UPEA met with PEHP to discuss Federal Health Care Reform

Last week UPEA met with PEHP to learn how federal health care reform will potentially affect PEHP. Through reading the two federal health care bills, PEHP has speculated how the mandates will probably affect them and if there will be additional costs. PEHP does not yet know what those additional costs will be, as that is still being determined. UPEA will continue to stay updated regarding this issue.

The two federal health care reform bills are: the Senate Bill - Patient Protection Affordable Care Act - signed 3/23/2010 and the House Bill - Health Care and Education Reconciliation Act of 2010 - signed 3/30/2010.

The purpose of these two health care bills are to improve access to health care. There are several mandates within the bills, and some of these mandates apply to only grandfathered plans, new plans or both. A grandfathered health insurance plan is a plan that existed before 3/23/2010 and does not make significant changes to their plan to lose grandfathered status. PEHP currently believes they are a grandfathered plan; however they have not yet been informed of their status.

Grandfathered Plan Mandates:

After 9/23/2010

1. No pre-existing condition exclusion for children under the age of 19.

• Currently PEHP requires a 9 month waiting period.
• This will be an additional cost for PEHP.

2. Two types of limits on benefits:

• No lifetime limits on dollar value benefits or type of care
• Only allowed "reasonable" lifetime or annual limits on nonessential benefits.
• PEHP plans to change to annual limits for both types of changes to keep this as cost neutral as possible.

3. Dependent children will be allowed to stay covered on employee health insurance plan until age 26, regardless of whether or no they are a dependent. This does not apply to the child if they have their own group coverage.

• Spouses or dependents of the dependent are not covered, only the dependent child.
• Only allowed to be added to insurance plan at the insurance carrier's open enrollment date.
• This will be an additional cost to PEHP.

4. No recession or termination of coverage without prior notice, with the exception for intentional misrepresentation or fraud.

• Does not apply to PEHP.

After 1/1/2011

1. Underwriting conditions - 85% threshold required for large employers (employers of 50 or more employees).

• If a plan falls below the threshold in a year, the plan shall refund premiums to employees on a pro-rated basis.
• This should not affect PEHP, as PEHP is a self-funded plan, always within 90% threshold.

After 3/23/2012

1. PEHP will be required to provide uniform summary plan description.

• Content and format required by statue.
• Must provide notice no later than 60 days notice to a change in plan.
• PEHP is not affected.

After 1/1/2014

1. No waiting period larger than 90 days, for every one of all ages.

• This will be an additional cost to PEHP.

2. No pre-existing exclusion may be applied to all, at any age.

• This will be an additional cost to PEHP.

3. Essential benefits can no longer have lifetime limits, only reasonable annul limits.

• PEHP is trying to keep costs neutral.

4. Dependent coverage required up to age 26, even if they are eligible for another insurance plan.

• This will be an additional cost to PEHP.

Government Plan Issue - Effective Immediately

Health Insurance plans for government employees can choose to be exempt from four federal health care regulations, including the Mental Health Parity Act, Women's Cancer Right's Act, the Newborn Act and Michelle's Law. Currently PEHP complies with all of these federal laws with the exception of the Mental Health Parity Act. Amendments made to this part of the federal health care reform bills do not clarify if government plans will have to comply with all four of these specific health care regulations. PEHP is waiting for an answer as they are currently unsure whether or not they will have to comply with the Mental Health Parity Act. If so, this would be an additional cost to PEHP.

UPEA's Work Brings Results

Changes have recently been announced by the Department of Human Resource Management this week. The changes will be reflected in the next Utah State Bulletin (7/1/2010) and will go into effect in August. Many of the modifications were made as a result of the hearing that UPEA requested.

The substantive rule amendments that UPEA influenced include:
R477-1-1
(50) Highly Sensitive Position: A position approved by DHRM that includes the performance of:
(a) safety sensitive functions:
(i) requiring an employee to operate a commercial motor vehicle under 49 CFR 383 (January 18, 2006);
(ii) directly related to law enforcement;
(iii) involving direct access or having control over direct access to controlled substances;
(iv) directly impacting the safety or welfare of the general public;
(v) requiring an employee to carry or have access to firearms; or
(b) data sensitive functions permitting or requiring an employee to access an individual's highly sensitive, personally identifiable, private information, including:
(i) financial assets, liabilities, and account information;
(ii) social security numbers;
(iii) wage information;
(iv) medical history;
(v) public assistance benefits; or
(vi) [household composition; or
(vii) ]driver license

UPEA requested that “household composition” be removed or defined as the term is very vague and could be interpreted in a number of ways.

