
- SHBP benefits that will be extended to same-sex
domestic partners of State employees and the employees of local government and
education entities that adopt SHBP domestic partnership benefits by resolution;
and
- Procedures for local
entities participating in the SHBP to adopt SHBP domestic partner benefits.
We
have sent all local public employers information about extending pension
benefits to domestic partners in a separate letter. The
SHBP Domestic Partner Benefit Chapter
246 states that same-sex domestic partners of State employees will be provided
the same SHBP benefits as are provided to spouses. It does this by changing the
definition of dependents of State employees in the statutes governing the
SHBP to include a same-sex domestic partner. Local government and education
employers have the option to keep the current definition of "dependent" or adopt
the definition that will be used by the State for its employees. (Note:
The provisions in Chapter 246 that address opposite-sex domestic partners over
age 62 do not apply to the health benefits or pension provisions in the law.
See sections 2e and 58a of the Domestic Partnership Act.) Also note that
the benefits described in this section will not apply to your employees
and retirees if your governing body does not specifically act to adopt the SHBP
provisions of the Domestic Partnership Act. To
implement this law, the Member & Spouse level of coverage will also be used
for an employee and domestic partner. The premium rate for Member & Spouse
and Member & Domestic Partner coverage will be the same. If the employee
also has children enrolled for coverage, then the Family level coverage will include
the domestic partner at the same cost as if a spouse were covered. Since
the stated intent of Chapter 246 is to provide benefits to domestic partners in
the same manner as for spouses, an employee will be able to add a domestic partner's
children to SHBP coverage under the same conditions that an employee can now add
stepchildren to coverage. Taxability
of the Domestic Partner Benefit Domestic
partners are not viewed in the same manner as spouses by the Internal Revenue
Code and are not automatically considered as dependents for tax purposes. Therefore,
the employer health benefits provided to the domestic partner is normally
subject to federal taxes (income, Social Security, and Medicare taxes) as
imputed income. However, the domestic partner benefit is not taxable under
New Jersey law. If your governing
body extends benefits to the domestic partners of your employees and retirees,
it should anticipate having to make employer FICA and Medicare contributions on
the imputed income. The FICA contributions will not be reimbursed since the State
reimbursement is limited to contributions on salary from which TPAF contributions
were taken. You will also have these same federal tax reporting and payment
requirements for your retirees who are receiving full or partial State-paid
health benefits. Estimating the
Imputed Income for Employees and Retirees If
an employee or retiree adds a domestic partner to coverage and that benefit is
deemed to be taxable (which will be the case unless the employee or retiree certifies
that it is not taxable), the value of the benefit for reporting imputed income
will be the cost of single coverage for the plan or plans in which the employee's
domestic partner is enrolled less any amount that the employee pays for the domestic
partner portion of the coverage. If the employee pays the full amount for
the domestic partner coverage, there will be no imputed income. If the employee
or retiree pays nothing towards the cost of the domestic partner benefit, the
imputed income will be the cost of single coverage in the plan or plans in which
the domestic partner is enrolled. Tax
Treatment of Employee Premium Payments If
the domestic partner benefit is taxable to the employee, any premiums that the
employee pays for that benefit cannot be made on a pre-tax basis. Therefore,
if you require employees to pay all or a share of the cost for dependent coverage,
and if the employee participates in a Section 125 Cafeteria Plan and normally
uses pre-tax dollars to pay the employee share for dependent coverage, the payment
that the employee makes to cover the domestic partner coverage cannot be made
through the Section 125 Plan and has to be made on an after-tax basis. The
Decision to Adopt SHBP Domestic Partner Coverage Chapter
246 allows local government and education employers participating in the SHBP
to adopt the same definition of dependent as the State, that is, one that includes
a same-sex domestic partner. There is no requirement for an employer to do so,
nor any time period in which a decision, one way or the other, must be made.
This decision is also independent of any decision to extend domestic partner pension
benefits to your employees. If an employer does adopt a SHBP Chapter 246 Resolution,
the option to add domestic partners to coverage will be available to all its employees
and all of its retirees enrolled in the SHBP. The local employer also
has the option to require the employee to pay all or a portion of the cost of
coverage for a domestic partner. SHBP uniformity rules, however, require that
domestic partner coverage be handled in the same manner as spousal coverage is
handled. To extend SHBP coverage to domestic
partners of your employees, your governing body must adopt by resolution the provisions
of Chapter 246. Attached is the Resolution that your governing body must
approve if it decides to provide the SHBP domestic partner benefit. Please complete
it and submit it to the Health Benefits Bureau of the Division of Pensions and
Benefits. The effective date for the addition of coverage of domestic partners
will be the 1st of the month following 60 days after the receipt of
the resolution. If at some time in the
future, an employer decides to reverse its decision to provide domestic partnership
health benefits to its employees and retirees, that decision will be applied prospectively
effective the 1st of the month following 60 days after the Division receives the
governing body resolution rescinding the previous decision. Domestic partners
losing coverage under these circumstances will not be eligible for COBRA coverage
since the employer's cancellation of the domestic partner benefit does not qualify
as a COBRA event. Summary
- A local employer who participates in the SHBP
has the option of allowing its employees and retirees to cover a same-sex domestic
partner as an eligible dependent.
- The
governing body must adopt a Chapter 246 Resolution to provide this benefit for
its employees and retirees. The effective date of the SHBP coverage will be the
1st of the month following 60 days after the resolution is received
by the SHBP.
- The governing
body may adopt a Chapter 246 Resolution for SHBP coverage independent of any action
it may take on pension benefits and at any time in the future.
- The
employer may require the employee to pay all or a portion of the cost of the SHBP
domestic partner coverage in the same manner as they require employees to pay
for spouse coverage.
- The
employer will be responsible for managing the federal tax consequences of its
Chapter 246 Resolution for its employees and retirees, that is, reporting imputed
taxable income on a Form W-2 for this benefit and reporting and making required
employee and employer contributions to the federal government.
Information
Resources An extensive set of questions
and answers about the domestic partner benefit is available on the Division's
Web site (www.state.nj.us/treasury/pensions).
We will be providing general information about this domestic partner benefit to
all retirees currently enrolled in the SHBP, but since their eligibility for coverage
will be based on the actions of your governing body, they may contact you directly
for information. We are also developing a new Fact Sheet #71, Domestic Partnership
Benefits that we will make available through our Web site as soon as possible.
If you have any questions about this letter, write the Division at the address
above or e-mail us (at Pensions.nj@treas.state.nj.us). enclosure SHBP
Chapter 246 Resolution (PDF
449K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
May 5, 2004
| TO: | Benefits
Administrators, SHBP
State Monthly Employer Group
| | FROM: | Florence
J. Sheppard
Deputy
Director, Benefits Operations
| | SUBJECT: | Domestic
Partnership Act: Health Benefits Implications | Chapter
246, P.L. 2003 the Domestic Partnership Act, is effective on July 10, 2004. This
law establishes the rights and responsibilities of domestic partners in the State
of New Jersey and also extends certain health and pension benefits to same-sex
domestic partners of employees with coverage in the State Employer Group of the
State Health Benefits Program (SHBP). The State Employer Group includes the State
colleges and universities, the Palisades Interstate Parkway Commission, the New
Jersey Building Authority, the State Library, and the Commerce and Economic Growth
Commission in addition to State employees paid through Centralized Payroll.
Chapter 246 also allows local government and education entities participating
in the SHBP to extend these same benefits to same-sex domestic partners of their
employees by resolution of their governing body. This letter describes
- SHBP benefits that will
be extended to same-sex domestic partners of State employees and the
- Responsibilities
of State Monthly employers in administering this benefit.
We
will send information about extending pension benefits to domestic partners in
a separate letter. The
SHBP Domestic Partner Benefit Chapter
246 provides that same-sex domestic partners be provided the same SHBP benefits
as are provided to spouses. It does this by changing the definition of dependents
of State employees in the statutes governing the SHBP to include a same-sex
domestic partner. (Note: The provisions in Chapter 246 that address opposite-sex
domestic partners over age 62 do not apply to the health benefits or pension provisions
in the law. See sections 2e and 58a of the Domestic Partnership Act.) To
add a domestic partner to SHBP coverage, the employee must produce a Certificate
of Domestic Partnership issued by any New Jersey local registrar or a similar
official document issued legally from a political jurisdiction in another State.
