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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2012

Also available: Archived E-Messages to Certifying Officers and EPIC Users

SUBJECT DATE
Online Requirement for Designation of Beneficiary - Certifying Officers December 13, 2012
Pension and Health Benefit Contribution Rate Change for the Judicial Retirement System (JRS) - Certifying Officers of the Judicial Retirement System December 5, 2012
Employer Demographic Changes Required Online through EPIC - Certifying Officers December 3, 2012
Second Update - Transition to Retirement Programs and Rescinding ABP Retirement - Certifying Officers, State and County Colleges and Universities October 11, 2012
SHBP Open Enrollment - Local Government Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the State Health Benefits Program September 27, 2012
SHBP Open Enrollment - Local Education Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the School Employees’ Health Benefits Program September 27, 2012
SHBP Open Enrollment - State Department Certifying Officers, Human Resource Directors, and Benefits Administrators September 27, 2012
SHBP Open Enrollment - State College and University Certifying Officers, Human Resource Directors, and Benefits Administrators;  State Monthly Certifying Officers, Human Resource Directors, and Benefits Administrators September 27, 2012
PERS Notice of Election - Certifying Officers of the Public Employees' Retirement System (PERS) September 25, 2012
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2013) - State University and College Certifying Officers, State University and College Benefits Administrators, State Monthly Certifying Officers, State Monthly Benefits Administrators September 21, 2012
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2013) - State University and College Certifying Officers, State University and College Benefits Administrators, State Monthly Certifying Officers, State Monthly Benefits Administrators September 21, 2012
ABP/ACTS Vendor, The Hartford, to be Acquired by MassMutual - Certifying Officers, State and County Colleges and Universities September 18, 2012
Online Application Requirement for Retirement - Certifying Officers August 27, 2012
Carrier Award for Alternate Benefit Program and Additional Contributions Tax-Sheltered Program - Certifying Officers, State and County Colleges and Universities August 8, 2012
Calling Pensions and Benefits — One Number — Expanded Hours - Certifying Officers August 3, 2012
Transmittal Electronic Payment System (TEPS) — ACH Updates - Certifying Officers July 11, 2012
Transmittal Electronic Payment System (TEPS) — Payment Warehousing Enhancement - Certifying Officers June 29, 2012
Pension Contribution Rate Change for the Public Employees' Retirement System (PERS) and the Teachers' Pension and Annuity Fund (TPAF) - Certifying Officers of the Public Employees' Retirement System and the Teachers' Pension and Annuity Fund June 18, 2012
Health Benefit Contribution Percentage Change for State Employees - State Biweekly Certifying Officers and Human Resources Representatives, State Monthly Certifying Officers and Human Resources Representatives June 18, 2012
Health Benefit Contribution Percentage Change for Local Government Employees and Local Education Employees - Certifying Officers of Local Government Employers Participating in the State Health Benefits Program (SHBP), Certifying Officers of Local Education Employers Participating in the School Employees’ Health Benefits Program (SEHBP) June 18, 2012
Update - Transition to Retirement Programs and Rescinding ABP Retirement - Certifying Officers, State and County Colleges and Universities May 9, 2012
Reimbursement of Medicare Premiums to Retirees - Certifying Officers of Local Government Employers participating in the State Health Benefits Program March 23, 2012
Alternate Benefit Program – Reimbursement of Employer Contributions to ABP for Adjuncts and Part-Time Faculty - Certifying Officers of the County Colleges March 8, 2012

CERTIFYING OFFICER LETTERS FROM OTHER YEARS

2014 CO Letters 2013 CO Letters 2012 CO Letters 2011 CO Letters 2010 CO Letters
2009 CO Letters 2008 CO Letters 2007 CO Letters 2006 CO Letters 2005 CO Letters
2004 CO Letters 2003 CO Letters 2002 CO Letters 2001 CO Letters 2000 CO Letters
1999 CO Letters 1998 CO Letters 1997 CO Letters    

Also available Archived E-Messages to Certifying Officers and EPIC Users.


December 13, 2012

TO: Certifying Officers
FROM: Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
SUBJECT: Online Requirement for Designation of Beneficiary

The Division of Pensions and Benefits is implementing significant changes to the procedure for designating a beneficiary for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS).

ONLINE DESIGNATION REQUIREMENT

Effective February 1, 2013, an active employee who wishes to verify, update, or change their beneficiary information with the retirement system, must use the online Designation of Beneficiary Application accessible through a personal account with the Member Benefits Online System (MBOS)1.

  • The MBOS Designation of Beneficiary Application provides your employees with a secure, fast, and efficient method to verify, update, or change beneficiary information.  Confirmation of receipt of a new beneficiary designation is provided to the member on screen and by e-mail.
  • Using MBOS improves the designation process for all participants, saving money by eliminating printing and mailing costs, saving time by reducing the handling and processing time required with paper forms, and eliminating keying or transcription errors or the need to return incomplete forms or unacceptable designations.  
  • Employees who are registered with MBOS already have access to the online Designation of Beneficiary Application through their MBOS account.

Employees who are new to MBOS can access MBOS after they register with both MBOS and the MyNewJersey Web site. Registration is free. New users should be provided with the MBOS Registration Instructions (see attachment).

  • If, after following the MBOS Registration Instructions, your employees still need assistance registering for or using MBOS, they should call the MBOS Help Desk at (609) 777-0534 or send an e-mail with the subject line "MBOS E-mail" to:pensions.nj@treas.state.nj.us
  • Also effective February 1, 2013, the paper Designation of Beneficiary form will no longer be accepted by the Division of Pensions and Benefits — except for “Special Provisions” as detailed on the next page.

SPECIAL PROVISIONS

While most employees can and must use the online Designation of Beneficiary Application in MBOS, the following “Special Provisions” will still require a paper form.  

  • Designations to a trust, organization, charity, or corporation;
  • a formal or informal trust;
  • through a power of attorney;
  • by court order; or
  • for an unequal distribution of a fixed percentage or definite dollar amount. 

Instructions for obtaining and using the Special Provisions Beneficiary Form are provided in MBOS when the member accesses the online Designation of Beneficiary Application. 

“Special Provisions” are the only circumstances when the use of a paper form will be permitted.  Paper forms that are received for any other type of designation after February 1, 2013, will be returned to the member with instructions for submitting the designation through MBOS. 
Limited access to a computer or reluctance to use MBOS is not considered sufficient reason to permit the use of a paper Designation of Beneficiary form.

EMPLOYER PARTICIPATION

Employer communication with employees is a key element for a smooth transition to meeting the requirement that all beneficiary designationsbe processed through MBOS. The Division expects employers to assist with the change.

  • Employers should take all available opportunities to inform employees of the coming change to the online Designation of Beneficiary Application using any in-house communication channels.
  • Employers should make the attached fliers, or similar messages, available to employees to inform them of the pending change. 
  • Please also advise your employees that as of February 1, 2013, the paper Designation of Beneficiary form will no longer be accepted by the Division of Pensions and Benefits — except for the “Special Provisions” listed above.

ADDITIONAL INFORMATION

For additional information about the designation of beneficiary and your retirement system benefits, please refer to your retirement system’s Member Handbook or Fact Sheet #68, Designating a Beneficiary, which are available for viewing or printing on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have questions regarding any of the other information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

1 MBOS is a set of applications that allow registered users access to their pension account information over the Internet.  Log on or register for MBOS at: www.state.nj.us/treasury/pensions/mbosregister.shtml

Enclosures
MBOS Online Designation of Beneficiary Flier Adobe PDF (30K)
Fact Sheet #68, Designating a Beneficiary Adobe PDF (33K)

CO Letter in Printable Format Adobe PDF (61K)

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December 5, 2012

TO: Certifying Officers of the Judicial Retirement System
FROM: Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
SUBJECT: Pension and Health Benefit Contribution Rate Change for the Judicial Retirement System (JRS)

Pursuant to an amendment to Article VI, Section VI, Paragraph 6 of the New Jersey Constitution — and originally authorized under Chapter 78, P.L. 2011, Pension and Health Benefit Reform —  employee pension and health benefit contribution rates for members of the JRS will increase as of State Biweekly Pay Period #1 of 20131.

PENSION CONTRIBUTION RATES

The increase in the JRS pension contributions is calculated in one of two different ways depending upon when an individual was enrolled into the JRS.

  • For JRS members enrolled into the retirement system on or after January 1, 1996, the pension contribution rate will increase to 5.56% of all compensation.
  • For JRS members enrolled into the retirement system before January 1, 1996, the pension contribution is calculated using one rate for the compensation of the member’s current position as of January 18, 1982, and a separate rate for the balance of the member’s compensation in excess of the January 18, 1982, compensation. The employee contribution rates for this group will be 2.56% for the compensation as of January 18, 1982, and 5.56% for any compensation exceeding the January 18, 1982, compensation.

No retroactive deductions will be taken for payroll prior to the effective date. The increased contributions will apply only to current and future salary. 

The increase in the JRS contribution rate will also increase the minimum repayment amount for new pension loans or the cost for a purchase of service credit if certified after the increased contribution rate becomes effective.

FUTURE PENSION INCREASES

The 2.56% contribution rate for compensation as of January 18, 1982 and 5.56% contribution rate for any compensation exceeding the January 18, 1982 compensation represents the second year of phased-in rate increases under the provisions of Chapter 78, P.L. 2011.  The third year contribution rate increase of an additional 1.28% will begin with the first payroll of July 2013.

Overall, Chapter 78 calls for JRS employee pension contribution rates to increase by 1.28% a year over 7 years until a total additional pension contribution rate of 9% is reached as of July 2017 — making the full contribution rate 12% for JRS members enrolled into the retirement system on or after January 1, 1996. 

EMPLOYEE HEALTH BENEFIT CONTRIBUTIONS

Chapter 78, P.L. 2011, also requires that employees enrolled in the State Health Benefits Program (SHBP) pay an increased portion of the cost of health benefits coverage based on a specified percentage of the medical and prescription drug plan premiums. Under no circumstances will an employee pay less than 1.5% of base salary for medical and/or prescription drug coverage.

For State employees who were enrolled in the SHBP before June 28, 2011, the contribution increase is phased in over four years with these employees paying ¼, ½, ¾ and the full amount of the contribution rate during the phase-in years. The majority of State employees are in year two of the phase-in.

The health benefits contribution is calculated in one of two different ways depending upon when an individual was appointed to the JRS position.

  • JRS members appointed prior to June 28, 2011 (the effective date of Chapter 78), or reappointed on or after that date with no break in service will pay the year two (½ of the full contribution) contribution rate for health benefits coverage. Year three of the phase-in (3/4 of the full contribution) begins with the first payroll in July 2013.
  • JRS members who are newly appointed2on or after June 28, 2011, or reappointed after that date with a break in service, pay the full (year four) contribution rate.

The amount paid is calculated using the level of coverage selected3 and a scale of percentages that increase with the employee’s annual salary. The appropriate percentage is multiplied by the premium cost4 of the medical and/or prescription drug plans selected.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

1 Pay period begins December 15, 2012; payroll date January 4, 2013.

2 State employees who were hired prior to June 28, 2011 and newly appointed as a judge on or after that date and had continuous service until the appointment as a judge, will pay the year two (½ of the full contribution) contribution rate for health benefits coverage. Year three of the phase-in will begin with the first payday in July 2013.

3 Rate charts and Percentage of Premium Calculators are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/

4 Plan Year 2013 premiums are effective as of State Biweekly Pay Period #2 of 2013, so members may see an increase in the health benefits contribution with the payroll dated January 18, 2013.

CO Letter in Printable Format Adobe PDF (61K)

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December 3, 2012

TO: Certifying Officers
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Employer Demographic Changes Required Online through EPIC

This letter is being distributed to announce new online procedures for the update and maintenance of Employer Demographics within the Employer Pensions and Benefits Information Connection (EPIC)1.

The updated procedures are part of the Division of Pensions and Benefits’ actions to comply with the annual certification requirements of Chapter 52, P.L. 20112, and include the following:

  • The employing location remains the responsible entity for designating the individuals who will serve as the Certifying Officer and the Supervisor of the Certifying Officer.
  • Immediate action is required from employers to designate, or identify any recent changes in, the employing location’s Certifying Officer and/or Supervisor of the Certifying Officer.
  • Effective January 1, 2013, all new and future designations of the Certifying Officer or Supervisor of the Certifying Officer MUST be made using the online “Demographic Changes” application within the EPIC Security System.

The online “Demographic Changes” application has been expanded to include, and allow updates to, the names, phone numbers, and e-mail addresses of the Certifying Officer and the Supervisor of the Certifying Officer.

