EMPLOYEE BENEFITS SUMMARY FOR FY 2004

July 1, 2003 to June 30, 2004

GROUP INSURANCES

A group benefit plan provides life and health insurance coverage for employees hired in established positions who work a minimum of 20 hours per week and whose appointment is to continue for longer than six (6) months.

HEALTH INSURANCE COVERAGE

The state offers a choice of four health care plans for employees and their family members (see chart below).

·         $1000 Deductible Plan,

·         $500 Deductible Plan (available to those living out of state and selected zip code areas within SD),

·         Provider Network Plan,

·         Opportunity to "opt out" of coverage if the employee has group health insurance elsewhere.

*  No PCP referral or non-DAKOTACARE provider. Even without a referral, employees will still receive price discounts for services provided by DAKOTACARE providers.

**  Out-of-pocket maximums exclude Network co-payments for emergency room visits, prescription drugs and office visits to PCPs and specialists; non-covered expenses; penalties for not contacting DAKOTACARE; and any charges above the Plan's allowed maximums.

The Maximum Benefit On All Plans is one million dollars coverage for each member.

The State of South Dakota Employee Benefits Program is a self-insured plan administered by the Bureau of Personnel www.bopweb.com .  The state has contracted with the DAKOTACARE www.dakotacare.com network to help reduce medical expenses. DAKOTACARE has negotiated discounts and maximum allowable charges with approximately 98% of the doctors within the state of South Dakota. Using these preferred providers affords:

·         access to transplant centers across the United States;

·         handling of claim forms and pre-authorization calls by the provider;

·         and reduction in costs for employees since they are not billed for costs above the usual and customary charges. 

DAKOTACARE also does the actual processing of the claims.

With either deductible plan, the employee must pay the first $500 or $1000 of medical expenses before the plan will begin paying benefits.  The state provides a $300 Flex Credit incentive ($25 per month) to those employees who choose the $1000 plan or who ‘opt out’ of the state’s health plan because of other health coverage.  These credits are placed in a Medical Expense Account that can be used to pay for eligible out-of-pocket expenses of employees and their eligible dependents.

With the Provider Network Plan, the employee must choose a specific clinic at which to begin their medical care. Co-pays for office calls to the basic provider are $20 and if the employee is referred to a specialist, the office visit co-pay is $30. Eligible expenses beyond the office visits are covered 75% by the insurance, 25% by the employee.  There is no deductible as long as the employee stays within the network and sees DAKOTACARE providers.

The Plan Year runs from JULY 1 TO JUNE 30 (Fiscal Year). The effective date of coverage for new employees is ONE MONTH AND ONE DAY from the date you begin working in a benefit-eligible position.

PREMIUMS

As of July 1, 2003, the premium paid by the employer for an active (currently on the payroll), benefit eligible employee is $395.67 per month (reviewed and subject to change).  Dependent premiums are paid on a pre-tax basis (reviewed and subject to change quarterly).  NOTE: Employees and covered spouses who use tobacco products will each pay an additional $30 monthly premium.

The following chart contains the premium rates for 12-month employees for Fiscal Year 2004.  The premium rates for dependents of eligible employees working anything other than 12 months will be pro-rated over eight months.  Monthly rates for dependents are based on the spouse’s age as of July 1, 2003.

Health Plan Contributions - Monthly Pay Periods

PORTABILITY OF HEALTH INSURANCE COVERAGE

The six-month pre-existing conditions clause is waived if the employee (and/or any eligible dependents) were covered by a qualifying health plan for at least 6 consecutive months prior to their hire date. Application must be made within 63 days of expiration of the previous coverage. The following constitute qualifying previous coverage: Medicare or Medicaid; an employer-based group health plan or an individual health insurance policy that essentially provides benefits similar to the state’s plan. Employees and/or covered family member(s) who do not meet this requirement must satisfy the six-month pre-existing condition clause.

PHARMACY NETWORK

The pharmacy network is available with both Deductible Plans and the Provider Network. It is not available to employees who "opt out" of the insurance plan. Employees using participating pharmacists have no annual deductible to meet. The employee pays only a nominal "co-payment" for each prescription. The co-payments do not apply toward the employee's annual health insurance deductible (they may be submitted to the Medical Expense Spending Account if applicable).

The employee's out-of-pocket maximum for covered medications is $800 per person or $2000 per family of three or more per year.  Differences in cost between brand and generic drugs, and excess amounts paid at nonparticipating pharmacies do not apply to the out of pocket max.

CHIROPRACTIC ASSOCIATES LTD. OF SOUTH DAKOTA

CASD includes a network of providers statewide. While employees may use chiropractors outside the network for services, they will receive a higher level of coverage with network providers. With In-Network coverage you pay a $20 co-payment for each visit. The plan covers all medically necessary services (including therapy, ultrasounds and x-rays) provided by the chiropractor during the visit. The $20 co-payments do not apply toward the employee's annual health insurance deductible (the $20 charge may be submitted to the Medical Expense Spending Account if applicable).  For a list of participating chiropractors, see the www.dakotacare.com website.