Residents of another State may obtain a New Jersey Certificate of Domestic
Partnership from any New Jersey local registrar as long as one of the partners
is a member of a New Jersey administered pension system. A Certificate
of Pension Membership is attached. This form can be used by out-of-State
residents to provide the documentation needed to obtain a New Jersey Certificate
of Domestic Partnership. A list of local registrars is on the Web site (http://www.state.nj.us/health/vital/regbycnty.shtml)
of the New Jersey Department of Health and Senior Services. To
implement this law, the Member & Spouse level of coverage will also be used
for an employee and domestic partner. The premium rate for Member & Spouse
and Member & Domestic Partner coverage will be the same. If the employee
also has children enrolled for coverage, then the Family level coverage will include
the domestic partner at the same cost as if a spouse were covered. Since
the stated intent of Chapter 246 is to provide benefits to domestic partners in
the same manner as for spouses, an employee will be able to add a domestic partner's
children to SHBP coverage under the same conditions that an employee can now add
stepchildren to coverage. The children of the domestic partner must be unmarried
and under age 23, live with the employee, and receive substantial financial support
from the employee. The employee will be required to file an Affidavit of Dependency
with the request to add the domestic partner's children to coverage. Enrollment
of Domestic Partners State
employees who wish to add domestic partners may do so beginning July 10, 2004
with the earliest possible coverage effective date of August 1, 2004. The SHBP
will require a Certificate of Domestic Partnership to add a domestic partner
to coverage. The employee must submit a copy of the certificate with the health
benefits enrollment application within 60 days of the Certificate of Domestic
Partnership date. If an application is submitted without the Certificate
of Domestic Partnership, we will return it without action. Certificates
of Domestic Partnership will be available from every State local registrar.
There is no special
open enrollment period for Domestic Partners. When the employee obtains a Certificate
of Domestic Partnership, the employee has 60 days from the date of the Certificate
in which to add the new dependent to SHBP coverage. If submitted within the 60-day
timeframe, the effective date of coverage will be retroactive to the date of the
Certificate, but no earlier than August 1, 2004. If this is not done, then the
employee must wait for the next regular open enrollment period to add the dependent. Taxability
of the Domestic Partner Benefit The
federal Internal Revenue Code does not view domestic partners in the same manner
as spouses. The IRS does not automatically consider domestic partners as dependents
for tax purposes. Therefore, the employer health benefits provided to a domestic
partner is normally subject to federal taxes (income, Social Security,
and Medicare taxes) as imputed income. However, the domestic partner benefit
is not taxable under New Jersey law. How you should calculate the value
of the domestic partner benefit is described in the next section of this letter.
If the domestic partner
meets the IRS definition of a dependent for tax purposes, then the employer does
not have to treat the domestic partner coverage as a taxable benefit. (See the
attached IRS
Tax Topic 354 — Dependents for information on IRS dependency
criteria.) The IRS has stated in private letter rulings that an employer can
rely on an employee's written certification that the dependent meets the IRS tests
for dependency. An Employee
Tax Certification — Domestic Partner Benefitthat will be used for
State employees paid through Centralized Payroll is attached for your consideration.
Since an individual's situation can change, you should obtain a new certification
each tax year. Calculating
the Imputed Income for Active Employees If
an employee adds a domestic partner to coverage and that benefit is deemed to
be taxable (which will be the case unless the employee certifies that it is not
taxable), the value of the benefit for reporting imputed income will be the
cost of Single coverage for the plan or plans in which the employee's domestic
partner is enrolled less any amount that the employee pays for
the domestic partner portion of the coverage. If the employee is premium
sharing, the amount that the employee pays for the domestic partner portion of
the coverage is the difference between the employee share for Single coverage
and for Member & Spouse or Domestic Partner coverage or the difference between
the employee share for Parent & Child(ren) coverage and for Family coverage,
whichever is appropriate. If the employee does not premium share, then the imputed
income is the full cost of Single coverage. Example:
An employee with Single coverage in NJ PLUS, the Employee Prescription Drug Plan,
and the Dental Expense Plan adds a domestic partner to the coverage of all three
plans. The domestic partner benefit is a federally taxable benefit. The monthly
imputed income for the NJ PLUS and the Employee Prescription Drug Plan, for which
there is no employee premium charge, is the full cost of Single coverage, or $286.23
and $102.81, respectively. The monthly imputed income for the Dental Expense Plan,
for which the employee does premium share, is $29.29. This is the full cost of
Single coverage, $40.16, minus the amount that the employee has paid for the domestic
partner coverage, $10.87 (the difference between the employee share for Single
coverage, $20.08, and for Member & Spouse or Domestic Partner coverage, $30.95).
The total monthly imputed income attributable to domestic partner coverage for
this employee is $418.33, the sum of the imputed incomes for all three plans. We
have enclosed a chart which shows the imputed income to an employee who adds a
domestic partner to coverage for every medical and dental plan. The employer
must take the necessary income tax, Social Security tax, and Medicare tax deductions
for the imputed income from the employee's regular pay and make the required employer
contributions to the federal government for the Social Security, Medicare, and
Unemployment taxes. Tax
Treatment of Employee Premium Payments If
the domestic partner benefit is taxable to the employee, any premiums that the
employee pays for that benefit cannot be made on a pre-tax basis. Therefore,
if the employee participates in the Tax$ave Premium Option Plan and normally uses
pre-tax dollars to pay the employee share for coverage, the difference between
Single and Member & Spouse or Domestic Partner coverage has to be made on
an after-tax basis. Example:
An employee premium shares for the Traditional Plan and the Dental Expense Plan
with Single coverage. The monthly employee share is $114.43 and $20.08, respectively
and it is made on a pre-tax basis. The employee adds a domestic partner to both
plans and the benefit is taxable. The new premium share amounts are $244.92 and
$30.95, respectively. For the new coverage, $114.43 and $20.08 can still be paid
using pre-tax dollars, but $130.49 and $10.87, the difference between the employee's
premium share for Single and Member & Spouse or Domestic Partner coverage,
must be paid using after-tax dollars. Calculating
the Imputed Income for Retirees The
federal government does not distinguish between active employees and retirees
with respect to the taxability of employer provided benefits. Therefore, the
taxability issues just discussed for employees apply also to any of your retirees
receiving the domestic partner benefit. The Division of Pensions and Benefits
will take the required steps to properly report any imputed taxable income to
State retirees because of domestic partner coverage. Information
Resources We
are enclosing copies of revised SHBP applications reflecting domestic partner
eligibility for coverage and for your information and use. These forms are available
on the Division's Web site (www.state.nj.us/treasury/pensions)
as are an extensive set of questions and answers about the domestic partner benefit.
