Borgess Health
2014
Nonunion
Benefit Update
Pete Krueger
Administrative Director
HR Operations
9/14/2013
Al Hoffman
Compensation and Benefits
Manager
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BH 2014 Benefit Update
9/14/2013
Today’s Agenda
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Review of current dynamics
Paid Time Off
Retirement Programs
Healthcare Benefits
Questions
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BH 2014 Benefit Update
9/14/2013
Our Reality Includes the
Following Dynamics
 Reductions in reimbursement
 Increases in
 Charity Care
 Bad Debt
 Affordable Care Act
 Deployment of Symphony
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BH 2014 Benefit Update
9/14/2013
These Dynamics Have
Significant Impact
 Affordable Care Act

New fees, taxes, and charges

New payment systems will be established with
the goal to directly tie reimbursement to
performance – ie HCAHPS/value based
purchasing
 Borgess will experience a significant reduction
in Medicare payments

Conservative estimates indicate a $50 million
reduction between FY 2013 and FY 2017
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BH 2014 Benefit Update
9/14/2013
These Dynamics Have
Significant Impact
 Symphony Deployment

Standardize/Align Human Resources, Finance,
and Supply Chain programs and services
throughout Ascension Health provide significant
opportunities for financial improvement through
reduced costs or gains in efficiencies.

This process will in some cases require Borgess
associates to change the way we work and
follow a different set of policies/programs.
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BH 2014 Benefit Update
9/14/2013
What does this all mean?
 Borgess will continually have pressure to do
more with less financial resources
 Borgess must be more efficient in all that it does
 Borgess must, where it can, leverage its
relationship within Ascension to use buying
power and market share to reduce its cost of
operations
 Borgess must ask all of its associates to
continue to work together as a team to meet
current and future challenges
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BH 2014 Benefit Update
9/14/2013
And What Does This Mean for
Benefit Programs
 Symphony standardization/alignment of
programs/policies will have positive financial
implications, but will require associates to
demonstrate additional flexibility
 Associates need to be sure they understand
benefit program changes and ask questions
 Associates need to make educated choices
regarding healthcare benefits, develop health
habits, and be wise consumers.
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BH 2014 Benefit Update
9/14/2013
Paid Time Off
Certain aspects of current PTO programs will
change as of January 2014
(Impact will vary to some BH companies)
PTO Hours will be earned based on hours worked
Currently for BH Associates
As of January 1st
• Every pay period a PTO
accrual is added to your PTO
bank based on your status and
years of service
• Associates will still accrue
PTO every pay period but
the accrual will be based on
hours worked and years of
service
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BH 2014 Benefit Update
Paid Time Off
Impact of accruing PTO based on Hours Worked
 Associates with a status of less than fulltime will be recognized
for working additional hours
 PTO accruals will be applied to hours worked up to a maximum
of 80 hours per pay period
 The following hours will be considered hours worked for
purposes of PTO accrual
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Regular paid hours of work
Low need time
Paid PTO hours
Jury duty
Bereavement leave
Military leave
(Premium hours, such as call pay, stand by pay, etc. are excluded)
9/14/2013
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BH 2014 Benefit Update
Paid Time Off
Where applicable, Holiday time will be separated from PTO accruals and
as January 2014 – 2 different banks; Borgess Health will recognize 8
holidays
9/14/2013

PTO accrual rates will be adjusted to account for the two
additional holidays; and the number of holidays will increase from
6 recognized holidays to 8

The intent is to designate the following days as the new Borgess
holidays:
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
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New Year’s Day
President’s Day
Good Friday
Memorial Day
Independence Day
Labor Day
Thanksgiving
Christmas
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BH 2014 Benefit Update
Paid Time Off
Impact of Revised Holiday Policy
Currently
As of 1/1/14 (example)
 FT receive 6 holidays
• 1.0 FTE (40 hrs/wk)
• receives 8 hours per holiday
 RPT/PT varies, but
generally receive 3
holidays
• .8 FTE (32 hrs/wk)
• receives 6.4 hours per holiday
9/14/2013
• .6 FTE (24 hrs/wk)
• receives 4.8 hours per holiday
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BH 2014 Benefit Update
9/14/2013
Paid Time Off
Andrew Associate works 24 hours/week. He is
fortunate that he is not scheduled to work any holiday
in 2014. Prior to the new PTO policy, Andrew would
have received 24 hours for holiday pay. However, in
2014 he will receive


