SECTION: PERSONNEL INDEX: C-2

SUBJECT: INSURANCE BENEFITS

POLICY

The University of Houston System provides a variety of group insurance programs to regular employees through the State of Texas Uniform Group Insurance Program (UGIP). These plans are administered by the Employees Retirement System (ERS). Plan design and premiums are established annually by ERS in accordance with state regulations.

The state contributes toward the payment of group insurance premiums for eligible employees and retirees. State contribution levels are established biennially in the General Appropriations Act.

This policy outlines the insurance benefits available to employees and the process through which insurance enrollment and changes take place. Insurance benefits are available to all regular University of Houston-Victoria employees and to eligible graduate assistants.

Definitions

Accelerated death benefits: Life insurance payments made available prior to death to terminally ill, terminally injured, or permanently disabled participants which are deducted from the amount of the death benefit

Accidental death and dismemberment (AD&D) insurance: An insurance benefit that is payable if the employee or the employee’s covered dependent sustains an accidental bodily injury that directly results in death or bodily loss (limb or eye) within 180 consecutive days following the date of the injury

Basic plan coverage: The university’s basic insurance program that currently includes coverage for the employee only (no dependent coverage) at no employee cost: Health Select medical insurance, $5,000 term life, and $5,000 accidental death and dismemberment insurance

Deductible: The pre-set flat amount that the employee is required to pay per year toward eligible expenses before contribution by the insurance company begins

Eligible dependents: For the purposes of this policy, an employee’s spouse (including common-law spouse), unmarried children under age 25, and unmarried disabled children of any age, if the child was covered before age 25

Evidence of insurability (EOI): Proof of good health (such as medical records or a physician’s statement) that may be required by an insurance carrier when an employee requests changes of coverage or adds dependents

Graduate assistants: Graduate students enrolled full-time who hold an appointment requiring the performance of such duties as classroom instruction, academic advising, grading papers and examinations, supervision, research, or administrative responsibilities. Graduate assistant positions include those of teaching fellow, teaching assistant, and research assistant.

Health/dental indemnity plans: Insurance plans that allow employees to use any physician or provider of their choice and pay a percentage of charges for covered expenses after a deductible is met by the employee.

Health/dental maintenance plans: Prepaid plans that provide comprehensive medical and dental coverage through a network of participating physicians and providers who have agreed to provide services at a reduced cost. The employee pays a small flat fee for services; there is no deductible and there are no claim forms.

Network: A group of physicians and providers who have agreed to provide services at a discounted rate for employees who live within specified areas

Optional coverage: Any insurance coverage in excess of that included in "basic plan coverage"

Primary care physician: The physician who manages the employee’s health care and refers the employee to other providers, specialists, etc., as necessary; usually in family practice, internal, medicine, or pediatrics

Qualifying events: Specific events (such as birth, marriage, divorce, termination of employment, death, etc.) determined by the Internal Revenue Code and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) as acceptable justification for allowing continued group insurance coverage or eligibility

Regular employee: A university employee who is appointed for at least 20 hours per week on a regular basis for a period of at least 4-1/2 months, excluding students employed in positions that require student status as a condition of employment

Group Insurance Coverage Offered to UH System Employees

Health insurance options include an indemnity plan and several health maintenance organization (HMO) options:

• HealthSelect: The State of Texas offers this indemnity plan, which provides comprehensive health coverage with both network and out-of-network options. An international insurance plan, Health Select provides a higher benefit payment through a network primary care physician, with the option of lower benefits when the insured chooses an out-of-network provider.
• Health Maintenance Organizations (HMOs): The University of Houston System offers several HMO options which may vary from year to year, each providing pre-paid medical care using HMO physicians and providers.

Dental insurance is offered, with two options:

• A dental indemnity plan allows the employee to receive dental care at the dentist of choice. A deductible applies, and claims are filed through which the insurance carrier pays a percentage of the costs.
• A dental maintenance organization provides for the employee to receive care by an approved participating dentist and pay a reduced fee at the time of service. There is no claim form to file.

Life insurance options are offered as follows:

• Employees are automatically enrolled in basic employee-only life coverage of $5,000, at no premium cost to the employee.
• Additional (optional) life insurance may be purchased provided the employee is enrolled in a health plan. The plan offered is an age-rated plan under which premiums are determined by age, level of coverage, and salary. Options may be obtained at one, two, three, and four times the employee’s annual salary, with a maximum benefit level of $400,000. Enrollment at the higher levels requires prior approval by the insurance company, based on evidence of insurability. Optional life insurance provides for accelerated death benefits for a terminally ill patient.
• Dependent life insurance is available for an employee’s eligible family members, currently at $5,000 on each family member.

Accidental death and dismemberment (AD&D) options include:

• Employees are automatically enrolled in basic AD&D with a benefit of $5,000, at no premium cost to the employee.
• Additional AD&D coverage may be purchased for the employee and/or eligible dependents. For insured individuals under age 70, the minimum optional AD&D coverage is $10,000; the maximum is $200,000. Lesser levels are available for older employees and dependents.
• Optional life insurance includes equal levels of AD&D coverage, subject to evidence of insurability at the higher levels.

Disability insurance: An employee may enroll in short-term disability (STD) and/or long-term disability (LTD) to provide protection from loss of income during extended absences due to disability. The benefit level offered is 60% of the employee’s gross salary.

