November 5 19, This publication is for Harvard Faculty, Administrative and Professional Staff, and Other Nonunion Staff

Transcription

1 Harvard University 2015 Benefits Open Enrollment GUIDE November 5 19, 2014 This publication is for Harvard Faculty, Administrative and Professional Staff, and Other Nonunion Staff

2 My Notes: My To Do s:

3 Table of Contents Benefits Open Enrollment Calendar of Events Page 4 During Benefits Open Enrollment You Can A Message from Marilyn Hausammann 5 Background Behind the Changes 6 Health Care Choices and Changes in Introducing the High-Deductible Health Plan (HDHP) with Health Savings Account (HSA) and a Limited-Purpose FSA Programs That Can Reduce Your Out-of- Pocket Expenses Medical Plan Comparison Chart 20 Other Resources and Information 22 How to Review Current Coverage, Enroll in, or Make Changes to Your 2015 Benefits Change, elect, or drop medical, dental, and/or vision coverage. Update your medical, dental, and/or vision coverage to add or remove a dependent. Elect a Health Care Flexible Spending Account (FSA) or Limited-Purpose FSA (if you enroll in the new High-Deductible Health Plan, or HDHP), and/or Dependent Care Flexible FSA. If you want to participate in any FSA for 2015, you must enroll 2014 coverage does not carry over to Elect to contribute to a Health Savings Account (HSA), if you enroll in the new HDHP in Elect Long-Term Disability Insurance. Elect or increase Supplemental Life Insurance coverage. To make your elections, go to the PeopleSoft Benefits Enrollment system on HARVie from November 5 19, Once in PeopleSoft, under Benefits and Payroll Quick Links, select Benefits Enrollment. Benefits Eligibility Guidelines Then you are eligible for, and affected by, 2015 changes to the If you are benefits-eligible HMO Plans POS/PPO Plans New HDHP* Dental Plan Administrative/professional staff Nonunion staff Faculty Internal post-doc External ( stipendee ) postdoc with Harvard research Coaching assistant, teaching assistant, intern, visiting fellow *High-Deductible Health Plan (HDHP) with Health Savings Account (HSA) and Limited-Purpose Flexible Spending Account (FSA) options. Note: If you are a member of one of these groups but are currently on Long-Term Disability (LTD), you are not eligible to participate in the HSA or the new Reimbursement Program. 3

4 Benefits Open Enrollment Calendar of Events Each year, Benefits Open Enrollment affords you the opportunity to enroll in and make changes to your medical, dental, vision, flexible spending accounts (FSAs), longterm disability insurance, and life insurance plans. This year, Benefits Open Enrollment for 2015 will take place online in PeopleSoft between 8:00 a.m. ET November 5 and 8:00 p.m. ET November 19, If you do not make an election, your 2014 elections will carry over to 2015 except for your participation in an FSA. However, please note that there are significant changes in the plans for 2015, so be sure to read this guide and review the information on HARVie before making any decisions about your elections for Here are some important dates to keep in mind: October November December January 4 Late October to Mid-November Online and on-campus educational sessions. November 5 First day to enroll in or make changes to your 2015 benefits. November 19 Last day to enroll in or make changes to your 2015 benefits. By December 31 You will receive your new 2015 prescription drug ID card, new FSA/HSA debit card, and other applicable health care ID cards FSA debit card will be deactivated. (See transition details on page 19.) January 1, 2015 Beginning date for 2015 coverages. Vendors for two important Harvard benefits change: Pharmacy benefits management moves to Catamaran (from Express Scripts). FSAs and other reimbursement programs move to Benefit Strategies (from Crosby). Begin using new 2015 medical, pharmacy, and HSA/FSA debit cards. Harvard HSA funding available January 2, 2015.

5 A Message from Marilyn Hausammann Vice President for Human Resources Dear Colleague, Benefits Open Enrollment is here, giving you the opportunity to review and make changes to your health and welfare benefits elections for These include medical, dental, vision, flexible spending accounts, long-term disability, and life insurance. As described in the Preview Brochure and the Harvard Benefits: What s New in 2015 multimedia presentation, which were made available to you earlier this fall, we have made some important changes to our benefits for Harvard is proud of the strong package of total rewards that we offer and remains committed to providing high-quality, affordable health care. This guide will provide you with additional information on the changes, how they may affect you, and programs and benefits that can help you manage additional costs. Being an informed consumer is the best way to get the health care you need and the most value from your Harvard benefits. Many of the benefits changes for 2015 were laid out in the Preview Brochure and the multimedia presentation, but we recognize the importance of continuing to help members of the Harvard community better understand their benefits. There are many opportunities to learn more at online and in-person information sessions being held in late October and early November. Among the changes this year, some may pay more for some kinds of services (e.g., surgery, hospitalization, advanced diagnostic testing) through the introduction of deductibles and coinsurance. At the same time, Harvard is taking steps to help limit or offset these additional costs such as lowering monthly premiums and annual out-of-pocket maximums for in-network care, and creating a new Reimbursement Program for those with an annual full-time equivalent (FTE) salary of $95,000 or less. Preventive care will continue to be provided at no charge, with office visits and prescriptions provided for only a copayment. And there are steps you can take to help reduce the costs you pay, such as enrolling in a tax-advantaged Flexible Spending Account or a Health Savings Account. This guide is designed to help you make fully informed decisions about your 2015 benefits. You can find these resources and more on HARVie (harvie.harvard.edu) as well as our external HR website (hr.harvard.edu). It is important that you understand these changes and the impact they will have on you, so you can make the choices that best meet your needs and those of your family. Sincerely, October