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

New Year’s Day
4.8 hours
President’s Day
4.8 hours
Good Friday
4.8 hours
Memorial Day
4.8 hours
Independence Day 4.8 hours
Labor Day
4.8 hours
Thanksgiving
4.8 hours
Christmas
4.8 hours
Total = 38.4 Hours of holiday time
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BH 2014 Benefit Update
Paid Time Off
Impact of Revised Holiday Policy
What happens if I am scheduled to work a holiday?

Associates will receive holiday pay up to their standard hours;

Instead, associates will have 90 days to utilize the hours for a
given holiday

Any holiday time not utilized after this 90 day period will be lost

If the rescheduled holiday hours are cancelled at the
supervisor’s request or utilizing the time causes the associate to
work over their standard hours – the hours will be paid the first
pay period following the 90 day window.
9/14/2013
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BH 2014 Benefit Update
9/14/2013
Paid Time Off
Holiday Example
Emily works July 4, 2014, she receives time and half for hours
worked but not holiday pay as she worked her standard hours
In order to receive her holiday, she needs to schedule an
additional day off between July 4th and October 4th
If Emily doesn’t schedule that additional day, she will lose that
holiday pay
If Emily’s supervisor can’t grant the time off for this day, Emily
will automatically receive her holiday after the 90 day window
expires
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BH 2014 Benefit Update
Paid Time Off
Other PTO Policy Revisions

Standard PTO maximum – 320 hours

PTO Sell
PTO sell options : 80 hours per year
A minimum of 80 hours must be retained within your PTO bank
Sells allowed twice per year – cash out will be at 90% of your
base hourly rate

9/14/2013
Revised PTO policy will be made available to associates prior to
January 2014
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BH 2014 Benefit Update
Retirement Program
Certain aspects of the Borgess Health
retirement/pension program will change as January 2014
Changes to the Retirement/Pension Program will apply
to those associates hired after January 1, 2014

Eligible associates employed prior to January 1, 2014 will continue to
participate in Borgess’ defined benefit (DB) retirement/pension program
and employer match program

Eligible associates hire after January 1, 2014 will participate in a new
defined contribution(DC) retirement program and employer match
program
9/14/2013
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BH 2014 Benefit Update
Retirement Program
Additional Clarification
Defined benefit (DB) retirement/pension program
 Promises a specific monthly benefit based on years of service and
employee earnings
Defined contribution (DC) retirement program
9/14/2013
 Both the employer and employee contribute dollars into a retirement
account (403B) whereby interest can be earned
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BH 2014 Benefit Update
Retirement Program
Comparison of Retirement Programs
Eligible associates hired prior to
1/1/14
 Grandfathered into current defined
benefit retirement program
 Eligible for a 50% match to their
403(b) plan up to the first 5% that is
deferred
 (As of 1/1/14, any associate who
has not met the 1 year vesting
requirement for the Employer Match
will be considered vested)
9/14/2013
Eligible associates hired after 1/1/14
 Eligible to receive an Employer
Automatic contribution (EAC) based on
years of service:
 Eligible for a 50% match to their 403(b)
plan up to the first 5% that is deferred
 Health Reimbursement Account
Employer deposit (for retiree healthcare costs)
for associates who complete 1000 hours or
more of service
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BH 2014 Benefit Update
Healthcare Benefits
General Considerations

Borgess Health benefits programs are a central component of your
total rewards structure

Borgess Health benefits compromise approximately between 30% to
40% of the average Borgess associate’s total compensation

Health and wellness benefits are an important part of Borgess’ ability to
attract and retain associates

