HR-308 Benefit Premiums
The employee portion of all benefit costs shall be paid through payroll deductions, whenever possible, one month in advance, except for the UM Flexible Spending Account Program (FSAP). Contributions to FSAP will be made during the month of coverage. In the event that the University is unable to process such deductions in advance, the deductions will be made from a later payroll. (Example: a person hired on September 1 enrolls for coverage on that date. Since there was no August pay from which premiums for September's coverage could have been taken, premiums for both September and October coverage will be taken from September pay.)
No premium will be charged for any initial coverage calendar month which is not a full month. A full month's premium will be charged for any final calendar month during which coverage is in effect for any part thereof. However, in the case of Flexible Spending Accounts, deductions can only be taken when there is sufficient pay to cover the pay cycle deduction. Situations may arise where a bi-weekly paid employee's pay is sufficient to cover only one of the month's bi-weekly pay cycle deduction. When this occurs, the employee is considered a participant for the full month.
Change of Coverage
It is the employee's responsibility to notify in writing (or by electronic media as prescribed by Faculty & Staff Benefits) the Benefit Representative of any family status changes and changes in the employee's dependents so that proper coverage can be obtained and the correct premium amount charged. Types of changes are described in the various employee benefit handbooks. New dependents acquired by marriage or birth must be added on a timely basis in accordance with the provisions of each respective plan. Coverage for any dependent ceases when the dependent is no longer eligible. It is the employee's responsibility to notify the Benefits Representative of any such event in order to adjust the coverage and premiums, in accordance with the provisions of each respective plan.
Premium Overcharge / Undercharge
Coverage is provided only for an eligible employee and, if applicable, eligible dependents. If an employee fails to provide notice of a change in eligibility within 31 days of the Qualifying Event which would result in a reduction in premium, a refund of the contribution overcharge, not to exceed the first two ineligible months' contribution rates, will be made to the employee. Any claims paid on behalf of an ineligible individual must be reimbursed to UM by the employee. (Example: An employee is divorced on December 31, 2005. Prior to that date "Employee and Spouse" coverage was provided under the UM Medical Plan. On October 1, 2006, the employee notifies the Benefits Representative of the change. The employee would be entitled to a refund of overpaid premiums for the period of January 1, 2006 through February 28, 2006. Any claims paid on behalf of the spouse during January 1, 2006 through October 1, 2006 must be reimbursed to the University.
If a premium undercharge is the result of an error on the part of the University, the employee will be given the option of continuing the coverage for which premiums have actually been charged, the employee may pay the amount of the retroactive premium undercharge and receive coverage from the date the incorrect premium charge began, or the employee may pay the increased premium amount from the point of discovery and receive coverage starting at the point of discovery. Shortages in employee contributions under FSAs must be caught up during the plan year to a level consistent with the target elected by the participant and his/her pay frequency.
Any premium adjustment will be made on the basis of premium rates applicable during the period for which coverage was provided. If any part of this policy is in conflict with the provisions of an insurance contract between the University and an insurance company applicable to a particular plan of coverage, the provisions of the insurance contract will govern the manner in which any premium or coverage adjustments are made with respect to that coverage. 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.
Date Created: 9/26/97
Last Updated: 9/1/2007