University Business Policies and Procedures Manual

3600
INSURANCE BENEFITS
Effective Date: March 01, 1987
Revised: 11/01/91, 12/13/91, 12/08/99, 07/01/01, 01/12/05, 07/01/07, 01/01/08
Subject to Change Without Notice

Authorized by Regents' Policy 6.3 "Privileges and Benefits"

1. General

The University provides a diversified package of insurance benefits including medical, dental, vision, life, long term disability, long term care, and accidental death and dismemberment insurance. The University pays a portion of these insurance costs (see Section 4. herein).  In addition, a Pre-Tax Insurance Premium Plan (PIPP) is available. This policy provides a general description of the University's insurance benefits. For a more complete explanation of the benefits, contact the University Human Resources Service Center.

2. Eligibility

The following individuals are eligible to receive any of the insurance benefits offered by the University:

2.1. Employees

The following employees are eligible:

• Staff employees who are full-time or part-time regular employees working twenty (20) hours or more per week (.50 FTE or greater).
  
• Faculty members who have a nine (9) month contract or more and who are full-time or part-time regular employees working fifty percent (50%) or more per week (.50 FTE or greater).
  
• Post Doctoral Fellows (PDFs) who have a contract of at least nine (9) months or more working at least .50 FTE are eligible for medical, dental, life, and vision insurance only.

Insurance benefits are not available to:

• part-time employees working less than twenty (20) hours per week (less than .50 FTE);
• temporary employees; or
• on-call employees.

2.2. Eligible Dependents

Eligible employees, as described in Section 2.1. herein, may choose insurance coverage for eligible dependents. Dependents include the following:

• a legal spouse (must provide a copy of marriage certificate);
• a domestic partner (must provide UNM affidavit, see "Domestic Partners" Policy 3790, UBP);
• unmarried children to age twenty-five (25); or
• unmarried children over the age of twenty-five (25); if mentally or physically handicapped, provided extension of coverage is applied for within thirty-one (31) calendar days of the child's twenty-fifth birthday.

2.3. Retirees

Eligible faculty and staff employees retiring from the University may continue their group medical/dental insurance into retirement. To be eligible they must have:

• completed a minimum of five (5) consecutive years of service immediately prior to retirement;
• met the criterion for either the State of New Mexico Educational Retirement Act (ERA) or the Alternative Retirement Plan (ARP);
• been covered by a local group medical/dental insurance policy for at least four (4) of the last five (5) years, and be currently enrolled in one of the available UNM medical/dental insurance plans for the last twelve (12) months of employment, prior to retirement; and
• must be on UNM's payroll the month prior to retirement with active insurance.

2.3.1. Coverage

Coverage will be at the same level it was prior to retirement, until the retiree reaches sixty-five (65) when some coverage may change. If coverage is not elected at retirement, or if elected and later canceled, the retiree may not enroll in coverage at a later date.

2.3.2. Insurance Premiums

Insurance premiums are due and payable each month. Retirees can request the monthly premium be deducted from their NM Educators Federal Credit Union account or they can be billed monthly through the Bursar's Office. Failure to pay the monthly premium may result in cancellation of insurance coverage.

Eligible faculty and staff employees retiring from the University may continue their life insurance in accordance with Section 4.2. herein, and their long term care insurance in accordance with Section 4.5. herein.

3. Coverage Period

3.1. Coverage Begins

3.1.1. Initial Eligibility Period

To obtain coverage, an eligible employee must enroll in an insurance plan within sixty (60) calendar days from the date of hire or eligibility. Enrollment forms must be post-marked or date stamped by any office within the University Division of Human Resources (HR) no later than the sixtieth (60th) day from the date of eligibility.  Coverage for the employee and dependents (if selected) will normally begin on the first of the month following the date the signed enrollment form is post-marked or date stamped by HR. An employee can select to have medical coverage begin on the date the signed enrollment form is post-marked or date stamped by HR, but the employee will be charged for a  full month's employee portion of the premium regardless of the beginning date of coverage.  If an employee does not enroll within sixty (60) calendar days of the date of eligibility, the employee must wait until the next open enrollment period as described in Section 3.1.2. herein, unless the employee experiences a Qualifying Change of Family Status.  In these cases the employee may make the  changes described in Sections 3.1.1.1. and 3.1.3. herein.

3.1.1.1. HIPAA Special Events Enrollment for Health Insurance

Under the provisions of the Health Insurance Portability and Accountability Act (HIPAA), there are two special events which may allow the employee to add health insurance coverage if an employee has not elected health insurance coverage during the initial eligibility period or during open enrollment:

• The first special event is marriage, where the employee has opted out of health insurance, the employee may enroll in a health insurance plan and add the new spouse. A copy of the marriage certificate is required.
  
