In this issue: New health-plan options, COBRA subsidy extension, financial resolutions, Diamondbacks discounts, Employee Benefit Trust amendments
MPS Introduces Two New Health-Plan Options
We know the health and well-being of you and your family is important for your peace of mind. At the same time, we are all facing some challenging economic times — and this includes our great district.
Health-care costs continue to rise each year, and we are finding it more challenging to continue to absorb these costs while providing you such a valuable benefit. A change is needed, and we are taking our health care strategy to a new level.
Here are some eye-popping facts:
- 50 to 70 percent of health-care costs are related to lifestyles and behaviors. *
- One out of three U.S. deaths is due to smoking, poor eating habits and physical inactivity.
- $274 billion in annual costs is related to obesity and diabetes. **
- 20 percent of U.S. residents still smoke. ***
* National Institutes of Health
** Economic and Health Costs of Diabetes: HCUP Highlight 1. AHRQ Publication No. 05-0034, January 2005
*** Centers for Disease Control and Prevention, 2008
Options Will Provide More Choices, Flexibility
We know that MPS employees will be the key to changing our health-care strategy. If the facts listed above are any indication, the choices you and I make and the lifestyles we lead will have a big impact on how successful this change will be. With a new health-care focus, we look to:
- Introducing medical plans focused on health and wellness now, rather than waiting until you are sick.
- Giving you more choices and more “say” in how your health-care dollars are spent
- Helping you better understand the true cost of health-care services
- Continuing to help protect you and your family from unexpected high costs
Beginning Oct. 1, 2010, MPS will introduce two new health-plan options that will give you more choice and flexibility. More importantly, you will be able to use the plans to stay healthy and to manage your condition, rather than to just cover an illness.
The new plans, known as consumer-driven health plans and health-savings accounts will be introduced across the district and will be provided through UnitedHealthcare.
We are excited about this new direction we are taking, and we hope you will be too. In the coming weeks, you will see more information about our new health-care strategy, including information about consumer-driven health plans and health-savings accounts. To become familiar with these plans now, visit the Employee Benefits Web site, and click on Health-Savings Account.
PPO ends Sept. 30, 2010
MPS currently offers two choices — an Exclusive Provider Option (EPO) and a Preferred Provider Option (PPO). In the PPO, you can receive benefits for providers not contracted with UnitedHealthcare. But the EPO is less expensive for you and the district, and it provides broader benefits. The PPO is more expensive in premium and out-of-pocket costs. The PPO has lost enrollment consistently for many years. As seen in the graph below, there are few people left on this plan.
Therefore, the PPO will be eliminated as of Sept. 30, 2010. The remaining 166 people on the PPO will automatically be enrolled in the EPO for the Oct. 1, 2010, plan year. Out-of-network coverage will be available through the new health-savings account.
Staying Healthy Can Help our Health-Care System
We've resolved to eat better, lace up the running shoes, shed a few pounds, quit smoking and lead healthier lives. If we could keep our promises beyond January, perhaps our health-care system wouldn't be as bloated as it is.
Indeed, some of the responsibility for health-care costs sits squarely on the shoulders of consumers who make unhealthy choices -— by supersizing meals, quenching thirst with sugar-laden sodas, filling lungs with tobacco and taking a less active role in maintaining their overall fitness.
"As important as health reform is, the real answer in reforming America's health-care system is to empower individuals to make better choices about what we eat and how we live," said Daniel Zingale, a senior vice president at the California Endowment, a health foundation.
While debate remains in Congress over health-care legislation, wellness advocates hope less controversial provisions that promote healthy living will remain in any bill that reaches the president's desk.
"As preventable illnesses and injuries are the most significant drivers of increasing health-care costs, it is essential that we reorient our health-care system from an after-the-fact approach to one that focuses on keeping people healthy in the first place," the Prevention Institute, based in Oakland, Calif., wrote in a letter to the White House.