6 Background Behind the Changes Harvard, like most employers, must respond to the national trend of rising health care costs, including some driven by health care reform. Even with the changes we have made over the past several years, health care costs continue to be a challenge, growing at a pace that threatens our ability to make necessary investments in Harvard s mission, sustain our benefits, and pay competitive salaries. To ensure that high-quality health care remains affordable and sustainable for the University and its faculty and staff, we are changing the way we share in the cost of care for some kinds of medical services. As the University Benefits Committee* and our senior leaders developed the changes that will take effect on January 1, 2015, they did so with the intent to preserve the health plans on which you and your family rely. Harvard remains committed to these guiding principles: Access to health care, and to top-rated doctors, providers, and networks in Boston s quality-rich area. Choice of both proven and innovative plan designs. Affordability for all of our people. Fairness in cost-sharing between the University and its faculty and staff, and among health plan participants. Transparency so that we can all become more aware of how much health care actually costs and the cost differences between providers. *Read more about the thinking and deliberations of the University Benefits Committee at: news.harvard.edu/gazette/ story/2014/09/changes-to-harvard-health-care. Did you know? Harvard spends over a half billion dollars a year for benefits. The Impact of Health Care Reform The Affordable Care Act (ACA, also known as health care reform) has brought new benefits and opportunities to many people, but with added costs to plan sponsors like Harvard. Some of the additional costs for Harvard are in the areas of: Extending coverage for children up to the age of 26. Preventive care which is fully paid by the University. Additional taxes and fees that began in 2012, and are ongoing. A potential 40% excise tax on the value of health insurance benefits exceeding certain thresholds, which is scheduled to go into effect in

7 Health Care Choices and Changes in 2015 HMO, POS, and PPO Medical Plans In 2015, for the HMO, POS, and PPO plans, the monthly premiums will decrease. The plans will now include deductibles and coinsurance for some kinds of non-preventive care. It s important to understand what each term used in this guide means: Deductible: The amount you must pay for health care services before the health plan begins to pay. Coinsurance: Your share of the cost of health care services, after the deductible. Out-of-Pocket Maximum: The maximum amount you will be required to pay during a calendar year for covered health care, excluding premiums, after which your medical plan will pay 100% of covered health care costs. Please note: Because Harvard is instituting a global out-of-pocket maximum, virtually all eligible out-of-pocket medical costs, including copayments for office visits and prescriptions, deductibles, and coinsurance will count toward your out-of-pocket maximum. Important: The deductibles and coinsurance do not apply to in-network preventive services (such as annual physicals and well-baby visits, immunizations, and preventive testing and screening), which continue to be covered at 100%. In addition, the deductibles and coinsurance will not apply to in-network office visits for care of sickness or injury, outpatient mental health, or prescription drugs; these will continue to have the same copayments as they do today. Please see Services and Charges at a Glance on page 8 for more detailed information. New cost structure for certain kinds* of non-preventive care in the HMO, POS, and PPO plans Plan Feature HMO What you pay POS and PPO What you pay In-Network Out-of-Network In-Network Out-of-Network $250 per person, $250 per person, Deductible* up to a maximum up to a maximum of $750 per family Services of $750 per family received from an Coinsurance* 10% out-of-network provider are not covered by the HMO plans. 10% 30% Out-of-Pocket Maximum (includes deductible, coinsurance, and copayments) $1,500 per person, up to a maximum of $4,500 per family $1,500 per person, up to a maximum of $4,500 per family $750 per person, up to a maximum of $2,500 per family $2,500 per person, up to a maximum of $7,500 per family Here s how the new cost structure works for certain kinds* of non-preventive medical expenses: 1st You pay for the full cost of your care for certain medical expenses until you reach your deductible. 2nd You and Harvard, through coinsurance, each pay for a portion of these covered health care services. 3nd Once you reach the out-of-pocket maximum for each individual, Harvard pays 100% of eligible costs. You will not pay more for covered health care services than the out-of-pocket maximum in a given year. If your annual FTE salary is $95,000 or less, Harvard offers a program that can help reduce your overall out-of-pocket expenses by providing reimbursement for eligible expenses. See page 19 for additional information. *Deductibles and coinsurance do not apply to in-network preventive care or to services where copayments apply, such as office visits. Please see Services and Charges at a Glance on page 8 for more details. 7

