Open enrollment ends Nov. 14

Open enrollment, the annual period when Harvard employees can make changes to their benefits, began Oct. 31.

Employees have until Nov. 14 to review and make needed changes to their medical, dental, and vision coverage, or open a flexible spending account (FSA) in which money can be set aside on a pretax basis to cover certain health or dependent-care costs. (Visit HARVie for more information or to make changes, which will be effective Jan. 1, 2013.)

“This is an annual opportunity for faculty and staff to review and select benefits that best meet their needs for the coming year,” said Marilyn Hausammann, vice president for Harvard Human Resources.

While health care plan design, coverage, and providers will be unchanged, some changes are planned for 2013, including the introduction of a global benefits plan for Harvard employees working abroad.

The 2010 Patient Protection and Affordable Care Act will also mean some changes to all medical plans next year. Starting on Jan. 1, generic prescription birth control will be fully covered, without co-payments, under federal law. Free preventive care was implemented across all plans in 2012.

In addition, as a result of health care reform, annual contributions to health FSAs beginning in 2013 may not exceed $2,500 — a reduction from the previous maximum contribution of $5,000. (Dependent-care FSA contribution limits will not be affected by the change.)  Employees must re-enroll each year to renew a health or dependent-care FSA.

As always, employees may change their benefits at any time of year if they experience a qualified life event, such as marriage, divorce, or the birth of a child. However, as of Jan. 1, the enrollment period to make such changes is being shortened from 60 days after the qualifying event to 30 days, a time frame that meets Internal Revenue Service regulations. Similarly, new employees will have 30 days to enroll in Harvard’s benefits plans.

Federal law also now requires that Harvard list the total annual value of its medical coverage (Harvard’s contribution plus the employee’s contribution) on employees’ annual W-2 tax forms for informational purposes.

Building on the work of the University Benefits Committee and its 2012 recommendations, the University has sought to manage rising health care and benefits costs.

The University will reduce its premium contribution by 2 to 3 percentage points for those non-union staff and faculty with a full-time equivalent (FTE) salary of greater than $70,000. This will lead to after-inflation increases in the employee share of premiums for this group of between $11 and $15 per month for an individual and between $30 and $38 for a family, dependent upon salary level and plan. Employees with an annual FTE salary of less than $70,000 and unionized staff will not experience a reduction in premium contribution. This represents almost 60 percent of employees.

“Harvard, like all employers, continues to grapple with significantly rising health care costs,” said Hausammann. “Our goal is to ensure any changes are introduced in a way that is fair to all employees, and, where we can, protect those at the lowest end of the salary scale from increased costs.”

According to Hausammann, health care costs account for a very significant percentage of overall benefits costs. (Harvard’s employee benefits costs have more than doubled in the past decade.)

“Harvard has undertaken many administrative reforms over the past five years to curb the rate of growth in our health care costs — we have consolidated health plans, moved to self-insurance, and ‘carved out’ pharmacy benefits from our health plans to improve their management. These changes have resulted in millions of dollars of savings for faculty and staff. However, given ongoing economic pressures, we must continue to find ways to manage health care and other rapidly increasing benefits costs,” said Hausammann.

Hausammann said that affordability for employees and the particular demands on low-wage workers, in addition to the quality of coverage and care, are always top of mind when changes are made.

“We regularly review our plans, benchmark them against those of our peers, and make adjustments to ensure our benefits remain competitive with other employers, as well as a good value to [employees].”

Harvard continues to pay the majority of health insurance premiums for employees — up to 85 percent in some cases — depending on salary level and provider. “Because of Harvard’s careful management of our plans, costs, and providers, our very significant financial subsidy, and our co-pay reimbursement program, we believe employee health benefits remain affordable for faculty and staff even with the changes we’ll see in 2013,” said Hausammann.