Background

Premium surcharges

Last year, the Legislature established two new premium surcharges to go into effect July 1, 2014:

  1. Tobacco use premium surcharge
  2. Spouse or registered domestic partner coverage premium surcharge

SmartHealth wellness incentive program

In October 2013, Governor Inslee issued an Executive Order to improve the health and productivity of state employees. One of the directives is to create a wellness incentive program for PEBB subscribers. Subscribers who do the three health-related tasks will be eligible to receive a wellness incentive in 2015.

PEBB subscribers received letters about the surcharges and incentive in February and March.
 

See frequently asked questions about...

Tobacco use premium surcharge
Spouse or registered domestic partner coverage premium surcharge
SmartHealth wellness incentive
Attesting on My Account

General questions

(Updated 10/3/14 | New information is marked with a )
 
  1. Who gets the money collected on the premium surcharges?

    The state will receive the money from the premium surcharges to use for employee health benefits.
     
  2. I am a retiree or COBRA subscriber enrolled in Medicare Part A and Part B; will I pay a surcharge?

    No. Retiree and COBRA subscribers enrolled in Medicare Part A and Part B are not subject to either the tobacco use surcharge or the spouse or registered domestic partner coverage surcharge. You will not pay either surcharge, even if your spouse or registered domestic partner is enrolled in PEBB medical coverage and uses tobacco products, or is not enrolled in Medicare Part A and Part B.
     
    See more frequently asked questions for retiree or COBRA subscribers enrolled in Medicare Parts A and B.
     
  3. Will I be billed for the premium surcharges?

    For employees: No. The surcharges will be deducted from your paychecks in addition to the monthly premiums you currently pay.

    For retirees and self-pay subscribers: The surcharges will be charged as follows:
     
    If you pay your monthly premiums this way: Any applicable surcharges can be charged this way:
    Pension deduction Surcharges can be deducted from your pension, in addition to your monthly premiums.
    Electronic debit service Surcharges can be deducted from your checking or savings account
    (the same account that you pay your monthly premiums from).
    Monthly invoice Surcharges will be itemized on your invoice. Submit payment for the total due.
  4. I’m a state agency employee. Will I see separate deductions on my paycheck for the premium surcharges?

    Yes.
     
  5. Will the premium surcharges show on my online Statement of Insurance (available through My Account)?

    The premium surcharges will not appear on your Statement of Insurance. We will look into how we can include them for 2015.
     
  6. If an employee attests to the premium surcharges and wellness incentive, then loses eligibility for PEBB coverage, but later regains eligibility for PEBB coverage, is it necessary to re-attest to the surcharges and wellness incentive? wellness incentive?

    If you are an employee who loses eligibility for PEBB coverage, and then regains eligibility by enrolling in PEBB COBRA, Leave Without Pay, or retiree coverage with no break in coverage, your attestations and surcharges will follow your account. You are required to submit the Premium Surcharge Attestation Form if there is a change in tobacco use by any enrolled family members and if you enroll a spouse or registered domestic partner in PEBB medical coverage. In this case, you will not need to re-attest to the surcharges and wellness incentive.
     
    The same situation applies if you are currently a COBRA subscriber who later gains eligibility for employer-sponsored PEBB coverage. If you do not have a break in coverage between your COBRA and employer-sponsored PEBB coverage, your attestations and surcharges will follow your account as long as no changes to your previous attestation have occurred.
     
    Exception: If you lose eligibility for PEBB coverage, and have a break in coverage before regaining eligibility for PEBB coverage later, you will need to re-attest to the premium surcharges and wellness incentive. Employees should contact their personnel, payroll, or benefits office for more information; all other subscribers should contact PEBB Benefits Services at 1-800-200-1004.
     
  7. Why did the premium surcharges and wellness incentive have different timelines for subscribers to attest?

    The account changes have different effective dates for implementation. The premium surcharges were effective July 1, 2014, so the deadline to attest was earlier to allow time for processing. The wellness incentive is effective January 2015, so the deadline for current subscribers to attest was later. For new subscribers, the deadline is based on when your medical benefits begin.
     
  8. Why aren’t Medicare retiree subscribers and Medicare COBRA subscribers subject to the premium surcharges?

    The rates for subscribers for whom Medicare pays primary are calculated differently than those subscribers for whom PEBB coverage pays primary. 
     
