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Listed on this page are letters the Division of Pensions and Benefits has recently sent to selected groups of retirees.
To view the text of a particular letter, click on the link under the Subject heading.


News and other information is also provided to retirees through the Division's retiree newsletters,
the PensionNews and Health Reporter. To view the most recent editions, visit our newsletter page.


Letters to Retirees

SUBJECT
DATE
Retired Group Dental Rates for Plan Year 2006 September 2005
1099-R Form December 2004
Effective Date of Enrollment in New SHBP Retiree Dental Plan
(For NJREA-MetLife Members Only)
November 2004
Retiree Dental Expense Plan Announcement Letter September 2004


State of New Jersey
Division of Pensions and Benefits
September 2005

Dear Retired Dental Enrollee:

Effective January 1, 2006, rates for the Retiree Dental Expense Plan of the State Health Benefits Program (SHBP) will be changing. The new rates are listed below:

RETIREE DENTAL EXPENSE PLAN - #398
COVERAGE LEVEL MONTHLY RETIREE RATE
SINGLE $35.53
MEMBER & SPOUSE/ELIGIBLE DOMESTIC PARTNER $70.10
FAMILY $91.34
PARENT & CHILD(REN) $52.83

If you would like to make any changes to your dental coverage, you may obtain a SHBP Retired Status Application from our Web site at: www.state.nj.us/treasury/pensions/shbp.htm

If you have any further questions, please call the Division of Pensions and Benefits - Office of Client Services at
(609) 292-7524.


State of New Jersey
Division of Pensions and Benefits
January 2005

Dear Retiree/Beneficiary:

Since this is the first year that you are receiving a 1099-R form, we have included this important tax notice with your form. The notice explains how your benefits are taxed at the state level. It also provides information that may assist you in understanding your 1099-R form. We recommend that you retain this tax notice for future reference.

Important New Jersey State Tax Information

New Jersey Residents:

Generally, your benefits are taxable for New Jersey purposes once you have fully recovered in benefits the amount you contributed to the pension plan while working. The exception is if you will not be able to recover all of your contributions within the first three years of your retirement. In that case, you must determine the taxable portion of your benefits using the general rule method. Under this method, you recover your contributions evenly over your lifetime or the combined lifetime of you and your pension beneficiary. This means that only a small portion of each monthly benefit is considered a return of your contribution and is tax exempt while the balance of your monthly benefit is taxable.

If you must recover your contributions under the general rule method, we recommend that you refer to IRS Publication 575, "Pension and Annuity Income" or consult with a tax advisor.

Nonresidents:

If you live outside New Jersey, you are not required to pay New Jersey income tax on the benefits you receive from the retirement system. However, your benefits may be taxable in your state of residence. Please check with your home state's tax office to determine if your benefits are subject to state tax. The Division of Pensions and Benefits does not withhold income tax for other states.

COMMONLY ASKED 1099-R QUESTIONS

Do I report the taxable amount shown in box 2a of the 1099-R form on my New Jersey tax return?

The amount reported on your 1099-R form is the federal taxable amount. You must determine the taxable amount for New Jersey purposes by applying the state tax rules indicated above. Please refer to your New Jersey Resident Return Booklet for complete instructions.

What information do I need to calculate the taxable amount for New Jersey purposes?

You need your total employee contributions. You can obtain this amount from your final retirement letter or by calling the Division of Pensions and Benefits at (609) 292-7524. You can also e-mail us at pensions.nj@treas.state.nj.us

Please note that there are two contribution amounts shown on your retirement letter, your after-tax contributions for federal purposes and your total contributions. Since you paid state tax on all of your contributions, use total employee contributions to calculate the amount subject to New Jersey income tax.

Is my disability pension subject to New Jersey/Federal Income tax?

According to the New Jersey tax instruction booklet, if you are under age 65 your disability pension is exempt from tax. If you are 65 or older, your disability pension is treated as an ordinary pension and is considered taxable income.

If you are receiving an Accidental Disability pension, or if you are a survivor receiving Accidental Disability or Accidental Death benefits, the Division of Pensions and Benefits reports your benefit as exempt from federal income tax.

What does the amount shown in box 5 of the 1099-R form represent?

This amount represents the portion of your gross distribution that is not subject to federal tax, i.e., the difference between the gross distribution (box 1) and taxable amount (box 2a). In other words, this amount is considered a return of your previously taxed contributions. It is not an insurance premium.

Is my benefit check for the month of December included in my gross distribution?