Detailed information on using EPIC Security applications can be found in “Part III” of the EPIC Users’ Guide at: www.state.nj.us/treasury/pensions/epic-security.htm

  • It is important that the employing location keep the Certifying Officer’s and Supervisor of the Certifying Officer’s identity and contact information current within EPIC. Correct identification of the Certifying Officer and Supervisor of the Certifying Officer is required for the proper enrollment of new employees and will be essential in the upcoming annual certification of enrollments required under Chapter 52. 

Note: if designating a new Certifying Officer or Supervisor of the Certifying Officer, it may also be necessary for that individual to complete the required training in enrollments – visit: www.state.nj.us/treasury/pensions/enrollment-ch52.shtml for more information.

Maintaining the Certifying Officer’s and Supervisor of the Certifying Officer’s current contact information also assures the accurate and timely delivery of information via Certifying Officer Letters, EPIC E-mail Messages, and other communications from the Division of Pensions and Benefits. The individuals identified within EPIC as the Certifying Officer and Supervisor of the Certifying Officer are the only individuals whose e-mail addresses are used by the Division for e-mail distributions to employers.

  • Effective January 1, 2013, the paper Employer Database Update Form will no longer be accepted by the Division for updates to EPIC.  Links to the paper form will be removed from the Division’s Web site and any paper update forms that are received will be returned to the employing location with instructions to submit the changes through EPIC. 

ADDITIONAL INFORMATION

For additional information about using EPIC or assigning access to EPIC applications to your staff, see the EPIC Users’ Guide at: www.state.nj.us/treasury/pensions/epic-security.htm,  contact the Division’s Employer Education help line at (609) 292-7524, or send an e-mail with the subject line "EPIC Help" to:pensions.nj@treas.state.nj.us

1 EPIC is a set of applications that allow registered employers access to their employees' pension and, if applicable, health benefit account information. “Employer Demographics” is one of the EPIC Security applications and allows employer update of the location address, identity of the Certifying Officer and Supervisor of the Certifying Officer, and required contact information.

2Chapter 52, P.L. 2011, (N.J.S.A. 43:3C-15) requires that both the Certifying Officer and the Supervisor of the Certifying Officer receive training in enrollments and annually certify that each member of the retirement system, for that employing location, is eligible for enrollment in the retirement system in accordance with the statutes and regulations of the retirement system. For more information about Chapter 52 visit: www.state.nj.us/treasury/pensions/enrollment-ch52.shtml

CO Letter in Printable Format Adobe PDF (63K)

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October 11, 2012

TO: Certifying Officers, State and County Colleges and Universities
FROM: Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
SUBJECT: Update - Transition to Retirement Programs and Rescinding ABP Retirement

On May 9, 2012, Acting Director Florence J. Sheppard advised all Alternate Benefit Program (ABP) employers and their staff that if there was no remedial correction to statutes to permit programs that had been referred to as “Transition to Retirement” by June 30, 2012, the Division’s position as stated in its July 1, 2011, communication on this subject would be implemented; all “Transition to Retirement” programs would need to be discontinued; and corrective measures would need to be taken with regard to your employees who had elected to participate in the program.

As background, on July 1, 2011, the Division released guidance relating to a practice at some, if not all, of the State’s public colleges and universities (including county colleges) offering programs referred to as “Transition to Retirement.”  Under those programs employees, typically faculty members, retired from their full-time position with the institution, began collecting retirement benefits from the ABP, and continued employment with the institution in a reduced, part-time capacity.  In some situations this practice may have been memorialized in a collective negotiations agreement. The ABP statutes do not authorize “Transition to Retirement” programs and, as such, the programs should not be utilized to qualify an employee for retirement benefits from the ABP. The Division did not take corrective action at that time since amendments to New Jersey’s Statutes to permit these programs were proposed.

Since no remedial correction to statutes has occurred, the Division is now implementing steps to discontinue these programs and correct actions taken by employers and employees under these programs in the past.

First, employers are advised that ABP members participating in “Transition to Retirement” programs will not be approved to receive any retirement benefits from the retirement system, including retiree health benefit coverage (if applicable), and those employees must continue participation under the ABP if their continued employment so permits.

Second, the Division requests a copy of all “Transition to Retirement” programs that have been in force through the employment agreements from January 2009 through July 2012.

Third, provide a list, in the format provided in attachment A Adobe PDF (135K) of this notice, of all employees who have participated in a “Transition to Retirement” program since January 1, 2009.  As you will see in the provided format, the Division is interested in the original date of retirement and the position from which the employee retired under the “Transition to Retirement” program, the date and position under which the employee continued employment under the “Transition to Retirement” program and if the subsequent employment has terminated.

Fourth, any ABP member who elected to retire under a “Transition to Retirement” program during calendar year 2012 only who wishes to rescind that retirement and continue participation under the ABP will be permitted to do so if:

a) The member submits a written request to their employer to rescind their retirement;

b) The employer confirms in writing that the retirement is rescinded and employment will continue;

c) The member, working through their ABP service provider, cancels any request for benefit payment or, in the case of an account that has been withdrawn or is otherwise in payment status, returns the funds that were distributed to their investment provider to re-establish the ABP retirement account, and;

d) The Division receives copies of the member’s and employer’s written confirmation of rescinding of retirement and the ABP service provider’s confirmation of cancelation or return of benefits.

Additional guidance will be provided concerning corrective actions that will be required for those employees who have participated in a “Transition to Retirement” program between 2009 and 2011 or in 2012 and are unable to re-establish their retirement account as outlined under the fourth step above.  That guidance will be provided after the Division is able to analyze data requested under the second and third steps above and conferring with the Office of Employee Relations and the Office of the Attorney General.  Therefore, your prompt attention is requested to allow for corrective action to take place as soon as is possible.

All information requested by the Division related to this matter should be forwarded to:

Attn: ABP Transition Project
Bureau of DB & DC Plans Reporting
New Jersey Division of Pensions and Benefits
50 West State St
PO Box 295
Trenton, NJ 08625-0295

Any questions may be directed to this address or to the ABP Transition to Retirement Project call center at (609) 292-3440.

Enclosure

Attachment A - Transition to Retirement Participation List Adobe PDF (135K)

CO Letter in Printable Format Adobe PDF (195K)

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September 27, 2012

TO: Local Government Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the State Health Benefits Program
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT

The State Health Benefits Program (SHBP) Open Enrollment period for Local Government employees will begin on October 1, 2012, and end on November 9, 2012.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan.  All changes to coverage made during this Open Enrollment period will be effective on January 1, 2013.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 16, 2012, to ensure processing for the start of the 2013 plan year. 

Note: Employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of Open Enrollment.

NEW MEDICAL PLANS AVAILABLE

Due to the recently completed Request for Proposal, new medical plan vendor choices are being added for the 2013 plan year.  Aetna will be offering four new Preferred Provider Organization (PPO) plans along with moving the High Deductible Health Plans to a PPO platform of providers. Horizon Blue Cross Blue Shield of New Jersey will offer Three new HMO plan* choices.

The full list of medical plans available to State employees includes:

  • PPO Plans: Aetna Freedom10; Aetna Freedom15; Aetna Freedom1525; Aetna Freedom2030; NJ DIRECT10; NJ DIRECT15; NJ DIRECT1525;
    NJ DIRECT2030.
  • HMO Plans: Aetna HMO; Aetna HMO 1525; Aetna HMO 2030; Horizon HMO; Horizon HMO 1525; Horizon HMO 2030.
  • High Deductible Health Plans: Aetna Value HD1500; Aetna Value HD4000; NJ DIRECT HD1500; NJ DIRECT HD4000. 

*Note: The service areas for the Horizon HMOs are limited to New Jersey, Delaware, and bordering counties of Pennsylvania and New York.

CIGNA MEDICAL PLAN TERMINATION

Also effective with the 2013 plan year, the Cigna medical plans — Cigna HealthCare HMO; Cigna 1525; Cigna 2030; Cigna HD1500; and Cigna HD4000 — will no longer be offered through the State Health Benefits Program (SHBP).

Active Employees enrolled in Cigna medical plans MUST select a new medical plan for 2013, by submitting a Health Benefits Application to their human resources representative during Open Enrollment.

Local government employees enrolled in Cigna who fail to select a new medical plan will not have medical coverage effective January 1, 2013.

Note: The Cigna Dental DPO remains available to employees whose employer participates in the SHBP Employee Dental Plans.

PAYROLL DEDUCTIONS AVAILABLE FOR HDHP PARTICIPANTS

Beginning in plan year 2013, employees participating in the one of the High Deductible Health Plans (HDHP) will be able to have tax deferred contributions from their paychecks to fund their Health Savings Account (HSA). Previously, employees were required to make direct contributions and then claim the contribution on their tax returns. If one of your employees chooses (or is currently enrolled) in one of the HDHP, Aetna or Horizon will contact you to assist in setting up the payroll deductions. A sample of the HSA Contribution Form is included with this letter.

SUMMARIES OF BENEFITS AND COVERAGE

Detailed information about the SHBP’s medical plans is available through new Summaries of Benefits and Coverage which are posted online at: www.state.nj.us/treasury/pensions/hb-sbc-home.shtml

A direct mailing is being sent to all SHBP members to announce the availability of the summaries, however, employers are also asked to provide notice of this information to their employees.  A sample of the mailer is included with this letter.

PLAN RATES

Plan rates for 2013 were approved by the State Health Benefits Commission on September 12, 2012.  Rate charts for the Local Government Group are attached and are also posted online for the Open Enrollment through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to the Pension and Health Benefit Reform (Chapter 78, P.L. 2011) and with the expiration, renewal, or extension of collective negotiations agreements, employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. 

Most local government employees are currently subject to one of four-year phase-in levels of contribution rates.  Employers should advise their employees of the current phased-in contribution level so they can correctly determine the required contributions when considering plan choices.

Percentage of premium contribution worksheets and online calculators have been revised for 2013 plan selections and rates, and are available through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

The increase in plan premiums for 2013 will increase the employee contribution for medical and prescription coverage.  Employees who are considering a change of medical plan based on cost should review the contribution amounts for both the current contribution phase-in level and for the next phased-in level — when the required contribution amount will increase. 

WAIVING SHBP COVERAGE

Local government employees are permitted to waive SHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent. 

Employers are permitted to offer an incentive to employees who waive SHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less.  In addition, because multiple coverage under the SHBP/SEHBP is prohibited, waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage a SHBP Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted during Open Enrollment. To waive coverage effective January 1, 2013, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be effective before January 1st.

DENTAL PLANS AND EMPLOYEE COSTS

The following information is for local government employers who provide employee dental coverage through the Employee Dental Plans:
Seven different dental plans are offered to eligible employees based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. 

DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Members must use a provider that participates with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is a PPO plan that allows members to obtain services from any dentist; however, as a PPO, using an in-network provider will reduce an employee’s costs.  After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for eligible services.

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that an employee who was not enrolled in a dental plan as of January 1, 2012, will not be permitted to change dental plans during this Open Enrollment.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. 

Dental Plan Rates for 2013 were approved by the State Health Benefits Commission on August 21, 2012.  Rate charts for dental coverage will be posted for Open Enrollment at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

As of this mailing, Open Enrollment informational materials are being prepared for posting to our Web site for the October 1st Open Enrollment starting date. 

As most Open Enrollment items are available in electronic format only, employers should direct their employees to the Open Enrollment information online at the Division of Pensions and Benefits Web site.  Included with this letter is an announcement flier with directions to the Division’s Web site that can be distributed to employees.

Items available on our Web site for Open Enrollment include the Health Capsule newsletter which details plan changes and other Open Enrollment news, Summaries of Benefits and Coverage (discussed earlier in this letter), rate information for plan year 2013, and revised Health Benefits Program Applications.

  • Employers should note that in addition to the separate State employee Health Benefits Program Applications for Medical and Dental plans, an additional application is being added this year for enrollment into any of the High Deductible Health Plans.  Please be certain that your employees are aware of, and have access to, all three types of application.  Samples of the revised applications are included with this letter. 

Plan Marketing Contacts — included with this letter you will find a listing of employer marketing contacts for the medical and dental plans.  Use these contacts to obtain plan specific information and literature for your employees. These telephone numbers are not for member services. Please do not give these telephone numbers to your employees. (Phone numbers and Web address contacts for employees are provided in the Health Capsule newsletter and on the Division of Pensions and Benefits Web site.)

Certifying Officers should check the Division’s Web site and watch for further e-mail notification of any updated information or publications and forward the information to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative or send an e-mail to:pensions.nj@treas.state.nj.us 

Thank you for your assistance in making the SHBP Open Enrollment a success for your employees.

