Analysis of Temple University’s Health System’s Employee Benefit Plan



———–Universal Employee Benefits Program———–

 

Benefit Analysis

Part I: Exposure Analysis

Part II: Inventory of Benefits

 

 

 

 

 

 

 

911 022 083

912 745 255

RMI 3501

Dr. Drennan

Fall 2010

 

Table of Contents

Part i: benefit matrix 1

part ii: inventory of benefits 2-16

SUMMARY OF BENEFITS 2

INTRODUCTION TO TUHS BENEFIT PACKAGE 3

OVERALL MEDICAL EXPENSES 3-4

TEMPLE CARE PHO 4-5

ADVANTAGE PLAN PHO 5

HIGH OPTION 5-6

DENTAL 6-7

VISION 7-8

PRESCRIPTION DRUGS 8

FLEXIBLE SPENDING ACCOUNTS 9

LOSS OF INCOME 10-14

LIFE INSURANCE 10-11

LONG-TERM DISABILITY INSURANCE 11-12

SHORT -TERM DISABILITY INSURANCE 12

ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE 12-13

RETIREMENT PLAN 13-14

OTHER EXPOSURES 14-16

EDUCATIONAL ASSISTANCE 14-15

WORK/LIFE BENEFITS 15

TRANSPORTATION AND BANKING SERVICES 15-16

EMPLOYEE ASSISTANCE PROGRAM 16

VOLUNTARY INSURANCE OPTIONS 16

 


Benefit Matrix for Temple University Health Systems

Loss Exposure Provided Coverage / Benefit Provided
Loss of Income: Medical Expenses
Overall Medical Expenses 

(Hospital/Physician)

Yes TempleCare, Advantage Plan, High Option, Medical Spending Account (HFSA)
Dental Yes ConcordiaFLEX Dental Plan
Vision Yes Routine vision examination every 2 years, as well as covered lenses, frames, and covered fitting and adjustment services.
Prescription Drug Yes Prescription Drug Plan – CVS Caremark PBM
LTC No
Retiree Health Care Yes Medicare, COBRA
Loss of Income: Death
Non Accidental, Non-Occupational Death Yes Group Term Life Insurance, Voluntary Group Term Life Insurance, Survivor Income Plan, OASDI, 403(b)
Accidental Death Yes Group Term Life Insurance, Voluntary Group Term Life Insurance, Survivor Income Plan, AD & D, OASDI, 403(b)
Occupational Death Yes Workers Compensation, Group Term Life Insurance, Voluntary Group Term Life Insurance, Survivor Income Plan, OASDI, 403(b)
Loss of Income: Unemployment
Unemployment Yes Unemployment Insurance
Loss of Income: Disability
Non-Occupational, Short-Term Voluntary STD, 403(b), OASDI, AD&D, Supplemental AD&D
Non-Occupational, Long-Term LTD, 403(b), OASDI, AD&D, Supplemental AD&D
Occupational, Short-Term Workers Compensation, Voluntary STD, 403 (b), OASDI, AD&D, Supplemental AD&D
Occupational Long-Term Workers Compensation, LTD, 403(b), OASDI, AD&D, Supplemental AD&D
Loss of Income: Retirement
Retirement Yes Defined Contribution Retirement Plan, OASDI

Other Exposures

Educational Assistance Yes Tuition Reimbursement / Tuition Remission for six credit hours per semester under Educational Assistance Program
Work/Life Benefits Yes PNC Workplace Banking, Pre-tax qualified transportation, Employee Assistance Program, On-campus fitness center, Paid time off
Dependent Care Yes Dependent Care FSA
Employee Assistance Program Yes Employee Assistance Program: Carebridge
Property/Liability No
Legal Expenses No
Supplemental (Voluntary) Insurance Yes AFLAC- Cancer Indemnity (Dread-Disease Policy), Intensive Care, Recovery Plus, Accidental Indemnity

 

Summary of Benefits for Temple University Health Systems

Benefit Plan                       A.M. Best          Financing                    Funding                      Eligibility 

Rating

TempleCare Medical Plan (PPO): with IBC Network N/A Contributory Self-funded Full-time employees, part-time employees, dependents
Advantage Medical Plan (PPO):  with IBC Network N/A Contributory Self-funded Full-time employees, part-time employees, dependents
High Option Medical Plan (PPO):  with IBC Network N/A Contributory Self-funded Full-time employees, part-time employees, dependents
HFSA: TPA-TRION Group N/A Fully Contributory Self-funded Full-time employees, part-time employees
Dental Plan: United Concordia A- Non-Contributory Fully Insured Full-time employees, part-time employees, dependents
Vision Plan: TUHS N/A Contributory Self-funded Full-time employees, part-time employees, dependents
Prescription Drug Plan : CVS Caremark Corporation N/A Contributory Self-funded Full-time employees, part-time employees, dependents
Basic Life Insurance: Prudential Life Insurance A+ Non-contributory Fully Insured Full-time employees, part-time employees
Survivor Income Plan: Prudential Life Insurance A+ Fully Contributory Fully Insured Full-time employees, part-time employees
Supplemental Life Insurance: Prudential Life Insurance A+ Fully Contributory Fully Insured Full-time employees, part-time employees
Basic Accidental Death and Dismemberment: Prudential Life Insurance A+ Non-contributory Fully Insured Full-time employees, part-time employees
Supplemental Accidental Death and Dismemberment: Prudential Life Insurance A+ Fully Contributory Fully Insured Full-time employees, part-time employees
Long Term Disability: CIGNA Life Insurance of North America A Contributory Fully Insured Full-time employees, part-time employees
Short Term Disability: UNUM/Provident N/A Fully Contributory Fully Insured 

 