House and Senate Bills Vary
The House bill includes $34 billion for a public health investment fund, including $15.4 billion for prevention and wellness programs. The Senate bill is less generous, providing $15 billion for a prevention and public health fund, some of which could be used for so-called community transformation grants to fund parks and urban trails and to promote access to nutrition. The Senate bill also would establish a national council that would take a broad approach to drafting a health-care strategy that integrates transportation, agriculture, education and employment policies. And it would adopt California's pioneering law requiring fast-food outlets and chain restaurants to provide nutrition information.
"This is the first time in recent history that community and government strategies will align to help support us in the resolutions we make on New Year's Day," said Larry Cohen, the Prevention Institute's executive director. Wellness and prevention have been "totally lost in the discussion over the health-care bill," Cohen said, "because they've . . . been recognized by both sides as being worthwhile."
Take an Active Role in Maintaining Good Health
By 2017, U.S. health care could account for $4.3 trillion in annual spending, or one-fifth of every dollar spent in the overall economy, according to the National Coalition on Health Care. Much of that could go to preventable conditions linked to obesity, smoking, diabetes and heart disease. Indirect and direct costs of smoking are now $193 billion a year, about half spent on medical expenses, according to the U.S. Centers for Disease Control and Prevention.
In 2007, diabetes accounted for $116 billion. In 2009, heart disease was expected to cost the country $305 billion for care services, medication and lost productivity, according to the CDC. Obesity costs the nation as much as $147 billion annually, according to a government study released in July. For years, experts have preached healthy living to reduce the rates of chronic conditions.
To save on costs and boost productivity, employers and insurers, over the years, launched wellness programs to promote healthy habits. Ellen Wu, executive director of the Oakland-based California Pan-Ethnic Health Network, isn't about to let the health-care industry off the hook.
"We are a nation of sick care. We don't do health care," she said. "Because we do sick care, that's reflected in how we set everything up." Gaining health insurance will allow those who are now uninsured access to doctors for regular checkups and routine care that, in the long run, could relieve the need for expensive emergency room visits. Even so, people will have to take a more active role in maintaining good health, Wu and others acknowledge.
Individuals Will Reap the Benefits
Healthier lifestyles could reduce health-care spending but, on a personal level, folks will reap the benefits, too, in the form of fewer trips to the physician — meaning fewer co-pays and other out-of-pocket expenses — and less time away from work, according to Dr. Lisa Liu, a physician at Kaiser Permanente's Elk Grove, Calif., medical offices.
"There is a linkage there between health-care utilization and cost. As individuals, there are ramifications associated with bad habits. People need to take personal accountability for their health," she said.
Reprinted from: Sacramento Bee, Bobby Caina Calvan, Jan. 6, 2010
COBRA Subsidy Extended
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health-care benefits the right to choose to continue group health benefits for limited periods of time under certain circumstances.
On Dec. 19, President Obama signed an extension of the COBRA premium subsidy as part of the Department of Defense Appropriations Act of 2010. The act extends eligibility for the COBRA premium reduction for an additional two months (through Feb.28, 2010), and the maximum period for receiving the subsidy for an additional six months (from nine to 15 months).
The American Recovery and Reinvestment Act (ARRA) of 2009 originally included provisions under which assistance-eligible individuals (AEIs) who involuntarily lost their jobs could receive a 65 percent subsidy for continuation-coverage premiums for up to nine months.
The act was set to expire Dec. 31, 2009. Under the extension, the subsidy is expanded from nine to 15 months, and AEIs can now receive the subsidy if their involuntary termination triggers COBRA by Feb. 28, 2010.
Time to Make New Year’s Financial Resolutions
Like many people, you may make some new year’s resolutions. Perhaps you’ve promised yourself to visit the gym more often or learn a new language or reconnect with a long-lost friend. All of these are worthy goals, of course. And if you achieve them, you may add new dimensions to your life. But if you want to accomplish other major milestones you may have envisioned — a new home, college for your kids, a comfortable retirement and so on — you may need to set some new year’s financial resolutions.