If employees use Out-of-Network providers there is a $25 co-pay and the remainder of the cost would be covered 65% by the insurance, 35% by the employee.  

MANAGED CARE PLAN

• High Risk Maternity Review: This program is designed to help ensure the health of expectant mothers and their babies. Expectant parents planning to add the baby to the health insurance are required to notify the managed care program of their pregnancy during the first trimester so that potential risk factors can be evaluated. The incentives for early notification by expectant parents are either an infant car seat, a $100 savings bond, or an electric breast pump kit.  Phone number to call:  1-888-821-2242.

• Incentive Program For Discovery of Billing Errors: Employees who discover billing errors on any bill may be eligible to receive a portion of the error in cash. For more information read the Summary Plan Description Booklet.  Phone number to call:  Bureau of Personnel Benefits Line at 605-773-5634.

• Wellness Incentive:  A $50 incentive will be put into a special spending account for employees when they attend the annual state-sponsored health screening and complete the health risk assessment questionnaire.

OTHER HEALTH INSURANCE OPTIONS

The following options are available to all employees and their families (including those who have opted out of the plan) should they desire to purchase them through payroll deduction. Premiums (with the exception of the Disability Coverage) are paid on a pre-tax basis.  There are no deductibles on these plans. 

• Dental Care: The plan pays 100% of the first $100 of eligible dental expenses each plan year, and then 60% of the next $750 of eligible expenses to a maximum annual benefit of $550 per enrolled person per plan year. Employees choice of dentists is not limited to DAKOTACARE providers.

• Vision Care: The plan pays 100% of the first $75 of eligible vision costs, and 60% of the next $350 of eligible expenses to a maximum of $285 per enrolled person per plan year. Employees choice of optometrists is not limited to DAKOTACARE providers.

• Major Injury Protection: This coverage pays above and beyond the major medical portion of they health insurance plan if the covered employee or family member is injured in an accident. The plan pays specific, fixed-dollar amounts, based on a schedule of benefits, for injuries suffered on or off the job. There is a six-month pre-existing clause on this plan.

• Hospital Income Protection: This coverage provides a daily benefit of $125 per day for each covered family member hospitalized overnight as the result of an illness or injury. The plan pays benefits for up to 365 days, beginning with the first day of a hospital stay. There is a six-month pre-existing clause on this plan.

• Short Term Disability Coverage: (For employee only) A benefit is paid after being totally disabled for 30 calendar days or after the employee has exhausted their earned sick leave (whichever is greater). The plan will pay 60% of the employee's monthly salary, up to a maximum of $2,200 per month for 12 months (if disabled all 12 months). There is a lifetime benefit maximum of 365 days in total on this plan. There is a six-month pre-existing clause on this plan.

RATE CHART FOR FLEX PRODUCTS PER MONTH

SPENDING ACCOUNTS

Medical Expense Spending Accounts and Dependent Daycare Accounts enable employees to pay for certain eligible out-of-pocket expenses on a tax-free basis. Under both of these plans, the employee authorizes the employer to deposit a set dollar amount each month into the spending account(s).  With both these accounts, it’s imperative that employees carefully calculate how much they contribute.  Remember that you must “use it or lose it” with these accounts.

• Medical Expense Spending Account:  This account can be used to pay eligible medical expenses not covered by insurance; such as deductibles, co-payments, and other expenses not covered by other insurance. Eligible expenses are those incurred by the employee and his or her dependents as defined by IRS guidelines. The maximum annual amount that employees can contribute to the Medical Expense Spending Account is $4,000. The flexible credits the state gives employees who chose the $1000 Deductible Plan or who choose to “opt out” of our health plan are all placed in the Medical Expense Spending Account.

• Dependent Daycare Account: The employee can contribute up to $5,000 (if single and the head of the household or married, filing jointly) per plan year for dependent day care expenses ($2,500 if married and filing a separate tax return).

There is no minimum contribution amount on either account.

LIFE INSURANCE and ACCIDENTAL DEATH AND DISMEMBERMENT

The State provides an employee life insurance benefit of $25,000. The Accidental Death and Dismemberment benefit provides accidental death benefits in addition to those offered by the death benefit. It also provides dismemberment benefits for certain injuries as specified in the "Summary Plan Description" booklet.

Supplemental Life: Additional (Supplemental) life insurance based on annualized salary is available through the state plan.  The premium is determined by salary and age.  Participants in this plan may also purchase dependent life insurance coverage for their spouse and children in the amount of $10,000 each (dependent children must meet age requirements).  Note that this product is tied to your state employment and only available for a limited time after termination.

TAX SHELTERED SAVINGS

SOUTH DAKOTA RETIREMENT SYSTEM

The South Dakota Retirement System Plan is a Defined Benefit Plan (401A) that automatically covers all employees who work at least six months per year and at least 20 hours or more per week. A member's contributions to S.D.R.S. are sheltered from taxes until retirement or withdrawal from the system. As of July 1, 2002, a deduction of 6% is taken out of the employee’s gross monthly salary and the employer matches that amount.

If an employee leaves the system within the first three years, he/she may withdraw or rollover 100% of their contribution plus 75% of the employer’s contribution.