8 How does this translate into costs in 2015? For the HPHC and HUGHP HMO, POS, and PPO plans, you will pay a deductible and coinsurance, up to the annual out-ofpocket maximum, for certain medical services, including: Hospitalization Surgery Advanced diagnostic testing Please note that out-of-network services in the POS and PPO plans have separate deductibles, coinsurance, and out-of-pocket maximums. Services and Charges at a Glance This chart summarizes the kinds of care that are provided by the HMO, POS, and PPO plans (in-network) without charge, those that are subject only to a copayment, and those that are subject to an annual deductible and coinsurance up to the annual out-of-pocket maximums. Type of care Routine examinations for preventive care, including immunizations and routine vision exams No charge Copayment only Annual deductible, then 10% coinsurance Up to out-of-pocket maximum Office visits for non-preventive care of sickness and injury, authorized office visits for consultations/evaluations with specialists Rehabilitation, speech, occupational, chiropractic, and physical therapy Prescriptions Outpatient mental health services including group and individual therapy, detoxification Emergency room care (copayment is waived if admitted directly to the hospital) Inpatient hospitalization (e.g., acute care, maternity, rehabilitation, mental health) Intermediate mental health care services (e.g., acute residential treatment including detoxification, intensive outpatient programs, partial hospitalization, and day treatment) Hospice, skilled nursing, home health care Non-preventive laboratory and radiology services (including advanced radiology such as CT and PET scans) Surgery inpatient and outpatient (including colonoscopy, endoscopy, and sigmoidoscopy) 8 This is a summary of services and charges only and not a complete listing of plan coverage, provisions, or limitations.

9 How the family deductibles and out-of-pocket maximums work for two-, three-, and four-person-plus families Two-person family If you cover yourself and one dependent under family coverage, your in-network deductible will be $500 ($250 per person), and your in-network out-of-pocket maximum will be $3,000 ($1,500 per person). Three-person family If you cover yourself and two dependents, your in-network deductible will be $750 for the family ($250 per person), and your in-network out-of-pocket maximum will be $4,500 ($1,500 per person). Four-person-plus family The in-network deductible and out-ofpocket maximum are capped at $750 and $4,500 per family, respectively. If you cover yourself and three or more dependents, your in-network deductible will be $750 for the family, and your in-network out-of-pocket maximum will be $4,500. Important note: For a family HMO, POS, or PPO plan, Harvard s 90% coinsurance begins for each covered individual after the annual in-network individual deductible ($250) is met for that person, and moves to 100% when the in-network out-of-pocket maximum ($1,500) is met for that person. Example: Emily is enrolled in individual coverage through the HUGHP HMO medical* plan. She needs minor surgery that will cost $2,000. Emily is using an in-network provider. Her annual in-network deductible is $250. 1st Now, coinsurance begins 2nd Before the plan starts to pay, Emily will need to reach her annual $250 deductible. Once Emily pays her $250 deductible, the remaining cost for her surgery is $1,750. Emily pays 10% of the remaining $1,750, which is $175. The plan pays 90% of the remaining $1,750, which is $1,575. Emily s total cost for this surgery is $425; her deductible is $250 and her coinsurance is $175. Both count toward her out-of-pocket maximum. For any remaining 2015 in-network medical services that are subject to coinsurance, Emily will pay 10% of the cost, up to the plan s out-of-pocket maximum of $1,500 (any other out-of-pocket expenses, such as copays, will also count toward this maximum). This example is provided for illustrative purposes only. Individual situations may differ. *Please note, HPHC and HUGHP HMO, POS, and PPO plans work similarly in this example; the costs are different for the new High-Deductible Health Plan. See page 15 for more information. Programs That Can Reduce Your Out-of-Pocket Expenses Tax-Favored Programs Flexible Spending Account (FSA): Participate in, or increase your contribution to, an FSA in By doing so, you lower your taxable income and can use the money you contribute toward out-of-pocket health care costs in an HMO, POS, or PPO plan in Reimbursement Program If your annual full-time equivalent (FTE)* salary is $95,000 or less and you enroll in an HMO, POS, or PPO plan, you can take advantage of Harvard s Reimbursement Program. You will be reimbursed for any eligible in-network out-of-pocket costs you incur over the 2015 thresholds. Learn more on page 18. *Your annual full-time equivalent (FTE) salary is the salary you earn if you work full-time, or if you work part-time, it is the salary you would earn working full-time at the same rate of pay. Did you know? 2015 health plan premiums will decrease, so less is taken from your paycheck. You can see the premiums in the 2015 Rates and Plan Comparison Chart, enclosed in this package. 9