R477-4-4
(a) All recruitment announcements shall include the following:
(i) Information about the DHRM approved recruitment and selection system; and
(ii) opening and closing dates.
(b) Recruitments for career service positions shall be posted for a minimum of seven calendar days.

UPEA requested that this information be added back into the rule so as to ensure that the hiring process is outlined in rule.

R477-15
It is the State of Utah's policy to provide all employees a working environment that is free from discrimination and harassment based on race, religion, national origin, color, gender, age, disability, or protected activity or class under state and federal law.

UPEA requested that discrimination be added back into the rule as discrimination can occur without harassment. It is important that this is verbalized in the rule.

UPEA was very instrumental in making these positive changes. UPEA is grateful to DHRM for listening to the concerns of our organization and for their ongoing communication with the Association.

Paid Time Off May Replace Leave Programs

Since the legislative session ended in March, UPEA has been hard at work trying to make sure we stay ahead of the curve when it comes to possible legislation affecting public employees. Through UPEA’s contacts and legislators UPEA staff hears of budget, health insurance, and many issues prior to any action being taken up on Capitol Hill. Some discussions come to fruition and others don’t. This year we have heard rumor of another piece of legislation that may affect public employees – PTO.

Over the course of the past decade, several private entities have changed how their annual and sick leave systems work in an effort to streamline their leave programs. Many companies moved to a Paid Time Off (PTO) System that does not differentiate between sick and vacation leave. Employees are given a set number of hours a year that they may use in whatever manner they wish. If they do not get sick, they can use it all as vacation time. However, if they are sick frequently, vacation may not be an option.

Currently, each employee receives a certain number of annual leave hours and sick leave hours, based on their years of service. Annual leave must be scheduled ahead of time and can be used for vacations, personal matters, etc. Sick leave can be used when an individual is ill, needs to go to a doctor’s appointment, or just needs a “mental health” day.

State employees also have a great benefit that they may use upon retirement. An employee may save their pre-2006 sick leave hours to purchase health insurance. Sick leave hours earned after 2006 can be cashed in upon retirement to be placed into a health savings account to use toward medical purchases.


This benefit has been instrumental in helping productivity in the state of Utah, and ensuring that employees use their sick leave wisely.

Would a PTO program take away from this benefit?

At this time, it is not known. However, UPEA is currently concerned about such a program because it may affect current Sick Leave Benefit upon retirement.

Also, if it does not impact current employees, will it be just for new employees? While UPEA is still seeking answers to this question, it is cause for anxiety.

Many studies have indicated that when a company has moved to a PTO-based system, that the leave hours given to employees has dropped, or cannot be carried over from year-to-year. UPEA’s concern is that employees will be negatively impacted by such a move.

UPEA is continually keeping in contact with legislators and other policy-makers that may potentially be close to this issue to ensure employees are protected and maintain the best benefits possible. As more information develops, UPEA will send emails or additional communications to its members.

UPEA is Hard at Work – Protecting your Rights

On June 8th, 2010, UPEA staff and representatives presented at a DHRM Hearing that UPEA requested regarding proposed rule changes that are to go into effect on July 1st.

UPEA shared concerns regarding rule changes including modifications to the recruitment, highly sensitive position, employee development, and discrimination and harassment policies.

UPEA staff insisted that employees are concerned that job positions continue to be recruited through a "competitive" and transparent process as this is a core merit principle.

UPEA and DHRM staff held a healthy discussion on the highly sensitive positions and information regarding "household composition" being added. UPEA requested that this term either be removed or defined as it is vague in nature.

While no changes were made immediately, DHRM staff expressed a willingness to look at and change a few items that were discussed. It will remain to be seen what actually gets some attention.

As an additional note, because of the efforts of UPEA - with regard to the DHRM rule changes, a section was added into the rule that allowed RIF’d employees that were rehired within a year to reinstate their Program I Sick Leave hours rather than having them all go back to Program II Sick Leave. This benefits employees as they will be able to use earned Program I hours upon retirement.