    See more frequently asked questions for retiree or COBRA subscribers enrolled in Medicare Parts A and B.
     
  9. Can I switch from a managed-care plan or preferred provider plan with a flexible spending account (FSA) to a consumer-directed health plan (CDHP) with a health savings account (HSA)?

    No.  You cannot switch from a managed-care plan with an FSA to a CDHP/HSA.  Employees are not allowed to enroll or cancel enrollment in an FSA during the premium surcharge attestation period.
     
    Exception: You can move from a managed-care plan to a CDHP/HSA if you aren’t enrolled in an FSA.
     
  10. During the premium surcharge adjustment period (July 1 - August 29, 2014), can I switch from a consumer-directed health plan (CDHP) with a health savings account (HSA) to a managed-care plan or preferred provider plan? What happens to my HSA contributions? Can I also enroll in a flexible spending account (FSA)?

    Yes, you can switch from a CDHP with an HSA to a managed-care plan. Keep in mind, your annual deductibles and out-of-pocket maximum will restart with your new plan.
     
    Your HSA contributions will remain in your account, and you can continue to use the money toward your IRS-qualified medical expenses. However, you and your employer may no longer contribute to your HSA.  If you currently contribute to your HSA through payroll deductions, you will need to tell your payroll to stop your contributions. If you contribute to your HSA through HealthEquity, you will need to tell HealthEquity to stop your contributions.
     
    From July 1 through August 29, 2014, you cannot enroll in an FSA.
     
  11. I am not enrolled in Medicare Part A and Part B, but my spouse or registered domestic partner is. Do I need to attest to the premium surcharges?

    Yes. All non-Medicare subscribers (employees, retirees, COBRA, and Leave Without Pay) need to attest to the premium surcharges.
     
    Note: Employees and Leave Without Pay subscribers enrolled in Medicare Part A and Part B also need to attest to the premium surcharges, as they are included in PEBB’s non-Medicare population (that is, Medicare does not pay primary for their health coverage).
     
  12. I am enrolled in Medicare Part A and Part B, but my spouse or registered domestic partner is not. Do I need to attest to the premium surcharges?

    No.  The surcharges do not apply when the subscriber is enrolled in Medicare Part A and Part B (and for whom Medicare pays primary), regardless of whether the spouse or registered domestic partner is enrolled in Medicare.
     
    Exception: Employees and Leave Without Pay subscribers enrolled in Medicare Part A and Part B need to attest to the premium surcharges. Medicare does not pay primary for these subscribers’ health coverage.
     
  13. I am a subscriber who turns age 65 and becomes eligible for Medicare Part A and Part B soon after I enroll in PEBB coverage. Do I have to attest to the premium surcharges?

    The month in which the subscriber’s medical premium changes from the non-Medicare rate to the Medicare rate is when the premium surcharges and wellness incentive would no longer apply. So when you become Medicare-eligible, you would not be eligible for the wellness incentive.
     
  14. Can I change my responses on My Account for the tobacco use surcharge?

    No. To report a change, use the Premium Surcharge Change Form
     
  15. Will the premium surcharges be deducted from my paycheck before taxes or after taxes?

    Any deductions taken from your paycheck to pay for the premium surcharges will be taken in the same manner that medical plan premiums are deducted from your paycheck. If you pay for your medical plan premiums before taxes are assessed, the premium surcharges will be deducted the same way.
     
    Exception: If you will pay the surcharge for an enrolled domestic partner, the surcharge can only be deducted after taxes unless your domestic partner qualifies as a tax dependent under IRC Section 152.
     
  16. Will the premium surcharges deducted from my paychecks in 2014 be reported on my W-2 that I receive in 2015?

    Yes. The surcharges will appear as part of your contributions for health care coverage.
     
  17. How much does it cost to administer the premium surcharge? Was it funded by the Legislature to cover the cost?

    The PEBB Program has not measured the costs to administer the premium surcharges. The Legislature did not appropriate funds for administering the premium surcharges; therefore, the costs are being covered within existing resources. 
     
  18. When will the updated Washington Administrative Codes (WACs) that govern the premium surcharges be available?

    The rules were published through WSR 14-08-040, effective April 26, 2014.