10 Examples of the Cost of Care under the New HMO, POS, and PPO Plans It s important to understand how these changes could affect you. Take a look at some examples of how costs yours and Harvard s may work under the new cost structure for the HMO, POS, and PPO plans. These examples are provided for illustrative purposes. Individual situations may differ. Example from Real Life: Having A Baby Sarah has a routine pregnancy and delivers a healthy baby by C-section Treatment Typical Costs Sarah Would Pay Initial office visit $200 $20 Office visit copayment Initial lab work $83 $83 Diagnostic testing; $83 paid toward annual $250 deductible Initial ultrasound $325 $183 Diagnostic testing; $167 paid to meet annual deductible; $16 is 10% coinsurance on the balance $1,400 $0 Preventive care, no charge $497 $50 Diagnostic testing; 10% coinsurance Ultrasounds, pre-delivery (7) $2,275 $228 Diagnostic testing; 10% coinsurance Inpatient C-section delivery $15,000 $936 10% coinsurance up to $1,500 annual out-of-pocket maximum $220 $0 Covered at no charge Newborn care $2,500 $0 Annual out-of-pocket (OOP) maximum met Total $22,500 $1,500* Maternity office visits (7) Lab work, pre-delivery Breast pump durable medical equipment Why? $20 copayment, $250 deductible, $1,230 coinsurance See FAQs on the HARVie 2015 Open Enrollment page for more details about maternity and parental benefits. Assumptions: All services are provided in-network. Sarah has family HMO coverage in a 2015 (faculty and nonunion staff) plan. *These predictable medical costs could be reduced through the use of a tax-favored flexible spending account (FSA). At a 20% tax savings, the net cost to Sarah s family for the delivery would be $300 less. 10

11 Example from Real Life: Serious Illness Jane is receiving treatment for breast cancer Treatment Typical Costs Jane Would Pay Why? Annual mammography screening Biopsy $2,600 $485 $300 $0 Preventive care, no charge $250 to meet annual deductible, plus 10% coinsurance ($235) on the balance for the procedure Pre-surgical office visit $215 $20 In-office care subject to only a copayment Outpatient surgery $11,000 $995 10% coinsurance, up to $1,500 annual out-of-pocket maximum Post-surgical office visit $215 $0 Annual out-of-pocket (OOP) maximum has been met Lab work/testing $10,000 $0 Annual out-of-pocket (OOP) maximum has been met Chemotherapy/radiation $44,000 $0 Annual out-of-pocket (OOP) maximum has been met Post-treatment office visits for follow-up (11) $2,369 $0 Annual out-of-pocket (OOP) maximum has been met Total $70,699 $1,500* $250 deductible, $1,230 coinsurance, $20 copayment Assumptions: All services provided are outpatient and in-network. Jane has individual HMO coverage in a 2015 (faculty and nonunion staff) plan. Example from Real Life: Serious Mental Illness Tom needs care for major depression Treatment Typical Costs Tom Would Pay Why? Inpatient hospitalization $18,000 $1,500 Outpatient counseling (35 visits) Generic medication (14 prescriptions) $250 to meet deductible and 10% coinsurance ($1,250) on the balance, up to $1,500 annual out-of-pocket maximum $3,500 $0 Annual out-of-pocket (OOP) maximum has been met $280 $0 Annual out-of-pocket (OOP) maximum has been met Total $21,780 $1,500* $250 deductible, $1,250 coinsurance Assumptions: All services are provided in-network. Tom has individual HMO coverage in a 2015 (faculty and nonunion staff) plan. *For both Jane and Tom, if they have an annual FTE salary of less than $70,000 they would each be eligible for a $600 reimbursement of these out-of-pocket costs. If they have an annual FTE salary of $70,000 to $95,000, they would each be eligible for a reimbursement of $250 for these out-of-pocket costs. See page 19 for more details. 11

12 Dental Plan We are providing enhanced dental coverage through an innovative collaboration with Delta Dental. This change will give participants greater financial protection against exceptionally high dental expenses by providing additional benefits beyond the current annual benefit of $3,000. This enhanced benefit replaces the rollover maximum feature, which will be discontinued as of December 31, Here s How It Works Dental coverage remains the same with Level 1 benefits: For preventive services, you pay no deductible, and the service is covered at 100%. For basic, restorative, and major services, you pay a deductible, and the service is covered at 75%, up to $3,000. Orthodontic* services are covered at 50% (with no deductible) for children under age 19, with a lifetime benefit of $1,500 per person. Once you reach the Level 1 annual maximum benefit of $3,000, Level 2 benefits begin. This coverage will apply automatically there is no need to enroll and it is included in the premium you pay. For preventive and diagnostic services, you pay no deductible, and the service is covered at 100%. For basic, restorative, and major services, you pay an additional deductible of $500 per individual (there is no family deductible), and the service is covered at 75%, with no annual plan maximum.* This additional level of coverage can provide you with valuable insurance protection that doesn t exist today Dental Plan Plan Feature Level 1 Benefit Level 2 Benefit Annual Deductible $50 Per Individual $150 Family Maximum $500 Per Individual (No family deductible) Preventive and 100%, no deductible 100%, no deductible Diagnostic Services Reach $3,000 Maximum Basic Services 75%, after deductible 75%, after deductible Major Services 75%, after deductible 75%, after deductible Annual Plan Maximum $3,000 Unlimited *Orthodontic services are not included in the Level 2 benefit. In-Network The percentages described above apply when using a dentist in the Delta Dental network. Participating dentists cannot bill you for fees beyond those approved by Delta Dental (a practice called balance billing ). Out-of-Network When using an out-of-network dentist your costs may be higher. You may be balance billed for any difference between the plan s approved cost and the dentist s charge. 12