Enclosure
Local Government Health Benefits and Dental Rates
Local Government Active Group Health Benefits Applications
HSA Contribution Form Adobe PDF (23K)
Notice of Summaries of Benefits and Coverage Adobe PDF (15K)
Open Enrollment Flier for Online Access Adobe PDF (33K)
Medical and Dental Plan Marketing Contacts Adobe PDF (11K)

CO Letter in Printable Format Adobe PDF (66K)

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September 27, 2012

TO: Local Education Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the School Employees’ Health Benefits Program
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT

The School Employees’ Health Benefits Program (SEHBP) Open Enrollment period for Local Education employees will begin on October 1, 2012, and ends on November 9, 2012.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan.  All changes to coverage made during this Open Enrollment period will be effective on January 1, 2013.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 16, 2012, to ensure processing for the start of the 2013 plan year. 

Note: Employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of Open Enrollment.

NEW MEDICAL PLANS AVAILABLE

Due to the recently completed Request for Proposal, new medical plan vendor choices are being added for the 2013 plan year.  Aetna will be offering four new Preferred Provider Organization (PPO) plans along with moving the High Deductible Health Plans to a PPO platform of providers.  Horizon Blue Cross Blue Shield of New Jersey will offer Three new HMO plan* choices.

The full list of medical plans available to State employees includes:

  • PPO Plans: Aetna Freedom10; Aetna Freedom15; Aetna Freedom1525; Aetna Freedom2030; NJ DIRECT10; NJ DIRECT15; NJ DIRECT1525;
    NJ DIRECT2030.
  • HMO Plans: Aetna HMO; Aetna HMO 1525; Aetna HMO 2030; Horizon HMO; Horizon HMO 1525; Horizon HMO 2030.
  • High Deductible Health Plans: Aetna Value HD1500; NJ DIRECT HD1500. 

*Note: The service areas for the Horizon HMOs are limited to New Jersey, Delaware, and bordering counties of Pennsylvania and New York.

CIGNA MEDICAL PLAN TERMINATION

Also effective with the 2013 plan year, the Cigna medical plans — Cigna HealthCare HMO; Cigna 1525; Cigna 2030; Cigna HD1500; and Cigna HD4000 — will no longer be offered through the School Employees’ Health Benefits Program (SEHBP).

Active Employees enrolled in Cigna medical plans MUST select a new medical plan for 2013, by submitting a Health Benefits Application to their human resources representative during Open Enrollment.

Local education employees enrolled in Cigna who fail to select a new medical plan will not have medical coverage effective January 1, 2013.

Note: The Cigna Dental DPO remains available to employees whose employer participates in the SHBP Employee Dental Plans.

PAYROLL DEDUCTIONS AVAILABLE FOR HDHP PARTICIPANTS

Beginning in plan year 2013, employees participating in the one of the High Deductible Health Plans (HDHP) will be able to have tax deferred contributions from their paychecks to fund their Health Savings Account (HSA).  Previously, employees were required to make direct contributions and then claim the contribution on their tax returns. If one of your employees chooses (or is currently enrolled) in one of the HDHP, Aetna or Horizon will contact you to assist in setting up the payroll deductions.  A sample of the HSA Contribution Form is included with this letter.

SUMMARIES OF BENEFITS AND COVERAGE

Detailed information about the SEHBP’s medical plans is available through new Summaries of Benefits and Coverage which are posted online at: www.state.nj.us/treasury/pensions/hb-sbc-home.shtml

A direct mailing is being sent to all SEHBP members to announce the availability of the summaries, however, employers are also asked to provide notice of this information to their employees.  A sample of the mailer is included with this letter.

PLAN RATES

Plan rates for 2013 were approved by the School Employees’ Health Benefits Commission on August 29, 2012.  Rate charts for the Local Education Group are attached and are also posted online for the Open Enrollment through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

EMPLOYEE CONTRIBUTIONS FOR SEHBP COVERAGE

Pursuant to the Pension and Health Benefit Reform (Chapter 78, P.L. 2011) and with the expiration, renewal, or extension of collective negotiations agreements, employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. 

Most local education employees are currently subject to one of four-year phase-in levels of contribution rates.  Employers should advise their employees of the current phased-in contribution level so they can correctly determine the required contributions when considering plan choices.

Percentage of premium contribution worksheets and online calculators have been revised for 2013 plan selections and rates, and are available through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

The increase in plan premiums for 2013 will increase the employee contribution for medical and prescription coverage.  Employees who are considering a change of medical plan based on cost should review the contribution amounts for both the current contribution phase-in level and for the next phased-in level — when the required contribution amount will increase. 

WAIVING SEHBP COVERAGE

Local education employees are permitted to waive SEHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent. 

Employers are permitted to offer an incentive to employees who waive SEHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less.  In addition, because multiple coverage under the SHBP/SEHBP is prohibited, waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage a Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted during the Open Enrollment.  To waive coverage effective January 1, 2013, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be effective before January 1st.

DENTAL PLANS AND EMPLOYEE COSTS

The following information is for local government employers who provide employee dental coverage through the Employee Dental Plans:
Seven different dental plans are offered to eligible employees based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. 

DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Members must use a provider that participates with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is a PPO plan that allows members to obtain services from any dentist; however, as a PPO, using an in-network provider will reduce an employee’s costs.  After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for eligible services.

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that an employee who was not enrolled in a dental plan as of January 1, 2012, will not be permitted to change dental plans during this Open Enrollment.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. 

Dental Plan Rates for 2013 were approved by the State Health Benefits Commission on August 21, 2012.  Rate charts for dental coverage will be posted for Open Enrollment at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

As of this mailing, Open Enrollment informational materials are being prepared for posting to our Web site for the October 1st Open Enrollment starting date. 

As most Open Enrollment items are available in electronic format only, employers should direct their employees to the Open Enrollment information online at the Division of Pensions and Benefits Web site. Included with this letter is an announcement flier with directions to the Division’s Web site that can be distributed to employees.

Items available on our Web site for Open Enrollment include the Health Capsule newsletter which details plan changes and other Open Enrollment news, Summaries of Benefits and Coverage (discussed earlier in this letter), rate information for plan year 2013, and revised Health Benefits Program Applications.

  • Employers should note that in addition to the separate State employee Health Benefits Program Applications for Medical and Dental plans, an additional application is being added this year for enrollment into any of the High Deductible Health Plans.  Please be certain that your employees are aware of, and have access to, all three types of application.  Samples of the revised applications are included with this letter.

Plan Marketing Contacts — included with this letter you will find a listing of employer marketing contacts for the medical and dental plans.  Use these contacts to obtain plan specific information and literature for your employees. These telephone numbers are not for member services. Please do not give these telephone numbers to your employees. (Phone numbers and Web address contacts for employees are provided in the Health Capsule newsletter and on the Division of Pensions and Benefits Web site.)

Certifying Officers should check the Division’s Web site and watch for further e-mail notification of any updated information or publications and forward the information to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

ADDITIONAL INFORMATION

If you have any questions about the SEHBP Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative or send an e-mail to:pensions.nj@treas.state.nj.us 

Thank you for your assistance in making the SEHBP Open Enrollment a success for your employees.

Enclosure
Local Education Health Benefits and Dental Rates
Local Education Active Group Health Benefits Applications
HSA Contribution Form Adobe PDF (23K)
Notice of Summaries of Benefits and Coverage Adobe PDF (15K)
Open Enrollment Flier for Online Access Adobe PDF (33K)
Medical and Dental Plan Marketing Contacts Adobe PDF (11K)

CO Letter in Printable Format Adobe PDF (66K)

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September 27, 2012

TO: State College and University Certifying Officers, Human Resource Directors, and Benefits Administrators;  State Monthly Certifying Officers, Human Resource Directors, and Benefits Administrators
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT

The State Health Benefits Program (SHBP) Open Enrollment period for State biweekly employees will begin on October 1, 2012, and end on November 9, 2012.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan.  All changes to coverage made during this Open Enrollment period will be effective on December 29, 2012 with any required deductions taken beginning with pay period 1 (pay check of January 4, 2013).

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 16, 2012, to ensure processing for the start of the 2013 plan year. 

Note: Employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of Open Enrollment.

NEW MEDICAL PLANS AVAILABLE

Due to the recently completed Request for Proposal, new medical plan vendor choices are being added for the 2013 plan year.  Aetna will be offering three new Preferred Provider Organization (PPO) plans along with moving the High Deductible Health Plans to a PPO platform of providers.  Horizon Blue Cross Blue Shield of New Jersey will offer three new HMO plan* choices.

The full list of medical plans available to State employees includes:

  • PPO Plans: Aetna Freedom15; Aetna Freedom1525; Aetna Freedom2030; NJ DIRECT15; NJ DIRECT1525; NJ DIRECT2030.
  • HMO Plans: Aetna HMO; Aetna HMO 1525; Aetna HMO 2030; Horizon HMO; Horizon HMO 1525; Horizon HMO 2030.
  • High Deductible Health Plans: Aetna Value HD1500; Aetna Value HD4000; NJ DIRECT HD1500; NJ DIRECT HD4000. 

*Note: The service areas for the Horizon HMOs are limited to New Jersey, Delaware, and bordering counties of Pennsylvania and New York.

CIGNA MEDICAL PLAN TERMINATION

Also effective with the 2013 plan year, the Cigna medical plans — Cigna HealthCare HMO; Cigna 1525; Cigna 2030; Cigna HD1500; and Cigna HD4000 — will no longer be offered through the State Health Benefits Program (SHBP).

Active Employees enrolled in Cigna medical plans MUST select a new medical plan for 2013, by submitting a Health Benefits Application to their human resources representative during Open Enrollment.

State biweekly employees enrolled in Cigna who fail to select a new medical plan will not have medical coverage effective December 29, 2012.

Note: The Cigna Dental DPO remains available to employees eligible for the SHBP Employee Dental Plans.

SUMMARIES OF BENEFITS AND COVERAGE

Detailed information about the SHBP’s medical plans is available through new Summaries of Benefits and Coverage which are posted online at: www.state.nj.us/treasury/pensions/hb-sbc-home.shtml

A direct mailing is being sent to all SHBP members to announce the availability of the summaries, however, employers are also asked to provide notice of this information to their employees.  A sample of the mailer is included with this letter.

PLAN RATES

Plan rates for 2013 were approved by the State Health Benefits Commission on September 12, 2012.  Rate charts for the State Biweekly Group are attached and are also posted online for the Open Enrollment through links at:  www.state.nj.us/treasury/pensions/health-benefits.shtml 

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to the Pension and Health Benefit Reform (Chapter 78, P.L. 2011), employees must pay a percentage of the medical and prescription plan premiums (or 1.5% of annual salary if greater). 

Most State employees are currently subject to a four-year phase-in of contribution rates, and pay at the “Year Two” contribution level.  “Year Two” contribution rates apply for the period of July 1, 2012 through June 30, 2013. “Year Three” contribution rates will apply for the period of July 1, 2013 through June 30, 2014.

The increase in plan premiums will also increase the required employee contribution for medical and prescription coverage.  Employees who are considering a change of medical plan based on cost should review the contribution amounts for both “Year Two” and “Year Three” contributions. 

Percentage of premium contribution worksheets and online calculators have been revised for 2013 plan selections and rates, and are available through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

 WAIVING SHBP COVERAGE

State employees are permitted to waive SHBP medical and prescription coverage — and avoid the required employee contribution — provided that they have other health care coverage.  To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed during Open Enrollment.  To waive coverage effective January 1, 2013, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be effective before January 1st.

DENTAL PLANS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans. Seven different dental plans are offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. 

DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Members must use a provider that participates with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is a PPO plan that allows members to obtain services from any dentist; however, as a PPO, using an in-network provider will reduce an employee’s costs.  After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for eligible services.

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that an employee who was not enrolled in a dental plan as of January 1, 2012, will not be permitted to change dental plans during this Open Enrollment.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. 

Dental Plan Rates for 2013 were approved by the State Health Benefits Commission on August 21, 2012.  Rate charts for dental coverage will be posted for Open Enrollment at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period begins October 1, 2012 and has been extended until November 9, 2012 (to coincide with the end of the SHBP Open Enrollment Period).  Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses with before-tax dollars.

Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.  Employees should consider the phased-in “Year Three” increases effective July 1, 2013 in their 2013 plan selection and Tax$ave decisions.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Publication #503, Dependents.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

As of this mailing, Open Enrollment informational materials are being prepared for posting to our Web site for the October 1st Open Enrollment starting date. 

