Open enrollment for Harvard employees begins Oct. 28 and runs through Nov. 12.
Each year at this time employees have the opportunity to make changes to their participation in the University’s benefit plans, including medical and dental coverage. Employees can also opt to elect a flexible spending account that allows for the setting aside of money for certain health or dependent care costs on a pretax basis.
Changes made during the open enrollment period will be effective as of Jan. 1.
The recently passed Patient Protection and Affordable Care Act includes important changes that affect Harvard’s health benefits.
Under the act’s new regulations, dependent children can now be covered under a parent’s medical coverage until the age of 26. While federal regulation mandates the change only for medical insurance, Harvard is extending the coverage to also include dental insurance.
Employees can add a dependent child up to their 26th birthday to their medical or dental coverage, or make any other changes to their benefit options by logging into PeopleSoft and clicking on the Open Enrollment link on the upper right side of the screen.
Additionally, beginning Jan. 1, 2011, the new rules require that over-the-counter medicine can only be reimbursed through a medical/dental flexible spending account when accompanied by a letter of medical necessity from a licensed physician.
Though not a part of the annual Benefits Open Enrollment period, Harvard has also made recent changes to its investment options, consolidating the number of mutual funds and annuities in its retirement plan, replacing most with a series of “lifecycle funds” that adjust from a position of higher risk to one of lower risk as the investor ages.
Harvard has selected “best-in-class” lifecycle funds from Vanguard, Fidelity, and TIAA-CREF that have strong performance track records and low built-in fees. The lifecycle funds hold a wide range of assets and automatically adjust the asset allocation, emphasizing wealth accumulation early on, then capital preservation as an employee ages.
Previously, the default alternative for Harvard employees who do not make an active choice about where their retirement savings are invested has been one of two TIAA-CREF annuities, which are stable investments but with low long-run returns. As of Nov. 12, newly hired faculty and staff who do not make an investment choice will be automatically invested into a Vanguard lifecycle fund with a target date closest to when they turn 65.
The structure and funding of Harvard’s retirement benefit will not change. The University will continue to make a defined contribution to the retirement account of every eligible employee, based on salary and age. (This Harvard contribution is independent of the employee’s contributions from their salary: The “tax-deferred account” is a benefit that allows faculty and staff to deduct money from their paychecks on a pretax basis to save and invest additional funds for retirement.)
— With reporting by Paul Massari