  
• The second special event is the birth or adoption of a child, where the employee has opted out of health insurance, at which time the employee may add a health plan and add the child.

In order to add a medical insurance plan for either of the above special events, the employee must submit an enrollment form to the University Benefits Office within thirty-one (31) calendar days of the event. These provisions apply only to medical, dental, and vision insurance.

3.1.2. Open Enrollment

Periodically, open enrollment will be scheduled to allow employees to select or change insurance benefits. You may choose to enroll, disenroll, or make changes to insurance plans and/or to your Pre-Tax Insurance Premium Plan (PIPP) during this period. The Employee Benefits Office facilitates this enrollment and notifies employees in advance.

 3.1.3.  Qualifying Change of Family Status

If an employee is enrolled in an insurance plan and experiences a qualifying change of status such as marriage, birth of a child, or qualifying job status change for a family member, the employee may make changes to his or her insurance coverage.  Changes must be made within thirty-one (31) calendar days from the Qualifying Change of Family Status event and must be consistent with the event.  Contact HR for more specific information concerning Qualifying Changes of Family Status.

3.2. Coverage While on Leave of Absence Without Pay

An employee on approved leave of absence without pay (LWOP) may continue insurance coverage by paying the employee's portion of the monthly premiums. Employees on approved LWOP will automatically be billed by the Bursar's Office for premiums while on LWOP.  If the employee wishes to cancel insurance benefits while on LWOP, the employee must notify the Employee Benefits Office in writing  within thirty-one (31) calendar days from the date LWOP begins.

If an employee cancels insurance while on LWOP, he or she must re-enroll within thirty-one (31) calendar days after returning from LWOP or at the next available open enrollment.  If the employee does not elect to re-enroll within thirty-one (31) calendar after returning to pay status and waits until the next open enrollment period, the employee will not have coverage until elections made during Open Enrollment become effective.

3.3. Coverage Terminates

3.3.1. Separation

Insurance benefits will terminate for the employee and dependents as of midnight on the last day of the month in which the separation date occurs.  The employee will be responsible for the full month's insurance premium through payroll deduction.  If the employee's paycheck is not enough to cover the full insurance premium, the employee will be billed for the difference.  In accordance with the COBRA continuation provision, an employee who separates from the University may elect to continue medical, dental, and/or vision insurance through the University (see Section 3.3.4. herein).

3.3.2. Employee Eligibility Ceases

If an employee is no longer eligible for coverage, insurance benefits for the employee and dependents will terminate on the last day of the month in which the eligibility ceases.  The employee will be responsible for the full month's insurance premium through payroll deduction.  If the employee's paycheck is not enough to cover the full insurance premium, the employee will be billed for the difference.  This would apply to employees whose assignment:

• is reduced to less than 1/2 time; or
• changes from regular to temporary or on-call. 

In accordance with the COBRA continuation provision, ineligible employees may elect to continue their medical, dental, and/or vision insurance through the University (see Section 3.3.4. herein).

3.3.3. Dependent Eligibility Ceases

When a dependent is no longer eligible for coverage as described in Section 2.2. herein, insurance benefits will terminate as of midnight on the last day of the month eligibility ceases. In accordance with the COBRA continuation provision, ineligible dependents may elect to continue their medical, dental, and/or vision insurance through the University (see Section 3.3.4. herein).

3.3.4. Consolidated Omnibus Budget Reconciliation Act (COBRA)

Some insurance packages may be continued through UNM in accordance with the federal guidelines of the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation provision. If a qualifying event occurs, an employee who is (or was) covered under the University's group medical, dental, and/ or vision plan at the time may continue coverage through the University's insurance plans for eighteen (18) months. The covered individual pays 102% of the premium costs. Contact the Employee Benefits Office for detailed information.

 3.3.5. Policy Conversion

Most of the insurance plans may be converted to an individual policy in accordance with the guidelines of each insurance contract. Contact the Employee Benefits Office for detailed information.

4. Types of Insurance Coverage

The types of insurance benefits available through the University include group medical, dental, vision, life, accidental death & dismemberment, long term disability, and long term care.  With the exception of vision, supplemental life, and accidental death & dismemberment insurance, premium costs are shared by the employee and the University. When an employee enrolls in any of the insurance plans, the premiums are automatically deducted from the employee's paycheck. The University contributes a percentage of the premium on medical, dental, long term disability, and basic life insurance. The percentage contributed by the University is based on salary and full-time status (FTE) according to the following schedule.