As most Open Enrollment items are available in electronic format only, employers should direct their employees to the Open Enrollment information online at the Division of Pensions and Benefits Web site. Included with this letter is an announcement flier with directions to the Division’s Web site that can be distributed to employees.

Items available on our Web site for Open Enrollment include the Health Capsule newsletter which details plan changes and other Open Enrollment news, Summaries of Benefits and Coverage (discussed earlier in this letter), rate information for plan year 2013, and revised Health Benefits Program Applications.

  • Employers should note that in addition to the separate State employee Health Benefits Program Applications for Medical and Dental plans, an additional application is being added this year for enrollment into any of the High Deductible Health Plans (provide the HSA Contribution Form to Centralized Payroll for any HDHP enrollments).  Please be certain that your employees are aware of, and have access to, all three types of application.  Samples of the revised applications are included with this letter.

Plan Marketing Contacts — included with this letter you will find a listing of employer marketing contacts for the medical and dental plans.  Use these contacts to obtain plan specific information and literature for your employees. These telephone numbers are not for member services. Please do not give these telephone numbers to your employees. (Phone numbers and Web address contacts for employees are provided in the Health Capsule newsletter and on the Division of Pensions and Benefits Web site.)

Certifying Officers should check the Division’s Web site and watch for further e-mail notification of any updated information or publications and forward the information to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative or send an e-mail to:pensions.nj@treas.state.nj.us 

Thank you for your assistance in making the SHBP Open Enrollment a success for your employees.

Enclosure
State Biweekly Health Benefits and Dental Rates
State Active Group Health Benefits Applications
HSA Contribution Form Adobe PDF (23K)
Notice of Summaries of Benefits and Coverage Adobe PDF (15K)
Open Enrollment Flier for Online Access Adobe PDF (36K)
Medical and Dental Plan Marketing Contacts Adobe PDF (11K)

CO Letter in Printable Format Adobe PDF (72K)

Return to Top


September 27, 2012

TO: State College and University Certifying Officers, Human Resource Directors, and Benefits Administrators;  State Monthly Certifying Officers, Human Resource Directors, and Benefits Administrators
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT

The State Health Benefits Program (SHBP) Open Enrollment period for State monthly employees will begin on October 1, 2012, and end on November 9, 2012.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan.  All changes to coverage made during this Open Enrollment period will be effective on January 1, 2013.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 16, 2012, to ensure processing for the start of the 2013 plan year. 

Note: Employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of Open Enrollment.

NEW MEDICAL PLANS AVAILABLE

Due to the recently completed Request for Proposal, new medical plan vendor choices are being added for the 2013 plan year.  Aetna will be offering three new Preferred Provider Organization (PPO) plans along with moving the High Deductible Health Plans to a PPO platform of providers.  Horizon Blue Cross Blue Shield of New Jersey will offer three new HMO plan* choices.

The full list of medical plans available to State employees includes:

  • PPO Plans: Aetna Freedom15; Aetna Freedom1525; Aetna Freedom2030; NJ DIRECT15; NJ DIRECT1525; NJ DIRECT2030.
  • HMO Plans: Aetna HMO; Aetna HMO 1525; Aetna HMO 2030; Horizon HMO; Horizon HMO 1525; Horizon HMO 2030.
  • High Deductible Health Plans: Aetna Value HD1500; Aetna Value HD4000; NJ DIRECT HD1500; NJ DIRECT HD4000. 

*Note: The service areas for the Horizon HMOs are limited to New Jersey, Delaware, and bordering counties in Pennsylvania and New York.

CIGNA MEDICAL PLAN TERMINATION

Also effective with the 2013 plan year, the Cigna medical plans — Cigna HealthCare HMO; Cigna 1525; Cigna 2030; Cigna HD1500; and Cigna HD4000 — will no longer be offered through the State Health Benefits Program (SHBP).

Active Employees enrolled in Cigna medical plans MUST select a new medical plan for 2013, by submitting a Health Benefits Application to their human resources representative during Open Enrollment.

State monthly employees enrolled in Cigna who fail to select a new medical plan will not have medical coverage effective January 1, 2013.

Note: The Cigna Dental DPO remains available to employees eligible for the SHBP Employee Dental Plans.

PAYROLL DEDUCTIONS AVAILABLE FOR HDHP PARTICIPANTS

Beginning in plan year 2013, employees participating in the one of the High Deductible Health Plans (HDHP) will be able to have tax deferred contributions from their paychecks to fund their Health Savings Account (HSA).  Previously, employees were required to make direct contributions and then claim the contribution on their tax returns. If one of your employees chooses (or is currently enrolled) in one of the HDHP, Aetna or Horizon will contact you to assist in setting up the payroll deductions.  A sample of the HSA Contribution Form is included with this letter.

SUMMARIES OF BENEFITS AND COVERAGE

Detailed information about the SHBP’s medical plans is available through new Summaries of Benefits and Coverage which are posted online at: www.state.nj.us/treasury/pensions/hb-sbc-home.shtml

A direct mailing is being sent to all SHBP members to announce the availability of the summaries, however, employers are also asked to provide notice of this information to their employees.  A sample of the mailer is included with this letter.

PLAN RATES

Plan rates for 2013 were approved by the State Health Benefits Commission on September 12, 2012.  Rate charts for the State Monthly Group are attached and are also posted online for the Open Enrollment through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to the Pension and Health Benefit Reform (Chapter 78, P.L. 2011), employees must pay a percentage of the medical and prescription plan premiums (or 1.5% of annual salary if greater). 

Most State employees are currently subject to a four-year phase-in of contribution rates, and pay at the “Year Two” contribution level.  “Year Two” contribution rates apply for the period of July 1, 2012 through June 30, 2013. “Year Three” contribution rates will apply for the period of July 1, 2013 through June 30, 2014.

The increase in plan premiums will also increase the required employee contribution for medical and prescription coverage.  Employees who are considering a change of medical plan based on cost should review the contribution amounts for both “Year Two” and “Year Three” contributions. 

Percentage of premium contribution worksheets and online calculators have been revised for 2013 plan selections and rates, and are available through links at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

WAIVING SHBP COVERAGE

State employees are permitted to waive SHBP medical and prescription coverage — and avoid the required employee contribution — provided that they have other health care coverage.  To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed during Open Enrollment.  To waive coverage effective January 1, 2013, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be effective before January 1st.

DENTAL PLANS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans. Seven different dental plans are offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. 

DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Members must use a provider that participates with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is a PPO plan that allows members to obtain services from any dentist; however, as a PPO, using an in-network provider will reduce an employee’s costs.  After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for eligible services.

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that an employee who was not enrolled in a dental plan as of January 1, 2012, will not be permitted to change dental plans during this Open Enrollment.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. 

Dental Plan Rates for 2013 were approved by the State Health Benefits Commission on August 21, 2012.  Rate charts for dental coverage will be posted for Open Enrollment at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period begins October 1, 2012 and has been extended until November 9, 2012 (to coincide with the end of the SHBP Open Enrollment Period).  Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses with before-tax dollars.

Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.  Employees should consider the phased-in “Year Three” increases effective July 1, 2013 in their 2013 plan selection and Tax$ave decisions.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Publication #503, Dependents.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

As of this mailing, Open Enrollment informational materials are being prepared for posting to our Web site for the October 1st Open Enrollment starting date. 

As most Open Enrollment items are available in electronic format only, employers should direct their employees to the Open Enrollment information online at the Division of Pensions and Benefits Web site. Included with this letter is an announcement flier with directions to the Division’s Web site that can be distributed to employees.

Items available on our Web site for Open Enrollment include the Health Capsule newsletter which details plan changes and other Open Enrollment news, Summaries of Benefits and Coverage (discussed earlier in this letter), rate information for plan year 2013, and revised Health Benefits Program Applications.

  • Employers should note that in addition to the separate State employee Health Benefits Program Applications for Medical and Dental plans, an additional application is being added this year for enrollment into any of the High Deductible Health Plans.  Please be certain that your employees are aware of, and have access to, all three types of application.  Samples of the revised applications are included with this letter.

Plan Marketing Contacts — included with this letter you will find a listing of employer marketing contacts for the medical and dental plans.  Use these contacts to obtain plan specific information and literature for your employees. These telephone numbers are not for member services. Please do not give these telephone numbers to your employees. (Phone numbers and Web address contacts for employees are provided in the Health Capsule newsletter and on the Division of Pensions and Benefits Web site.)

Certifying Officers should check the Division’s Web site and watch for further e-mail notification of any updated information or publications and forward the information to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative or send an e-mail to:pensions.nj@treas.state.nj.us 
Thank you for your assistance in making the SHBP Open Enrollment a success for your employees.

Enclosure
State Monthly Health Benefits and Dental Rates
State Active Group Health Benefits Applications
HSA Contribution Form Adobe PDF (23K)
Notice of Summaries of Benefits and Coverage Adobe PDF (15K)
Open Enrollment Flier for Online Access Adobe PDF (36K)
Medical and Dental Plan Marketing Contacts Adobe PDF (11K)

CO Letter in Printable Format Adobe PDF (72K)

Return to Top


September 25, 2012

TO: Certifying Officers of the Public Employees' Retirement System (PERS)
FROM: Hank Schwedes, Board Secretary, Public Employees' Retirement System
SUBJECT: PERS NOTICE OF ELECTION

Please note that this Notice of Election is for "State" and "Municipal" positions, and does not include County governmental entities.

Once again, in an effort to support a decrease in administrative costs and to preserve resources, this certifying officer letter and the attached notice for the 2013 Public Employees' Retirement System (PERS) elections are being transmitted to you electronically and will require your electronic response.

We are seeking your assistance in servicing an election for one “State” Representative position, and one “Municipal” Representative position to the PERS Board of Trustees. Both the State and Municipal representatives will be elected for a three-year terms as of July 1, 2013.
Candidates for all positions must qualify by nomination. We are requesting that you distribute the attached election notice electronically to each PERS member employed at your location, as the information will explain the pre-election procedures.

It is most important that each individual active PERS member receives this notice. If you are the certifying officer for multiple locations, you will only receive one certifying officer letter and will be required to distribute the attached election notice to active PERS members at all
locations. Your attention to this distribution is required as regulated by N.J.A.C. 17:2-1.4. We ask that you distribute this notice by the preferred method of distribution, which is electronically. If you are not able to accommodate electronic distribution, please make copies of
the notice and provide to all active PERS employees. In addition, if you maintain a website for your employees, you may post the notice there and in any other appropriate public place at your location.

It is very important that you confirm distribution of this notice. To confirm distribution of the notice to your active PERS employees, please send an e-mail to NJBOT.ELECT@treas.state.nj.us

Thank you for your prompt assistance in the timely response and distribution of this notice.

Attachment: Election Notice Adobe PDF (25K)

CO Letter in Printable Format Adobe PDF (54K)

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September 21 , 2012

TO: State Department Certifying Officers, State Department Human Resources Directors, State Biweekly Payroll Locations Benefits Administrators
FROM: John Megariotis, Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2013)

The annual open enrollment for the calendar year 2013 New Jersey State Employees Tax Savings Program (Tax$ave 2013) will begin October 1 and is extended this year until November 9, 2012.  A benefit program available under Section 125 of the Federal Internal Revenue Code, Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. 

Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave. 

Note: Chapter 78, P.L. 2012, the Pension and Health Benefit Reform Law, requires local government and local education employers to offer Section 125 plans to their employees. Because Tax$ave is only available to State employees, local employers are required establish their own Section 125 programs. Local government and local education employees can contact their human resources office or benefits administrator to determine the specific plans and benefits that are available.

ABOUT TAX$AVE

Tax$ave consists of three components:

  1. The Premium Option Plan (POP);
  2. The Unreimbursed Medical Flexible Spending Account; and
  3. The Dependent Care Flexible Spending Account. 

Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not.  Open Enrollment offers employees the opportunity to conduct this review and then act on their decision. 

Note: Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.  See Fact Sheet #67, Commuter Tax$ave Program, for details.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This plan saves your employees money by paying health and dental premiums from pre-tax dollars and reducing their tax liability.  If an employee does not wish to take advantage of the Premium Option Plan in 2013 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form. 

FLEXIBLE SPENDING ACCOUNTS

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts (FSA) allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.  WageWorks, Inc*. administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

* Formerly Fringe Benefits Management Company, a Division of WageWorks

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2012 does not carry over automatically into 2013.  Employees must enroll each year with WageWorks to participate in an FSA for calendar year 2013. 