Note that the separate medical/Rx and dental plan applications have been combined
into one form. We will provide information about this domestic partner benefit
to all retirees currently enrolled in the SHBP. We are developing a new Fact
Sheet #71, SHBP Domestic Partnership Benefits that we will make available
through our Web site as soon as possible. We are also preparing a summary of
domestic partner pension and health benefits that will be available for distribution
to your employees in mid-June. If
you have any questions about this letter, write the Division at the address above
or e-mail us (at Pensions.nj@treas.state.nj.us). enclosures Certificate
of Pension Membership (PDF
399K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
IRS
Tax Topic 354 - Dependents Employee
Tax Certification - Domestic Partner Benefit Form (PDF
394K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe Domestic
Partner Monthly Imputed Income (PDF
62K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
Revised
SHBP Application (PDF
477K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
May 5, 2004
| TO: | Benefits
Administrators, SHBP
State Biweekly Employer Group
| | FROM: | Florence
J. Sheppard
Deputy
Director, Benefits Operations
| | SUBJECT: | Domestic
Partnership Act: Health Benefits Implications | Chapter
246, P.L. 2003 the Domestic Partnership Act, is effective on July 10, 2004. This
law establishes the rights and responsibilities of domestic partners in the State
of New Jersey and also extends certain health and pension benefits to same-sex
domestic partners of employees with coverage in the State Employer Group of the
State Health Benefits Program (SHBP). Chapter 246 also allows local government
and education entities participating in the SHBP to extend these same benefits
to same-sex domestic partners of their employees by resolution of their governing
body. This letter
describes the SHBP benefits that will be extended to same-sex domestic partners
of State employees. We will send information about extending pension benefits
to domestic partners in a separate letter. The
SHBP Domestic Partner Benefit Chapter
246 provides that same-sex domestic partners be provided the same SHBP benefits
as are provided to spouses. It does this by changing the definition of dependents
of State employees in the statutes governing the SHBP to include a same-sex
domestic partner. (Note: The provisions in Chapter 246 that address opposite-sex
domestic partners over age 62 do not apply to the health benefits or pension provisions
in the law. See sections 2e and 58a of the Domestic Partnership Act.) To
add a domestic partner to SHBP coverage, the employee must produce a Certificate
of Domestic Partnership, issued by any New Jersey local registrar, or a similar
official document issued legally from a political jurisdiction in another State.
Residents of another State may obtain a New Jersey Certificate of Domestic
Partnership from any New Jersey local registrar as long as one of the partners
is a member of a New Jersey administered pension system. A Certificate
of Pension Membership is attached. This form can be used by out-of-State
residents for the documentation needed to obtain a New Jersey Certificate of
Domestic Partnership. A list of local registrars is on the New Jersey Department
of Health and Senior Services Web site (http://www.state.nj.us/health/vital/regbycnty.shtml).
To implement
this law, the Member & Spouse level of coverage will also be used for an employee
and domestic partner. The premium rate for Member & Spouse and Member &
Domestic Partner coverage will be the same. If the employee also has children
enrolled for coverage, then the Family level coverage will include the domestic
partner at the same cost as if a spouse were covered. Since
the stated intent of Chapter 246 is to provide benefits to domestic partners in
the same manner as for spouses, an employee will be able to add a domestic partner's
children to SHBP coverage under the same conditions that an employee can now add
stepchildren to coverage. The children of the domestic partner must be unmarried
and under age 23, live with the employee and receive substantial financial support
from the employee. The employee will be required to file an Affidavit of Dependency
with the request to add the domestic partner's children to coverage. Initial
Enrollment of Domestic Partners State
employees who wish to add domestic partners may do so beginning July 10, 2004
with the earliest possible coverage effective date of August 7, 2004. The SHBP
will require a Certificate of Domestic Partnership to add a domestic partner
to coverage so the employee must submit a copy of the certificate with the health
benefits enrollment application within 60 days of the Certificate of Domestic
Partnership date. If an application is submitted without the Certificate
of Domestic Partnership, we will return it without action. Certificates
of Domestic Partnership will be available from every State local registrar.
There is no special
open enrollment period for Domestic Partners. When the employee obtains a Certificate
of Domestic Partnership, the employee has 60 days from the date of the Certificate
in which to add the new dependent to SHBP coverage. If submitted within the 60-day
timeframe, the effective date of coverage will be retroactive to the date of the
Certificate, but no earlier than August 7, 2004. If this is not done, then the
employee must wait for the next regular open enrollment period to add the dependent. Taxability
of the Domestic Partner Benefit The
federal Internal Revenue Code does not view domestic partners in the same manner
as spouses and they are not automatically considered as dependents for tax purposes.
Therefore, the employer health benefits provided to a domestic partner is
normally subject to federal taxes (income, Social Security, and Medicare
taxes) as imputed income. However, the domestic partner benefit is not taxable
under New Jersey law. How Centralized Payroll will calculate the imputed
value of the domestic partner benefit is described in the next section of this
letter. If the
domestic partner meets the IRS definition of a dependent for tax purposes, then
the employer does not have to treat the domestic partner coverage as a taxable
benefit. (See the attached IRS
Tax Topic 354 - Dependents for information on IRS dependency criteria.)
The IRS has stated in private letter rulings that an employer can rely on an
employee's written certification that the dependent meets the IRS tests for dependency.
An Employee Tax Certification
- Domestic Partner Benefit that will be used for State employees paid
through Centralized Payroll is attached for use of your employees. Since an individual's
situation can change, an employee who files a certification stating that the domestic
partner meets the IRS definition of dependent will be required to file a new certification
every calendar year to continue that same tax treatment of the benefit. Calculating
the Imputed Income for Active Employees If
an employee adds a domestic partner to coverage and that benefit is deemed to
be taxable (which will be the case unless the employee certifies that it is not
taxable), the value of the benefit for reporting imputed income will be the
cost of Single coverage for the plan or plans in which the employee's domestic
partner is enrolled less any amount that the employee pays for
the domestic partner portion of the coverage. If the employee is premium
sharing, the amount that the employee pays for the domestic partner portion of
the coverage is the difference between the employee's share for Single coverage
and Member & Spouse or Domestic Partner coverage or the difference between
the employee's share for Parent & Child(ren) coverage and Family coverage,
whichever is appropriate. If the employee does not premium share, then the imputed
income is the full cost of Single coverage. Example:
An employee with Single coverage in the NJ PLUS, the Employee Prescription Drug
Plan, and the Dental Expense Plan adds a domestic partner to the coverage of all
three plans. The domestic partner benefit is a federally taxable benefit. The
biweekly imputed income for the NJ PLUS and the Employee Prescription Drug Plan,
for which there is no employee premium charge, is the full cost of Single coverage,
or $131.75 and $47.32, respectively. The biweekly imputed income for the Dental
Expense Plan, for which the employee does premium share, is $13.48. This is the
full cost of Single coverage, $18.48, minus the amount that the employee has paid
for the domestic partner coverage, $5.00 (the difference between the employee
share for Single coverage, $9.24, and for Member & Spouse or Domestic Partner
coverage, $14.24). The total biweekly imputed income attributable to domestic
partner coverage for this employee is $192.55, the sum of the imputed incomes
for all three plans. We
have enclosed a chart which shows the imputed income to an employee who adds a
domestic partner to coverage for every medical and dental plan. Centralized Payroll
will take the necessary income tax, Social Security tax, and Medicare tax deductions
from the employee's regular pay and the State will make the required employer
contributions to the federal government for the Social Security, Medicare, and
Unemployment taxes. Tax
Treatment of Employee Premium Payments If
the domestic partner benefit is taxable to the employee, any premiums that the
employee pays for that benefit cannot be made on a pre-tax basis under
an Internal Revenue Code Section 125 plan. Therefore, if the employee participates
in the Tax$ave Premium Option Plan and normally uses pre-tax dollars to pay the
employee share for coverage, the difference between Single and Member & Spouse
or Domestic Partner coverage has to be made on an after-tax basis. Example:
An employee premium shares for the Traditional Plan and the Dental Expense Plan
with Single coverage. The biweekly employee share is $52.67 and $9.24, respectively,
and it is made on a pre-tax basis. The employee adds a domestic partner to both
plans and the benefit is taxable. The new premium share amounts are $112.73 and
$14.24, respectively. For the new coverage, $52.67 and $9.24 can still be paid
using pre-tax dollars, but $60.06 and $5.00, the difference between the employee
premium share costs for Single and Member & Spouse or Domestic Partner coverage
for each plan, must be paid using after-tax dollars. Calculating
the Imputed Income for Retirees The
federal government does not distinguish between active employees and retirees
with respect to the taxability of employer provided benefits. Therefore, the
taxability issues just discussed for employees apply also to any State retirees
receiving the domestic partner benefit. The Division of Pensions and Benefits
will take the required steps to properly report any imputed taxable income to
State retirees because of domestic partner coverage. Information
Resources We
are enclosing copies of revised SHBP applications reflecting domestic partner
eligibility for coverage for your information and use. These forms are available
on the Division's Web site (www.state.nj.us/treasury/pensions)
as well as an extensive set of questions and answers about the domestic partner
benefit. Note that the separate medical/Rx and dental plan applications have
been combined into one form. We will provide information about this domestic
partner benefit to all retirees currently enrolled in the SHBP. We are developing
a new Fact Sheet #71, SHBP Domestic Partnership Benefits that we will make
available through our Web site as soon as possible. We are also preparing a summary
of domestic partner pension and health benefits that will be available for distribution
to your employees with their July 2nd pay checks. If
you have any questions about this letter, write the Division at the address above
or e-mail us (at Pensions.nj@treas.state.nj.us). enclosures Certificate
of Pension Membership (PDF
399K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
IRS
Tax Topic 354 - Dependents Employee
Tax Certification - Domestic Partner Benefit Form
(PDF 394K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
Domestic
Partner Biweekly Imputed Income (PDF
55K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
Revised
SHBP Application (PDF477K)
To print this in PDF, you must have Acrobat
Reader which is available free from Adobe.