Full-time employees, part-time employees
Educational Assistance: TUHS N/A Non-contributory Self-funded Full-time employees, part-time employees, dependents
Employee Assistance Program: Carebridge Corporation N/A Contributory Fully-Insured Full-time employees, part-time employees, dependents

 

Source: http://www3.ambest.com/ratings/default.asp

A+ Superior Financial Strength   (2nd highest out of 15)    A- Excellent Financial Strength  (4th highest out of 15)

A Excellence Financial Strength  (3rd highest out of 15)

Introduction

Temple University Health System (TUHS) offers the non-union members a ‘Universal Employee Benefits Program.’ Union members can receive benefits in this plan but that depends on their bargaining unit. TUHS is comprised of three hospitals located within Philadelphia, Pennsylvania: Jeanes Hospital, TUH Episcopal Campus, and Temple University Hospital. There are roughly 4,800 employees covered on the plan and 9,000 dependents whom receive benefits through TUHS.

 

Overall Medical Expenses

Eligible employees at TUHS have the option of choosing between three Health Care Plans, which are all offered through Independent Blue Cross’ (IBC) Network – Personal Choice. Employees have the choice between: Temple Care PHO, Advantage Plan PHO, and the High Option Plan. The percentage contribution that TUHS offers on behalf of their employee’s premium payment varies for each plan. Moreover, the benefits received under each plan are the same. However, the levels of cost sharing differ significantly with each plan. These details will be discussed in further depth in each segment under each health plan. Enrollment in one of the three Health Care plans simultaneously enrolls an employee for Prescription Drug Coverage.

For enrollment into a medical plan, an ‘eligible employee’ at TUHS may either work full-time (the employee is regularly scheduled to work at least 35 hours a week) or part-time (the employee is regularly scheduled to work at least 20 hours, but less than 35 hours a week). An eligible employee may enroll their ‘dependents’ to the plan as well. Moreover, a dependent may include an eligible employee’s legally married spouse or same-sex domestic partner and the employee’s children. A dependent child must be unmarried and primarily dependent on the parents for financial support. Furthermore, the child must be under the age of 19 or under the age of 23 if the child is a full-time student at an accredited college, university, or trade school, or also if the child became totally and permanently disabled (regardless of their age) while covered under the benefits program.

Open enrollment occurs annually on July 1st for the Medical Plans, Dental Plan and the Vision Plan. During open enrollment, employees have the opportunity to enlist any additional dependents whom satisfy the eligibility requirements previously mentioned and employees can switch their coverage options.
Temple Care Physician Health Organization (PHO)
TUHS offers Temple Care PHO to full-time and part-time employees and their legal spouses or same-sex domestic partners and dependent children on a contributory basis. The employee contribution is 10% and the payments are made by employees on a bi-weekly basis. TUHS self-funds Temple Care PHO and the plan is experience rated. Employees that are enrolled in Temple Care PHO may decide at the point-of-service to receive coverage either through the Temple Care Network, the Personal Choice Network (the Network is comprised of Blue Cross participating Providers), or the employee may elect to be treated out-of-network. An employee does not need to obtain a referral in order to access treatment that is out-of-network. TUHS steers employees whom elect the Temple Care PHO plan, to utilize the Temple Care Network, which is Temple University Hospital located in North Philadelphia. More so, employees who elect treatment through the Temple Care Network at the point-of-service pay no deductible and employees pay the smallest copayment amongst the three options for Doctor Office Visits. In addition, employees receive 100% coinsurance in contrast to 80% and 60% for utilizing the Personal Choice Network and going out of network, respectively. In addition, individual employees and employee’s with families, have no out-of-pocket maximums when they receive treatment through the Temple Care Network. Whereas the Personal Choice Network implements an out-of-pocket maximum set at $3,000 for individuals and $9,000 for families. An employee who seeks treatment out-of-network will be subject to an out-of-pocket maximum of $4,000 for individuals and $12,000 for families.
Advantage Plan PHO
The Advantage Plan PHO is self funded by TUHS and it is experience rated. Employees whom elect the Advantage Plan PHO contribute 20% of the premium costs and premium payments are scheduled on a bi-weekly basis. TUHS offers the Advantage Plan PHO to full-time and part-time employees and their legal spouses or same-sex domestic partners and dependent children. Similar to Temple Care PHO, employees may elect to choose between three networks through the Advantage Plan PHO: Temple Care Network, Personal Choice Network; or an employee may seek treatment out-of-network. Again, TUHS encourages employees to utilize the Temple Care Network due to the fact that an employee would pay no deductible, the smallest copayment amongst the three networks for Doctor Office Visits, 100% coinsurance, and the employee would not have any out-of-pocket maximum. If an employee were to elect to use the Personal Choice Network or to go out-of-network, the level of cost sharing increases along with their out-of-pocket maximum.
High Option Plan
An employee at TUHS may elect to enroll in the High Option Plan if they are a full-time employee or a part-time employee. An eligible employee may also enroll any dependents to the plan who satisfy the dependent eligibility requirements. The employee contribution rate is the highest amongst all three plans at 25% for the Advantage Plan. Furthermore, the High Option Plan is self-funded by TUHS and the plan is experienced rated. An employee who elects the High Option Plan may determine at the point-of-service to receive treatment either in-network or out-of-network. In-network is comprised of both the Temple Care Network and the Personal Choice Network. However, the distinction between the High-Option plan and both the Temple Care PHO and the Advantage Plan PHO is that an employee is subject to the same cost-sharing rates and out-of-pocket maximums if they pursue treatment either the Temple Care Network or the Personal Choice Network. If an employee at TUHS requires treatment out-of-network, they will be subject to a $500 deductible for individual employees and a $1,500 deductible for employees with families. On top of the deductible, employees are subject to 80% coinsurance. Lastly, employees pay 80% of the cost for Doctor Visits that are out-of-network, in contrast to the $10 copayment for visiting a Doctor in-network. While there is no out-of-pocket maximum for staying in-network, an employee who receives treatment out-of-network will be subject to a $1,000 and $2,000 out-of-pocket maximum for individual employees and employees with families, respectively.