Healthcare expenses continue to trend higher

Most employers are sharing more of the cost of benefits with their
associates
9/14/2013
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BH 2014 Benefit Update
Healthcare Benefits
Strategies to Impact Borgess Benefit Cost
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Adjust associate benefit premiums
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Revise plan designs
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Encourage associates to be wise healthcare consumers – make the
utilization of Tier 1 networks/providers a priority

Associates participate in Wellness programs and make a commitment
to a healthy lifestyle

Leverage Ascension Health’s size to provide benefit programs at
reduced cost
Borgess Health will utilize a more market competitive plan design
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9/14/2013
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BH 2014 Benefit Update
Healthcare Benefits
SmartHealth Plan Design Changes as of January 1, 2014
Deductible and Co-Insurance will be utilized for all benefit Tiers
 Deductible:
The amount you have to pay out-of-pocket for expenses before the
insurance company will cover the remaining costs

Co-Insurance
A co-sharing agreement between the insured and the insurer under a
health insurance policy which provides that the insured will cover a set
percentage of the covered costs after the deductible has been paid.

Copays
A fixed payment where the insured pays a specified amount of out-ofpocket expenses for health-care services such as doctor visits and
prescriptions drugs at the time the service is rendered, with the insurer
paying the remaining costs. Co-pays do not count towards and
individual’s annual out of pocket maximum
9/14/2013
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
2014 SmartHealth Plan Design
Plan Design Feature
Deductible
Coinsurance
Out-of-Pocket Maximum
Office Visit - PCP
Office Visit - Spec
Urgent Care
Hospital Inpatient
Hospital Outpatient
Emergency Room
Preventive Care
In-house Rx
Retail Rx
HRA Opportunity
2014
Domestic/ Tier 1
$200 / $400
90% / 10%
$1,400 / $2,800
$15 copay +
Deductible
$25 copay +
Deductible
$40 copay +
Deductible
In-Network/Tier2
$600 / $1,200
75% / 25%
$3,400 / $6,800
$25 copay +
Deductible
$35 copay +
Deductible
$50 copay +
Deductible
Non-Network/Tier 3
$3,000 / $6,000
50% / 50%
$6,000 / $12,000
Deductible +
Coinsurance
Deductible +
Coinsurance
Deductible +
Coinsurance
Subject to Deductible / Coinsurance
$150
Deductible +
100%
Coinsurance
$7 / $15 /$30
N/A
Covered up to 3x per year at in-house copays
Wellness Program
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BH 2014 Benefit Update
Healthcare Benefits
Example
Physician Office Visits
9/14/2013
 Currently when you see your Borgess primary care provider you pay
an office co-pay of $15

Beginning in January, your office co-pay will remain the same,
however you will have to satisfy a deductible as well

January 15th, you go to your Primary Care Provider (PCP), due to
the flu and this is your 1st medical visit for the year. The total office
visit expense is $100. Your patient responsibility for this visit will be
as follows:
Copay ----------$15
Deductible-----$85
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
Associate SmartHealth Premiums
 On average, Borgess Health associate premiums represent
approximately 22.5% of medical/Rx benefit costs
 Survey data indicates that a majority of employers share costs with
associates at a rate of 25% or higher
 As of January 1, 2014, SmartHealth benefit premiums will be targeted
at a 25% contribution rate
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BH 2014 Benefit Update
Healthcare Benefits
2014 Rates
2014
Coverage
Single
EE +
Spouse
EE +
Children
Family
9/14/2013
Employer
Monthly
Premiums
Associate
Monthly
Premiums
Associate Pay
Period
Premiums
Increase per
Pay Period
$661.88
$165.47
$76.37
$11.36
$1,194.09
$298.52
$137.78
$21.47
$977.69
$244.42
$112.81
$16.44
$1,473.09
$368.27
$169.97
$21.57
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
2014 Additional Benefit Changes
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Dental
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Vision
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Basic Life
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Family AD & D Coverage
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Network Changes
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Short Term Disability Rates

Benefit Term Date

Additional Dependent Coverage

HRA-Wellness Program
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BH 2014 Benefit Update
Healthcare Benefits
2014 Dental Changes
3 Dental Plans for 2014
9/14/2013
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Dental Comprehensive Plus (Formally known as the High Dental Plan)