May 10, 2004
| TO: | Local
Certifying Officers, Public
Employees' Retirement System, Teachers'
Pension and Annuity Fund,
Police and Firemen's Retirement System
| | FROM: | Janice
C. Curtin
Assistant Director, Pension Operations
|
| SUBJECT: | Domestic
Partnership Act: Pension Implications | Chapter
246, P.L. 2003, the Domestic Partnership Act, is effective on July 10, 2004.
This law establishes the rights and responsibilities of domestic partners in the
State of New Jersey. Chapter 246 extends certain health and pension benefits
to same-sex, domestic partners of employees of the State. The law also
gives a local governmental entity the option to extend these same benefits
to domestic partners of its employees and retirees by resolution of the governing
body. (Note: The provisions in Chapter 246 that address bopposite-sexb domestic
partners over age 62 do not apply to the health benefits or pension provisions
in the law. See sections 2e and 58a of the Domestic Partnership Act.) This
letter describes the - Pension
benefits that may be extended to same-sex domestic partners and
- Procedures
for a local governmental entity to adopt these benefits for its employees and
current and future retirees.
The
extension of health benefits to domestic partners of employees and retirees of
local government will not be discussed in this letter. That topic will be covered
in a separate letter for employers who participate in the State Health Benefits
Program for their active employees.[1] Chapter
246 potentially affects local public employees who are members of the Public Employees'
Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF), and the
Police and Firemen's Retirement System (PFRS). The Consolidated Police and Firemen's
Pension Fund and the Prison Officers Pension Fund are not affected by this law. PERS
and TPAF Implications. The law adds a domestic partner to the existing definitions
of spouse, widow, and widower for these systems. The only PERS and TPAF benefit
affected by Chapter 246 is the survivor's benefit in the event of the accidental
death of the member while in the performance of duty. Other retirement benefits
are not affected since a retiring member may already name anyone as the beneficiary
of the pension benefit, within the constraints imposed by the Internal Revenue
Code described below. There are very few accidental deaths in the PERS and TPAF
and there is almost always a beneficiary eligible to receive the accidental death
benefits when a qualifying death occurs. Therefore, there will be little or
no additional employer costs resulting from extending these benefits to domestic
partners of members of the PERS and TPAF. The
PERS and TPAF benefits extended to a domestic partner are essentially identical
to those provided a spouse with two exceptions caused by federal tax code. The
Internal Revenue Service does restrict who a member can name as a beneficiary
under Options 2, A, and B. Under Options 2 and A, a member cannot name a non-spouse
beneficiary who is more than 10 years younger than the member; under Option B,
the beneficiary cannot be more than 19 years younger. Additionally, a survivor's
benefits from an Accidental Disability retirement or accidental line-of-duty death
going to a domestic partner would be subject to federal tax. This is not the case
when a survivor's benefit is paid to a spouse. PFRS
Implications. Chapter 246 adds domestic partner to the current definitions
of spouse, widow, and widower. The law potentially affects all PFRS survivor benefits,
both active and retired, since the pension beneficiary is established by law,
not member choice. There currently are frequent occurrences of member deaths
where there is no eligible beneficiary, so extending these survivor benefits
to domestic partners may result in some additional employer pension costs since
it will increase the likelihood of a survivor's benefit being paid. It will
be several years before those costs can be determined. It is difficult to accurately
estimate the potential impact on employer costs without knowing how many employees
and retirees have or may have domestic partners. Very rough estimates from the
experience of other employers who provide domestic partner benefits are indicate
that adding the domestic partner benefit may result in an increase in employer
pension contribution requirements of between ½ to 1% of salary. Non-Portability
of the Domestic Partner Benefit. Domestic partner benefits are associated
with specific employers that opt to extend them to their employees and retirees.
If an employee transfers to another employer, the domestic partner benefit does
not transfer with them. If the new employer has opted to provide domestic partner
benefits, then that pension benefit will continue. If the new employer has not
extended the pension benefit to domestic partners, then the eligibility for that
benefit will end. The
Decision to Extend Domestic Partner Benefits. Employers should keep the following
in mind as they decide whether to extend pension benefits to domestic partners
of its employees and retirees. The decision - Is
optional and can be made separately from any decision regarding the extension
of other benefits to domestic partners, e.g., health benefits;
- Can
be made at any time, now or in the future;
- Will
be prospective and not cover anyone who died or transferred employment prior to
the governing body's adoption;
- Cannot
be restricted to select employee groups, but must include members of all pension
systems in which your employees participate;
- Will
automatically extend domestic partner benefits to all of your present and future
retirees;
- May
entail some future pension costs, but they cannot be determined at this time;
- Can be
rescinded at some future date, but the pension benefit will be guaranteed to any
employee or retiree with more than five years of service at the time of the action
to rescind the benefit for as long as they are associated with your organization.
The
governing body of your organization must approve by resolution or ordinance the
extension of pension benefits to same-sex domestic partners of its employees and
retirees under the provisions of Chapter 246. The resolution or ordinance must
include all the language of the attached Resolution, on which the action
of the governing body is to be reported to the Division of Pensions and Benefits.
Please complete it and submit it to the Division of Pensions and Benefits at
the address shown. Certificates
of Domestic Partnership. If your governing body opts to extend domestic partner
pension benefits to its employees and retirees, pension members will have to submit
a Certificate of Domestic Partnership, or a similar official document issued
legally from a political jurisdiction in another State, to the Division of Pensions
and Benefits when they designate a domestic partner as a beneficiary. The member
can obtain the Certificate of Domestic Partnership from any New Jersey
local registrar. Residents of another State may obtain a New Jersey Certificate
of Domestic Partnership from any New Jersey local registrar as long as one
of the partners is a member of a New Jersey administered pension system. A Certificate
of Pension Membership is attached. This form can be used by out-of-State
residents for the documentation needed to obtain a New Jersey Certificate of
Domestic Partnership. A list of local registrars is on the New Jersey Department
of Health and Senior Services Web site (http://www.state.nj.us/health/vital/regbycnty.shtml).
Other Information.
We have prepared an extensive Question and Answer document about the pension and
health benefits provisions of the Domestic Partnership Act and posted it on our
Web site (www.state.nj.us/treasury/pensions).
If you have any questions about the subject of this letter, please contact us
by e-mail (Pensions.nj@treas.state.nj.us)
or by letter at the address on the letterhead. enclosures Employer
Domestic Partner Resolution Certificate
of Pension Membership
[1] Chapter 246 gives statutory authority to provide health benefits to domestic
partners only to local employers participating in the SHBP. Therefore,
local group retirees enrolled in the SHBP, for whom the State pays all or a portion
of the cost of their coverage and who retired from employers that do not participate
in the SHBP for their active employees, will not be eligible for the domestic
partner health benefit. This includes retirees of education employers and
PFRS members enrolled in the SHBP under the provisions of Chapter 330, P.L. 1997
unless their former employer participates in the SHBP for their active employees
and opts to extend benefits to domestic partners.