 For more information about the University's contribution for part-time employees and insurance coverage, please visit the Human Resources website. 

4.1. Medical, Dental, and Vision Insurance

The University's insurance program offers medical, dental, and vision coverage. Both individual and dependent coverage are available. Payroll deductions for medical, dental, and vision premiums can be made on a pre-tax basis, thereby reducing social security, federal, and state income taxes.

4.1.1. Pre-Tax Insurance Premium Plan (PIPP)

The Pre-Tax Insurance Premium Plan (PIPP) allows medical, dental, and/or vision insurance premiums to be subtracted from the gross salary before computing taxes. This reduces the employee's amount paid in federal, state, and FICA (social security) taxes. This method of pre-tax payment generally increases the employee's take-home pay. If this method is used, the employee may not deduct medical, dental, and vision premiums when filing federal and state income tax returns. Additionally, the employee may have a slight reduction at the time the employee qualifies for social security income benefits. When an employee enrolls in any insurance plan, the employee is enrolled automatically in PIPP. If the employee elects insurance coverage and does not want PIPP, a form must be completed declining the PIPP election. The PIPP election is valid through June 30 of each year and may only be changed during open enrollment or as the result of an Internal Revenue Service (IRS) defined "change in status."

4.2. Life Insurance

Term life insurance is available to all eligible employees, their dependents, and retired employees under age sixty-five (65). The Basic Life insurance coverage is available to employees and is equal to one (1) times the employee's base annual salary, with a minimum available coverage level of $25,000 and a maximum of $80,000. Basic Life insurance is guarantee issue if the eligible employee enrolls within 60 days of their initial eligibility date.   Supplemental Life coverage is available in increments of one (1), two (2), and three (3) times the employee's annual salary.  Supplemental Life tier 1 is guarantee issue if the employee enrolls within 60 days of their initial eligibility date.  Maximum coverage for Supplemental tier 1 is $100,000.  If the employee applies for Supplemental tiers 2 or 3 or applies for any level of coverage after their initial 60 days of eligibility, they must be approved for coverage by the insurance company.  The maximum benefit for basic and supplemental combined coverage levels is $1,000,000.  Employees may also purchase coverage for their spouse, domestic partner, and dependents.  Spouse and domestic partner coverage must be approved by the insurance company.

Retirees may continue their life insurance coverage at the same levels until age sixty-five (65), when basic life insurance coverage decreases to $4,000. If the retiree had additional/supplemental life insurance coverage, the retiree may elect to continue the coverage; however, the additional/supplemental coverage decreases to $2,000 for those that had an increment of one (1) and $6,000 for those that had an increment of two (2) or three (3).

4.3. Accidental Death & Dismemberment Insurance

Accidental death & dismemberment benefits are payable only when a death or dismemberment results from a covered accident. Coverage is available in $10,000 increments, provided it is not more than ten (10) times the employee's actual salary or $600,000 whichever is less. Additional coverage can be purchased for eligible family members.

4.4. Long Term Disability Insurance

Long term disability insurance is available to those eligible employees whose base annual salary is $10,000 or more. After six (6) continuous months of a covered disability, an employee may qualify for a disability income benefit. The benefit is equal to sixty percent (60%) of the base monthly UNM earnings to a maximum salary protection of $8,333 per month (such as the maximum benefit available is $5,000). If an employee is eligible for income from other group sources because of the disability, the benefit will be reduced by the amount of that income.

4.5. Long Term Care Insurance

Long term care insurance covers some or all of the costs of custodial care of an individual who is no longer capable of caring for him/herself. Custodial care in a residential facility or private home is not covered by either health insurance or Medicare. Full-time employees employed for one (1) year will be automatically enrolled in the basic plan in which the University pays 100% of the premium and basic coverage is guaranteed.  Part-time employees may apply for coverage after one (1) year of employment but must satisfy underwriting requirements.  Employees, full-time or part-time, with basic coverage can purchase additional coverage for themselves, a spouse, domestic partner, parents (in-laws), and grandparents (in-laws). The additional coverage is subject to underwriting and does not have a guaranteed issue.

Eligible faculty and staff employees retiring or separating from the University may continue their long term care insurance by contacting the insurance carrier directly. The University's long term care insurance contribution ceases when the employee retires or separates from the University.

5. Related Information

The Human Resources Benefits website has additional information and enrollment forms.

Comments may be sent to UBPPM@UNM.edu
http://www.unm.edu/~ubppm