13 Pharmacy Benefits Prescription drug coverage is included with all HPHC and HUGHP medical plans (HMO, POS, PPO, and HDHP). Prescription drug coverage has three copayment tiers, with generic medications having the lowest copayments. You can save even more on medications you take regularly, sometimes called maintenance medications, by using mail order. Prescription drugs are not subject to a deductible under the HMO, POS, and PPO plans just copayments. Under the new HDHP, you must meet the plan deductible before the plan covers prescription drug costs; once you meet the deductible, the same copayment structure applies. See HARVie or the enclosed 2015 Plan Comparison Chart for costs. For 2015, Harvard has chosen Catamaran, which is expected to offer enhanced customer service, as our new pharmacy benefits administrator. Catamaran is one of the largest pharmacy benefits administrators in the U.S. and provides a number of online tools to help you manage your prescription benefits (see the enclosed FAQs for more information). It is recommended that you have on hand a three-week supply of your medication during the transition. There are no changes to the copayment structure for prescription drugs in 2015, which remains: What you pay for... Retail (30-day supply) Mail- Order (90-day supply) Generic Drugs $7 $14 Preferred Brand-Name Drugs $20 $50 Non-Preferred Brand-Name Drugs $45 $110 While the copayments themselves are not changing, you may see adjustments to where your medication falls (and how much it will cost) on the plan s preferred drug list, also called a Formulary. You will receive personal communication from Catamaran beginning in November if your prescription is: expected to change cost tiers so that you may explore a generic or preferred brand-name alternative with your doctor if one is available and you so desire; a mail-order prescription transferring from Express Scripts in this case, you will need to provide new shipping and payment information to Catamaran; a mail-order prescription that will not transfer from Express Scripts. This may happen if there are no refills remaining on it, it is a controlled substance, the refill by date has expired, it is being held for a future fill date, or it is a compound medication. If you still need the medication, you will need to get a new prescription from your physician and submit it to Catamaran. Once they receive the prescription, the mail-order process can take up to 14 days to resume; subject to prior authorization requirements or exceeds typical quantity limits. Harvard faculty and staff can contact Catamaran s Customer Service Center at beginning October 27, 2014 with any questions. To learn more about the 2015 Formulary, visit Catamaran s Open Enrollment online portal, which can be accessed via HARVie (select Compensation & Benefits > 2015 Open Enrollment) or at hr.harvard.edu, under Total Rewards. All employees will receive new pharmacy ID cards before January 1, Once you receive your new ID card, it is very important to present it when filling any prescriptions on or after January 1, You will also receive a Welcome Kit with more information. Other Benefits to Consider Vision Plan Davis Vision provides you and your covered dependents with coverage for in-network vision exams, eyewear, and contact lenses (with copayments), and discounts for outof-network services and laser surgery. Davis Vision has a broad, nationwide network of participating providers. To find one near you, call Davis Vision at , or visit davisvision.com and enter Client Code See HARVie or the enclosed 2015 Plan Comparison Chart for costs. Long-Term Disability (LTD) Insurance Optional LTD insurance protects your financial security if you become unable to work due to illness or disability. If you elect LTD insurance, you must provide evidence of insurability (EOI) by completing a Medical History Statement, available on the PeopleSoft Open Enrollment page. Final approval comes from The Standard. See HARVie or the enclosed 2015 Rates and Plan Comparison Chart for costs. Supplemental Life Insurance Supplemental Life Insurance coverage is available at 1 to 5 times your annual salary (up to a maximum of $1.25 million). If you need to complete a Statement of Health form, it will be mailed to you in December. Final approval comes from MetLife. A medical statement will be sent to you at the mailing address Harvard has on file. See HARVie or the enclosed 2015 Rates and Plan Comparison Chart for costs. 13