 

Dental Plan

The Dental Plan is funded through an insurance contract with United Concordia Dental Plans of Pennsylvania. United Concordia Dental Plans of Pennsylvania received an AM Best rating of A- indicating ‘Excellent’ Financial Strength. The ConcordiaFLEX dental plan is financed on a contributory basis. Coverage is available to full-time employees and part-time employees, their spouses or same-sex domestic partners, and dependent children. The dental plan provides the benefits on a schedule basis. The schedule consists of four ‘class services.’ The classes differ by coinsurance requirements: Class I Services has 100% coinsurance, Class II Services requires 80% coinsurance, Class III Services requires 70% coinsurance, and the fourth class ‘Orthodontics’ requires 50% coinsurance. Class II requires a $50 deductible per lifetime per member. Class III requires a $50 deductible per Calendar Year per Member. Class IV has a lifetime benefit maximum of $2,500 per member. The plan offers a $2,000 per Calendar Year Maximum per Member. The ConcordiaFLEX dental plan has a preferred provider network. An employee’s out-of-pocket cost is limited if the employee decides to stay within the network. However, an employee who goes to a dentist outside the United Concordia network will have to pay the dentist at the point of service, complete and submit a claims form, and wait for TUHS to reimburse them.

Vision Plan

The Vision Plan is self-funded by TUHS. Coverage is available to full-time employees and part-time employees, their spouses or same-sex domestic partners, and dependent children. Financing differs for full-time employees and part-time employees. Full-time employees can have a single plan or a family plan at no cost (non-contributory basis). Part-time employees can have a single plan at no cost (non-contributory basis). However, if an employee elects family coverage they will have to pay a $1.70 on a Bi Weekly basis (contributory basis). The open enrollment period is July 1st of each year. The Vision Care Plan takes effect on the date of hire for non-bargaining unit employees. For bargaining unit employees with TUHS Universal Program Benefits the open enrollment date is stated within the specific union contract. The participating providers for the vision plans are: Temple University Hospital (TUH) Department of Ophthalmology, Tus Ojos, Inc., and the Eye Institute of the Pennsylvania College of Optometry (PCO). The TUHS Vision Plan provides a limited number of services such as: a free eye exam every twenty-four months (2 years) and standard frames and lenses every two years (subject to exclusions).

 

Prescription Drug Coverage
Once an employee satisfies the eligibility requirements for enrollment into one of the three Health Care options, an employee is automatically enrolled in the Prescription Drug Plan. More specifically, Prescription Drugs coverage is made available only to full-time employees, part-time employees, and dependents of full-time or part-time employees. In addition, employees may become eligible for Prescription Drug coverage when an employee elects to pursue one of the three Health Care plans during open enrollment on July 1st of the calendar year. The Prescription Drug plan is administered by Caremark. Caremark implements a three-tiered system with varying coinsurance percentages based on whether an employee decides to purchase either: Generic Drugs, Performance Brand-Name Drugs, and Non-Performance Brand-Name Drugs. The table below indicates the specific coinsurance percentage for each type of prescription drug.

An employee may purchase: The Coinsurance amount is:
Generic Drug 15% up to the plan maximum
Performance Brand-Name Drug 20% up to the plan maximum
Non-Performance Brand-Name Drug 35% up to the plan maximum

 

It is critical to note that employees are subject to an annual out-of-pocket maximum of $1,000 per family. That is, if an employee incurs $1,000 in coinsurance payments, the plan will pay 100% for any further Prescription Drug Coverage.

Flexible Spending Accounts (FSA)

The Flexible Spending Accounts are administered by TRION Group. Temple University Health Systems offers their employees a Health Care Flexible Spending Account Program (HFSA) and a Dependent Care Flexible Spending Account Program (DFSA). Both FSAs are on a fully-contributory basis. Full-time employees may elect to participate in either the HFSA and/or DFSA. Part-time employees can only elect to participate in the HFSA program. An employee can elect a FSA upon initial benefit eligibility or during open enrollment. Employees’ contributions to the flexible spending accounts are reduced from their payroll on a before-tax basis for purposes of federal income and social security taxes. TUHS allows a two and a half month grace period which employees can spend any of their unused funds. TUHS will use any unused contributions left remaining to defray the overall costs of the plan. Open enrollment is January 1st for the HFSA program and DFSA program.

If an employee elects a Health Flexible Spending Account the employee will receive a HFSA debit card to facilitate payment of eligible health care expenses in conjunction with the employee’s account with a maximum contribution of $2,500 per calendar year.

A full-time employee that elects DFSA upon initial benefit eligibility can make a maximum contribution of $5,000 per household per calendar year or $2,500 per calendar year if employee is married but is filling separately from their spouse. An eligible dependent could be a child, spouse, domestic partner, or elderly parent can also qualify if they are residing in the employee’s home who is physically or mentally unable to care for themselves. ‘Eligible expenses’ are defined as expenses that the employee incurs to enable them to work full-time.

Loss of Income due to Death

Group Term Life Insurance

An employee at TUHS may become eligible for Group Term Life Insurance (GTLI) if they satisfy the eligibility requirements for full-time or part-time employment status. There is no GTLI coverage offered to full-time or part-time employee’s dependents. TUHS purchases their GTLI coverage through Prudential Insurance Company of America. Prudential received an AM Best Rating of A+, indicating ‘Superior’ Financial Strength. GTLI coverage is financed on a noncontributory basis. Employees at TUHS are automatically enrolled in GTLI for $10,000 worth of coverage on the first date of their employment. Employees may elect to pursue additional GTLI coverage, but the employee must share the cost of the benefit.

