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UM System

HR-308 Benefit Premiums

Summary

This policy addresses eligible individuals’ responsibilities for paying benefit costs and notification of changes in qualifying events. 

If any part of this policy does not reflect the Collected Rules and Regulations (CRR), or the benefit Summary Plan Descriptions (SPD), the provisions of the CRR and SPD will govern.

HR Policy Provisions

  1. Employee Premium Charges
    1. Initial and final premiums
      • If initial coverage begins on any day other than the first day of the month, no premium will be charged for the first partial month of coverage. 
      • A full month's premium will be charged for the employee’s final month of coverage, regardless of whether the employee worked a partial or full month. 
    2. Premiums are not prorated. If a bi-weekly paid employee's pay is sufficient to cover only one of the month's bi-weekly pay cycle deductions, the employee is considered a participant for the full month and premiums will be collected in accordance with paragraph C.
    3. The employee portion of all benefit costs shall be paid through payroll deductions, whenever possible, during the month of coverage. 
      • If the University is unable to process such deductions, the deductions will be made from a later payroll or may be invoiced by UM Office of Human Resources.
      • Flexible Spending Account (FSA) or Health Savings Account (HSA) deductions can only be taken when there is sufficient pay to cover the pay cycle deduction.
      • If the employee terminates or becomes non-benefit eligible and is in arrears for premiums due, the arrears amount will be collected from any vacation or temporary pay until paid in full.
      		 Example: A person hired on September 1 enrolls for coverage on September 28. The September pay from which premiums for September's coverage has passed, therefore premiums for September & October coverage will be deducted from the October pay. 
  2. Retiree Premium Charges
    1. Premiums are not prorated. Initial coverage will begin on the first day of the month. A full month's premium will be charged for any final calendar month in which coverage is in effect for any part thereof.
    2. The retiree portion of all benefit costs shall be paid through deductions from the retiree’s monthly pension payment, whenever possible, during the month of coverage. 
      • If the University is unable to process such deductions (e.g., pension is not active or large enough), any balance will be invoiced separately by Retirement Payroll.
      • All premium invoices will be produced at the end of the month of coverage and are payable by the 15th of the following month. A direct debit option is preferred.
  3. Long-Term Disability Recipient Premium Charges
    1. Premiums are not prorated. Initial coverage will begin on the first day of the month. A full month’s premium will be charged for any final calendar month in which coverage is in effect for any part thereof.
    2. The long-term disability recipient portion of all benefit costs will be invoiced by the UM Office of Human Resources.
    3. All premium invoices will be produced at the end of the month of coverage and are payable by the 30th of the following month.
  4. Change of Coverage 
    1. Changes in benefit coverage are typically only available during the University’s Annual Enrollment period or based on the occurrence of a “Qualifying Family/Employment Status Change” as identified in the applicable rule, policy or summary plan description. Exceptions may apply for after-tax benefits.
    2. It is the employee, retiree or long-term disability recipient’s responsibility to notify the UM Office of Human Resources of any "Qualifying Event" including family status changes and changes in dependents so that proper coverage can be obtained and the correct premium amount charged. Notification requirements identified in the applicable summary plan description must be followed.
    3. Please refer to the summary plan description for additional details regarding eligibility and coverage.
  5. Premium Overcharge  
    1. If an employee, retiree or long-term disability recipient fails to provide notice of a change in eligibility within 31 days of a Qualifying Event that would result in a reduction in premium, a refund of the contribution overcharge may not exceed the prior two ineligible months' contribution rates.
    2. Any claims paid on behalf of an ineligible individual by the University’s medical, prescription, dental, and/or vision plan will be reversed. The individual will then be responsible for paying any amount owed to the service provider (e.g., physician).
      • If an employee, retiree or long-term disability recipient fails to provide notice of a change in eligibility within 31 days of a Qualifying Event that would result in a reduction in premium, a refund of the contribution overcharge may not exceed the prior two ineligible months' contribution rates.
      • Any claims paid on behalf of an ineligible individual by the University’s medical, prescription, dental, and/or vision plan will be reversed. The individual will then be responsible for paying any amount owed to the service provider (e.g., physician).

      Example: An employee is divorced on 12/31/2018. Before that date, Employee & Spouse medical coverage was provided. On 10/01/2019, the employee notifies the UM System Human Resources of the change. The employee is entitled to a refund of overpaid premiums for the period of 08/01/2019 through 09/30/2019. 

      Claims paid by the University for the spouse' for the period 01/01/2019 through 10/01/2019 will be reversed. The employee will then be responsible for paying the amount of the claims to the service providers.
  6. Premium Undercharge 
    1. If a premium undercharge is the result of an error on the part of the University, the employee, retiree or long-term disability recipient will be given the following options:
      • Pay retroactive premiums for the amount of the undercharge from the date the incorrect premium charge began; or
      • Pay the increased premium amount from the point of discovery and receiving coverage, starting at the point of discovery; or 
      • Continue the coverage for which premiums have been charged. 
    2. Shortages in employee contributions under FSAs must be caught up during the plan year to a level consistent with the target amount elected by the participant and their pay frequency.
  7. Premium Adjustments
    1. Any premium adjustment will be made based on premium rates applicable during the period for which coverage was provided.
    2. Except as provided above under Premium Undercharge, any payroll processing error will be corrected so that coverage will be provided, adjusted, or terminated as if no error had been made.

See Also

Summary Plan Descriptions
CRR Section 510.010: Benefit Programs

Date Created: 09/26/1997
Updated: 09/01/1998; 01/01/2003; 09/01/2007; 12/01/2013; 05/05/2022; 11/04/2022

Reviewed 2022-11-10