FREQUENTLY ASKED QUESTIONS for FY16 MEDICAL RATES 1. Why are only BCBS participants seeing an increase in premiums? Many factors were considered by the actuaries in pricing, including claims experience, slight differences in benefit designs, and provider networks, as well as the recommendation from the Health Plan Committee to blend the pre-‐65 employee claims experience with the active employee claims experience. Actuaries then developed rates with the aim of fostering a long term, financially stable health plan with multiple carrier and network choices. Presbyterian’s current rates, which are higher than the other offerings, do not accurately reflect the minor network and medical management variations of the three networks. As a result of this pricing, the rates for Presbyterian are projected to cross the ‘Cadillac Tax’ threshold outlined by the Affordable Care Act much sooner than the other plans offered by UNM, which will cause undue cost and benefit design pressure on UNM. By normalizing the premiums, the ‘Cadillac Tax’ pressures will be delayed for a number of years. Therefore, Presbyterian rates are being held flat. UNM Health rates were set a little high in their first year (FY15) because our actuaries did not know how many employees would select UNM Health, and did not know what the UNM Health claims experience would be. We have commitments from UNM Hospitals and providers that their underlying charges for services on the UNM Health Plan will not increase in the next fiscal year. This, along with additional experience with the UNM Health plan, is allowing us to further reduce the premiums for UNM Health. 2. For several years, UNM has stated that medical premiums were based on actual claims experience of employees and dependents enrolled with each Third Party Administrator (UNM Health, BCBS, Presbyterian) that administers UNM’s plan by paying claims, providing utilization management, and providing other healthcare administrative services, and by each tier (Employee only, Employee + Spouse, Employee + Child(ren), Family). How are the premiums under each plan now being determined, if not by actual claims experience? See FAQ #1. 3. Can the health insurance reserve be used to cover the employee portion of the medical premium increase? Because the reserve funds are still higher than necessary, and UNM plans to return some of those funds to employees by taking no medical premium deduction from their December 2015 paycheck. This premium holiday is a one-‐time occurrence, and will apply to all active employees on Main Campus, HSC, Branch Campuses, and Affiliates. The net result is that active employees, who make no change in their medical election, (i.e. remain with the same Third Party Administrator that they are currently enrolled with), will not pay more for their FY16 medical contributions. Revised 04.08.2015 4. Which group (plan and tier) will see the highest increase impact, and why? Employees earning $50,000 and above, who are enrolled in family coverage with BCBS, will experience the highest dollar increase ($24.40 / month). Please see FAQ #1 related to the BCBS increase in premiums. UNM Health monthly premiums will decrease by $1.80 to $10.80 compared to the current year, depending on level of coverage and income. 5. I am only enrolled in dental coverage. Why do only employees enrolled in medical coverage receive a premium holiday? We were asked by the Administration to lessen the impact in FY16 for active employees enrolled in the medical plan, due to active employees’ rates increasing on average 2.5% as a result of blending the pre-‐65 retiree claims experience with the active employee claims experience. 6. If I am a new hire and my medical coverage is effective December 1, 2015, will the premium holiday apply to me? Yes, it will apply to anyone enrolled in UNM medical coverage on December 1, 2015. 7. Whom should I contact if I have specific questions related to my coverage? For information about benefits and rates, please visit the HR website, or call 277-‐MYHR (6947). Revised 04.08.2015