For income tax purposes, income is considered earned as of the date of the check. Since your December benefit was due and payable on January 1, 2005, it is not considered income for tax year 2004 and is not included in the gross distribution for 2004 shown in box 1 of your
1099-R form.

If you have any questions regarding the above information, please contact us.

November 2004

TO: State Health Benefits Program Participants Enrolled in the NJREA-MetLife Dental Program
FROM: Christine Servis, Chief Health Benefits Bureau
State Health Benefits Program
SUBJECT: Effective Date of Enrollment in New SHBP Retiree Dental Plan

Our records indicate that you are enrolled in a State Health Benefits Program (SHBP) medical plan and participate in the NJREA-MetLife Dental Program.

In September you should have received a letter from the NJEA informing you of the termination of the NJREA's MetLife Dental Program as of February 28, 2005, and an upcoming opportunity to enroll in the new SHBP Retiree Dental Expense Plan. The initial enrollment period for the new SHBP Retiree Dental Expense Plan extends from
October 1, 2004 through March 31, 2005, with effective dates of coverage commencing January 1, 2005 through
May 1, 2005.

The Division of Pensions and Benefits mailed enrollment materials pertaining to the new SHBP Retiree Dental Expense Plan to all eligible retirees at the beginning of October.

Since the NJREA-MetLife Dental Program remains in effect until February 28, 2004, all applications for enrollment in the new SHBP Retiree Dental Expense Plan submitted by members currently enrolled in the MetLife program that are received between October 1, 2004 and February 1, 2005 will be processed for an effective date of coverage as of March 1, 2005. Applications received after February 1, 2005 will be processed for an effective date as shown in the chart below.

NJREA-MetLife enrollees who wish to change to the SHBP Retiree Dental Expense Plan must enroll during the initial enrollment period by submitting an application (enclosed) to the Division of Pensions and Benefits. If you have already mailed an application for enrollment in the SHBP Retiree Dental Expense Plan to the Division of Pensions and Benefits, you do not need to do anything else at this time. Your application will be processed for an effective date of March 1, 2005. (Note: Please do not call the Division of Pensions and Benefits to verify the receipt of a previously mailed application. The volume of applications being received prevents us from verifying the status of any individual enrollment at this time.)

Effective Dates of Enrollment in the Retired Dental Expense Plan
for NJREA-MetLife Participants

If the SHBP receives your enrollment application by

Your first monthly premium will be deducted from the pension
check dated

Your effective dateof enrollment will be

October 1, 2004 through
February 1, 2005

March 1, 2005

March 1, 2005

March 1, 2005

April 1, 2005

April 1, 2005

April 1, 2005

May 1, 2005

May 1, 2005

For More Information

If you have questions regarding eligibility and/or enrollment in the SHBP Retiree Dental Expense Plan, you may contact the Division of Pensions and Benefits Office of Client Services at (609) 292-7524, or e-mail us.

For benefit information about the Retiree Dental Expense Plan, see Fact Sheet #73, Retiree Dental Expense Plan, which is available from the Division of Pensions and Benefits. The fact sheet, a page of Frequently Asked Questions, and an Enrollment Application is also be found on our Web site. Or visit the State Retiree Dental Expense Plan.



TO: State Health Benefits Program Retirees
FROM: Florence J. Sheppard
Deputy Director, Benefits Operations
SUBJECT: Retiree Dental Expense Plan

The State Health Benefits Commission has established a dental plan for retirees eligible for State Health benefits Program (SHBP) coverage. The Retiree Dental Expense Plan will be implemented January 1, 2005 and will be administered by Aetna Dental.

You may join the Retiree Dental Expense Plan during this initial six-month offering period which extends from October 1, 2004 through March 31, 2005. If you decline enrollment during this initial offering period, you cannot enroll at a future date (exception - see Waiver of Dental Coverage below).

ELIGIBILITY

The Retiree Dental Expense Plan is available to the following retirees:

  • Any retiree, including survivors, enrolled in a medical plan in the Retired Group of the SHBP.

  • Any retiree, including survivors, eligible for enrollment in the SHBP but who elected to waive their medical coverage because of other SHBP coverage or coverage provided from another public employer.


Waiver of Dental Coverage - You may defer your one-time opportunity to enroll in the Retiree Dental Expense Plan if you have other group dental coverage through a public employer (federal, state, county, or municipal government; authority; local board of education; or state or county college/university) as either a dependent of a spouse or same-sex domestic partner through your own employment. You must request enrollment in the Retiree Dental Expense Plan within 60 days from the loss of the other public employer dental coverage by contacting the Division of Pensions and Benefits. Proof of the other dental coverage termination must be submitted with the SHBP enrollment application in the form of a HIPPA Certification of Coverage or a letter from the public employer.

