Faculty Benefits Committee Meeting

Minutes, October 17, 2002

11:00 – 12:00

 

The following committee members were present: Dale Atkins, Chuck Donbaugh, Blair Funderburk, Marc Goetschalckx, John Grovenstein, Jim Higgins, Jonathan Morris, Gail Giles for Jackie McGill, and Gayle Warren.

The meeting was called by to order and the minutes from the September 10, 2002 meeting were approved.

Four issues were discussed: domestic partner benefits, life insurance, deposit of funds into retirement accounts, and open enrollment.

Domestic Partners

Georgia Tech’s OHR will extend benefits to domestic partners if Georgia Tech has the authority to set eligibility and the vendors agree to the change. These benefits will include:

§         CompBenefits (which recently bought OHS and provides the OHS and the CompBenefits PPO dental plans)

§         Cinga (accidental death and dismemberment)

§         Georgia Tech access (BuzzCard, SAC, Library, and check cashing, with OHR currently working out the administrative details)

None of these benefits require Georgia Tech or Board of Regents contributions. The full cost of these benefits are paid for by the employee. For domestic partners, these benefits must be paid for with post-tax deductions.

Participation is likely to be low. Nationally, 1.5% to 2% of employees participate in these programs. The program applies equally to same sex and opposite sex partners. All employees seeking access to domestic partner benefits must sign a Declaration of Domestic Partnership. The declaration requires both the employee and the partner to declare partnership, and to provide evidence of either a contractual relationship between the partners or some shared financial resource. While not a contract, false statements in the declaration is grounds for employee termination.

Life Insurance

The current Board of Regents $25,000 limit has been in place since 1988. It is unlikely that the BoR will reconsider this limit until the system does not have budget shortfalls.

The Supplemental Life is also provided by the BoR. The recent increase was due to the large number of retirees that Georgia Tech has in the system. The increases are largest in older age brackets. Despite the increase, the rates still appear to be competitive with the market. This policy currently limits employees to three times their salary, and has a $40,000 cap after retirement (for employees employed before 1980, the limit is $125,000). It also requires employees to reduce their coverage by 35% at age 67 and to a maximum of $40,000 at age 70. Approximately 40% of employees purchase supplemental life.

The BoR recently decided that this benefit would be paid for with after-tax dollars. Tax law caps the amount of life insurance that can be paid through pre-tax dollars to $50,000. Since the Regents provide $25,000 to all employees, only $25,000 additional coverage can be pre-tax. After that, the employer must calculate “imputed income” from the benefit. This is complicated, and the tax savings are not significant. Hence, the Regents decided to drop the pre-tax option.

Of particular concern is how we protect younger faculty and staff, who have little estate protection in case of death.

Georgia Tech could provide additional supplemental life. The advantages of this is that the employee is guaranteed to be accepted, without health and family history screens. A second advantage is that payroll deduction can be used to ensure that premiums are paid. Most universities in the state already provide for a second supplemental life policy program. Blair will look into options for this.

Deposit of funds into retirement accounts

Currently, over 80% of retirement contributions are transferred to the retirement company electronically. Hence, the employees accounts are credited on the day the paycheck is issued.

 Last month, funds to the TIAA retirement accounts were not transmitted on schedule due to a formatting problem on a Georgia Tech deduction summary report. Once the problem was identified, the form was redesigned and the monies transmitted. TIAA-CREF credited the accounts as if the money had been transmitted correctly on the original day.

Open enrollment

Health care increases were more modest than expected, and lower than the general market (which rose 15-20%). BlueChoice went down in price, while the BlueCross Indemnity plan went up 15%. The indemnity program also instituted a nation-wide network. This is expected to save the program 10 to 15%, but now if an employee is out of state, the employee needs to find a network doctor or the employee could be balance-billed (which is usually 10 to 15% above the covered costs). Employees traveling in other countries can still see any doctor.

The dental plan was expanded. A PPO was added which provides better coverage for people using out-of-network dentists. The PPO will provide a 70% reimbursement of the negotiated network rate, for routine dental services,  if an employee chooses to go out-of-network.  The member will be responsible for the 30% co-payment plus any amount charged above the network rate.  In contrast, under the current OHS plan, if a member goes out of network, the reimbursement tends to be in the 10 to 15% range.

The next meeting will be held on January 14th. We will discuss the College and University Professional Association for Human Resources benefits survey.