May 5, 2004
| TO: | State
Certifying Officers, Public
Employees' Retirement System, Teachers'
Pension and Annuity Fund, Police
and Firemen's Retirement System, State Police Retirement System, Judicial Retirement
System
|
| FROM: | Florence
J. Sheppard
Deputy
Director, Benefits Operations
| | SUBJECT: | The
Domestic Partnership Act: Pension Implications | Chapter
246, P.L. 2003, the Domestic Partnership Act, is effective on July 10, 2004.
This law establishes the rights and responsibilities of domestic partners in the
State of New Jersey. Chapter 246 also extends certain health and pension benefits
to same-sex, domestic partners of employees of the State. (Note: The provisions
in Chapter 246 that address opposite-sex domestic partners over age 62 do not
apply to the health benefits or pension provisions in the law. See sections 2e
and 58a of the Domestic Partnership Act.) This letter describes the pension
benefits that will be extended to domestic partners of State employees enrolled
in a pension system. Extending health benefits to domestic partners will be covered
in a separate letter. Chapter
246 affects State employees who are members of the Public Employees' Retirement
System (PERS), the Teachers' Pension and Annuity Fund (TPAF), the Police and Firemen's
Retirement System (PFRS), the State Police Retirement System, and the Judicial
Retirement System. Domestic
Partner Benefits in the PERS and TPAF. The Domestic Partnership Act basically
adds a domestic partner to the existing definitions of spouse, widow and widower
in the statutes governing the PERS and the TPAF. Therefore, the only PERS and
TPAF benefit affected by Chapter 246 is the survivors benefit in the event of
the accidental death of the member while in the performance of duty. Other retirement
benefits are not affected since a retiree may already name anyone as the beneficiary
of the pension benefit within the constraints imposed by the Internal Revenue
Code. The IRS does restrict who a member can name as a beneficiary under Options
2, A and B. Under Options 2 and A, a member cannot name a non-spouse beneficiary
who is more than 10 years younger than the member; under Option B, the beneficiary
cannot be more than 19 years younger. Since the IRS is a federal agency, it is
not governed by the provisions of Chapter 246. Domestic
Partner Benefits in the PFRS and the SPRS. Chapter 246 also adds domestic
partner to the current definitions of spouse, widow, and widower in the statutes
governing the PFRS and the SPRS. Therefore, the law potentially affects all PFRS
and SPRS survivor benefits, both active and retired, since the pension beneficiary
is established by law, not member choice. A domestic partner will now qualify
for a survivor's benefit in the same manner as a spouse. Additionally, if an individual
is receiving a PFRS or SPRS survivors benefit (with the exception of a survivor
of an accidental death in the line of duty), the survivor will lose that pension
benefit if they remarry or establish a same-sex domestic partnership. Domestic
Partner Benefits in the JRS. The Domestic Partnership Act basically adds
a domestic partner to the existing definitions of spouse, widow and widower in
the statutes governing the JRS. Therefore, the law potentially affects all JRS
survivor benefits, both active and retired, since the pension beneficiary is established
by law, not member choice. A domestic partner will now qualify for a survivors
benefit in the same manner as a spouse. Additionally, if an individual is receiving
a JRS survivor's benefit, the survivor will lose that benefit if he/she remarries
or establishes a same-sex domestic partnership. If a judge wishes to select a
joint and survivor retirement option, the IRS restrictions mentioned above under
the PERS and TPAF would apply. Other
Pension Funds. Chapter 246 did not extend any domestic partner pension
benefits to members of the Alternate Benefit Program, the Consolidated Police
and Firemen's Pension Fund or the Prison Officers' Pension Fund. The
Division will prepare a notification for State employees of the impact of the
Domestic Partner Act on their pension and health benefits for distribution in
July. If you have questions about the pension ramifications of this law, e-mail
us (Pensions.nj@treas.state.nj.us)
or write us at the address on the first page.
March 2004
| TO: | Certifying
Officer: Teachers' Pension and Annuity Fund, Public Employees' Retirement
System and Police and Firemen's Retirement System
| | FROM: | John
D. Megariotis
Deputy Director, Finance
| | SUBJECT: | Report
of Contributions, First Quarter 2004 (January 1st to March 31st) |
This memorandum
has pertinent information concerning the completion of your Report of Contributions.
Please read this memorandum before you make any changes to the Report. CHANGE
TO MEMBER PENSION RATES - TEACHERS' PENSION AND ANNUITY FUND Effective
January 1, 2004 the Teachers' Pension and Annuity Fund (TPAF) member contribution
rate returned to the normal rate of 5%. The
previous reduction in the member rate for the TPAF was authorized by statute and
was based on the existence of surplus pension assets in the retirement system.
However, also per statute, when there are no longer surplus pension assets, the
member rate for TPAF will return to the normal rate of 5%. Employee
pension contributions for retroactive salary increases paid on or after January
1, 2004 should be calculated at the rate of 5%, including any portion of the retroactive
salary that covered a period prior to January 1, 2004. PUBLIC
EMPLOYEES' RETIREMENT SYSTEM - MEMBER RATES REMAIN UNCHANGED Chapter
415, P.L. 1999 reduced the pension rate for members of the Public Employees' Retirement
System from 4.5% to 3%. The pension rate for calendar year 2004 will remain at
3% for PERS Local employees. Employee
pension contributions for retroactive salary increases paid on or after January
1, 2000 should be calculated at the rate of 3%, including any portion of the retroactive
salary that covered a period prior to January 1, 2000. Because the change
is a temporary reduction, the minimum repayment for pension loans and the minimum
deduction for the purchase of service credit will not change. The minimum deduction
for the single payment value will continue to be computed on 5% of base salary. DEADLINE
FOR FILING
| Teachers'
Pension and Annuity Fund | April
10, 2004 | | Public
Employees' Retirement System | April
10, 2004 | | Police
and Firemen's Retirement System | April
10, 2004 | It
must be noted that these deadlines are established to provide for the timely updating
of member accounts each quarter. In order to accomplish this goal for the over
300,000 members of the retirement plans, we rely on you, our participating employers,
to report pension information to us by the 10th calendar day of the
month following the end of the calendar quarter. In return, your employees' accounts
are updated with the most recent pension information, which in turn may be used
to process benefit claims by those same employees or their beneficiaries. In
recent years more and more employers have been delivering their reports to us
later and later. However, we have extended the courtesy of holding open the reporting
period to accommodate this late receipt of information so as to not adversely
impact the employees. We must now notify you that this courtesy may no longer
be extended because it conflicts with our goal to provide timely benefit processing
to other retirement plan members whose employers submit their reports by the prescribed
due date. We will continue to accept your reports beyond the 10th
of each calendar quarter but we will not guarantee that your employees' pension
accounts will be updated or benefits processed within the time period they would
expect. That may result in your employees not receiving service credit as earned,
loans when submitted or retirement benefits immediately following termination
of employment. REPORTING
PROCEDURES Employers
must submit monthly transmittal remittances through the Transmittal Electronic
Payments System (TEPS). Token payments are not acceptable. Approximately
one-third of the total quarterly amount due for pension contributions, contributory
life insurance premiums and SACT is expected to be remitted through TEPS each
month. Your March 2004 transmittal remittance, which represents the deductions
due for the balance of the quarter, should be made through TEPS. The portion
of the remittance for total pension deductions should reflect the sum of normal
pension contributions, back deductions, loan payments, and arrears/purchase deductions.
The TEPS remittance is also due by April 10, 2004. With
the Report of Contributions, you must complete and return the Transmittal Summary
form for the 1st quarter 2004. This document is used to assist your
office and this Division in reconciling your transmittal remittances to the quarterly
Report. If your
quarterly Report and total contributions are not received in a timely manner,
we cannot update the pension accounts of your employees. This may adversely affect
any claim for benefits, including loan applications, filed by your employees.
Also, any delay affects our scheduling in posting contributions to all members'
accounts as well as the mailing of Reports of Contributions for the following
quarter. Interest will be assessed, as prescribed by statute and administrative
code, when monthly transmittal remittances and the quarterly Report of Contributions
are not received within fifteen days of the due dates. When
you receive your quarterly Report, you should review it immediately. If
you think you will have a problem in meeting the filing deadline, or if there
is anything you do not understand, contact the Audit/Billing Section at (609)
292-3630. Normally reporting inquiries can be resolved with a telephone call.