What type of financial resolutions should you make? Here are a few ideas to consider:
- Contribute as much as you can afford to your employer-sponsored plan. Take full advantage of your 403(b) or other employer-sponsored retirement plan. Your contributions are typically tax deductible, and your earnings grow on a tax-deferred basis. Every time you get a boost in salary, try to increase the amount going into your district's plan whether that is your 457 or your 403(b) plan. In 2010, the contribution limit for your plans are $16,500, or $22,000 if you’re age 50 or over, although both these limits may increase if they are indexed for inflation.
- Max out on your Individual Retirement Account. Even if you have another retirement plan, you’re probably still eligible to contribute to an IRA. A traditional IRA grows tax deferred, while a Roth IRA’s earnings are tax free, provided you’ve had your account at least five years and don’t start taking withdrawals until you’re 59-1/2. (Your ability to contribute to a Roth IRA is based on your income.) You can fund your IRA with virtually any type of investment. In 2010, you can put up to $5,000 in your IRA, or $6,000 if you’re age 50 or older, although, as was the case with your 401(k), these limits may go higher if they’re indexed for inflation.
- Rebalance your investments as needed. Over time, your goals and risk tolerance can change. That’s why it’s a good idea to review and rebalance your portfolio at least once a year, possibly with the help of a professional financial adviser who is familiar with your situation.
- Avoid emotional investing. Don’t make decisions based on emotional reactions to what’s happening with your investments. For example, just because the price of an investment may have dropped significantly, it doesn’t necessarily mean you should rush to sell it. Despite the price drop, it may still have good prospects, and it might be an important part of your investment strategy. Consider all factors before making buy-or-sell decisions.
- Keep sufficient cash in your portfolio. During the long bear market of 2008 and early 2009, many investors discovered that they lacked enough cash in their portfolios. Of course, you need enough cash on hand to meet unexpected expenses without dipping into long-term investments. But beyond that, the presence of cash and short-term, more liquid investments can help reduce the volatility in a portfolio that may sometimes be battered by both the stock and bond markets.
These financial resolutions, like all types of new year’s resolutions, may not be easy to keep. But if you can stick with them, you may have many happy new years in the future.
Sponsored by Edward Jones
Save the Date: Employee Night at Chase Field
MPS and the Arizona Diamondbacks invite all employees and their families to a night at the ballpark.
This year’s end-of-year celebration at Chase Field will begin at 6:40 p.m. May 7 at the game against the Milwaukee Brewers.
For this game, the tickets are specially discounted so that you, your family and colleagues will be able to spend time together and celebrate the end of your school year. Information about discounts and online ticket sales will be coming soon.
Participant Notice: Plan Amendments
The Plan Document and Summary Plan Description of the MPS Employee Benefit Trust has been updated with Amendments No. 5 and 6. As an Employee Benefit Trust participant, you are responsible for understanding the benefits to which you are entitled under the policy and the rules you must follow to receive those benefits.
Portions of the amended sections focus on: clarified enrollment and eligibility procedures, nondurable medical supplies, vision benefits, foot-care exclusions, home health infusion benefit changes, medical leave assistance donations, and pre-existing exclusion modifications.
The complete plan amendments are available on the Employee Benefits Web site or in the Employee Benefits office on the second floor of the Administrative Services Center, 63 E. Main St., Mesa. If you have coverage questions, please call the Employee Benefits Department at (480) 472-7222.
Employee Benefits Journal is published for employees of Mesa Public Schools, an equal opportunity organization:
The district does not discriminate on the basis of age, race, color, religion, sex, marital status, handicap/disability, or national origin.
The Journal is produced by the Employee Benefits Department.
Questions and comments are welcome.
Please write to Andrea Billings, Director of Employee Benefits, Mesa Public Schools, 63 E. Main Street #101, Mesa, AZ 85201-7422.