Dental Comprehensive (Formally known as the Standard Dental Plan)

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No Plan Design Changes
Deductible is reduced from $100 per participant to $25
Individual / $75 Family
Dental Basic (New Plan Offering for 2014)

100% Preventive

50% Basic

No Major services covered

$500 Annual Max
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
2014 Vision Changes

New Vision Provider
VSP a national vision provider that provides vision care to over 59
million participants
 Well Vision Exam
Focuses on your eyes and overall wellness
Every calendar year. $10 Co-Pay
 Frames
$130 allowance for a wide selection of frames or contact lenses
20% off amount over your allowance
Every calendar year
 Lenses
Single vision, lined bifocal, and lined trifocal lenses
Polycarbonate lenses for dependent children
Every calendar year
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
2014 Other Plan Changes

Basic Life & AD&D Coverage


Current Plan provides up to 1.5 times coverage of your annual
salary
New Plan provides up to 2 times coverage of your annual salary
 Voluntary Associate & Family AD&D plan

A supplemental plan that you can purchase Accidental Death and
Dismemberment Coverage for you and your family. Coverage
levels available are 1 – 10 times your annual salary
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BH 2014 Benefit Update
Healthcare Benefits
2014 Other Plan Changes
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
9/14/2013
Network Changes

All current network exclusions for 2014 have been eliminated (Bronson,
Spectrum, Lakeland & Metro)

Services at these entities will be covered at Tier 2

OB High Risk and Inpatient Peds will continued to be covered at Tier 1 at
any Blue Cross/Blue Shield provider
Short Term Disability

Borgess will continue to subsidize a large portion of this benefit

Associates premiums will be based upon their age and income
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BH 2014 Benefit Update
Healthcare Benefits
2014 Other Plan Changes
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9/14/2013
Termination of Benefits

Currently benefits term at midnight on your last day of employment

Benefits will now terminate on the last day of the month that contains
your termination date

Dependent Children benefit coverage terms on their 26th birthday
Dependent Coverage

Borgess/Ascension Health will be expanding its definition of
dependents and will now cover any child with respect to whom the
Eligible Associate has been granted court appointed full legal (both
managing and possessory conservatory) custody or guardianship
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BH 2014 Benefit Update
Healthcare Benefits
HRA Defined

9/14/2013
Health Reimbursement Account (HRA)

This is an account that reimburses associates for their out of pocket
medical expenses

This account is “Employer Funded”

Funds from this account can be rolled over for up to 3 years

Account works very similar to a Flexible Spending Account (FSA)

Funds are tax free
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BH 2014 Benefit Update
9/14/2013
Healthcare Benefits
2014 Wellness Program
HRA Opportunities for 2014

Must be enrolled in SmartHealth to participate

$600 in total rewards will be available to associates

$350 for completion of an HRA (Health Risk Appraisal); HRQ
(Health Risk Questionnaire) and a follow up documented visit
with your PCP (Primary Care Provider)
-

These funds will be made available in your account with-in
2 weeks after completion of these activities
$250 for activities related to fitness and other related wellness
activities. These funds will be made available at the end of the
calendar year.
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BH 2014 Benefit Update
Healthcare Benefits
2013 Wellness Awards
The distribution of the 2013 Wellness awards will change slightly,
when they are awarded in January 2014

9/14/2013
If the associate earned a Level 5 award, the prize selection that will be
available for the participant is as follows:

$325 Cash (taxable)

1 Year Fitness Center Membership

Premium offset (January thru August)
Example – If you earn $500, you will receive $29.41 a pay
period for 17 pay periods to off set your premiums. This
program will have to stop prior to 9/1, as this will not be
supported by Symphony.
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BH 2014 Benefit Update
Next Steps

Benefit Enrollment Packets will be mailed October 4th

Detailed Information will be available and posted on the HR Intranet
site (www.hr.borgess.com)

Benefit Q&A drop in sessions will be made available the weeks of
October 7th and 14th (specific times and locations will be posted on the
HR intranet site)
9/14/2013
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