Please make all necessary corrections to the Report before you return it to the
Division of Pensions and Benefits. Verify that all changes are explained, the
Report is added correctly, and the totals agree with the sum of the transmittal
remittances. Please
show on the quarterly Report the telephone number of the individual to be contacted
if our auditors have questions concerning any items. SIGNATURE
- Your quarterly Report of Contributions must be signed. Any Report not bearing
a signature will be considered delinquent until an affidavit is submitted by the
Certifying Authority attesting to its contents. Initials will not be accepted. SACT
TAX-SHELTERED ANNUITY - REMITTANCE OF 403(b) CONTRIBUTIONS Chapter
247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be
transmitted and credited within five business days from the pay date. Employees
of local boards of education may participate in the SACT 403(b) program or a 403(b)
plan administered by their employer. This law impacts both arrangements. Members
of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund
and Police and Firemen's Retirement System in the Supplemental Annuity (SACT)
Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted
to the Division of Pensions and Benefits within the timeframes prescribed by law.
Contributions for these members must be made through the Transmittal Electronic
Payments System (TEPS). Please
note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted
prior to the processing of your report of contributions. If the full contribution
is not submitted, it may be necessary to refund any supplemental annuity contributions
remitted for the quarter. This could adversely affect your employees' retirement
savings. REPORTING
ACTUAL SALARIES FOR PART-TIME EMPLOYEES (Rule Change N.J.A.C. 17:2-4.7)
The Public Employees' Retirement
System's Board of Trustees at its November 17, 1999 meeting adopted a rule change
for N.J.A.C. 17:2-4.7 that became effective on January 1, 2000. The amendment
requires reporting districts to use the actual creditable salary earned by employees,
not estimated salary, for part-time hourly, on-call and per diem employees. The
enrollment criteria for part-time hourly, on-call, and per diem employees remains
unchanged. 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. If the member does not make $1,500 in the current calendar
year, and is not expected to make $1,500 in the following year, that employee
is no longer eligible for the retirement system. TEPS
- TRANSMITTAL SHORTAGE PAYMENTS The
Division sends transmittal shortage statements when the sum of the transmittal
remittances does not equal the amount due on the quarterly Report of Contributions.
Transmittal shortage statement payments must be paid through TEPS. Checks received
for payment of transmittal shortages will be returned. If you have questions
related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries
to the Audit/Billing Section at (609) 633-1708. CHANGING
BANKING INFORMATION FOR TEPS Notice
of Changes for TEPS should be submitted to the Division of Pensions and Benefits
on or after the date that the new checking account becomes effective.
Every Notice of Change is verified to ensure that the Division has the correct
banking information. This normally takes 12 to 15 days. CHANGE
TO BASE SALARY It
is important to review the salary shown in column 6 and verify that it correctly
reflects the member's base salary for the quarter. If the salary shown is not
correct, draw a line through it and write the correct salary above it. Pension
Contributions, Contributory Insurance, SACT, and Tax-Sheltered Annuity deductions
must be changed to reflect amounts due on the new salary. If
your employees received a salary increase that is retroactive to a prior quarter,
change column 6 to reflect the COMBINED TOTAL of:
(a) the new base salary for the quarter, plus,
(b) the additional base salary for the retroactive period. The
new quarterly base salary should be written in column 1 of the Report. This salary
will be projected in column 6 of your next quarterly Report. This will eliminate
the need to make numerous changes on your 2nd quarter Report of Contributions.
Also, in the "Remarks Column" of the current Report you should indicate that the
members had a salary increase and the effective date. REPORTING
RETROACTIVE SALARY AFTER RETIREMENT If
a member receives a retroactive salary adjustment after retirement, do not
write the member's name on the Report of Contributions. Complete a new Certification
of Service and Final Salary and indicate that it is a retroactive adjustment after
retirement by writing on the top of the Certification "Revised Due to Retro."
Deduct the pension contributions and contributory life insurance, if applicable,
from the retroactive check and remit that amount on behalf of the member to the
Audit/Billing Section of this Division. STATEMENTS
OF OVERAGES/SHORTAGES Overages
and shortages that affect a member's Annuity Savings Fund identify whether or
not the pension contributions are subject to the 414(h) provision. These statements
should be reviewed to determine when adjustments are required to your payroll
records in calculating year-to-date mandatory pension contributions under 414(h).
All overage and shortage statements that cover a period prior to January 1, 1987
are not subject to the 414(h) provision. Please note that all member shortages
are to be paid by separate check. Do not remit through TEPS. Should
you have any questions or need assistance in completing the Report, please telephone
us at (609) 292-3630. Enclosures: -
Quarterly Report of Contributions
- Transmittal Summary for 1st
Quarter 2004
- Return Envelope
March, 2004
| TO: | Certifying
Officer
Autonomous
State College/University
| | FROM: | John
D. Megariotis
Deputy Director, Finance
| | SUBJECT: | Report
of Contributions, 1st Quarter 2004 | CHANGE
TO MEMBER PENSION RATES - TEACHERS' PENSION AND ANNUITY FUND Effective
January 1, 2004 the Teachers' Pension and Annuity Fund (TPAF) member contribution
rate returned to the normal rate of 5%. Retroactive
increases paid on or after December 13, 2003 should be deducted at 5% including
any portion of the retroactive salary that covered a period prior to December
13, 2003. CHANGE
TO MEMBER PENSION RATES - PUBLIC EMPLOYEES' RETIREMENT SYSTEM Chapter
415, P.L. 1999 reduced the pension rate for members of the Public Employees' Retirement
System from 4.5% to 3%. Effective the first payday on or after July 1, 2004 the
Public Employees' Retirement System (State Employees) member contributions rate
will return to the normal rate of 5%. The
previous reduction in the member rate for the PERS was authorized by statute and
was based on the existence of surplus pension assets in the retirement system.
However, also per statute when there are no longer surplus pension assets, the
member rate for PERS will return to the normal rate of 5% Retroactive
increases paid on or after July 1, 2004 should be deducted at 5%, including any
portion of the retroactive salary that covered a period prior to July 1, 2004. Your
1st quarter 2004 tape Report of Contributions applicable to the Teachers'
Pension and Annuity Fund, Public Employees' Retirement System, and Police and
Firemen's Retirement System is due April 10, 2004. Your March 2004 transmittal
remittance, which represents the deductions due for the balance of the quarter,
should be made through the Transmittal Electronic Payments System (TEPS). The
portion of the remittance for total pension deductions should reflect the sum
of normal pension contributions, back deductions, loan payments, and arrears/purchase
deductions. Your TEPS remittance is also due by April 10, 2004. With
the tape Report of Contributions, you must complete and return the Transmittal
Summary form for the 1st quarter 2004. This document is used to assist
your office and this Division in reconciling your transmittal remittances to the
quarterly Report. The Control and Certification form must also accompany your
quarterly tape Report. This is essential as it attests to the accuracy and validity
of the submitted documentation. If
your quarterly Report and total contributions are not received in a timely manner,
we cannot update the pension accounts of your employees. This may adversely affect
any claim for benefits, including loan applications, filed by your employees.
Also, any delay affects our scheduling in posting contributions to all members'
accounts as well as the mailing of Reports of Contributions for the following
quarter. A tape Report of Contributions will be considered received when it is
submitted in an acceptable format, passes all data processing edits, and can be
used to update members' accounts. Interest will be assessed, as prescribed by
statute and administrative code, when monthly transmittal remittances and the
quarterly Report of Contributions are not received within fifteen days of the
due dates. Retroactive
increases paid on or after January 1, 2000 should be deducted at 3%, including
any portion of the retroactive salary that covered a period prior to January 1,
2000. Because the change is a temporary reduction, the minimum repayment for
pension loans and the minimum deduction for the purchase of service credit will
not change. The minimum deduction for the single payment value will continue
to be computed on 5% of base salary. SACT
TAX-SHELTERED ANNUITY - REMITTANCE OF 403(b) CONTRIBUTIONS Chapter
247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be
transmitted and credited within five business days from the pay date. Members
of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund
and Police and Firemen's Retirement System in the Supplemental Annuity (SACT)
Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted
to the Division of Pensions and Benefits within the timeframes prescribed by law.