 

Supplemental (Voluntary) Life Insurance

TUHS offers their employees the option of pursuing Supplemental Life Insurance on a purely voluntary basis. An employee at TUHS who elects to receive this voluntary benefit will pay the full cost of the benefit and premium payments will be deducted from the employee’s paycheck on an after-tax basis. In addition, to qualify to receive Supplemental Life Insurance, an individual must be a full-time or part-time employee at TUHS. The Supplemental Life Insurance is funded by American Family Life Assurance Co (AFLAC) of New York. AFLAC received an AM Best Rating of A+ indicating a ‘Superior’ Financial Strength Rating. An employee at TUHS may become eligible during open enrollment for this voluntary benefit on June 1st of the calendar year.

 

 

 

Survivor Income Plan

The Survivor Income plan is conjoined to the Supplemental Life Insurance offered through AFLAC. More so, the Survivor Income plan is only available to employees at TUHS who elect coverage in Supplemental Life Insurance that is greater than or equal to 1.5 times their base pay. The Survive Income Plan provides additional protection on top of the Supplemental Life Insurance from the loss of income due to death. An employee may delegate a ‘qualified survivor’ whom in the event of the employee’s death, the qualified survivor would receive a percentage of the deceased’s average monthly earnings.

Loss of Income due to Disability

Long-Term Disability

Long-term disability (LTD) is available to full-time employees and part-time employees at TUHS. The LTD plan is financed on a contributory basis. Moreover, an employee contributes 50% of the premium on an after-tax basis. The LTD plan is funded by an insurance contract provided by CIGNA Life Insurance of North America. CIGNA received an AM Best rating of A, indicating ‘Excellence.’ LTD provides coverage that is 60% of an employee’s base salary only after they have been disabled for 180 days. The LTD will pay benefits to employees after they have been disabled for 180 days and the coverage will continue unless one of the following events occurs: the employee is no longer disabled, the employee retires, or the employee reaches age seventy.  Monthly benefit levels vary for LTD. More so, the benefit amount can be at the minimum $100, but the benefit amount cannot exceed $10,000. If an employee elects the LTD plan, TUHS will provide the employee with their ‘core benefits.’ Core benefits include: Medical, Dental, Prescription Drug, Vision, Basic Life Insurance, Basic AD&D, and the Defined-Contribution Retirement Plan. The continuation of the core benefits would be financed on a non-contributory basis.

 

Short-Term Disability

An employee at TUHS may purchase Short-Term Disability (STD) coverage on an employee-pay-all basis provided by UNUM/Provident (UNUM/Provident’s AM Best rating is N/A). In order to purchase STD coverage, an employee at TUHS must be considered a full-time or part-time employee. An employee becomes eligible for STD coverage on the first date of their employment at TUHS and they can purchase the benefit at any time during the year. STD coverage will provide up to 60% an employee’s average monthly salary. Furthermore, STD coverage will not exceed the payment of $10,000 per month and the coverage will not last more than six months following the date on which the employee files for STD coverage.

Accidental Death and Dismemberment

TUHS automatically provides full-time employees and part-time employees with Basic Accidental Death and Dismemberment (AD&D) coverage for $10,000 on a non-contributory basis provided by Prudential Life Insurance.  An employee can receive the AD&D plan the first day of the month following their initial date of employment at TUHS. Prudential Life Insurance received an AM Best Rating of A + indicating ‘Superior’ Financial Strength.  An employee can select single coverage or family coverage. Eligible Dependents may be enrolled into the plan as well. Spouses and Same-Sex Domestic Partners that are covered under the AD&D plan will be insured for $1,000 for each $5,000 worth of coverage the employee purchases.  Each eligible child will be insured for $500 for every $5,000 an employee purchases in coverage, the partner will be insured for $2,000 and an eligible child will be insured for $1,000.  Benefits paid for loss of a limb or eyesight is paid to the employee not the beneficiary. The total benefits received by an employee or a beneficiary will not exceed the employee’s amount of insurance in effect at the time of the accident.

Loss of Income due to Retirement

Defined Contribution Retirement Plan – 401 (a) and 403 (b)

TUHS provides and administers a Defined Contribution (DC) Retirement Plan to protect eligible employees against the loss of income following their retirement. An eligible employee for the plan may either be a full-time employee or part-time employee at TUHS. Full-time employees may become eligible for the benefit on the first day of the month following their first day of employment at TUHS. In contrast, part-time employee’s eligibility is contingent upon completing 1,000 hours of service at TUHS over the course of one year of employment. If a part-time employee completes the 1,000 hours of service requirement by the point of one full year of service at TUHS, they may become eligible for the plan on January 1st of the following year.

TUHS makes contributions to their employee’s plans in the form of a percentage of an employee’s eligible compensation for each pay period. More specifically, an employee’s eligible compensation is the employee’s base salary each pay period minus any form of additional compensation (bonuses and over-time pay). The amount that the employer contributes to the plan goes into a 401 (a) and the funds must be invested either through TIAA-CREF and/or Fidelity Investments. The percentage that TUHS contributes to the 401(a) varies based upon the employee’s length of service at TUHS. The table below lists the percentages TUHS will contribute to the plan:

 

Years of Participation in the Plan TUHS’ Contribution Percentage
Less than 3 3.0%
At least 3 but less than 5 3.5%
At least 5 but less than 7 4.0%
At least 7 but less than 9 4.5%
9 or more 5.0%

In addition, employees may contribute funds to a separate account called a 403 (b). The amount that the employee contributes to the 403(b) may be a percentage of their periodic pay or a flat dollar amount which is made on a salary reduction before-tax or after-tax basis.  The employee may elect which tax-basis they prefer and the employee may also choose how their funds are to be invested through TIAA-CREFF and/or Fidelity Investments.

