Group Life, Medical Insurance and Flexible Spending Programs
Murray State University
POLICY NUMBER: V A
SUBJECT: GROUP LIFE, MEDICAL INSURANCE AND FLEXIBLE SPENDING PROGRAMS
APPLIES TO: FULL-TIME STAFF AND FACULTY
EFFECTIVE DATE: January 1, 1994
REVISED FROM: February 17, 1990
GROUP LIFE, MEDICAL INSURANCE AND FLEXIBLE SPENDING PROGRAMS
Murray State University provides a Group Medical and Life Insurance program for its eligible full-time faculty and staff. Details of the program, certificates, identification cards, and claim forms may be obtained from Human Resources.
The contract with insurance companies to underwrite or administer claim payments is currently on a calendar year basis renewable January 1 of each year. The contract and/or coverage may be changed by the University at any time in accordance with the terms of the underwriting contract.
All full-time, regular employees working a minimum of 37 1/2 hours per week are eligible for medical insurance coverage on themselves and their eligible dependents, the basic life insurance coverage on themselves, and the tax-saver program. The effective date for medical insurance, life insurance, and tax-saver programs is the first day of the month following thirty (30) days of employment.
2. Life Insurance
Term life insurance coverage and accidental death and dismemberment coverage are provided to all eligible faculty and staff employees.
3. Optional Life Insurance Coverage
a. Through payroll deductions each eligible faculty and staff employee may purchase additional life insurance coverage (does not include dependents). Details are available in Human Resources.
b. New employees may purchase optional life insurance coverage during the first 30 days of their initial employment.
c. An employee who resigns his/her employment with the University and is rehired at a later date is considered a new employee for insurance purposes.
d. An employee cannot buy more than the maximum life insurance allowed.
e. Eligible employees may purchase additional supplemental life insurance or increase their coverage at any time during the year by providing evidence of insurability.
f. Employees may be required to provide the insurance company evidence of insurability for initial purchases or increases in coverage.
4. Medical Insurance
Detailed information of the group medical plan is provided in the insurance booklet issued by the insurance company administering the plan. Additional information regarding coverage may be obtained from Human Resources.
5. Tax-Saver Program - This program is available to all regular, full-time employees. A brief summary of the program follows. Additional information may be obtained in the Human Resources office.
a. Insurance Premium - The insurance premium for the option chosen by the employee will be withheld from the employee's gross wages but will not be included in the taxable income and taxes will be reduced.
b. Medical Spending Account - An employee may set aside money in an individual medical spending tax-saver account for reimbursement of out-of-pocket medical expenses not covered by insurance and incurred during a calendar year. Money put into a medical spending account is not subject to federal and state income taxes or to Social Security tax. IRS regulations stipulate that amounts left in medical spending or dependent care accounts at year end cannot be returned to the employee.
c. Dependent Care Account - a dependent care account can be used for reimbursement of eligible day care costs of a dependent under the age of 13 or a dependent child or adult who meets IRS qualifications. Money put into a dependent care account is not subject to federal and state income taxes or to Social Security tax. The annual maximum established by IRS code that can be put into a dependent care account is $5,000.
6. Coverage Periods
a. Anyone covered under the group plan who wishes to continue the medical insurance upon termination of employment should contact Human Resources. The spouse and/or dependent children may also continue the medical insurance under the COBRA (Consolidated Omnibus Budget Reconciliation Act) if qualifying events such as the death of the employee, divorce or legal separation, or the dependent child reaching the age limit of 19 or 24 removes him/her as a covered dependent. Details are available from Human Resources.
b. A ten-month faculty or staff member who has signed a contract to return in August will have the University portion of medical and basic life insurance premiums paid by the University for the full twelve months. Any premiums incurred as a result of any insurance option selected by the employee will be the responsibility of the employee.
c. A ten-month faculty member on leave with pay for ten months and planning to return the following August will have the University portion of medical and basic life insurance paid by the University for the full twelve months. Any premiums incurred as a result of any insurance option selected by the employee will be the responsibility of the employee.
d. A ten-month faculty member who is not granted a leave of absence and who does not sign a contract to return in August will automatically be removed from the insurance program at the time he/she is removed from the payroll or May 31, whichever is earlier.
e. A regular, full-time staff employee employed for a term of less than 12 months per year will have the University portion of the medical and basic life insurance paid by the University during the months not employed if he/she is planning to return to his/her position or is receiving a leave of absence after the break in employment. Any premiums incurred as a result of any insurance option selected by the employee will be the responsibility of the employee.
f. A faculty or exempt staff employee on an academic year contract who is on a leave without pay beginning in August will have the University portion of medical and basic life insurance premiums paid by the University through the preceding July 31. Any premiums incurred as a result of any insurance option selected by the employee will be the responsibility of the employee. The individual must pay the entire premium for the insurance beginning August 1 and will continue paying the entire premium until he/she returns. Details are available from Human Resources.
g. An employee who resigns or is terminated will have his/her insurance coverage terminated at the end of the month in which his/her last day of work occurs.
h. Upon termination of employment (for any reason other than gross misconduct), the former employee has the right to continue coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) provided he/she is not covered by any other group medical insurance plan. Details are available from Human Resources.
i. Retired employees:
(a) The retired employee who is vested in TRS/KERS is covered by a medical plan provided by the systems when he/she begins to receive his/her retirement.