Contributions for these members will be made through the Transmittal Electronic
Payments System (TEPS). Please
note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted
prior to the processing of your report of contributions. If the full contribution
is not submitted, it may be necessary to refund any supplemental annuity contributions
sent in for the quarter. This could adversely affect your employees' retirement
savings. REPORTING
ACTUAL SALARIES FOR PART-TIME EMPLOYEES (Rule Change N.J.A.C. 17:2-4.7) The
Public Employees' Retirement System's Board of Trustees adopted a rule change
for N.J.A.C. 17:2-4.7, that became 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
enrollment criteria for part-time hourly, on-call, and per diem employees remains
unchanged. 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. If the member does not make $1,500 in the current calendar year, and
is not expected to make $1,500 in the following year, that employee is no longer
eligible for the retirement system. TEPS
- TRANSMITTAL SHORTAGE PAYMENTS The
Division sends transmittal shortage statements when the sum of the transmittal
remittances does not equal the due figure on the quarterly Report of Contributions.
Transmittal shortage statement payments can only be paid through TEPS. Checks
received for payment of transmittal shortages will be returned. If you have questions
related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries
to the Audit/Billing Section at (609) 633-1708. CHANGING
BANKING INFORMATION FOR TEPS Notice
of Changes for TEPS should be submitted to the Division of Pensions and Benefits
on or after the date that the new checking account becomes effective. Every Notice
of Change is verified to ensure that the Division has the correct banking information.
This normally takes 12 to 15 days. STATEMENTS
OF OVERAGES/SHORTAGES Overage
and shortage statements, which affect a member's Annuity Savings Fund, identify
whether or not the pension contributions are subject to the 414(h) provision.
These statements should be reviewed to determine when adjustments are required
to your payroll records in calculating year-to-date mandatory pension contributions
under 414(h). Please note that all member shortages are to be paid by separate
check. Do not remit through TEPS. Should
you have any questions or need assistance in completing the Report, please telephone
Peter Groffie at (609) 984-4807. Enclosures:
- Transmittal Summary for 1st Quarter 2004
- Control and Certification
Form
March 5, 2004
| TO: | County
Vocational-Technical School Benefits Administrators
| | FROM: | Janice
C. Curtin
Assistant Director, Pension Operations
|
| SUBJECT: | Postsecondary
Vocational-Technical School Instructors | On
January 20, 2004, the State Board of Education approved new Administrative code
for certification of instructors. The Vocational-technical Part-time certificate
has been eliminated as a result of the adoption of N.J.A.C. 6A:19-2.3, Administrative,
instructional and educational services personnel. This revision allows non-certificated
individuals to be employed in postsecondary vocational-technical schools. This
is a revision of the current N.J.A.C. 6:51-1.5 that requires administrative, instructional
and educational services personnel to meet certification requirements. The section
has been updated from current N.J.A.C. 6:51-1.5 to include a provision that county
vocational schools may employ individuals that do not possess educational licenses
to provide postsecondary vocational-technical course instruction, as long
as the individuals possess the appropriate education or industry-endorsed credentials
requisite to meeting educational objectives of the course. This
rule change by the State Board of Education has several effects on the Division
of Pensions and Benefits regarding pension policy: -
Part-time instructors at postsecondary vocational-technical schools who are currently
members of the Teachers Pension and Annuity Fund (TPAF) will be "grandfathered"
in their positions with postsecondary vocational-technical schools as long as
they remain with their current employers. If they change employers, they will
be enrolled in the Public Employees' Retirement System (PERS) if they are employed
as part-time instructors at postsecondary vocational-technical schools.
- New part-time
instructors with postsecondary vocational-technical schools will be enrolled in
the PERS.
-
Part-time instructors at postsecondary vocational-technical schools who retire
under the TPAF will not be eligible for enrollment in the PERS if they accept
other part-time instructor positions at postsecondary vocational-technical schools
after their dates of retirement. A retiree can, however, accept the employment.
The New
Jersey Department of Education (NJDOE) has informed the Division of Pensions and
Benefits that it will not be issuing new certificates to individuals employed
in part-time instructor positions at postsecondary vocational technical schools.
The NJDOE has also informed the Division that current certificates expire within
5 years from the date of issuance and will not be renewed.
February
4, 2004 TO:
Certifying Officers, Alternate Benefits Program FROM: John
Megariotis
Deputy Director, Finance SUBJECT:
New Contracts Awarded for the Alternate Benefit Program and the Additional Contributions
Tax-Sheltered Program The
State has awarded a five-year contract to five companies to serve as investment
carriers in the Alternate Benefit Program (ABP) and the Additional Contributions
Tax-Sheltered (ACTS) Program beginning April 1, 2004. These companies, joined
by TIAA-CREF, which is designated in statute as an investment provider for ABP
and ACTS, gives us the following investment providers for these programs:
- AIG-VALIC
-
CitiStreet
-
Equitable
-
The Hartford
-
ING
-
TIAA-CREF
Two
of the current providers, Lincoln Financial and Met Life, will no longer be offering
service to new members nor be eligible to receive continuing contributions after
March 31, 2004. Between
now and April 1, 2004, your human resource departments will be contacted by representatives
from each of the approved investment carriers to arrange for worksite visits.
We expect that you will continue your gracious support of these retirement programs
and do everything within your powers to accommodate these visits. The Division
will not interfere with your administration of these meetings at your worksite
other than reminding you that each carrier must be given equal access to your
worksites and staff. As always, the carriers are responsible to make prior arrangements
with each human resource office before appearing on campus. The
following questions and answers address the key issues regarding the transition
to the new contract. If you have questions not addressed by this letter, please
contact our Defined Contribution Plans Unit at (609) 777-0887 where one of our
staff will assist you or log your inquiry and reply to you. We will also be providing
this information on our Web site with updates added as soon as it becomes available. Please
look for this information at: www.state.nj.us/treasury/pensions/abp_transition.htm
Questions
and Answers Q:
What will happen to investments currently with Lincoln Financial or MetLife? A:
We hope to allow members to keep their current assets with these carriers. However,
the provider whose contract is terminated as a result of the expiration of the
previous contract must agree to: 1)
Servicing the existing accounts of program members pursuant to the terms and conditions
under the expiring contract, and 2)
Continuing reporting requirements to the Division pursuant to the terms and conditions
under the expiring contract for as long as assets are held by the provider in
program member accounts. If
Lincoln Financial and MetLife agree to these conditions, program members with
accounts maintained by these providers may leave accumulated account balances
with that provider until such time as these providers are unable to fulfill their
requirements under the contract. However, a new election is required from these
members to direct all future investments to one or more of the six providers approved
under the new contract taking effect on April 1, 2004. If a member fails to make
such an election, contributions after March 31, 2004, must be directed by the
employer to the default carrier to be placed into the default investment vehicle. We
hope Lincoln Financial and MetLife will agree to these conditions. However, in
the event either does not agree to these conditions, program members with accounts
maintained by that provider will be given until September 27, 2004, to transfer
these assets to an approved provider under the new contract. Members failing
to make such a transfer will have their assets transferred to the program's default
carrier. Q:
What is the timeline for initiating the use of the providers under the new contract? A:
Under the provisions of the new contract, there is a 60-day mobilization and implementation
period that each provider has agreed to and has provided a detailed timetable
for this period. It is expected that each provider will be fully operational
by April 1, 2004; the starting date for the new agreement. Q:
Which provider will be Default Provider? A:
We anticipate meeting with the approved providers within the next two weeks.
