Updated 12/03/13 | Recent updates are shown with a • symbol.
The new state budget, signed into law June 30, 2013, included several changes related to Public Employees Benefits Board (PEBB) benefits. The budget included two new surcharges that are described as follows in the budget.
Beginning July 1, 2014, the board shall add a $25 per month surcharge to the premiums due from members who use tobacco products and a surcharge of not less than $50 per month to the premiums due from members who cover a spouse or domestic partner where the spouse or domestic partner has chosen not to enroll in other employer-based group health insurance that has benefits and premiums with an actuarial value of not less than 95 percent of the actuarial value of the public employees’ benefits board plan with the largest enrollment.
• Third Engrossed Substitute Senate Bill (3ESSB) 5034, Section 932 (1)(b)
PEBB received many questions from members and stakeholders on the surcharges. Many answers are still pending, and we are working to release information as soon as it’s available. The following Q&As address some top member concerns.
- What are the surcharges and who is requiring them?
The surcharges are extra costs that will be added to some PEBB members’ monthly premiums. The state Legislature included the surcharge requirement in the new state budget signed into law on June 30, 2013.
- When do the surcharges start?
July 1, 2014.
- Are the surcharges happening because of the Affordable Care Act?
No. They are a state Legislature decision.
- • Will I get to make changes to my account before the surcharges start?
Yes. The PEBB Program will hold a surcharge open enrollment in Spring 2014 for subscribers to:
- Attest to their enrolled family members’ tobacco use.
- Attest to whether their spouse or domestic partner (if enrolled) has comparable, employer-based group health coverage.
- Add or remove dependents.
- Change medical plans.
- Change dental plans.
- Waive or defer coverage.
- Return from waiving or deferring coverage.
Note: Subscribers will not be able to enroll in or make changes to their flexible spending arrangement (FSA) or Dependent Care Assistance Program (DCAP) during this surcharge open enrollment.
We will send more details about the surcharge open enrollment to members by March 2014.
- What are the surcharge amounts?
There are two types of surcharges:
- Tobacco surcharge:
- Cost: $25 per month per account
- Required when: Any enrolled family member uses tobacco products
- Spousal surcharge:
- Cost: $50 per month
- Required when: A subscriber covers a spouse or domestic partner who waived their own employer-sponsored health coverage that’s comparable to PEBB.
- • The budget* says "Beginning July 1, 2014, the board shall add…a surcharge of not less than $50 per month to the premiums due from members who cover a spouse or domestic partner where the spouse or domestic partner has chosen not to enroll in other employer-based group health insurance…" That makes me think a higher surcharge can be charged. What's the maximum surcharge I could be charged per month?
The maximum surcharge could be $75 per account per month--a $25 tobacco surcharge plus a $50 spousal/domestic partner surcharge, when appropriate.
About the tobacco surcharge
- I have two family members on my account who use tobacco. Does that mean I have to pay twice the surcharge?
No. You’ll only be charged $25 per month. The surcharge applies once per account, regardless of how many family members use tobacco products.
- My dependent is in college and uses tobacco, but doesn’t live with me. Do I have to pay the surcharge?
Yes. The tobacco surcharge applies whether your covered dependents live with you or not.
- What is a “tobacco product”?
We expect to have an answer soon, and will update this Q&A as soon as information is available.
- My family members have Medicare Parts A and B. Do we have to pay the surcharge?
No. The surcharge won’t apply if everybody enrolled on an account has Medicare Parts A and B.
- Does the tobacco surcharge apply to other accounts such as COBRA, Leave Without Pay, non-Medicare retirees, K-12 and political subdivision employees?
Yes. The surcharge would apply to any non-Medicare accounts.
- • I'm an employee who waived PEBB medical coverage, but I do have PEBB dental coverage for myself and my family members. If one of my family members or I use tobacco, do I have to pay the tobacco surcharge?
No. The surcharge won't apply.
- • I'm an employee enrolled in PEBB medical coverage. My dependent uses tobacco, but he's only enrolled on PEBB dental coverage. Do I still have to pay the surcharge?
Yes. The surcharge will apply.
About the spousal surcharge
- • The October 2013 For Your Benefit newsletter says that subscribers will have to pay a $50 surcharge if they cover a spouse or state-registered domestic partner who has waived enrollment in other employer-sponsored coverage that is comparable to PEBB. How can I determine if my spouse’s or partner’s coverage is comparable to PEBB’s?
The legislation requires the PEBB Program to add “…a surcharge of not less than $50 per month to the premiums due from members who cover a spouse or domestic partner where the spouse or domestic partner has chosen not to enroll in other employer-based group health insurance that has benefits and premiums with an actuarial value of not less than 95 percent of the actuarial value of the public employees’ benefits board (PEBB) plan with the largest enrollment.”
We highlighted benefits and premiums because both conditions must be met for you to be charged the $50 per month surcharge. We will compare the 95% actuarial value standard for other employer-based group health insurance to Uniform Medical Plan (UMP) Classic, which is the PEBB plan with the largest enrollment.
HCA staff are working on a tool to help you determine if your spouse’s or domestic partner’s employer-based benefits are within the 95% actuarial value of UMP Classic’s benefits. The tool will be available within the next few months.
Additionally, the premium charged by your spouse’s or domestic partner’s employer to cover your spouse or partner must be below $84.55 per month to qualify for the $50 surcharge. For calendar year 2014, members will pay $89 per month in premiums to cover a spouse or domestic partner on UMP Classic. Therefore, if your spouse or domestic partner would pay more than $84.55 ($89 x 95%) per month for his or her health insurance premiums through his or her employer, then the $50 surcharge would not apply to you.
- Both my spouse (or domestic partner) and I work at a state agency, higher-education institution, or community and technical college. If we are both eligible for PEBB benefits and one of us has waived coverage to enroll as a dependent on the other’s account, will the spousal surcharge apply?
No. The surcharge won’t apply.
- My spouse (or domestic partner) is retired and deferred Medicare Part B to enroll under my PEBB employee account. Do we have to pay the surcharge?
No. The surcharge won’t apply.
- My spouse (or domestic partner) and I both have Medicare Parts A and B. Do we have to pay the surcharge?
No. The surcharge won’t apply if both spouses (or domestic partners) are on Medicare Parts A and B.
• • •
I have surcharge questions that aren’t answered here. When will you have more information?
We appreciate your questions, and understand that you may have concerns about how the surcharges could affect your individual circumstance. Because the surcharges have so many potential impacts, we are working to ensure we’ve considered all aspects in member feedback as part of our decision-making process. We will post information here on our website as soon as it’s available.
The PEBB Program will provide more information to members before July 2014. Please check the PEBB website over the coming months as new information becomes available.
Information will be sent directly to agencies before July 1 implementation. Retirees can also receive information via the Medicare Minute