14 Introducing the High-Deductible Health Plan (HDHP) with Health Savings Account (HSA) and a Limited-Purpose FSA The High-Deductible Health Plan with HSA is a different approach to how you pay for today s health care and save for your future. It is a lower-premium, high-deductible health insurance plan, which means you pay less out of your paycheck for premiums and more out of pocket at the point of care before the plan pays for services that are not considered preventive. Harvard s new HDHP meets the federal requirements that allow an enrollee to also qualify for a tax-advantaged HSA. Did you know? Two-thirds of U.S. employers with 1,000 or more employees offer a high-deductible health plan. There Are Several Features of the HDHP with HSA Health Plan The HDHP provides you the flexibility to receive care from both in-network and out-of-network providers (you ll pay more for out-of-network providers). In-network preventive care services are covered at 100% meaning you do not pay for this type of service (as defined by the plan). For all other services, you are responsible for paying the full cost of care until you reach the plan s deductible. You are then responsible for a portion of the cost of care (your coinsurance), until you reach the plan s out-of-pocket maximum. See the HDHP with HSA Summary Chart on page 15 for details. You can also see a side-by-side comparison of all plans on pages A Pre-Tax Savings Plan (Health Savings Account) If eligible, you can contribute via payroll deduction on a pre-tax basis to a Health Savings Account (HSA) to pay for out-of-pocket medical expenses, including deductibles, coinsurance, and copayments. The HSA is a fully employee-owned account. Funds roll over from year to year. There is no use it or lose it rule. Once the balance in your savings account reaches $2,100, you can select from a choice of investment options, in $100 increments. For 2015, Harvard will make a tax-free contribution to your account you must open an HSA, through Harvard s third-party administrator, Benefit Strategies, in order to receive this funding: $500 for individual coverage $1,000 for family coverage Debit Card With your HSA, you receive a debit card that you can use for easy access to your account (once funds are accumulated) to pay for out-of-pocket medical expenses, including your copays, prescriptions, and other health care costs. If you decide to also enroll in the Limited-Purpose FSA which reimburses you for eligible dental and vision expenses only your FSA dollars will be loaded onto the same debit card. See pages to learn more about FSA coverage. 14

15 HDHP Summary Chart Plan Feature In-Network Out-of-Network Preventive Care Covered at 100% Deductible, then 35% coinsurance Deductible* $1,500 (individual) $3,000 (family) For family coverage, the full family deductible must be met before plan (Harvard) coverage begins. Coinsurance (once deductible is met) 15% coinsurance 35% coinsurance Out-of-Pocket Maximum (includes deductible, coinsurance, and prescription drug costs) $3,000 (individual) $6,000 (family) For family coverage, the full family out-of-pocket maximum must be met before 100% plan (Harvard) coverage begins. $6,000 (individual) $12,000 (family) For family coverage, the full family out-of-pocket maximum must be met before 100% plan (Harvard) coverage begins. Emergency Room Deductible, then 15% coinsurance All other covered non-preventive care such as: PCP/Specialist Office Visits; Hospital Admission; Outpatient Surgery; In-patient Surgery; Advanced Diagnostic Testing; Lab/X-Rays Deductible, then 15% coinsurance Deductible, then 35% coinsurance Prescription Drugs (Retail/Mail-Order) Generic Preferred Brand-Name Non-Preferred Brand-Name $7/$14, after deductible $20/$50, after deductible $45/$110, after deductible *The deductible applies to all non-preventive health care expenses. Amounts paid for covered in-network and out-of-network care are combined to satisfy the deductible. 15

16 Features of a Health Savings Account (HSA) An HSA provides you with flexibility in how you pay for medical services today and in the future. Tax Advantages: Your contributions to your HSA come out of your paycheck before taxes are withheld, so every dollar that goes toward your HSA reduces your taxable income. Participants can also make contributions to the HSA with after-tax dollars. (Because this is a tax-favored account, there are IRS limits on annual contributions; see chart below for details.) Use It Today: Pay for regular health care expenses, including deductibles, coinsurance, copayments, and prescription drugs, with an easy-to-use debit card. Save for Tomorrow: If you save more money than you spend on health care expenses in the plan year, you can use that money in the future. Any money remaining in this account at the end of the plan year rolls over into the next year and, even if you leave Harvard, the money remains yours. Invest for Your Future Tax-Free: Once the balance in your HSA reaches $2,100, your funds will be automatically directed into the investment you select helping you build savings for your future. When used to pay for qualified medical expenses, distributions from your HSA are tax-free. Catch-up Contributions: Employees 55 years of age or older can contribute additional dollars to their HSA. See the chart below for details HSA Maximum Contributions Coverage Level HSA Contribution HSA Contribution for Age 55+ Individual Family $3,350 (Total includes: $2,850 employee contribution plus $500 Harvard contribution) $6,650 (Total includes: $5,650 employee contribution plus $1,000 Harvard contribution) $4,350 (Total includes: $2,850 employee contribution plus $1,000 age 55+ catch-up contribution plus $500 Harvard contribution) $7,650 (Total includes: $5,650 employee contribution plus $1,000 age 55+ catch-up contribution plus $1,000 Harvard contribution) 16