At that time a default provider will be chosen for each of the calendar years
under the contract. Therefore, you will receive notification shortly identifying
the default provider for the remainder of calendar year 2004. CitiStreet will
continue to be the default provider through March 31, 2004. Q:
What investment option will be utilized when a member fails to make an election
(i.e., forced enrollments)? A:
If a member chooses a provider but fails to make an investment election, the administrator
has instructed each provider to credit contributions to the most conservative
investment option available. Under the new contract, those options will be:
| Provider |
Investment Option |
| AIG-VALIC |
Money Market II |
| CitiStreet |
Travelers Money Market |
| Equitable |
Alliance Money Market |
| The
Hartford | Hartford
Money Market | | ING |
ING VP Money Market |
| TIAA
/ CREF | CREF
Money Market | Q:
How long must funds stay with the default provider before a member may transfer
them to another approved provider? A:
Contributions will continue to be sent to the default carrier until the employee
designates a provider by completing the appropriate application(s). The employer
will redirect the contributions to the provider(s) of choice upon notification
of the election and a reasonable period for administrative implementation. The
employee, even if he or she is under a delayed vesting status (NJAC 17:7-3.23),
may choose to transfer funds from the default provider to another provider. Q:
What investment options will be available from the new carriers? A:
The new carriers will have options comparable to those offered by the other carriers
that have been participating in the program. We will provide you a list of these
options, along with new options being offered by carriers under the previous contract,
no later than February 15, 2004. Initially the information will be distributed
by accessing the information on the Internet. Later, a print version will be
available.
January 13, 2004
TO:
State Benefits Administrators FROM: John
D. Megariotis
Deputy Director, Finance SUBJECT:
New State Transportation Benefit The
State is implementing a transportation benefit in April 2004 that is authorized
by Chapter 162, P.L. 2001. The benefit is being offered under the provisions
of Section 132(f) of the Internal Revenue Code. It will allow employees to use
pre-tax dollars to pay for mass transportation (train, bus, ferry, and vanpool)
used to commute to and from work and to pay for parking at work or at Park-and
Ride locations. The program is entitled the New Jersey State Employees Commuter
Tax Savings Program with a short title of the Commuter Tax$ave Program. This
letter provides a brief description of the Commuter Tax$ave Program and how it
will be administered. It also delineates the responsibilities of departmental
and agency benefits/payroll administrators in its administration. The letter
essentially reiterates the information already provided to the benefits/payroll
personnel who attended the meetings on this subject on January 6th
and 7th. The
Section 132(f) Benefit: Eligible employees may execute salary reduction agreements
to have up to: - $100
per month ($1,200 per year) deducted from salary to pay for mass transit commutation
costs (mass transit includes train, bus, ferry, and vanpool expenses) and/or
- $195
per month ($2,340 per year) to pay for parking at work or at park and ride sites.
The
money deducted is not subject to federal income taxes, Social Security taxes,
or Medicare taxes. There is a minimum deduction of $15 for either mass transit
or parking deductions. There are no provisions for higher deductions on an after-tax
basis. Deductions may only be made for use with the employee's personal commutation
costs for going to and from work. Deductions may not be made to pay for commutation
costs of dependents. The
Section 132(f) benefit is a monthly benefit. Eligible employees may enroll in
the program or end participation at any time during the year and may change deductions
as often as they like during the year. Once an employee has enrolled, the employee
remains enrolled for all subsequent months at the same level of participation
until they change their deduction amounts or elect to end participation. Eligibility:
Employees eligible for State-paid health benefits coverage are eligible to participate
in the Commuter Tax$ave Program. Administration:
TransitCenter, Inc., a public nonprofit corporation, will administer the
Commuter Tax$ave Program under contract with the State of New Jersey.
TransitCenter will - Develop
marketing information for employees,
- Enroll
employees for the available benefits through the Internet or by Interactive Voice
Response (IVR) telephone programs,
- Provide
the benefits directly to enrolled employees, and
- Operate
a toll-free customer service operation for employee use beginning February 2,
2004.
The
Executive Account Manager for the State of New Jersey is Ron Reinhardt (Tel. 201-216-6245,
Fax 201-216-6576, e-mail rreinhardt@transitcenter.com).
TransitCenter's Customer Service telephone number, the IVR number, and the Web
site address, which become operational before the end of the month, will be provided
at that time. The
Division of Pensions and Benefits is responsible for oversight of the contract
with TransitCenter and the overall administration of the Commuter Tax$ave Program.
The Project Manager for the Division is Timothy McMullen, Chief of Budget and
Compliance (Tel. 609-292-4542, Fax 609-393-5037, e-mail timothy.mcmullen@treas.state.nj.us). The
Office of Management and Budget - Centralized Payroll is responsible for transferring
eligibility information to TransitCenter, taking payroll deductions from enrolled
employees, and transmitting those deductions to TransitCenter. Kevin McMullen,
Supervisor of Payroll Audit, is the Project Officer for OMB. (Tel. 609-984-6363,
Fax 609-777-3530, e-mail kevin.mcmullen@treas.state.nj.us). The
Commuter Tax$ave Program was designed to minimize the responsibilities of Departmental/agency
benefits administrators (Human Resource, Personnel, or Payroll staff as appropriate
to each organization). However, as the individuals in direct contact with employees
about their benefits, some involvement is necessary and desirable. Departmental/agency
benefits administrators have the following responsibilities:
- Distribute initial marketing
materials to all eligible employees with their January 30th paycheck
(view Commuter Tax$ave Announcement Letter and Brochure). Posters describing
the program will also be provided you to display throughout employee work sites.
- Arrange
with TransitCenter for initial orientation meetings with their employees - the
initial enrollment period is February 2-15, 2004.
-
Be able to answer basic questions about the Commuter Tax$ave Program and refer
more involved questions to TransitCenter Customer Service.
-
Work with OMB Centralized Payroll
to resolve eligibility problems if employees are unable to enroll with TransitCenter.
- Orient
new employees on the Commuter Tax$ave Program when they are hired.
The
Benefit Process: The first Commuter Tax$ave Program benefits will be offered
in April 2004 with marketing materials distributed to employees with their January
30th paycheck. Employee orientation and enrollment will occur between
February 2 -15, 2004. OMB will take the deductions for the April benefit from
the first check in March. Unlike the Tax$ave Program (Section 125) that requires
one annual election, the transportation benefit allows an employee to opt in and
out or change amounts on a monthly basis. The schedule for enrollments and changes
during this calendar year is shown in the following chart.
| ENROLLMENT PERIOD |
DEDUCTION DATE |
BENEFIT PERIOD |
| February 2-15 |
March 12 |
April 2004 |
| February 16 - March
15 | April 8 |
May 2004 |
| March 16 - April 15 |
May 7 |
June 2004 |
| April 16 - May 15 |
June 4 |
July 2004 |
| May 16 - June 15 |
July 2 |
August 2004 |
| June 16 - July 15 |
August 13 |
September 2004 |
| July 16 - August 15 |
September 10 |
October 2004 |
| August 16 - September
15 | October 8 |
November 2004 |
| September 16 - October
15 | November 5 |
December 2004 |
| October 16 - November
15 | December 3 |
January 2005 |
Note
that the monthly deduction for the Commuter Tax$ave Program
will be taken
from only the first paycheck each month. Delivery
of the Benefit: Once OMB sends the deductions to TransitCenter, TransitCenter
will deliver the benefits requested by the participating employees directly to
the employees at their home address. Section 132(f) requires that the mass transit
benefit be delivered in the form of a ticket or payment mechanism (electronic
credit/debit-like card or voucher) that can only be used to procure mass transportation
services. TransitCenter offers several options in this regard and will deliver
the benefit requested by the employee during enrollment. Section 132(f) permits
the parking benefit to be delivered either in the same manner as the mass transit
benefit or through reimbursement. Here again, TransitCenter will deliver the
benefit to the employee in the manner requested during enrollment. If reimbursement
is selected, this will be done by direct deposit or check upon submission of the
parking expenses. Reimbursement will be accomplished weekly. Commuter
Tax$ave Announcement Letter (18.8K)
To
print this letter in PDF, you must have Acrobat
Reader which is available free from Adobe.
Commuter
Tax$ave Brochure (115.9K)
To
print this brochure in PDF, you must have Acrobat
Reader which is available free from Adobe.
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