Forty one staff and faculty members attended three open meetings hosted by Provost Pat Farrell and Vice President for Finance and Administration Peggy Plympton in December. We thought everyone might be interested in the questions that they asked during the meetings, as well as the answers they received.
MEDICAL PLAN CHANGES
Q: Will pre-existing condition exclusions apply to our medical plans?
A: With the implementation of the Affordable Care Act (ACA), all medical insurance plans must drop pre-existing conditions clauses if they have them. That said, none of Lehigh’s medical plans have had a pre-existing conditions clause for at least 28 years.
Q: Will the added wellness program provide a premium cost break for individuals who participate?
A: We expect there to be financial incentives built into the wellness program. This could include a reduced premium for participants; however, we don’t have the final plan design at this time. Members of the university’s Wellness Committee will be involved in developing the program, so staff and faculty voices will be included in the process.
Q: Who will the medical plan vendor(s) be?
A: We will continue to work with Capital Blue Cross as our medical plan administrator for at least the 2013 plan year. As we move forward in adding a wellness component to our medical plan, we may seek proposals from other insurance providers.
Q: What might employees have to pay for medical coverage in the future?
A: It is not possible to make a prediction about future medical premiums, co-insurance and co-pay amounts at this point. HR will continue to keep staff and faculty informed about any potential changes to the medical plan resulting from the Affordable Care Act. One way we will do this is through a new monthly feature in Spotlight beginning in February.
Q: Can funds be moved from the current Voluntary Retirement Savings Program (VRSP) to the new retirement plan?
A: Assets in the current VRSP plan can remain where they are or be transferred to the funds available with the new vendor. The decision is left to the employee. The university will not require that the funds be transferred.
Q: Will employees be able to make after tax contributions in the new plan; will a Roth option be available?
A: The pension plan design calls for a Roth (after tax) employee contribution option to be available. This will give employees the opportunity to save both before and after tax funds from salary in the new plan.
Q: Will the deferral contribution maximum remain the same as it is currently?
A: Those maximums are set annually by the Internal Revenue Service (IRS). They will not be directly affected by the new retirement program.
Q: Will TIAA-CREF remain a part of the program; who will the vendor(s) be?
A: We are awaiting proposals from six vendors, including TIAA-CREF, and will have a decision by the end of the spring semester. TIAA-CREF may or may not be the vendor selected. If they are not, their funds may still be included in the mix of investment offerings, depending on whether they are rated as top funds in their categories.
Q: Will retirement plan contributions change for current employees; can they stay in the current plan?
A: All employees will transition to the new retirement program. There will be no grandfathering. The phase-in period described on page 8 of the Senior Officers’ Report will give employees the opportunity to adjust to the new plan structure.
Q: How many employees participate in a matching pension plan where they work; that is, how widespread is this kind of program?
A: According to The Mercer Group, consultants with knowledge of the benefits landscape in higher education, over 58% of large higher education institutions that have between $200 million and $1 billion in plan assets include a matching requirement in their retirement program. The source of this figure is the 2012 Plan Sponsor Survey, a national study of employers’ retirement plans.
Q: What will happen to the money saved if fewer employees participate in the matching plan than we estimate? Where will funds come from if more employees than budgeted for participate in the new plan?
A: If fewer employees participate in the matching plan, there may be uncommitted funds available. Alternatively, if more employees participate than anticipated, there could be increased cost to the university for the plan. We will monitor participation and may revise the parameters for the matching plan if the level of participation results in either a surplus or a deficit for the budget.
Q: How will things change if TIAA-CREF is not our retirement plan vendor?
A: The entire program is changing, so whether or not TIAA-CREF is our vendor, you will see changes in how the plan works. Human Resources will make every effort to clearly and frequently communicate with staff and faculty in the period leading up to and during the entire transition.
No questions or issues were raised.
Q: Will all the information related to these changes be made available in one central place?
A: Yes. We will aggregate all of the information about changes in one area of the HR website. For now, if you are interested in reading everything that has led up to this point, you can visit the Benefits Allocation Review page.