If you are currently enrolled for dental coverage, under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you must make a decision during this special open enrollment to either enroll in the Retiree Dental Expense Plan or continue your COBRA dental benefits. You will not be given another opportunity to enroll in the Retiree Dental Expense Plan when your COBRA benefits end.

(Note to NJREA members: The rules which will govern the Retiree Dental Expense Plan will allow a special open enrollment period for eligible retirees who are covered by a group dental plan, for which the Division of Pensions and Benefits deducts premiums from retirement allowances pursuant to N.J.S.A. 43:15A-72, if that plan drops below 1,000 retirees or is terminated.)

ELIGIBLE DEPENDENTS

Eligible dependents are your spouse or same-sex domestic partner1 and unmarried children under age 23 who are living with and dependent upon you for substantial support or who are not living with you, but you are legally required to support. The definition of children includes step-children, adopted children, foster children, legal wards, and children of your eligible same-sex domestic partner.

1 To cover a same-sex domestic partner for dental coverage, the retiree must have been an employee of the State (includes the state colleges and universities, the State Library, Palisades Interstate Park Commission, and the NJ Commerce and Economic Growth Commission) or an employee of a local employer that participates in the SHBP and has adopted a resolution extending health benefits to domestic partners of its employees and retirees. A list of employers who have done this can be viewed at the Division of Pensions and Benefits Web site at: www.state.nj.us/treasurer/pensions

COSTS

Monthly premiums for the Retiree Dental Expense Plan for calendar year 2005 are shown in the chart below.

CONTRACT LEVEL

2005 MONTHLY COST

Single

$31.72

Retiree and Spouse or Domestic Partner

$62.59

Retiree and Child(ren)

$47.17

Family

$81.55


If you enroll in the Retiree Dental Expense Plan, the Division of Pensions and Benefits will deduct the monthly premium from your retirement allowance. If the retirement allowance is not sufficient to cover the cost of the premium, or if you, as a surviving spouse, do not receive a retirement allowance from the Division, you will be billed on a monthly basis.

SUMMARY OF DENTAL PLAN BENEFITS

The Retiree Dental Expense Plan is a traditional indemnity, fee-for-service plan. There is a $50 per person deductible, and a maximum deductible of $150 per family, which must be met before reimbursements are made. The Retiree Dental Expense Plan reimburses covered services provided by any dental provider licensed to practice at a percentage of reasonable and customary fees. There is a maximum annual reimbursement of $1,500 per person.

Plan Design

The Retiree Dental Expense Plan has three benefit Tiers (Tier 1, 2, and 3) depending upon whether you had at least 12 months of other group dental coverage just prior to enrollment. If you were not covered for a minimum of 12 months in a group dental program within 60 days of enrolling in the Retiree Dental Expense Plan, you will be enrolled in Tier 1. Your benefit tier has no impact on your monthly premium payment.

Tier 1 provides benefits at a lower level of reimbursement than Tier 2 or Tier 3 . After one year of coverage in Tier 1, you will be automatically moved to Tier 2. After one year of coverage in Tier 2, you will be automatically moved to Tier 3.

If you enroll in the Retiree Dental Expense Plan within 60 days of leaving another group dental program in which you were enrolled for a minimum of 12 months, you may enroll in the highest reimbursement tier, Tier 3. Specific information concerning your prior dental plan enrollment must be provided on your enrollment application in order to qualify for Tier 3.

RETIREE DENTAL EXPENSE PLAN REIMBURSEMENT TIERS

 

TIER 1

TIER 2

TIER 3

Annual Deductible

$50 per person, but not more than $150 total; waived for Preventive Care

$50 per person, but not more than $150 total; waived for Preventive Care

$50 per person, but not more than $150 total; waived for Preventive Care

Coinsurance

80% - Preventive Care

50% - Basic Restorative

30% - Major Restorative

90% - Preventive Care

60% - Basic Restorative

40% - Major Restorative

100% - Preventive Care

70% - Basic Restorative

50% - Major Restorative

Maximum Annual Benefit

$1,500 per person

$1,500 per person

$1,500 per person

Covered Services

The Retiree Dental Expense Plan covers Preventive Care, Basic Restorative, and Major Restorative services at different levels. The deductible is waived for preventive services. The Retiree Dental Expense Plan does not reimburse for any orthodontic services.