NOTE: With the recent system migration by WageWorks during September 1-18, 2012, it is especially important for employees to understand that they must still reenroll during the Open Enrollment to be able to participate in an FSA plan for calendar year 2013.

Some of the benefits of FSA participation include:

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2013 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000.  Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see below), or dependent care. 
  • Medical FSA Eligibility includes Adult Children until Age 26.  Qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status.
  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period.  Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year.  In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement extends to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees have an extended period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds.  Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 extended deadline are forfeited.
  • Unreimbursed Medical FSAs feature the WageWorks Healthcare Card® that draws on the value of the employee’s annual Medical FSA election amount.  The WageWorks Healthcare Card is included free when you sign up for the Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the WageWorks Healthcare Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees.  The WageWorks Healthcare Card can also be used for certain eligible over-the-counter medical expenses (see below) at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants. 
  • Look Back Feature. The WageWorks Healthcare Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2012 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2013 before using funds contributed in the 2013 plan year.

Prescription Required for Reimbursement of Over-the-Counter Items.

The federal Patient Protection and Affordable Care Act requires a prescription for any eligible Over-the-Counter (OTC) drug or medicine (except diabetic supplies) before it will qualify for reimbursement under the Unreimbursed Medical FSA.  This includes OTC items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.  To be reimbursed for these types of OTC items through the Unreimbursed Medical FSA, you must submit a copy of your doctor’s prescription along with your Claim Form for verification (eligible items requiring a prescription may be purchased using the WageWorks Healthcare Card if the prescription is used to purchase it).  OTC items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes continue to be reimbursed without a prescription.

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, and Internet.  WageWorks will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through e-mail or direct mailing in September.  The Tax$ave publications also provide the following enrollment instructions to employees:

  • Internet: Employees can enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet at: www.wageworks.com  The deadline for enrollment over the Internet is midnight, November 9, 2012.
  • Fax: FSAEnrollment Forms may be faxed by the employee to 1-866- 672-4780.  The deadline for accepting faxed enrollment forms is midnight, November 9, 2012. 
  • Mail: FSAEnrollment Forms can be mailed by the employee directly to WageWorks, Enrollment Processing, PO Box 1840, Tallahassee, FL, 32302-1840. To be accepted, enrollment forms must be postmarked no later than November 9, 2012.  Forms postmarked after November 9, 2012 will be returned without action.  Employer benefits offices should not be involved in processing or mailing FSAEnrollment Forms.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.shtml  or contact WageWorks Customer Service at 1-855-428-0446.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA. 

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility. 
  • There is a 30 day waiting period for Dependent Care FSA eligibility. 

The effective date will be the first day of the month following eligibility.  If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage.  However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account. 

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes. 

Information about New Jersey Civil Unions can be found in Fact Sheet #75, Civil UnionsInformation about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits under the Domestic Partnership ActBoth fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 26 TO 31

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 31st birthday.  However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.  See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes.  

Information about continued coverage for children age 26 to 31, can be found in Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375.

EMPLOYEE SEMINARS

Upon request, WageWorks will provide educational employee seminars about the Tax$ave Flexible Spending Accounts.  A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on July 15, 2012.

TAX$AVE SUPPORT MATERIALS

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees.  Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them.  We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program. 

Milestones

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2013 Open Enrollment and outlines the efforts being made to educate employees.  Please use this chart as a checklist to guide your activities during the open enrollment.

Check Messages

Announcement of the open enrollment to employees paid through Centralized Payroll will be made with a paycheck message on the September 28 payroll statement.

An additional “reminder message” will be provided to employees through a paycheck message on October 26.  The text of the check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

Online Distribution of Tax$ave Newsletter and Open Enrollment Fliers

In compliance with State initiatives to provide paperless services, the Tax$ave 2013 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan Flier are only available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2013 Open Enrollment News announces the open enrollment, outlines the components of the program with an emphasis on its tax saving advantages, and identifies the extended November 9, 2012 deadline for submission of all enrollment materials;
  • The Premium Option Plan 2013 flier explains the advantages and disadvantages of participation; and
  • The FSA Plan Flier describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by WageWorks.

Access to the Tax$ave publications is available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

Other open enrollment materials available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) form. 

  • A small supply of the 2013 FSA Reference Guide and Enrollment Form will be sent directly to benefits administrators by WageWorks.  Please provide the FSA Reference Guides or Enrollment Forms to employees who request them.

The FSA Reference Guide and Enrollment Form are also available online at: www.state.nj.us/treasury/pensions/taxsave.shtml  

  • This letter includes the Declination of Premium Option Plan (POP) form — which can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax.  Please do not distribute POP declination forms to employees unless they ask for one.  If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2013, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from benefits administrators and return the Declination of Premium Option Plan (POP) forms to benefits administrators by November 9, 2012.  Benefits administrators must then forward declination forms to Centralized Payroll by November 16, 2012. 

As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment.  Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. 

If you have any general questions about Tax$ave 2013, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml  call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to:pensions.nj@treas.state.nj.us  

For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact WageWorks at: www.wageworks.com  or call WageWorks Customer Service at 1-855-428-0446.

Enclosures:
Tax$ave 2013 Open Enrollment Milestones Adobe PDF (10K)
Tax$ave 2013 Open Enrollment News Adobe PDF (103K)
The Premium Option Plan 2013 Flier Adobe PDF (44K)
Tax$ave — WageWorks Flexible Spending Accounts Flier Adobe PDF (91K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (36K)
Tax$ave — WageWorks Flexible Spending Accounts Enrollment Form Adobe PDF (91K)
Declination of Premium Option Plan (POP) for Plan Year 2013 Adobe PDF (17K)

CO Letter in Printable Format Adobe PDF (76K)

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September 21 , 2012

TO: State University and College Certifying Officers, State University and College Benefits Administrators, State Monthly Certifying Officers, State Monthly Benefits Administrators
FROM: John Megariotis, Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2013)

The annual open enrollment for the calendar year 2013 New Jersey State Employees Tax Savings Program (Tax$ave 2013) will begin October 1 and is extended this year until November 9, 2012.  A benefit program available under Section 125 of the Federal Internal Revenue Code, Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. 

Full-time employees of the State or a State college or university who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave. 

Note: Chapter 78, P.L. 2012, the Pension and Health Benefit Reform Law, requires local government and local education employers to offer Section 125 plans to their employees. Because Tax$ave is only available to State employees, local employers are required establish their own Section 125 programs.  Local government and local education employees can contact their human resources office or benefits administrator to determine the specific plans and benefits that are available.

ABOUT TAX$AVE

Tax$ave consists of three components:

  1. The Premium Option Plan (POP);
  2. The Unreimbursed Medical Flexible Spending Account; and
  3. The Dependent Care Flexible Spending Account. 

Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not.  Open Enrollment offers employees the opportunity to conduct this review and then act on their decision. 

Note: Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.  See Fact Sheet #67, Commuter Tax$ave Program, for details.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This plan saves your employees money by paying health and dental premiums from pre-tax dollars and reducing their tax liability.  If an employee does not wish to take advantage of the Premium Option Plan in 2013 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form. 

FLEXIBLE SPENDING ACCOUNTS

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts (FSA) allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.  WageWorks Inc.* administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

* Formerly Fringe Benefits Management Company, a Division of WageWorks.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2012 does not carry over automatically into 2013. Employees must enroll each year with WageWorks to participate in an FSA for calendar year 2013. 

NOTE: With the recent system migration by WageWorks during September 1-18, 2012, it is especially important for employees to understand that they must still reenroll during the Open Enrollment to be able to participate in an FSA plan for calendar year 2013.

Some of the benefits of FSA participation include:

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2013 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000.  Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see below), or dependent care. 
  • Medical FSA Eligibility includes Adult Children until Age 26.  Qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status.
  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period.  Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year.  In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement extends to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees have an extended period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds.  Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 extended deadline are forfeited.
  • Unreimbursed Medical FSAs feature the WageWorks Healthcare Card® that draws on the value of the employee’s annual Medical FSA election amount.  The WageWorks Healthcare Card is included free when you sign up for the Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the WageWorks Healthcare Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees.  The WageWorks Healthcare Card can also be used for certain eligible over-the-counter medical expenses (see below) at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants. 
  • Look Back Feature. The WageWorks Healthcare Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2012 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2013 before using funds contributed in the 2013 plan year.

Prescription Required for Reimbursement of Over-the-Counter Items.

The federal Patient Protection and Affordable Care Act requires a prescription for any eligible Over-the-Counter (OTC) drug or medicine (except diabetic supplies) before it will qualify for reimbursement under the Unreimbursed Medical FSA.  This includes OTC items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.  To be reimbursed for these types of OTC items through the Unreimbursed Medical FSA, you must submit a copy of your doctor’s prescription along with your Claim Form for verification (eligible items requiring a prescription may be purchased using the WageWorks Healthcare Card if the prescription is used to purchase it). OTC items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes continue to be reimbursed without a prescription. 

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, and Internet.  WageWorks will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through e-mail or direct mailing in September.  The Tax$ave publications also provide the following enrollment instructions to employees:

  • Internet: Employees can enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet at: www.wageworks.com   The deadline for enrollment over the Internet is midnight, November 9, 2012.
  • Fax: FSAEnrollment Forms may be faxed by the employee to 1-866- 672-4780.  The deadline for accepting faxed enrollment forms is midnight, November 9, 2012. 
  • Mail: FSAEnrollment Forms can be mailed by the employee directly to WageWorks, Enrollment Processing, PO Box 1840, Tallahassee, FL, 32302-1840. To be accepted, enrollment forms must be postmarked no later than November 9, 2012.  Forms postmarked after November 9, 2012 will be returned without action.  Employer benefits offices should not be involved in processing or mailing FSAEnrollment Forms.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.shtml  or contact WageWorks Customer Service at 1-855-428-0446.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA. 

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility. 
  • There is a 30 day waiting period for Dependent Care FSA eligibility. 

The effective date will be the first day of the month following eligibility.  If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage.  However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account. 

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes. 

Information about New Jersey Civil Unions can be found in Fact Sheet #75, Civil UnionsInformation about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits under the Domestic Partnership ActBoth fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 26 TO 31

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 31st birthday.  However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.  See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes. 

Information about continued coverage for children age 26 to 31, can be found in Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375.

EMPLOYEE SEMINARS

Upon request, WageWorks will provide educational employee seminars about the Tax$ave Flexible Spending Accounts.  A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on August 1, 2012.

TAX$AVE SUPPORT MATERIALS

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees.  Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them.  We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program. 

Milestones

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2013 Open Enrollment and outlines the efforts being made to educate employees.  Please use this chart as a checklist to guide your activities during the open enrollment.

Online Distribution of Tax$ave Newsletter and Open Enrollment Fliers

In compliance with State initiatives to provide paperless services, the Tax$ave 2013 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan Flier are only available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2013 Open Enrollment News announces the open enrollment, outlines the components of the program with an emphasis on its tax saving advantages, and identifies the extended November 9, 2012 deadline for submission of all enrollment materials;
  • The Premium Option Plan 2013 flier explains the advantages and disadvantages of participation; and
  • The FSA Plan Flier describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by WageWorks.

Access to the Tax$ave publications is available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

Other open enrollment materials available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) form. 

  • A small supply of the 2013 FSA Reference Guide and Enrollment Form will be sent directly to benefits administrators by WageWorks.  Please provide the FSA Reference Guides or Enrollment Forms to employees who request them.

The FSA Reference Guide and Enrollment Form are also available online at: www.state.nj.us/treasury/pensions/taxsave.shtml  

  • This letter includes the Declination of Premium Option Plan (POP) form — which can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax.  Please do not distribute POP declination forms to employees unless they ask for one.  If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2013, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from benefits administrators and return the Declination of Premium Option Plan (POP) forms to benefits administrators by November 9, 2012.  Benefits administrators must then forward declination forms to Centralized Payroll by November 16, 2012. 

As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment.  Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. 

If you have any general questions about Tax$ave 2013, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml  call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to:pensions.nj@treas.state.nj.us  

For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact WageWorks at: www.wageworks.com  or call WageWorks Customer Service at 1-855-428-0446.