An eligible employee for the DC Retirement Plan must follow a vesting schedule to withdraw the employer’s contributions. In order to complete one year of ‘vesting service’, an employee must work at least 1,000 hours of service at TUHS in a calendar year. An employee at TUHS is not vested in any percentage during their first three years of vesting service. However, after the third year, an employee is 100% (fully) vested in the plan.

Furthermore, an employee at TUHS may not withdraw any distributions from the 401 (a) or 403 (b) plans while employed at TUHS (even if the employee is fully-vested). An employee at TUHS may only withdraw distributions after they are fully-vested and they leave (no longer employed at) TUHS.

 

Other Exposures

Educational Assistance

Tuition remission and reimbursement are available to part-time employees, and full-time employees along with their dependent children. Part-time employees’ dependents are not eligible for tuition benefits. Benefits are limited to a maximum of ten semesters.  The tuition remission and reimbursement program excludes benefits for ‘professional schools’ such as the Schools of Law, Medicine, Dentistry, or Podiatric Medicine. In addition, courses must be related to an employee’s job or related to a job in which the employee aspires to obtain within TUHS. Full-time employees are eligible for tuition remission at Temple University for up to six credit hours up to $315 per credit hour. Eligible dependent children of full-time employees who were hired after September 1, 2006 will receive tuition reimbursement up to $1,750 per semester. Part-time employees who work 20 or more hours per week are eligible to receive $750 per year. Part-time employees who work less than twenty hours per week are eligible for $350.

 

Work/Life Benefits

TUHS contracted Carebridge Corporation to provide Work/Life Benefits for their employees on a non-contributory basis. The Life Management and Work-Life services include: child care resources and referrals, eldercare consultation and referrals, college planning, and continuing education. In addition to these services, the program includes adoption information personal financial management, real estate specialists, time management and life balance, personal convenience services, achieving wellness, and online shoppers discount program. Employees can receive any additional information about the services on the Carebridge website (www.mylifesource.com).

 

Transportation and Banking Benefits

Employee’s parking costs and options vary depending which building they work in and the available parking arrangements. Full-time and part-time employees can contribute on a pre-tax basis up to $180 per month for public transportation expenses. Full-time employees and part-time employees can elect to receive a free checking account with PNC Bank if the employee signs up for direct deposit. An employee will not have to pay any fees to access their PNC checking account and they can receive free web banking and online payment services.

 

Employee Assistance Program Plan

The Employee Assistance Program is available to full-time employees and part-time employees, their spouses or same-sex domestic partners, or dependent children. TUHS provides this benefit on a non-contributory basis and is funded by Carebridge Corp. The Employee Assistance program is designed to help employees and their dependents to deal with their psychological problems and stress. The Carebridge EAP assistance is completely confidential and must conform to HIPAA regulations. The EAP benefit includes up to eight hours free of counseling.  Counseling sessions or an assessment session can take place in a face-to-face meeting or over the telephone. In addition, the Carebridge counselor may refer an eligible person who receives their services to additional appropriate sources of help.

 

Voluntary Insurance Options

TUHS contracted AFLAC to provide full-time and part-time employees who work more than 20 hours per week. Open enrollment takes place on June 1st each year. An employee can purchase all or some of the following plans: Cancer Indemnity, Intensive Care, Recovery Plus, and Accidental Indemnity. All of the plan options are portable and offer lifetime coverage. Premiums that an employee pays are determined by age, plan coverage, and family status. An employee can receive different benefits depending which type of plan they enroll in.

 

———–Universal Employee Benefits Program———–

 

Part III: Benefits Analysis

 

 

 

 

 

 

 

 

 

 

911 022 083

912 745 255

RMI 3501

Dr. Drennan

Fall 2010
 

 

Table of Contents

Part iII: BENEFITS ANAYLSIS

OVERALL PLAN DESIGN CONSIDERATIONS AND OBJECTIVES 1-4

GOALS 1-2

DEMOGRAPHICS OF TUHS’ WORKFORCE 2

FUNDING AND FINANCING CONSIDERATIONS 3-4

PROBLEMS, ISSUES, CONSIDERATIONS IN THE DESIGN OF HEALTH BENEFITS 4-7         PERSONAL CHOICE AS OF TODAY 4-5

ADVERSE SELECTION 5-6

ADMINISTRATION OF THE PLAN 6

FUNDING CONSIDERATIONS 6-7

COST COINTAINMENT OF HEALTH BENEFITS 7-8

PROBLEMS, ISSUES, CONSIDERATIONS IN OTHER TYPES OF NON-RETIREMENT   BENEFITS 8-9

DISABILITY  BENEFITS 8

WORK/LIFE BENEFITS 8-9

COMMUNICATION 9

REGULATORY COMPLIANCE 9-12

COBRA 9-10

ERISA 10-11

HIPAA 11

PPACA 11-12

RECOMMENDATIONS   12-

CHDP 12-13

PPACA 13

PPACA 13

CONCLUSION 13-14

 
 


Overall Design Considerations in the Universal Employee Benefits Program
Goals

Temple University Health System (TUHS) offers an employee benefits plan with the ultimate goal of attracting and retaining talented employees. In designing the Universal Employee Benefits Program, TUHS kept this goal in mind in deciding which benefits to offer its employees. In addition, TUHS sought to design a benefit plan that matched and surpassed the plans of its competitors, such as Jefferson Hospital, University of Pennsylvania Hospital and Einstein Hospital. However, TUHS also realized that it was imperative to offer the most necessary benefits to protect its employees from the two most prevalent loss exposures: the loss income and any medical expenses an employee may incur.