Preventive Care consists of diagnostic and preventive services that are intended to maintain oral health and reduce the effects of tooth decay or gum disease that could lead to an increased need for more costly restorative services. They include the following:

  • Oral examinations (includes comprehensive, periodic, limited and specialist oral evaluations). You can have two comprehensive evaluation in a calendar year and one emergency or limited evaluation per year;

  • Horizontal bitewing X-rays limited to two series of four films per calendar year; vertical bitewing X-rays limited to one series of eight films per 12 month interval; complete series X-rays limited to once per 36 months with no more than 18 films;

  • Prophylaxis (cleaning and polishing) twice in a calendar year; and

  • Topical application of fluoride for children under 19 twice per calendar year.

Basic Restorative Services include the following:

  • Palliative emergency treatment;

  • Space maintainers;

  • Simple extractions;

  • Surgical extractions;

  • Oral surgery;

  • Anesthesia services;

  • Basic restorations (amalgam and resin-based composite restorations);

  • Endodontics (treatment of diseases of the dental pulp including root canal and associated services); and

  • Repairs to removable and fixed dentures.

Major Restorative Services include services to restore existing teeth that cannot be restored with an amalgam, acrylic, synthetic porcelain, or resin-based composite restoration (filling). Inlays, onlays, and crowns are typical examples of major restorative services. Other major restorative services include:

  • Periodontal services - services involving the maintenance, reconstruction, regeneration, and treatment of the supporting structures surrounding teeth, including bone, gum tissue, and root surfaces. Scaling and root planning is limited to one treatment per quadrant every 12 months. Periodontal surgical procedures are limited to one surgery per quadrant every 36 months.

  • Prosthodontic services - services using removable or fixed dentures (bridges) to replace missing teeth. Replacement of removable devices is covered only after a 5-year period from their installation.

Network Dentists

You may use any licensed dentist and the Retiree Dental Expense Plan will reimburse you for covered services in accordance with the plan design. If, however, you use dentists who participate in the Plan Network, your costs will generally be lower as these dentists have agreed to accept a lower fee for their services. You can access a list of participating providers on Aetna's Web site (www.aetna.com/docfind) or contact Aetna Dental at 1-877-238-6200 (select the Aetna member prompt).

HOW TO ENROLL

To enroll, complete and send the enclosed Retiree Dental Expense Plan Enrollment Application to the Division of Pensions and Benefits by March 31, 2005. If you wish to enroll for the highest level of reimbursement, Tier 3, you must include specific information concerning your prior group dental coverage in Section 4 on the application to enable the SHBP and Aetna Dental to verify this coverage.

If you are enrolling your spouse or same-sex domestic partner who has not previously been covered under an SHBP plan, you must also attach a copy of your marriage certificate or Certificate of Domestic Partnership.

WHEN COVERAGE BEGINS

For SHBP retirees or their survivors electing enrollment during the initial offering of the Retiree Dental Expense Plan, coverage begins on the first of the month following a full month from the date the Division of Pensions and Benefits receives the dental plan enrollment application.

The following chart illustrates the Retiree Dental Expense Plan effective date in relation to the SHBP's receipt of your completed dental plan enrollment application.

If the SHBP receives your enrollment application by

Your first monthly premium will be deducted from the pension check dated*

Your effective date
of enrollment will be

December 1, 2004

January 1, 2005

January 1, 2005

January 1, 2004

February 1, 2005

February 1, 2005

February 1, 2005

March 1, 2005

March 1, 2005

March 1, 2005

April 1, 2005

April 1, 2005

April 1, 2005

May 1, 2005

May 1, 2005


* If the monthly premium cannot be deducted from your retirement benefit, you will be billed monthly in advance of the coverage period.

MORE INFORMATION ABOUT THE PLAN

For more information about the plan design or to locate dentists who are part of the Retiree Dental Expense Plan's provider network, contact Aetna Dental at 1-877-238-6200. You may also access a list of participating providers on Aetna's Web site (www.aetna.com/docfind). For information about enrollment eligibility, contact Aetna Dental at the number above, the Division of Pensions and Benefits Office of Client Services at (609) 292-7524, or view information about the Retiree Dental Expense Plan on our Web site at: www.state.nj.us/treasury/pensions/shbp.htm and click on the State Retiree Dental Expense Plan under Hot Topics. When you enroll in the Plan you will receive a Retiree Dental Expense Plan Member Handbook that will provide you with complete details. The handbook will also be posted to our Web site when it becomes available.

Enclosures

State Retiree Dental Expense Plan Application

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Last Updated: September 27, 2005