17 What You May Want to Consider As with any benefit choice, there are things you should carefully consider prior to enrolling. As you think about your health care needs, be sure you understand how the medical plan works. Here are some things to keep in mind as you review the HDHP with HSA plan compared to Harvard s other options: Lower Premium: You pay less out of your paycheck for coverage. Higher Out-of-Pocket Costs: You pay 100% of any non-preventive expenses until you meet your deductible before the plan pays for services. Deductible: If you re enrolled in family coverage, you must meet the entire family deductible before the plan pays unlike the HMO, POS, and PPO plans. Out-of-Pocket Maximum: If you re enrolled in family coverage, you must meet the entire family out-of-pocket maximum before the plan pays 100% there is no perperson maximum like there is in the HMO, POS, and PPO plans. Access to the Same Doctors and Networks: The HDHP with HSA is offered through Harvard Pilgrim Health Care and HUGHP Blue Cross Blue Shield of MA, so you will continue to have access to doctors and networks that are currently part of these health plans. Additionally, HUGHP HDHP members will have access to an expanded network of Blue Cross Blue Shield of MA providers that includes Harvard University Health Services (HUHS) providers. Limited-Purpose Flexible Spending Account: According to federal regulations, HSA participants are not eligible to participate in a regular Health Care Flexible Spending Account (FSA). However, HSA participants can participate in the Limited-Purpose FSA, which provides a tax-free way to save and pay for dental and vision expenses not covered by your health plan. All other Health Care FSA rules and features apply to the Limited-Purpose FSA same maximum, same useit-or-lose-it rule, same claim-filing deadline, and if you enroll, you will receive a debit card to pay for eligible dental and vision expenses. If you elect an HSA, you will receive one combined debit card. HSA Requirements You cannot be covered under another non- HDHP medical plan or Health Care FSA (such as your spouse s plan/fsa) and contribute, or receive Harvard s contribution, to the HSA. HSA contributions must be in your account before you can use them to pay for eligible medical expenses or receive reimbursement. Please note that Harvard s funding will be deposited on January 2, You must be under age 65 and not enrolled in Medicare to contribute, or to receive Harvard s contribution, to the HSA. If you enroll in the HDHP for 2015 and currently have a 2014 Health Care FSA, you must have a $0 balance in your FSA by December 31, 2014 to be eligible for an HSA in January If you have a balance remaining in your Health Care FSA as of January 1, 2015, you will not be eligible to enroll in the HSA or receive Harvard s contribution until April 1, If this occurs, you will not be able to use HSA funds to get reimbursed for medical costs incurred before April 1. 17

18 Programs That Can Reduce Your Out-of-Pocket Expenses Save on Eligible Expenses with a Flexible Spending Account (FSA) Participating in an FSA can help you lower your taxable income while paying for eligible health care and/or dependent day care expenses. You contribute to your FSA before taxes are withheld from your paycheck, meaning that every dollar that goes toward your FSA reduces your taxable income. Let s take a look at this example: 18 Assumptions No FSA Contribution FSA Contribution Your income $75,000 $75,000 You contribute $0 $2,000 Taxable income $75,000 $73,000 Taxes you pay (based on 22.65% federal income and FICA tax rate) $16,988 $16,535 This example is provided for illustrative purposes only. Individual situations may differ, and tax savings will depend upon your tax rate. By using an FSA, you can save $453 in taxes and use the $2,000 you saved pre-tax to pay for eligible, out-of-pocket health care expenses. If you know that you will have out-of-pocket costs for health care or dependent care during the year, enrolling in an FSA might be the right choice for you. But remember FSA funds do not roll over from year to year. Unused funds in your FSA are forfeited. So estimate carefully you will need to use it or lose it! FSAs Available to You You are eligible to enroll in one of the following FSAs whether or not you are enrolled in a Harvard-sponsored health plan. Health Care FSA: You can use this account to contribute up to $2,500 on a pre-tax basis to be used to reimburse out-of-pocket medical, dental, and vision expenses. Important: A Health Care FSA can also aid in managing the costs of the copayments, deductibles, and coinsurance in the Harvard-sponsored HMO, POS, and PPO plans. Dependent Care FSA: You can use this account to contribute up to $5,000 on a pre-tax basis to be used to reimburse eligible dependent day care expenses. Covered dependents include a dependent child under age 13, a disabled spouse, or a disabled dependent of any age. Your health plan enrollment has no impact on your eligibility for the Dependent Care FSA. Limited-Purpose FSA: You can use this account to contribute up to $2,500 on a pre-tax basis to be used to reimburse out-of-pocket dental and vision expenses. Important: Per federal regulations, if you enroll in a qualified HDHP with an HSA, such as the one being introduced at Harvard in 2015, you are only eligible to enroll in a Limited-Purpose FSA. You must enroll annually during Open Enrollment in order to have an FSA for the following year your election in an FSA does not carry over from year to year. If you enroll in any of the FSA plans for 2015, you will receive a debit card that can be used to pay eligible expenses from participating providers and merchants. Remember: Use It or Lose It Any money left in your FSA(s) at the end of the plan year is forfeited. Grace Period Reminder: You may incur expenses until March 15, 2016 for reimbursement from your 2015 FSA(s). All claims for reimbursement must be postmarked by March 31, The debit card makes it easier to manage your cash flow you don t need to pay and then file for reimbursement. However, you may be asked to submit receipts after using your debit card you must save receipts/documentation for all purchases made with an FSA debit card. With the Health Care and Limited-Purpose FSA, your entire elected amount is available as of January 1 you don t need to wait until all your contributions have been made. So, if you need money for a bigger expense early in the year, the funds are there. For the Dependent Care FSA, you may only be reimbursed up to the amount in your account as of the date you request reimbursement. If you want to participate in an FSA for 2015, you must elect this coverage by going to PeopleSoft during Open Enrollment. The deadline to elect 2015 participation is 8:00 p.m. ET, Wednesday, November 19, The 2015 FSA plan year begins January 1, 2015.