A feature of the benefits plan which Paul Csigi, the director of Benefits and Pension Administration at TUHS, noted as particularly vital to TUHS’ ability to attract and retain employees was its decision to offer part-time employees all of the same benefits as its full-time employees. Furthermore, TUHS offers both full-time and part-time employees’ dependents coverage for nearly all the benefits. TUHS also remained competitive by offering same-sex domestic partners all the benefits received by heterosexual spouses.
When Paul Csigi was hired at TUHS in the mid 1980s, he faced the daunting task of establishing a uniform benefits plan for all TUHS employees. At that time, there were 14 collectively-bargained units at TUHS, each with their own unique benefits plan. Over the years, he was able to develop a plan that was identical for all employees, including those 14 collectively-bargained units. As a result, Mr. Csigi effectively reduced the overall administrative costs associated with the plan, simultaneously improving TUHS’ efficiency through the design of such a comprehensive plan.
Demographics of TUHS Workforce
TUHS was forced to consider the demographic composition of its workforce when it designed the benefits plan. That is, TUHS took several factors into account, including average employee age and marital and family status. Mr. Csigi noted that these considerations were taken into account gradually, but as the data changed, TUHS sought to amend the plan to accommodate these differences. In addition, Mr. Csigi noted that these differences from year to year were slight, but nonetheless, the modifications were an important issue that TUHS was forced to address.

The average employee at TUHS is approximately 43 years of age. Mr. Csigi stated that the average employee age, “is not too high nor too low and the group’s experience rating for the health plan has benefited as a result.”Furthermore, the younger employees, who generally incur fewer medical claims than older employees, stabilize the group’s experience rating. Many of TUHS’ employees are married and have families. The decision to include eligible dependents for benefits was largely in response to the fact that so many employees at TUHS have families. In recent years, more TUHS employees have established domestic partnerships. Similarly, the decision to include domestic partners as eligible dependents was largely due to this increased demand in recent years.

 

Funding and Financing Considerations

TUHS decided to provide benefits to its employees that are a mix between insured and self-insured funding arrangements. The decision to self-fund certain benefits at TUHS has helped to contain costs with respect to the overall plan. Self-funded plans avoid premium taxes that insurers pass on to the group’s premiums and also allow greater flexibility in benefits design. In addition, self-funding has allowed TUHS to improve cash flow and avoid compliance with state mandates. TUHS purchased specific stop-loss insurance in the amount of $500,000 per covered life to protect itself from catastrophic losses.

Other benefits offered by TUHS are managed more effectively and cost-efficiently through an insurance company. For these types of loss exposures, insurance protects against potential catastrophic losses that would result in large payouts. The majority of benefits that TUHS offers in its Universal Employee Benefits Program are funded by an insurance company.

During plan design, TUHS decided that each benefit provided should be financed differently. Some benefits are implemented on a non-contributory basis because TUHS wanted to maximize employee participation.  Furthermore, by making certain benefits non-contributory, the potential for adverse selection is effectively minimized.

However, TUHS felt that it was unrealistic to offer all the benefits on a non-contributory basis. Moreover, if all benefits were non-contributory, it would be too expensive for TUHS. Therefore, a number of benefits are offered on a contributory basis.

Several benefits are offered on a fully-contributory basis by TUHS. Mr. Csigi believes that TUHS’ voluntary insurance benefits allow the company to maintain its competitive edge. TUHS’ decision to offer voluntary benefits was influenced by the notion that employees should have the choice to seek the protection of insurance if they felt it was needed.
Problems, Issues, Concerns, and Considerations in the Design of Health Benefits
Temple Care Network vs. The Personal Choice Network Before 2009

Before July of 2009, TUHS offered a health care plan solely comprised of the IBC’s Personal Choice Network. Since this time, TUHS has offered its employees the choice between three different plans – each with three choices of networks – in which an employee at TUHS may elect at the point-of-service to receive treatment. An evident difference in the current plan was the addition of the Temple Care Network. The Temple Care Network is located at Temple University Hospital in North Philadelphia and the network is comprised of 900 Temple-employed physicians. Mr. Csigi proposed that the addition of the Temple Care Network has been an effective method of bringing money back into TUHS’ pockets. Furthermore, Mr. Csigi implied that TUHS sought to steer its employees and dependents to elect the Temple Care Network by offering the lowest copayments, deductibles, coinsurance and out-of-pocket maximums. Mr. Csigi commented that his administration was able to negotiate the largest discounts for services rendered by the Temple Care physicians, which ultimately enabled TUHS to offer the previously mentioned benefit enhancements.

In addition, Mr. Csigi noted that the new plan is more cost-efficient than the old plan that was solely comprised of a larger IBC’s Personal Choice network. Now, the current network of physicians offered through the Personal Choice option is more limited than the former network; therefore, the cost for TUHS employees to pursue treatment through the Personal Choice network is slightly lower than before.

Another important decision in the design of TUHS health care plan was to self-insure the benefits. Prior to July of 2009, TUHS did not self-insure its health care plan because since it was fully-insured through IBC. Mr. Csigi noted that, “they (TUHS’ workforce) were a large and credible group… It was about time we made the switch.”
Adverse Selection
TUHS offers its employees the choice between three plans; the injection of choice into TUHS’ “menu” of health care plans minimizes, but does not eliminate, the problem of adverse selection. Mr. Csigi noted that total enrollment for each plan did not vary too drastically.