Enclosures:
Tax$ave 2013 Open Enrollment Milestones Adobe PDF (10K)
Tax$ave 2013 Open Enrollment News Adobe PDF (103K)
The Premium Option Plan 2013 Flier Adobe PDF (44K)
The Premium Option Plan 2013 Flier (For Colleges and Universities) Adobe PDF (44K)
Tax$ave — WageWorks Flexible Spending Accounts Flier Adobe PDF (91K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (36K)
Tax$ave — WageWorks Flexible Spending Accounts Enrollment Form Adobe PDF (91K)
Declination of Premium Option Plan (POP) for Plan Year 2013 Adobe PDF (17K)
Declination of Premium Option Plan (POP) for Plan Year 2013 (For Colleges and Universities) Adobe PDF (17K)

CO Letter in Printable Format Adobe PDF (76K)

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September 18 , 2012

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager, Fiscal Resources, Division of Pensions and Benefits
SUBJECT: ABP/ACTS Vendor, The Hartford, to be Acquired by MassMutual

We have received information from The Hartford concerning MassMutual’s intention to purchase The Hartford’s Retirement Plans business.  Attached is a participant letter which you may distribute to your employees who might be affected by this intended acquisition by MassMutual.  A copy of this letter has also been posted to the Division’s ABP and ACTS Web sites.

If and when this acquisition is completed you will receive additional information concerning this matter.  Until then, The Hartford has indicated that their relationship with the NJ Alternate Benefit and ACTS programs will continue as usual.  Any additional questions related to this matter should be directed to The Hartford through your campus representative or through their ABP/ACTS office at (848) 248-4877.

Enclosure
Participant Letter Adobe PDF (58K)

CO Letter in Printable Format Adobe PDF (75K)

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August 27, 2012

TO: Certifying Officers
FROM: Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
SUBJECT: Online Application Requirement for Retirement

The Division of Pensions and Benefits is implementing significant changes to the retirement process for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS).

ONLINE RETIREMENT APPLICATION REQUIRED

Effective October 1, 2012, an eligible member who wishes to apply for retirement must use the online Retirement Application accessible through a personal account with the Member Benefits Online System (MBOS).1

  • The MBOS Retirement Application provides your employees with a secure, fast, and efficient method to apply for retirement. Confirmation of receipt of an application is provided to the member on screen and by e-mail.

  • MBOS will allow applications to be submitted for all types of retirement — including disability.

  • Before applying, members can use MBOS to obtain the most accurate Estimate of Retirement Benefits that is available.

  • Using MBOS improves the retirement process for all participants, saving money by eliminating printing and mailing costs, and saving time by reducing the handling and processing time required with the use of paper forms.  

  • Employees who are currently registered with MBOS already have access to the online Retirement Application through their MBOS account.

  • Employees who are new to MBOS can access MBOS after they register with both the MyNewJersey Web site and MBOS. Registration is free. New users should be provided with the MBOS Registration Instructions (see attachment).

  • If, after following the MBOS Registration Instructions, employees still need assistance registering for or using MBOS, they should call the MBOS Help Desk at (609) 777-0534 or send an e-mail with the subject line "MBOS E-mail" to:pensions.nj@treas.state.nj.us

1 MBOS is a set of applications that allow registered users access to their pension account information over the Internet.  Log on or register for MBOS at: www.state.nj.us/treasury/pensions/mbosregister.shtml

EMPLOYER PARTICIPATION

Early and frequent communication with employees is a key element for a smooth transition to meeting the requirement that all Retirement Applications be processed through MBOS. The Division expects employers to assist with the change.

  • Employers should take all available opportunities to inform employees of the coming Retirement Application change using any in-house communication channels.
  • Employers should make the attached fliers, or similar messages, available to employees to inform them of the pending change. 

ELIMINATION OF PAPER APPLICATIONS

Please also advise your employees that as of October 1, 2012, the Application for Retirement Allowance will no longer be available as a printed form or through the Division’s Web site. 

In addition, any paper Applications for Retirement Allowance that are received after October 5, 2012, will be returned to members with instructions for submitting the retirement application through MBOS. 

Exception to Online Retirement Application

While the majority of Retirement Applications will require processing through MBOS, members of the Judicial Retirement System (JRS) will continue to use the paper JRS Application for Retirement Allowance, which will be available on the Division of Pensions and Benefits Web site.  

All other employers and members should note that limited access to a computer or a member’s reluctance to use MBOS will not be considered sufficient to permit the use of a paper Application for Retirement Allowance.

ADDITIONAL INFORMATION

For additional information about retirement, please refer to the retirement fact sheets or your retirement system’s Member Handbook that are available for viewing or printing on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

For assistance registering with or using MBOS, contact the MBOS Help Desk at (609) 777-0534 or send an e-mail with the subject line "MBOS E-mail" to:pensions.nj@treas.state.nj.us

If you have questions regarding any of the other information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

Enclosure

MBOS Flier - Online Retirement Application Requirement Adobe PDF (32K)

CO Letter in Printable Format Adobe PDF (75K)

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August 8, 2012

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager, Fiscal Resources, Division of Pensions and Benefits
SUBJECT: Carrier Award for Alternate Benefit Program and Additional Contributions Tax-Sheltered Program

The State of New Jersey has awarded a five-year contract to seven companies to serve as service providers in the Alternate Benefit Program (ABP) and the Additional Contributions Tax-Sheltered (ACTS) Program.

Companies serving as service providers in the ABP and ACTS as of July 1, 2012 include:

  • AXA Equitable
  • The Hartford
  • ING Financial Advisers, LLC
  • MetLife  
  • Prudential Retirement
  • TIAA/CREF
  • VALIC

The Default Carrier

Alternate Benefit Program enrollees not designating an investment provider for their program contributions within 45 days of program participation are enrolled with the investment provider designated by the Division of Pensions and Benefits as the default investment provider at the time of enrollment.

The default investment provider is authorized to accept employer and employee mandatory contributions. These contributions will be invested in the investment option approved by the Division of Pensions and Benefits as the designated option for that particular provider. Contributions will continue to be sent to the default investment provider and invested in the approved investment option until the ABP member designates an investment provider, completes an application with that investment provider, and notifies the employer of this action.

If the member is subject to delayed vesting, and is enrolled with the default investment provider, the member is allowed to choose an alternate investment provider during the first year and transfer the contributions deposited to that alternate investment provider.

The default provider for the current fiscal year, covering July 1, 2012 thru June 30, 2013, will be the Hartford.  The Division of Pensions and Benefits will provide notification of future fiscal year default providers at a future date.

New Administrative Service Data Coordinator

In accordance with the Request for Proposal (RFP), ING Advisers, LLC, has been selected to provide Data Coordinator services over the contract period.  The functions of the data coordinator are expected to include the following services and benefits.

  • Online enrollment processing including completion and modification of salary reduction agreements and daily electronic notification to the participant’s payroll location.
  • Common remitter services allowing all payroll locations to remit employer and employee contributions to the data coordinator for disbursement to the appropriate program provider.
  • Loan, hardship, and domestic relations order (DRO) coordination, review, and limitation monitoring will be handled by the data coordinator.
  • Contribution limitation compliance monitoring will be handled by the data coordinator.
  • A central landing page will be provided that will allow plan participants to access program provider’s websites. Contact information and enrollment instructions for each program provider will be provided as well as a learning center, providing information to employees on retirement planning.

The proposed implementation date for the ABP Data Coordinator is January 1, 2013. In order to meet the implementation date the full cooperation of all participating ABP institutions is required. ING Financial Advisers, LLC, will be contacting all ABP institutions concerning the set up of Data Coordinator services.

If there are any questions or concerns regarding this communication please contact the ABP section of the Defined Contribution Plans Unit at (609) 777-0887.

CO Letter in Printable Format Adobe PDF (63K)

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August 3, 2012

TO: Certifying Officers
FROM: Division of Pensions and Benefits
SUBJECT: Calling Pensions and Benefits — One Number — Expanded Hours

ONE NUMBER FOR ALL CALLS

Contacting the Division of Pensions and Benefits just became easier than ever.  As part of our continuing efforts to improve customer service, members and employers can now dial a single telephone number, (609) 292-7524, to contact the Division’s Call Center, the Employer Help line, and to access personal account information through the Automated Information System.  When you dial (609) 292-7524, your call will be directed to the system you wish to use, based on the prompt that you choose.

EXPANDED CALL CENTER HOURS

The Division’s Call Center hours have been expanded to 7:30 a.m. until 4:30 p.m., Monday through Friday, (except State holidays). Our Call Center Representatives are now available to take more of your calls.

IMPROVED EMPLOYER LINE ACCESS

Our Employer Help line — selection #2 at (609) 292-7524 — now has additional staff dedicated to answering employer calls or providing prompt call-backs when you leave a message for our Employer Education Unit.  (Please note that the Employer Help line option is intended for employer specific issues or questions. To ensure efficient access for all employers, questions from employees must be directed to the Automated Information System or a Call Center Representative.)

AUTOMATED INFORMATION SYSTEM AT NEW NUMBER

The Automated Information System is now at (609) 292-75241Enhanced with Interactive Voice Technology, the Automated Information System provides access to personal account information; 24 hours-a-day, 7 days-a-week! 

In addition to information such as enrollment date or service credit, employees who call the Automated Information System can also apply for a pension loan, obtain an estimate of the cost to purchase service credit or an estimate of retirement benefits; or check the status of a pending purchase or retirement application2.

Retired pension members who call the Automated Information System, can change direct deposit accounts, change income tax withholding, request a duplicate Form 1099R, or obtain letters such as statements of account or mortgage verification information2.

EMPLOYEE NOTIFICATION

Please make the information in this letter available to your employees and any other staff who would assist employees in pension and/or health benefits matters.  

The Automated Information System provides a quick and easy way for your employees to obtain answers to their pension-related questions.  Attached with this letter is a flier that can be posted or distributed to inform employees about the new contact number for the Automated Information System.

For more difficult questions or problem resolution, call during our expanded Call Center hours and speak with one of our trained Call Center Representatives.

If you have questions regarding the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524 or you can e-mail the Division at:pensions.nj@treas.state.nj.us

1Calls to the Automated System’s former number at (609) 292-7524 will be temporarily re-routed to the new number; however, the former number will be disconnected later in the year.

2Pension members can also access account information and applications online through the Member Benefits Online System (MBOS). Log on or register for MBOS at: www.state.nj.us/treasury/pensions/mbosregister.shtml

Enclosure

Automated Information System Flier Adobe PDF (30K)

CO Letter in Printable Format Adobe PDF (55K)

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June 29, 2012

TO: Certifying Officers
FROM: John D. Megariotis, Deputy Director of Finance
Division of Pensions and Benefits
SUBJECT: Transmittal Electronic Payment System (TEPS) — ACH Updates

The Division of Pensions and Benefits has become aware that some bank accounts from employers have an ACH debit fraud protection block on them.  This will cause employers’ remittances for both Health Benefits and Pensions to be returned by our bank.

In order to properly have your funds deducted for Health Benefits and Pensions remittances your bank must have our company identification number below.

2219170631

In some situations your bank may also require the Originating RTN number which is 091000019.

Before you submit your next remittances for Health Benefits and Pension payments please make sure that your bank has our above company identification number in place.

If you have any questions, contact Ricardo Arce at (609) 984-4293 for Health Benefits or Jennifer Tylutki at (609) 292-3637 for Pensions.

CO Letter in Printable Format Adobe PDF (58K)

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June 29, 2012

TO: Certifying Officers
FROM: John D. Megariotis, Deputy Director of Finance
Division of Pensions and Benefits
SUBJECT: Transmittal Electronic Payment System (TEPS) — Payment Warehousing Enhancement

The Division of Pension and Benefits is pleased to announce an enhancement to the Transmittal Electronic Payment System (TEPS) — used by employers for the transmittal of pension contributions and the remittance of premiums for the State Health Benefits Program and School Employees’ Health Benefits Program.

The new TEPS “payment warehousing” feature allows employers to schedule payments for pension appropriations, health benefit premiums, and other TEPS payments up to 30 days in advance.  With payment warehousing, employers may ensure timely filed TEPS payments when they prepare and submit payment to their TEPS account well in advance of the due date.  The Division will not withdraw the payment from the employer's designated bank account until the date specified. 

As always, TEPS is a safe and efficient system that allows you toauthorize payments from your bank account to the Division of Pensions and Benefits.

  • Convenient and Easy-To-Use: You can make your payments using the Internet or the telephone seven days a week.  Each payment method will prompt you for the required information.
  • Free of Charge: There is no charge by the State of New Jersey or the Division of Pensions and Benefits for using TEPS. Your bank may charge an incidental fee to process these transactions.
  • At your Control: A payment is made only when you authorize it through one of the payment methods. With the new payment warehousing feature, you have maximum use of your funds while ensuring on-time payments.
  • Reliable: Once you have completed the payment through one of the payment methods, you will receive a reference number as your proof of payment. You also have the capability to inquire, cancel, or research a payment.