After three years, an employee leaving the system has access to 100% of their contribution and 100% of the employer’s contribution. The terminating employee may select a defined retirement (monthly) benefit, or rollover or refund out the contributions in the system (penalties and taxes may apply).

Employees receive disability benefit coverage after three (3) years as a contributing member. After one (1) year as a contributing member, employees are eligible for a Pre-Retirement Death Benefit that provides protection for the employee’s spouse and dependents in the event of his or her death.

S. D. RETIREMENT SYSTEM SUPPLEMENTAL RETIREMENT PLAN (Deferred Compensation Plan)

This 457 plan is designed to simplify the task of personal savings by giving employees alternatives for investing savings and reducing income taxes. This plan is not matched by the state.  The minimum monthly contribution to this plan is $25.

TAX SHELTERED ANNUITIES

Tax Sheltered Annuities (TSA's) are optional for employees of higher education institutions through a 403b account. The employee may choose any company licensed to do business in the state of South Dakota. The employer will take the deduction from the earnings before taxes and mail it directly to the company of the employee's choice. Employees should refer to their financial advisor or tax consultant for more information.  TSA’s may be set up at any time.

LEAVE

Twelve Month (100% time) Employees: Annual leave is earned at the rate of ten hours per month and may be accrued to a maximum of 240 hours (accrual amounts and maximums change with the 16th year of employment). Sick leave is earned at the rate of 9.334 hours per month. There is no maximum accrual for sick leave. Accrual amounts are pro-rated for employees working less than 100% time

.

Employees Working Less than 12 months: Nine-month faculty do not accrue annual leave. Ten and eleven-month faculty accrue annual leave only if they are required to work during normal school holidays. All other types of employees accrue annual and sick leave at the same monthly rate and to the same maximum as twelve month employees with the exception that leave is accrued only during the months when the employee is in a pay status.

All regular employees receive their normal pay for ten legal holidays:  New Year’s Day, Martin Luther King Jr. Day, President’s Day, Memorial Day, Independence Day, Labor Day, Native American Day, Veterans’ Day, Thanksgiving Day, and Christmas Day. 

For more information on annual, sick and other types of leave, please consult your handbook or contact Human Resources.

REDUCED TUITION

State employees are eligible to attend state supported classes offered by an institution under the control of the Board of Regents at one-half tuition, for a maximum of 6 credit hours per semester and a total of 18 per year, on a space available basis, provided the following criteria are met:  The employee is eligible for benefits and has been continuously employed by the State of South Dakota for one year or more;

• The employee is a resident of the State of South Dakota;
• The employee is not entitled to other reduced tuition benefits by law;
• The employee has a grade point average of 2.0 or greater;
• The employee is not currently on a prescriptive or work improvement plan.

An application form for the reduced tuition benefit may be obtained from your Human Resources office.

WORKER'S COMPENSATION

State employees are covered by Worker’s Compensation for injuries sustained under the following conditions:

·       Arising out of employment and

·       In the course of employment, and

·       Sustained while in a paid duty status

·       Employment (or related activity) is a major contributing cause of the condition or injury.

An injured employee must notify the employer in writing within three (3) business days of the injury.  The Human Resources office, most department secretaries, administrative assistants or supervisors have a copy of the claims form and procedures.  Procedures are also printed in employee handbooks.

SOCIAL SECURITY

Social Security deductions are matched by the state monthly according to Federal regulations.

UNEMPLOYMENT BENEFITS

Unemployment benefits are provided according to state regulations.

DIRECT DEPOSIT

Direct deposit of payroll checks is mandated in accordance with Board of Regents Policy (4:46).  This program allows you to have your paycheck deposited electronically on payday into any bank that participates in electronic funds transfer.

OPTIONAL INSURANCES

Reliastar Tri-Term (Three year term life): Available at low group rates and, if the application is made within a prescribed time limit, does not require a physical examination. Initial maximum coverage without evidence of insurability:  Employee: $30,000, Children: $10,000.  Maximum coverage with evidence of insurability: Employee: $250,000, Spouse: $95,000.

New York Life: Available at low group rates and, if the participant enrolls within the time limit, does not require a physical examination. This is a "whole life" insurance policy.

American Family Life Assurance Company (AFLAC) Hospital Intensive Care: Policy provides benefits for intensive care confinement resulting from injury or illness. It pays in addition to any other plan the employee may have. (Premiums may be paid pre-tax if enrolling during the first 30 days of employment.)

AFLAC Cancer Care Plan: Policy provides benefits that cover gaps in health insurance such as co-payments, deductibles or non-medical costs (travel, lodging, phone calls, child care, etc.). It pays in addition to any other plan the employee may have. (Premiums may be paid pre-tax if enrolling during the first 30 days of employment.)

This document is intended to provide a summary of our employee benefit plans and should not be used as a replacement for the actual plan documents.  Any statement that purports to diminish or to expand upon benefits specifically set forth under the statues, rules, or regulations of the State of South Dakota and the Board of Regents shall be, to that extent, null and void without effect.

For more detailed information, contact your Human Resources office.

Revised 4/16/03