However, the High-Option plan is the most vulnerable to the ever-present problem of adverse selection. The High-Option plan offers the richest benefits and consequently, is the most expensive choice among the options. On the surface, any employee who correspondingly anticipates expansive medical treatment may pursue the High-Option plan. Similarly, younger and healthier employees have been deterred from enrolling in this plan since it is the most expensive option. Mr. Csigi noted that the High-Option plan had the highest average age among enrollees. Thus, the potential for adverse selection in the High-Option plan is a valid concern for TUHS.
Administration of the Plans

TUHS decided to outsource the administrative functions associated with the health care plans, vision plan and prescription drug plan to IBC, as a part of IBC’s role as a Third-Party Administrator (TPA). IBC is responsible for various enrollment activities, claims handling and compliance activities. Mr. Csigi mentioned that this decision was influenced by his underlying belief that, “IBC simply could handle these various activities more efficiently.”

TUHS out-sourced the administration of the dental plan to United Concordia. Ultimately, outsourcing the administrative activities allows TUHS to focus on its immediate, job-related functions more adequately.
Funding Considerations
When TUHS transitioned from the Personal Choice network to its current three-network plan in July of 2009, TUHS decided to switch from fully-insuring to self-funding its health care plan. The issue had been debated for a long time at TUHS. However, Mr. Csigi commented that the switch was due to TUHS’ large workforce. TUHS’ workforce is also a statistically-credible group. Furthermore, Mr. Csigi noted that TUHS was able to self-insure because his budget committee had deemed that TUHS had adequate financial resources to pay claims if TUHS was to pursue self-funding.
Mr. Csigi anticipates considerable cost-savings from TUHS’ decision to self-fund. Self-funded plans are not subject to Pennsylvania 52 state mandates. [1] In addition, TUHS will not be subject to state health insurance taxes; thus, Mr. Csigi anticipates that the decision to convert to self-funding will improve TUHS’ cash-flow.

Cost Containment of Health Benefits

When asked about the issue of cost-containment, Mr. Csigi expressed that the issue “is what it is all about,” meaning that cost-containment was a vital consideration throughout the entire design process of the health benefits. The decision to self-fund TUHS’ health care plans was one measure TUHS made to control the rising costs of health insurance each year. In addition, TUHS self-funds its vision and prescription drug plan. Mr. Csigi and his staff are considering self-funding the dental plan in the future.

TUHS has sought to reduce the frequency of its employees’ medical claims by implementing a wellness program that is administered by IBC. The wellness program provides financial incentives to its members for actively pursuing healthier lifestyles. More specifically, IBC provides reimbursement for smoking cessation and gym memberships, among other endeavors.

With respect to the prescription drug plan, Mr. Csigi indicated that the establishment of a three-tiered copayment system was another measure taken by TUHS to control costs. TUHS pays the entire cost and an employee is subject to a zero dollar copayment for selecting generic drugs. Generics are significantly cheaper than brand-name formularies and brand-name non-formularies. Over the past year, TUHS has benefited in terms of cost-savings, as it has effectively steered its employees to utilize generic drugs more frequently than other types of drugs.

 

Problems, Issues, Concerns and Considerations in the Design of Other Types of Non-Retirement Benefits
Disability

The second most important loss exposure, according to Mr. Csigi, is the loss of income due to disability. TUHS properly manages this risk by providing its employees’ with an array of disability coverages, along with several optional or voluntary benefits. Mr. Csigi believes that offering disability benefits to TUHS’ employees will provide employees with the necessary financial protection, while an employee is unable to work in the event of an employee’s disability. Another reason why TUHS has multiple benefits that insure the risk of disability is because TUHS values protecting its employees from severe financial distress. TUHS is unique because in designing its long-term disability plan they decided to provide “core benefits” to employees at no cost to the employee.

Work/Life Benefits
Mr. Csigi decided to add work/life benefits to TUHS’ product mix when designing the benefit plan. Work/life benefits resulted in improved employee morale and higher productivity. Younger employees tend to value these benefits the most. Older employees find their health and disability benefits the most desirable. Whereas younger workers tend to enjoy work/life benefits such as childcare resources, college planning, financial management, etc. Work/life benefits are a relatively inexpensive benefit to provide to employees, which Mr. Csigi believes that these benefits supersede the costs.

Communication
Communication is vital to enhancing employees’ satisfaction with their benefits at any firm. TUHS uses several communication medians, which Mr. Csigi believes improve TUHS employees’ appreciation of their benefits. Every newly hired employee at TUHS attends an orientation session, in which TUHS provides the new employees with an informational pamphlet on its benefits. Furthermore, TUHS created a website that provides TUHS’ employees with additional information, such as an employees’ FSA balance, among other features.

Regulatory Compliance

TUHS out-sources the task of complying with COBRA, HIPAA and ERISA through IBC. Failure to comply with these laws may result in substantial litigation and pecuniary penalties. Thus, TUHS realized the importance that compliance was best handled by specialists at IBC.

COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allows an employee who is no longer eligible for their group health insurance plan to receive a continuation of its coverage. More specifically, a “qualified beneficiary” who may be eligible for continuation coverage must have suffered a “qualifying event.” A qualified beneficiary could be a terminated employee or a retired employee and a dependent, amongst several other eligible categories of individuals. IBC provides TUHS’ employees with a brief overview of their COBRA rights during open enrollment. The overview is a two-page document that is strategically printed on blue paper to stand out among the other documents. In addition, the document provides a more adequate summary regarding the definitions of “qualified beneficiaries” and “qualifying events.” If an employee files for COBRA continuation coverage, an employee must notify TUHS within 60 days and then TUHS will communicate to IBC the event; at this point, IBC is legally required to send the employee additional notification of their COBRA rights within 14 days.
ERISA

The Employee Retirement Income Securities Act (ERISA) of 1974 imposes certain requirements on an employer, such as: administrative fiduciary responsibility, required communication activities, and reporting and compliance requirements.

