Health Reimbursement Accounts (HRA) 101

Union Delegates Conference 2010Los Angeles, CA

2

Overview

• Effective January 1, 2010

• Offered to eligible employees represented by Coalition Unions

• Tax-free reimbursement for:– out-of-pocket eligible medical, dental, and vision care expenses.

• Funded with 80% of value of unused sick leave as of employee’s termination date

• Retiree medical eligibility, medical plan and benefit levels are not affected by the HRA

3

What is the HRA?

The Health Reimbursement Account allows retirees to pay for out-of-pocket qualified medical, dental, vision, and

hearing care expenses.

The HRA also covers:

•expenses of eligible dependents

•premiums paid to a Kaiser Permanente medical plan, tax-free

4

Who can participate?

Employees represented by LMP Unions participating in:• Earned Time Off Program, or• Work/Life Balance Time Off Program

Participants must meet these requirements: *55 or older 15 years of service or more†

* age and years of service waived for Disability Retirement

†as defined under the KP-sponsored defined benefit plan, or the pension plan under the union trust as applicable

5

Who can participate? (cont’d)

• Eligible for KP medical coverage on last day of employmentenrollment in plan not requiredemployees represented by the UFCW Pharmacy

must be eligible for the union-sponsored medical plan

• Must be in employee groups that participate in the

HRA

• Alternate Compensation Program included

6

Who can participate? (cont’d)

HRA-convertible sick leave hours vary according to different collective bargaining agreements.

• Different groups of employees: Employees in the Attendance Program Employees with an “annual refresh’’ provision to

their sick leave program Employees in the Extended Sick Leave program Georgia region employees, who follow a unique

system of sick leave accrual

7

Who can participate? (cont’d) Eligible Dependents

• Legal spouse– Unless divorced or legally separated

– Must be of the opposite sex to whom legally married under federal law

• Domestic partner– If they qualify as a dependent on employee’s federal income taxes

– May not use HRA account to pay expenses for the child of domestic partner if domestic partner claims the child as a dependent on his or her tax return

• Your unmarried dependent children under age 25– If divorced, children will be considered eligible under the plan if

employee is

• responsible for children’s support, and,

• has custody of children for more than half of the calendar year, per the Internal Revenue Code

8

Eligible Expenses

• IRS determines which expenses are eligible (qualified) for reimbursement

• May not also claim the expense through your health care plan, insurance program, or income taxes

• Consult a tax advisor for tax implications

9

Eligible expenses: examples

• Premiums– Dental insurance premiums and co-payments – Long-term care insurance premiums– Medicare– Cobra

• Equipment and Supplies– Dental implants, supplies

– Wheelchair

• Care and Treatment– Acupuncture

– Chiropractic care

– Hearing exams and treatment

10

Ineligible expenses: examples

• Baldness treatments or hair transplants

• Dancing lessons, swimming lessons

• Exercise equipment

• Herbal and holistic drugs or remedies

• Special diet foods

• Vacation expenses (even if recommended by a doctor)

11

How is the HRA established?

On termination or retirement:– HRA-convertible sick leave hours converted at 80% of value

• Kaiser Permanente deposits into HRA • No employee contributions allowed• $100 minimum required to establish account

– No cost for this new benefit

– Automatic participation, if eligible

• No opt-out option

12

HRA transfersWork/Life Balance Time Off Program

• Banked Sick Leave (BSL)– Unused hours accrued in 2006 and thereafter

converted at 80% of value– Deposited into HRA

• No conversion to Credited Service for post-2005 BSL hours

13

HRA transfersEarned Time Off Program

Extended Sick Leave (ESL)– Effective first pay period of 2010, employees

have two ESL banks• Current ESL bank• Pre-2010 ESL bank

– ESL hours beginning first pay period 2010 go into current ESL bank

– Unused ESL hours last pay period 2009 go into pre-2010 ESL bank

– Accrued, unused ESL in current ESL account converted at 80% of value and deposited into HRA

No Credited Service for unused post-2009 ESL hours

14

How to File for Reimbursement

– Fax: 1-866-717-3820– Mail:

Ceridian FSA ServicesP.O. Box 534200 St. Petersburg, FL 33747-4200

• Reimbursement via check or direct deposit

• Check on the status of your claim or payment at – www.ceridian-benefits.com

Submit claims through Ceridian:

15

Claims Guidelines

• Claims processed weekly – No limit on number of claims– No minimum/maximum dollar amount

• Submit claims within 60 days

• Unused funds carry over from each year

16

Account Closures• HRA Account closes if:

– Account balance is $0– Account is abandoned– Death of employee, with no surviving eligible

dependents– Death of surviving eligible dependents– If during the termination or retirement

process, you are deemed ineligible for the HRA

17

Account Suspension or Reactivation

• Account suspended – If you are rehired and return to work at

Kaiser Permanente in any capacity

• Account Reactivated

– When you terminate again: No minimum

balance required

18

Contact Information• For HRA detailed questions, covered expenses and claims:

– Ceridian• Monday-Friday, 5 a.m.-5 p.m. Pacific Time• 1-866-370-2534• www.ceridian-benefits.com

• For HRA general questions:– My HR Web site

• http://insidekp.kp.org/myhr– Human Resources Service Center (HRSC)

• 1-877-4KP-HRSC (1-877-457-4772)

• Ceridian Customer Service– 1-866-370-2534

or– Online at www.ceridian-benefits.com

• Social Security number (with dashes)• Initial password/PIN

– (last 4 numbers of your SSN reversed)

19

Questions?