(b) An employee who retires and is vested but chooses not to participate in KERS/TRS immediately and is not covered by another medical plan may elect coverage under COBRA at his/her own expense. (See Consolidated Omnibus Budget Reconciliation Act)
(c) An employee who retires and is not vested in TRS/KERS and is not covered by other medical coverage may elect coverage under COBRA at his/her own expense. (See Consolidated Omnibus Budget Reconciliation Act)
(2) Life Insurance
(a) The retired employee who is vested in TRS/KERS is provided with a death benefit policy through the retirement system when he/she begins to receive his/her retirement.
(b) The retired employee can convert his/her life insurance at the time of retirement. This transaction is strictly between the employee and the University life insurance provider.
7. Consolidated Omnibus Budget Reconciliation Act
a. Federal law requires that most employer sponsored group medical insurance plans offer employees and their families the opportunity for a temporary extension of medical insurance coverage (called "continuation coverage") at group rates in certain instances where coverage under the plan would otherwise end provided they are not covered by any other group medical insurance plan. Under the continuation coverage, the former employee is required to pay the premium for this coverage.
b. If an employee is currently covered by Murray State University's medical insurance plan, he/she has a right to choose this continuation coverage if he/she loses his/her group medical insurance coverage because of a reduction in his/her hours of employment or the termination of his/her employment (for reasons other than gross misconduct on the employee's part).
c. If an individual is the spouse of an employee covered by this plan, he/she has the right to choose continuation coverage if he/she loses group medical insurance coverage for any of the following four reasons:
(1) the death of a spouse,
(2) termination of a spouse's employment (for reasons other than gross misconduct) or reduction in a spouse's hours of employment,
(3) divorce or legal separation from a spouse, or
(4) a spouse becomes eligible for Medicare.
d. In case of a dependent child of an employee covered by this plan, he/she has the right to continuation coverage if group medical insurance coverage is lost for any of the following five reasons:
(1) the death of a parent,
(2) the termination of a parent's employment (for reasons other than gross misconduct) or reduction in a parent's hours of employment with Murray State,
(3) parent's divorce or legal separation,
(4) a parent becomes eligible for Medicare, or
(5) the dependent ceases to be a "dependent child" under the medical insurance plan.
e. The employee or a dependent has the responsibility to notify Human Resources within 60 days of a divorce, legal separation, or a child losing dependent status under the group medical insurance plan.
f. When Human Resources is notified that one of these events has occurred, it will in turn notify the affected individual that he/she has the right to choose continuation coverage. He/she will have 60 days from the date coverage would terminate because of one of the events described above to inform Human Resources that he/she wants continuation coverage. If he/she does not choose continuation coverage within the allowable period, his/her group medical insurance coverage will end.
g. If an individual chooses continuation coverage, Murray State is required to give him/her coverage which is identical to the coverage provided under the plan to similarly situated employees or family members. He/she will be afforded the opportunity to maintain continuation coverage for three years unless he/she loses group medical insurance coverage because of a termination of employment or reduction in hours. In that case, the required continuation coverage period is eighteen months. The law provides that continuation coverage may be cut short for any of the following five reasons:
(1) Murray State no longer provides group medical insurance coverage to any of its employees,
(2) the premium for continuation coverage is not paid by the established dates,
(3) the individual becomes covered under another group medical insurance plan, as an employee or otherwise, or
(4) he/she becomes eligible for Medicare.
h. An individual does not have to show that he/she is insurable to choose continuation coverage. However, he/she will have to pay all of the premium for the continuation coverage. At the end of the eighteen month or three year continuation coverage period, he/she must be allowed to enroll in an individual conversion plan provided under the group medical insurance plan.
8. Coverage During Pending Disability Retirement
An employee who has applied for disability benefits under Kentucky Teachers' Retirement or Kentucky Employees Retirement will be placed on leave without pay effective at the time all sick leave and vacation leave has been used and be carried on leave for a maximum of six months. The University portion of the medical and basic life insurance premium will be paid by the University. Any premiums incurred as a result of any insurance option selected by the employee will be the responsibility of the employee. If at the end of the family leave, the eligibility for disability retirement has not been determined, the employee may be placed on leave without pay. The employee will be responsible for the entire medical insurance premiums.
9. Right to Change Benefit Coverage
The University has the right to change the medical and/or the life insurance policy at any time without prior notice to the employees.