TUHS assumes fiduciary responsibility for its benefit plan. That is, TUHS must subordinate its own interests and act in the best interest of plan participants at all times. Mr. Csigi noted that TUHS assumes fiduciary responsibility with diligence and honesty. In regards to TUHS’ health care plans, TUHS is constantly looking for alternative health care plans to offer its employees that improve the quality of treatment and lower the costs association with participation. TUHS believes that they have accomplished these goals through its most current health care plan that provides its employee’s with ample choices in terms of selecting a financially-viable plan.

Under ERISA, TUHS must provide all employees participating in its plans with Summary Plan Descriptions (SPD). During open enrollment, TUHS provides all enrollees with this critical document. In addition, TUHS provide its employee’s with a notification known as a Summary of Material Modification (SMM) whenever TUHS makes a “material” change to its benefit plan. This document is sent out to all of the plan participants via e-mail.

In addition, ERISA imposes certain reporting requirements to the Federal Government and the Department of Labor. Generally speaking, self-funded benefits are subject to many tedious reporting requirements. Thus, TUHS realized that it was critical to let IBC administer this aspect of compliance with regards to ERISA.

HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 requires that any employer, such as TUHS, must maintain certain privacy protection standards for information that is sensitive to a covered employee’s medical records. TUHS entrusts IBC with effectively complying with HIPAA’s many requirement and standards with respect to this issue to avoid litigation.

PPACA

The Patient Protection and Affordable Care Act (PPACA) of 2010 imposes countless requirements on any employer that provides health insurance benefits to its employees. However, certain plans that are deemed as “grandfather plans” are not forced to comply with many of the initial regulations. A grandfather plan is considered any plan that existed before March 23, 2010. TUHS health care plan is a qualified grandfather plan.

Mr. Csigi commented that, “my phone has been ringing constantly throughout the past few months with people asking when my kid (dependent) can get back on the plan.” Mr. Csigi noted that misinformed employees and its dependents have been the most tedious issue that TUHS and himself were forced to comply with, in respect to PPACA.

TUHS plans to maintain its grandfather status until it is expires. Thus, TUHS has sought to minimize most of the compliance activities set forth in the legislation, at least for as long as its grandfather status remains eligible. However, Mr. Csigi noted that in the near future, the extension of dependent coverage on the plan was presenting itself to him and TUHS as “a royal head-ache.”
Recommendations for the Future
Implementing a CDHP
We would like to suggest to TUHS the possibility of offering its employees a Consumer-Driven Health Plan (CDHP) as a choice on its menu of health care plans. Our reason is simple. That is, since the majority of employees at TUHS work in the Health-Services industry, we are assuming that by their  nature, they are knowledgeable and educated on health-related issues and consequently their own individual health-related issues. Thus, we feel that a high-deductible plan would reinforce TUHS’ already health-care conscientious employees to minimize unnecessary or minor treatments.
There are numerous advantageous if TUHS were to implement a CDHP. Since employees at TUHS would have to pay a large amount of their own money to satisfy the high-deductible, employees would be more likely to behave as traditional consumers. Furthermore, TUHS employees may be less likely to utilize health care goods and services when employees share in the costs; rather than when an insurer covers their expenses. In addition, a CDHP may result in considerable savings for TUHS. With these savings, TUHS may assist employees in satisfying the high-deductible.
Out-Sourcing Compliance to PPACA
We suggest that TUHS considers out-sourcing compliance activities with PPACA in the near future. That is, if TUHS were to make significant changes to its plan, they may lose the plan’s grandfather status. Consequential loss of grandfather status would make TUHS liable for complying with all the rules and regulations already deemed active under PPACA. The numerous rules and regulations set forth under PPACA will only become more intricate and complex over the next few years. Thus, we feel that it is imperative for TUHS to approach this issue in a more pressing manner.

 

Conclusion

TUHS offers its employees a diverse and comprehensive benefits plan. TUHS has been able to meet many of its’ goals through the Universal Employee Benefit Program. Mr. Csigi was able to maintain a balance of quality and cost and as a result, TUHS is better able to attract talented employees. The Universal Employee Benefits Program fixed the problem of confusion that existed with the different benefits offered in each collectively bargained unit in the past. Now, non-union employees and union employees all have the same benefits, with varying levels depending on the collectively bargained unit for the union employees. In addition, the Universal Employee Benefits Program allowed TUHS to stay on the same level as its competitors. Mr. Csigi and his staff put a lot of hard work into designing the plan and we feel that the result was superb.

 

 

 

 

 

 

 

 

 

 

December 10, 2010

Paul A. Csigi

Director, Benefits and Pension Administration

Temple University Health System

Human Resources Department, Benefits

Temple University Health System Corporate Office

2450 West Hunting Park Avenue

Room 4-151

Philadelphia, PA 19129

 

Dear Mr. Csigi,

It was a joy working with you over the course of the past two weeks. We make the following statement with utmost sincerity – we could not have completed this project without your constant guidance and willingness to help. We consumed much of your time over the past two weeks – meeting in person, e-mailing, and talking over the phone – nonetheless, it should give you great reassurance that your time was not wasted. We have put many hours of our own time into this project and we feel that our final paper is indicative of our hard-work.

We came into this project having only learned about employee benefits. However, the experience that we shared with you bestowed upon us an inside look at the true practice of employee benefits. It was a great pleasure to see the topics that we have learned about over the course of our semester take real form. We feel that we could not have had a more beneficial and rewarding experience than our experience working with you in analyzing Temple University Hospital System’s benefit plan.

If you would care for a copy of our final paper, we would be honored to send you a copy.

Sincerely,

Elizabeth Alcamo

Timothy Bacak

 


[1] (Bunce, Victoria. (2009). Health insurance mandates in the state 2009. Council for Affordable Health Insurance, Retrieved from http://www.cahi.org/cahi_contents/resources/pdf/HealthInsuranceMandates2009.pdf)