If you have any questions about the TEPS process, please contact Customer Service at the TEPS Helpline: 1-888-835-3345 (weekdays 9:00 a.m. to 7:00 p.m. EST).  Thank you for your participation with TEPS.

CO Letter in Printable Format Adobe PDF (57K)

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June 18, 2012

TO: Certifying Officers of the Public Employees' Retirement System and the Teachers' Pension and Annuity Fund
FROM: Florence J. Sheppard, Acting Director
Division of Pensions and Benefits
SUBJECT: Pension Contribution Rate Change for the Public Employees' Retirement System (PERS) and the Teachers' Pension and Annuity Fund (TPAF)

Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, PERS and TPAF employee pension contribution rates will increase from 6.5% to 6.64% of salary with the first paycheck on or after July 1, 2012. 

  • State employees paid through the Centralized Payroll Unit will receive check messages as notification of the contribution change which will begin as of the July 6, 2012 paycheck.
  • For all other employees, the increase to 6.64% is to be effective with the first paycheck to be paid on or after July 1, 2012 (which is reported to the Division of Pensions and Benefits as compensation during the 3rd calendar quarter of 2012).

The increase in the employee’s contribution rate will also increase the minimum repayment amount for new pension loans or the cost for a purchase of service credit if certified after the increased contribution rate becomes effective.

Note: For PERS Prosecutors Part members the employee pension contribution rate increased in October 2011 from 8.5% to 10% of salary.  There is no additional increase for Prosecutors Part members at this time.

NOTIFICATION OF EMPLOYEES

State biweekly employees paid through the State Centralized Payroll Unit will receive check messages with Pay Periods #13 (June 22, 2012) and #14 (July 6, 2012) to announce the contribution increase.  Copies of the check messages are attached for reference.  State biweekly employers are encouraged to provide their employees with additional reminders of the coming rate increase.
State monthly, local government, and local education employers are asked to provide payroll messages or other notifications to inform their employees of the coming rate increase.

FUTURE INCREASES

The July 1, 2012 increase is the second rate increase under the provisions of Chapter 78, which calls for PERS and TPAF employee pension contribution rates to increase over 7 years until the total pension contribution rate is 7.5% of salary as of July 2018.  The third contribution rate increase to 6.78% will be effective beginning July 1, 2013.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

Enclosure
Centralized Payroll Check Message — Pension Rate Increase


Centralized Payroll Check Message — Pension Rate Increase 

Under Pension and Health Benefit Reform, employee pension contribution rates will increase to 6.64% effective with the July 6, 2012 paycheck for all PERS and TPAF members who currently contribute 6.5% of salary. 

CO Letter in Printable Format Adobe PDF (55K)

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June 18 , 2012

TO: State Biweekly Certifying Officers and Human Resources Representatives
State Monthly Certifying Officers and Human Resources Representatives
FROM: Florence J. Sheppard, Acting Director
Division of Pensions and Benefits
SUBJECT: Health Benefit Contribution Percentage Change for State Employees

Under the provisions of Chapter 78, P.L. 2011, employees are required to pay an increased contribution toward the cost of health benefits coverage based on a specified percentage1 of the medical and prescription drug plan premiums. 

For State employees who were hired on or before June 28, 2011, the contribution increase is being phased in over four years with these employees paying ¼, ½, ¾ and the full amount of the contribution rate during the phase-in years.

Effective July 1, 2012, most State employees begin the second year Phase Two2 of contribution percentages (½ of the full percentage). 

  • State biweekly employees paid through the Centralized Payroll Unit will see the contribution increase effective with the July 6, 2012 paycheck.
  • For all other employees the increase should be applied effective with the first paycheck to be paid on or after July 1, 2012.

For future years of the phase-in period, the increase will be effective each July (Phase Three – July 1, 2013 and Phase Four/Full Contribution – July 1, 2014).

Note: State employees who are hired after June 28, 2011 currently pay the (Phase Four) full contribution percentage and should not see an increase in their health benefit contribution as of July 1, 2012.

1The amount paid is calculated using the level of coverage selected and a scale of percentages that increase with the employee’s annual salary. Single coverage and Family coverage have separate scales of percentages. Member & Spouse/Partner and Parent & Child coverage use the same scale of percentages. The appropriate percentage is multiplied by the premium cost of the medical and/or prescription drug plans selected. The total contribution cannot be less than 1.5% of annual salary.

2Except for Judiciary employees (other than judges) who are covered by the collective negotiations agreement which expires on June 30, 2012.  These employees will begin contributions at the first year Phase One rate (¼ of the full percentage or 1.5% of annual salary, whichever is greater) effective with the July 20, 2012 paycheck and will increase contribution rates each July over four years to the full percentage as of July 1, 2015.

CONTRIBUTION EXAMPLE

For example: An employee with an annual salary of $50,000 has a gross biweekly pay of $1,915.71 and 1.5% of that salary equals $28.73 per pay period.  The employee also has Family coverage through NJ DIRECT15 and the Employee Prescription Drug Plan with a biweekly premium of $809.56 for Plan Year 2012. 

The first year Phase One contribution is 3% of the premium, with a biweekly cost for medical and prescription drug coverage equal to $24.28. For the first year, this employee continues to pay the 1.5% ofsalary ($28.73) per biweekly pay period because it is greater than the 3% contribution ($24.28).

For the second year Phase Two, effective July 1, 2012, the contribution increases to 6% of the premium, or $48.56 per biweekly pay period. Therefore, the employee would begin to pay the Phase Two percentage of the premium ($48.56) as this amount is now greater than 1.5% of salary ($28.73).

NOTIFICATION OF EMPLOYEES

State biweekly employees paid through the State Centralized Payroll Unit will receive check messages with Pay Periods #13 (June 22, 2012) and #14 (July 6, 2012) to announce the contribution increase.  Copies of the check messages are attached for reference.  State biweekly employers are encouraged to provide their employees with additional reminders of the coming contribution increase.

State monthly employers are asked to provide payroll messages or other notifications to inform their employees of the coming contribution increase.

Calculating Contributions

For employees who wish to estimate their expected health benefit contributions amounts, Percentage of Premium Worksheets and Percentage of Premium Calculators are available on the Division’s Web site at: www.state.nj.us/treasury/pensions/  At the Division’s home page select “Percentage of Premium Calculators” under “Hot Topics”.  Separate worksheets and calculators are provided for both State biweekly employees and State monthly employees.

Note: For the Premium Calculators, Internet Explorer or Firefox browsers are recommended.Safari or Chrome users may receive error messages.

ADDITIONAL INFORMATION

Employers with questions regarding any of the information provided in this letter can contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

Enclosure
Centralized Payroll Check Message — Health Benefit Rate Increase


Centralized Payroll Check Message — Health Benefit Rate Increase

For health benefits, effective with the July 6, 2012 paycheck, Executive, Legislative, and non-represented Judiciary employees hired on or before June 28, 2011 will pay at the Year 2 percentage for medical and prescription drug plan premiums (or 1.5% of annual salary, whichever is greater).  Employees in these categories hired after June 28, 2011 pay at the Year 4 percentage (or 1.5% of salary, whichever is greater).  Current Judiciary employees covered by collective negotiations agreements that expire on June 30, 2012 will contribute at the Year 1 percentage level for health benefits (or 1.5% of annual salary, whichever is greater), effective with the July 20, 2012 paycheck.  Additional information and Percentage of Premium calculators can be found on the Division of Pensions & Benefits website at www.state.nj.us/treasury/pensions

CO Letter in Printable Format Adobe PDF (68K)

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June 18 , 2012

TO: Certifying Officers of Local Government Employers Participating in the State Health Benefits Program (SHBP)
Certifying Officers of Local Education Employers Participating in the School Employees’ Health Benefits Program (SEHBP)
FROM: Florence J. Sheppard, Acting Director
Division of Pensions and Benefits
SUBJECT: Health Benefit Contribution Percentage Change for Local Government Employees and Local Education Employees

Under the provisions of Chapter 78, P.L. 2011, employees are required to pay an increased contribution toward the cost of health benefits coverage based on a specified percentage1 of the medical and prescription drug plan premiums. 

For most employees the contribution increase is being phased in over four years with these employees paying ¼, ½, ¾ and the full amount of the contribution rate during the phase-in years. 

1Under Chapter 78, the amount paid is calculated using the level of coverage selected and a scale of percentages that increase with the employee’s annual salary. Single coverage and Family coverage have separate scales of percentages. Member & Spouse/Partner and Parent & Child coverage use the same scale of percentages. The appropriate percentage is multiplied by the premium cost of the medical and/or prescription drug plans selected. The total contribution cannot be less than the 1.5% of annual salary required under Chapter 2, P.L. 2010.

IMPLEMENTING CONTRIBUTION INCREASES

Due to the variation in local Collective Negotiations Agreements (CNA), it is the local employer’s responsibility to correctly identify and implement the correct level of required contributions for the next phase-in amount and to appropriately notify their employees of the increase.  In addition, the required contribution increases are implemented differently for Local Government or Education Employees who were covered under a CNA as of the effective date of Chapter 78 (June 28, 2011) and employees with agreements that were expired or who were without CNA coverage as of the effective date of Chapter 78. 

In general, required contributions under Chapter 78, P.L. 2011, are applied as follows:

  • For Local Government or Education Employees covered under a CNA that was still in effect as of June 28, 2011, the four-year phase-in was to start upon expiration of the CNA and must run for the full four years.  Existing CNAs that are extended, altered, reopened, amended, or otherwise adjusted are considered to be new CNAs.
  • New Local Government or Education Employees whose positions are covered by an existing CNA who began work on or after June 28, 2011, are treated the same as employees who are already employed and covered under the CNA.  In other words, the phase-in of contributions begins upon the expiration of the CNA that was in effect on June 28, 2011.
  • For Local Government or Education Employees who were covered under a CNA that was expired as of June 28, 2011, and employees not covered by a CNA, the four-year phase-in began immediately effective with Chapter 78. If an expired CNA was under negotiation as of June 28, 2011, and the final settlement included retroactive salary increases, the health care contribution must take into account increases in salary only back to the date the Year One contributions were implemented. The Year Two amount of the phase-in begins July 1, 2012, regardless of when the Year One contributions began.  
  • New Local Government or Education Employees whose positions were covered by an expired CNA and employees not covered by a CNA who began work after June 28, 2011, pay the full (Year Four) contribution amount specified under Chapter 78. Since these employees already pay the full contribution, there should be no increase seen in their contribution level as of July 1, 2012.
  • Employees with separate individual employment agreements in effect as of June 28, 2011, paid pursuant to the agreement until it expired; after which the four-year phase-in was required to begin.
  • Employment is based on the employing entity. Changing employers to one with a different (or without a) CNA can result in the employee being considered as “new” and subject to the immediate implementation of the full (Year Four) contribution.

Employers were expected to use due diligence in working with staff and vendors to implement the contributions required under the law. 

CONTRIBUTION EXAMPLE

For example: A government employee with an annual salary of $50,000 has a gross monthlypay of $4,166.66 and 1.5% of that salary equals $62.49 per month.  The employee also has Family coverage through NJ DIRECT15 and the SHBP Prescription Drug Plan with a monthly premium of $1,904.75 for Plan Year 2012. 

The first year Phase One contribution is 3% of the premium, with a monthly cost for medical and prescription drug coverage equal to $57.14. For the first year, this employee continues to pay the 1.5% of salary ($62.49) per month because the 1.5% amount is greater than the 3% contribution ($57.14).

For the second year Phase Two, the contribution increases to 6% of the premium, or $114.28 per month. Therefore, the employee would begin to pay the Phase Two percentage of the premium ($114.28) per month as this amount is now greater than 1.5% of salary ($62.49).

NOTIFICATION OF EMPLOYEES

Local Government and Local Education employers are asked to provide any necessary payroll messages and/or other notifications to inform their employees of the upcoming contribution increase as appropriate with the employers CNAs and phase-in level.

Calculating Contributions

For employees who wish to estimate their expected health benefit contributions amounts, Percentage of Premium Worksheets and Percentage of Premium Calculators are available on the Division’s Web site at: www.state.nj.us/treasury/pensions At the Division’s home page select “Percentage of Premium Calculators” under “Hot Topics”.  Separate worksheets and calculators are provided for both local government employees and local education employees.

Note: For the Premium Calculators, Internet Explorer or Firefox browsers are recommended. Safari or Chrome users may receive error messages.