19 New FSA Administrator for 2015 We are moving to a new FSA administrator Benefit Strategies. In addition to high marks in the area of customer service, Benefit Strategies offers additional online tools to help you manage your account. When you enroll for 2015, if you wish to be reimbursed through direct deposit, you ll need to establish a new direct deposit account with Benefit Strategies. You ll also receive a new debit card from them. And, new for 2015, if you enroll in the Dependent Care FSA, you will receive a debit card that can be used to pay for eligible dependent care expenses (where accepted). Transition: If you have an FSA for 2014, you will need to submit any claims for your 2014 expenses through the current administrator, Crosby Benefits Systems. Please note: Your 2014 FSA debit cards will be deactivated as of December 31, You may request reimbursement either online or via paper submission. You can find reimbursement request forms on HARVie (harvie.harvard.edu): select the link to Forms at the top of the page and click FSA. You have until March 15, 2015 to incur expenses and until March 31, 2015 to submit expenses to Crosby for reimbursement from your 2014 FSA. Be sure to use up any 2014 funds before spending 2015 funds. FSA Direct Deposit For 2015, if you wish to be reimbursed via direct deposit, you will need to establish a new direct deposit account with Benefit Strategies (even if you currently have this set up with Crosby Benefits Systems). Manage Your Health Care Costs with Our Reimbursement Program Harvard s new Reimbursement Program provides an important financial protection for those earning an annual full-time equivalent (FTE) salary of $95,000 or less who are enrolled in the 2015 HMO, POS, or PPO health plans. The Reimbursement Program will cover a broader range of costs and reflect the 2015 plan changes. The program is not available to HDHP participants. You do not need to enroll in this program. However, you will need to submit a claim for reimbursement, if eligible. What s Changing? New Program Administrator. Benefit Strategies will be the administrator for our 2015 Reimbursement Program. Broader Eligibility for Reimbursable Expenses. Any eligible out-of-pocket, in-network medical expenses that you pay above the thresholds shown below can be reimbursed through the Reimbursement Program. Eligible expenses include amounts that you pay toward your deductible and your coinsurance, along with copayments for emergency room visits, office visits, and prescription drugs. (Ineligible expenses include monthly premiums and out-of-network costs.) New Thresholds. You will be eligible to receive reimbursement for any out-of-pocket, in-network costs that exceed these new thresholds. Annual FTE Salary of Covered Harvard Employee Did you know? 2015 Individual Threshold 2015 Family Threshold Under $70,000 $900 $2,250 $70,000 $95,000 $1,250 $3,125 You may not be reimbursed for the same expenses through the Reimbursement Program and the Health Care FSA. However, you may cover expenses up to the thresholds shown above with money saved in your FSA without affecting your eligibility for the Reimbursement Program. The Reimbursement Program is available to you if your annual FTE salary is $95,000 or less and you are enrolled in a 2015 HMO, POS, or PPO plan. To learn more about the Reimbursement Program, including deadlines and information on filing a claim through our program administrator, Benefit Strategies, please visit the HARVie 2015 Open Enrollment page. 19

20 Medical Plan Comparison Chart There is a lot for you to consider to make well-informed benefits choices and get the most value from them. Take the time to review this Medical Plan Comparison Chart to help you choose the plan that is right for you and your family. Plan Comparison Chart Plan Feature Preventive Care Non-Preventive Care Services In-Network Covered at 100% HMO Out-of-Network Office Visit: PCP/Specialist $20 Emergency Room Visit $100 Other Medical Services (for example, hospitalization, surgery, advanced diagnostic testing) Deductible, then 10% coinsurance Prescription Drugs: Retail (30-day supply)/mail-order (90-day supply) Generic $7/$14 Preferred Brand $20/$50 Non-Preferred Brand $45/$110 Deductible $250 per person, up to a maximum of $750 per family Services received from an out-of-network provider are not covered by the HMO plans. Coinsurance Out-of-Pocket Maximums** Individual and Family (includes deductible, coinsurance, and copayments) Programs That Can Reduce Your Out-of-Pocket Expenses Health Care FSA (medical, dental, and vision) Limited-Purpose FSA (dental and vision only) Health Savings Account (HSA) Reimbursement Program if Annual FTE Salary is $95,000 or less 10% $1,500 per person, up to a maximum of $4,500 per family Yes No No Yes *Amounts for both in-network and out-of-network care can be combined to satisfy this deductible in the HDHP. However, for family coverage, the entire family deductible must be met before the plan begins to share costs for any individual family member. **There are two separate out-of-pocket maximums one for in-network care and one for out-of-network care. They accrue separately, which means that neither counts toward the other. 20