• Short-term disability has a 30-day waiting period and provides benefits for up to five months, subject to maximum allowable monthly benefits.
• Long-term disability has a 90-day waiting period and provides benefits until age 65 in the event of permanent and total disability, subject to maximum allowable monthly benefits. Long-term disability benefits will be coordinated with any other disability benefits received (e.g., social security, workers’ compensation).

Other Insurance and Insurance-related Benefits Offered to UH System Employees

TexFlex is a "cafeteria plan" offered by the State of Texas that provides employees the option of paying for group insurance premiums, eligible health care expenses, and eligible dependent care expenses with pre-tax dollars, thus reducing the employee’s taxable income.

• Premium conversion provides the employee the option to have group insurance premium costs (except for dependent life) deducted from his/her salary on a pre-tax basis.
• TexFlex reimbursement accounts allow employees to authorize deductions from their pay on a pretax basis to go into the account(s) for those expenditures authorized by law. The accounts must be renewed on an annual basis at the beginning of each fiscal year. Reimbursement is made through the filing of claim forms, and money in either account not used by the end of the fiscal year is forfeited.

-The Health Care Reimbursement Account (HCRA) contains funds set aside for eligible health care expenses not covered by group insurance within the enrolled fiscal year. An employee must be employed for six continuous months to enroll for this benefit, and enrollment is irrevocable for the year in which enrolled; i.e. contributions must be made, even if the employee has terminated.

-The Dependent Care Reimbursement Account (DCRA) contains funds set aside for dependent day care expenses that are necessary for the employee to continue working. The commitment for the fiscal year is irrevocable as long as the employee is employed, unless there is a qualifying change in family status.

Consolidated Omnibus Budget Reconciliation Act (COBRA): This federal law provides that group health and dental insurance coverage may be extended for the employee and insured dependents after employment with the university ceases, or for other qualifying events.

• Employees may continue health and dental coverage for up to eighteen months upon termination for reasons other than gross misconduct, or when employment is reduced to less than .50 FTE.
• Dependents may continue health and dental coverage for up to thirty-six months in the case of one of the following qualifying events: death of the employee covering the dependent; divorce (or dependent being dropped in anticipation of divorce); or dependent child loss of eligibility for such reasons as marriage or turning age 25.

Workers Compensation: All university employees are covered under provisions of the Texas Workers’ Compensation Act. In addition to medical coverage for job-related injuries or illness, monetary compensation is available for employees in the event of injury while performing authorized services for the university and to their beneficiaries in the event of death. To ensure timely coverage under Workers’ Compensation, any accident, illness, or injury occurring while on the job must be reported to the employee’s supervisor immediately, in accordance with UHV Policies and Procedures, C-11.

Unemployment Compensation: University employees are covered by the Texas Unemployment Compensation Act and may be eligible for weekly benefit payments during a period of unemployment. The university bears the cost of unemployment compensation insurance. This program is administered by the Texas Workforce Commission, which determines eligibility of the former employee to receive benefits. Voluntary termination or discharge for cause are not normally covered by unemployment compensation.

Social Security: All employees participate in the federal Social Security Program (FICA), which provides an employee with death, survivor, and disability benefits during the years of employment, as well as retirement benefits. Contribution rates to Social Security are determined by the U. S. Congress; the university and the employee contribute equally to the cost. The deduction from an employee’s pay and the university contribution are deposited to the employee’s credit with the federal government according to federal guidelines.

Insurance in Case of Retirement or Termination

Employees who retire from the university with at least ten years of creditable service may continue coverage in the group insurance program and continue to receive the state contribution toward premium payment.

Employees who terminate and do not retire may elect to convert their health, dental, and life coverage from the group plan to an individual plan. The terminated employee is then responsible for paying the full premium to the insurance company.

PROCEDURES

Enrollment: During new employee orientation and sign-up, new benefits-eligible employees will be provided with information regarding group insurance options. New employees have a 31-day period during which to select optional insurance coverage or decline coverage.

Eligible employees, except for graduate assistants, who fail to make a selection are automatically enrolled in basic plan coverage at no cost to the employee, and must remain in the basic plan for the balance of the plan year. Graduate assistants who do not make a selection will receive no coverage.

An employee must enroll in a health plan in order to be eligible to enroll in any other group insurance coverage.

Enrollment changes: Employees are allowed to make changes to insurance selections during the annual summer enrollment period, usually during July and August, to become effective on September 1 for the new fiscal year. Each year, employees will receive packets mailed via campus mail with information on available changes, new options, and premium changes. Employees are responsible for obtaining the necessary change forms from the Human Resources Department and submitting change requests by the specified date.

Changes at times other than during summer enrollment are limited by federal law. Guidelines governing changes, as well as other information regarding university insurance benefits, may be obtained from the Human Resources Department.

Payment for group insurance: The state covers the cost of basic employee-only coverage. The costs of optional coverage that exceeds the amount of the state contribution will be deducted from the employee’s pay; such deductions will be itemized on the employee’s earnings statement. Retirees will be billed by the ERS.

Faculty on a nine-month pay option or a spring semester appointment of four and one-half months continue coverage through the summer months by having summer premiums withheld in April and May and making no payments during June, July, and August. Faculty on 12-month pay options continue monthly contributions/ payments.

Approved by:



Signature on file                      			   9/9/98  
Dr. Karen S. Haynes				Date
President

Originating department:	Human Resources
New review date: August 2000