ADDITIONAL INFORMATION

Employers with questions regarding any of the information provided in this letter can contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at:pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (70K)

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May 9, 2012

TO: Certifying Officers, State and County Colleges and Universities
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Update-Transition to Retirement Programs and Rescinding ABP Retirement

On July 1, 2011, the Division released guidance relating to a practice at some, if not all, of the State’s public colleges and universities (including county colleges) offering programs referred to as “Transition to Retirement”.  Under those programs employees, typically faculty members, retired from their full-time position with the institution, began collecting retirement benefits from New Jersey Alternate Benefit Program (ABP), and continued employment with the institution in a reduced, part-time capacity.  In some situations this practice may have been memorialized in a collective negotiations agreement.

That guidance advised that it had been determined that the ABP statutes do not authorize “Transition to Retirement” programs and, as such, the programs should not be utilized to qualify an employee for retirement benefits from the ABP.

These “Transition to Retirement” programs continued during the 2011-2012 school year while remedial legislation was sought in the NJ Legislature to retroactively permit the utilization of the programs. There is currently legislation, S-1819, that would statutorily authorize “Transition to Retirement” Programs and would make that authorization retroactive.

Since your employees may now be seeking approval to utilize a “Transition to Retirement” program following the current academic term, you and your employees may be questioning your ability to utilize these programs in light of our earlier guidance on this matter. We are advising you and your staff that if there is no remedial correction to statutes by June 30, 2012, the Division’s position as stated in its July 1, 2011, communication on this subject would be implemented; all “Transition to Retirement” programs would need to be discontinued; and corrective measures would need to be taken with regard to your employees who had elected to participate in the program.

We encourage you to monitor the progress of this legislation and make appropriate accommodations within your organizations accordingly.

CO Letter in Printable Format Adobe PDF (77K)

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March 23, 2012

TO: Certifying Officers of Local Government Employers participating
in the State Health Benefits Program
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Reimbursement of Medicare Premiums to Retirees

This letter is directed to the attention of employers participating in the State Health Benefits Program (SHBP) who have adopted the provisions for the payment of post-retirement health benefit costs for their retirees under Chapter 88, P.L. 1974 and/or Chapter 48, P.L. 1999.

Employers who adopt the provisions of Chapters 88 and 48 are required to reimburse eligible retirees for the full premium cost of Medicare Part B medical coverage which is deducted from the Social Security benefit unless a lesser amount of reimbursement is negotiated.  In addition, beginning with Plan Year 2012, Medicare-eligible retirees will be enrolled in the SHBP’s new Medco Medicare Prescription Drug Plan and Medicare Part D prescription drug premiums will be deducted from the Social Security benefit of some higher income retirees.  Local employers are required to reimburse the Medicare Part D premiums in the same manner as the Medicare Part B premiums are reimbursed.

MEDICARE PART B REIMBURSEMENT

Most Medicare eligible retirees are reimbursed for the standard monthly Part B premium ($96.40 in 2011).  However, some retirees pay a higher premium based on their modified adjusted gross income1 or their Medicare enrollment date. 

Local Government retirees who qualify for reimbursement of Medicare Part B premiums under Chapters 88 and 48, are to be reimbursed by the former Local Government employer.  If a local employer is required to reimburse the full premium cost of Medicare Part B, reimbursement must include the additional premiums based on income.  

Note: Part B reimbursement in excess of the standard premium is not required where the retiree pays a higher Medicare Part B premium due to a late enrollment penalty.

In general, retirees who earn more than $85,000 per year ($170,000 if married and filing jointly) will have an additional premium deduction for Medicare Part B.  The chart below outlines the Medicare Part B premiums due for 2011 and 2012 based on income reported.

1Prior to January 1, 2007, the cost of coverage under Medicare Part B was the same for anyone who enrolled when first eligible for coverage. Since January 1, 2007, the cost of coverage under Medicare Part B has been based on an eligible individual’s or couple’s modified adjusted gross income.

2011 Medicare Part B (Medical) Premiums Based on Income
2011 Part B Monthly Premium Modified Adjusted Gross Income
  If Retiree files an Individual Tax Return with Income of: If Retiree files a Joint Tax Return with Income of: If Retiree is Married but files a Separate Tax Return from a Spouse and the income is:
$96.40 if the retiree/spouse received a SSA benefit in 2009; $110.50 if retiree/spouse were new to SSA in 2010 and had SSA withhold; $155.40 for all others $85,000 or less $170,00 or less $85,000 or less
$161.50 $85,000 - $107,000 $170,001 - $214,000 N/A
$230.70 $107,001 - $160,000 $214,001 - $320,000 N/A
$299.90 $160,001 - $214,000 $320,001 - $428,000 $85,001 - $129,000
$369.10 Above $214,000 Above $428,000 Above $129,000
Social Security uses the income reported two years ago on the retiree's federal income tax return to determine the premium (if unavailable, Social Security uses income from three years ago). For example, the income reported on the 2009 tax return was used to determine the monthly Part B premium in 2011.

 

2012 Medicare Part B (Medical) Premiums Based on Income
2012 Part B Monthly Premium Modified Adjusted Gross Income
  If Retiree files an Individual Tax Return with Income of: If Retiree files a Joint Tax Return with Income of: If Retiree is Married but files a Separate Tax Return from a Spouse and the income is:
$99.90 $85,000 or less $170,00 or less $85,000 or less
$139.90 $85,000 - $107,000 $170,001 - $214,000 N/A
$199.80 $107,001 - $160,000 $214,001 - $320,000 N/A
$259.70 $160,001 - $214,000 $320,001 - $428,000 $85,001 - $129,000
$319.70 Above $214,000 Above $428,000 Above $129,000
Social Security uses the income reported two years ago on the retiree's federal income tax return to determine the premium (if unavailable, Social Security uses income from three years ago). For example, the income reported on the 2010 tax return was used to determine the monthly Part B premium in 2012.

MEDICARE PART D REIMBURSEMENT

Beginning January 2012, retirees and/or covered spouses/partners in the SHBP who are eligible for Medicare are enrolled in Medicare Part D prescription drug coverage through the Medco Medicare Prescription Drug Plan.

When enrolled into Medicare Part D, some retirees with higher incomes will have a monthly premium for Part D coverage deducted from their Social Security benefit.

Local Government retirees who qualify for reimbursement of Medicare Part B premiums under Chapters 88 and 48, are to also be reimbursed beginning in 2012 for any Medicare Part D premiums.  

In general, retirees who earn more than $85,000 per year ($170,000 if married and filing jointly) will have a premium deduction for Medicare Part D from their Social Security benefit.  The chart below outlines the 2012 Part D premiums due based on income reported.

2012 Medicare Part D (Prescription Drug) Premiums Based on Income
2012 Part D Monthly Premium Modified Adjusted Gross Income
  If Retiree files an Individual Tax Return with Income of: If Retiree files a Joint Tax Return with Income of: If Retiree is Married but files a Separate Tax Return from a Spouse and the income is:
Medco Medicare Prescription Plan (Part D Plan) Premium* $85,000 or less $170,00 or less $85,000 or less
$11.60 + Part D Plan Premium $85,000 - $107,000 $170,001 - $214,000 N/A
$29.90 + Part D Plan Premium $107,001 - $160,000 $214,001 - $320,000 N/A
$48.10 + Part D Plan Premium $160,001 - $214,000 $320,001 - $428,000 $85,001 - $129,000
$66.40 + Part D Plan Premium Above $214,000 Above $428,000 Above $129,000
*If the retiree does not currently pay a premium for SHBP coverage, the retiree's premium for the Medco Medicare Prescription Drug Plan is $0.00.

REIMBURSEMENT METHODS

Medicare Part B and/or Medicare Part D reimbursement of Local Government retirees is coordinated and paid through the former Local Government employer. The schedule a Local Government employer selects for reimbursement (quarterly, annually, etc.) is at the employer’s discretion but it cannot be less often than on an annual basis.

As an example, the State reimburses the standard Medicare Part B premium in the monthly retirement check of eligible retirees. Part B reimbursement for amounts paid in excess of the standard premium is paid to eligible retirees annually, upon receipt of proof of the premiums paid.

Proof of payment required by the State includes a copy of the cost of living adjustment letter from Social Security at the end of 2010 indicating the 2011 Medicare Part B premium increase and the income-related premium, and a copy of the 2011 Social Security Form SSA-1099 or Form RRB-1099 (or other proof of such as copies of quarterly billing statements or cancelled checks).

Local Government employers who adopted the provisions of Chapters 88 and 48 should take any actions necessary to assure that reimbursements for plan year 2011 are made to eligible retirees for standard and/or additional Medicare Part B premiums.  These employers should also make any necessary preparations for upcoming reimbursements to be paid for Medicare Part B and Part D premiums for the current 2012 plan year.

ADDITIONAL INFORMATION

If you have any questions about the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

For more information about Medicare Part B, Medicare Part D. or Medicare premiums based on income, visit the Social Security Administration's Web site at www.socialsecurity.gov or call Social Security at 1-800-772-1213.

For more information about the Medco Medicare Prescription Plan contact Medco member services at 1-866-544-9703.

CO Letter in Printable Format Adobe PDF (59K)

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March 8, 2012

TO: Certifying Officers of the County Colleges
FROM: Joseph Zisa, Manager 1, Fiscal Resources, Division of Pensions and Benefits
SUBJECT: Alternate Benefit Program – Reimbursement of Employer Contributions to ABP for Adjuncts and Part-Time Faculty Subsequent to the Enactment of Chapter 89, P.L. 2008

Since the signing of Chapter 89, P.L. 2008, into law on September 29, 2008, administrators of the various county colleges have inquired of the Division as to whether or not adjunct and part-time faculty would be considered eligible for reimbursement of employer pension contributions from the State.  The belief was that, in the same way the State provides for the reimbursement of the 8% employer pension contribution under the Alternate Benefit Program (ABP) for full-time faculty members of the ABP, these newly eligible faculty employees would be subject to the same State reimbursement of the employer ABP pension cost to the county college employers.

Since this was a fundamental change in the funding of pension costs for this group of employees, shifting the responsibility from the county colleges’ budgets to the State’s, and the enabling legislation was not clear on the intent of the statutory change in relation to this matter, the Division sought guidance from the Office of the State Attorney General.  That guidance has confirmed that the State will assume responsibility for the employer ABP pension costs for these individuals.  We have also received authorization from the Office of Management and Budget that funding will be made available during the current fiscal year to cover the reimbursements for the employer costs incurred from Fiscal Year 2009 through Fiscal Year 2012.

In order to facilitate the reimbursement of these employer costs to the county colleges for prior and current fiscal years and the future costs associated with these employees, the Division asks for your cooperation in satisfying the following reporting requirements.  By doing so we will be able to more efficiently review and verify your reimbursement requests related to adjunct and part-time faculty and expedite the transfer of funds to your institution while at the same time providing a proper audit trail and sufficient documentation to support those reimbursements.

Reporting Requirements for Prior Fiscal Years

The Division will begin processing reimbursement requests by fiscal year beginning in March 2012.  We ask that each county college employer report all adjunct and part-time faculty compensation and ABP contribution data, by fiscal year (July – June), beginning with Fiscal Year 2009 using the attached spreadsheet format (Appendix A).  We ask that Fiscal Year 2009 data be submitted no later than April 11, 2012.  We ask that the same information be submitted in the same format for Fiscal Year 2010 no later than May 23, 2012 and Fiscal Year 2011 data by June 29, 2012.  Employer submissions by these dates will be given priority processing. Those failing to meet those dates will be processed as resources become available to review those requests.

Reporting Requirements for Current and Future Fiscal Years

We believe the current reporting process used for reimbursement of employer ABP pension costs for full-time faculty, utilizing a process of reporting additions and deletions to payroll, would be cumbersome for adjunct and part-time faculty due to the manner in which the typical employment relationship operates between these employees and the institutions.  Therefore, the Division is implementing a variation of the process described above for prior fiscal years to request reimbursement of current and future fiscal year employer ABP pension costs.

Employers are to request reimbursement of their ABP pension costs at the close of the fall and spring semesters (December and June each fiscal year).  Using the same spreadsheet format (Appendix A Adobe PDF (82K)) data is to be reported for each adjunct and part-time faculty ABP member showing data for the entire semester period covered by the semiannual report.  Employer reimbursement requests for full-time faculty should continue to be submitted in the same fashion as is current practice for those individuals.

The Division thanks you for your patience and cooperation as we move forward processing these reimbursements to your institution.  If you have any questions concerning the reporting process for your adjunct and part-time instructors, please contact us through our ABP/ACTS Helpline at (609) 777-0887.

Please direct your completed reports to us at: typabp1@treas.state.nj.us

Enclosure

Appendix A — Sample Remittance Report Format Adobe PDF (82K)

CO Letter in Printable Format Adobe PDF (141K)

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