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Montana University System's
Flexible Benefits Program

If you were to try to describe a typical member of the faculty and staff of the Montana University System you would probably find it more difficult than you may think. The fact is, our work force represents a wide variety of employment, individual and family situations.

This diversity means that a traditional "one-size-fits-all" benefits program does not meet our faculty and staffs' benefit needs.  A more flexible approach is necessary--one that gives you the option to choose the benefits that are important to you and your family.

Choices, has been designed with the flexibility to let you choose the benefits that best fit your needs -- now and in the future.

This web site will help familiarize you with your flexible benefits program. It highlights information describing how Choices works and the benefit options it includes. For additional information regarding Choices, refer to Questions and Answers.

Choices:
The Advantages of Flexible Benefits

The benefits available to you are a significant part of your overall compensation from the Montana University System. They are also an important source of financial protection for you and your family. That's why our goal has always been to provide a benefits program that effectively meets your benefit needs, at an affordable cost.

It's no secret, however, that the gap between the cost of benefits to the Montana University System and the State for funding our benefits has continued to grow over the past several years.  State funding increases have not kept up with increasing benefit costs.

As a result, the Montana University System has paid the rising benefit expenses without increasing costs to faculty and staff or implementing across-the-board benefit cuts that many other employers throughout the country have put into effect. But, this was just a stop-gap measure: A long-term solution was needed to help keep the benefits program on a healthy financial foundation now and in the years to come.

After researching a number of alternatives, the Montana University System decided to introduce a flexible benefits program called Choices. This flexible approach to benefits offers a number of advantages to you and the Montana University System, including:

  • Increased responsiveness to the diverse and changing benefit needs of our faculty and staff-- since a flexible benefits program allows you to choose the benefits mix that seems right for you and your eligible dependents.
  • Tax advantages for you and the Montana University System-- because most benefit options may be paid through before-tax payroll deductions. As a result, your taxable income is reduced and you'll save on federal and state income taxes and Social Security taxes.

Tax Savings Example:

You may generally estimate your annual tax savings with Choices as follows ...

If you're in the 15% federal income tax bracket, your cost for benefits may be reduced by:

15% on federal income taxes
+
7.65% in Social Security taxes
+
8.00% in Montana State taxes

for a total tax reduction of 30.65% in federal and state taxes.

This example is for illustrative purposes only. Your actual tax savings will vary based on your personal situation.

  • More opportunity for you to manage your own benefits-- since, with Choices, you choose benefits that are best for your needs. And, you have the opportunity each year to make changes in your benefits mix as your personal and family situation evolves over time.
  • Help in attracting and retaining highly qualified faculty and staff-- because a financially solid benefits program tailored to individual needs can be added incentive to work for the Montana University System.

How Choices Works
The Advantages of Flexible Benefits

Under Choices, you select the benefits that best meet your personal situation. Here's how it works:

  1. Each eligible faculty and staff member receives a monthly allocation towards the cost of benefits -- called Flex Credits. This amount is based on the Montana State legislature's allocation toward the cost of benefits for state employees.
  2. Each benefit option in Choices has a monthly cost associated with it. These costs are shown on your enrollment form. The exception is the cost for Optional Supplemental Life insurance.
  3. During annual enrollment each year, you select from among the benefit plan options shown on your enrollment form.
  4. To determine the before-tax cost of your benefits, add up the total cost of the benefits you've selected and compare it to the Flex Credits provided to you by Montana University System. If the benefits you choose cost ...
    • The same as your Flex Credits, you won't see any change in your paycheck.
    • More than your Flex Credits, you'll pay the difference through automatic payroll deductions.
    • Less than your Flex Credits, you'll either forfeit the remaining Flex Credits or you may apply them to a Health Care Reimbursement Account in your name..

Your Choices Benefit Options

Choices includes a wide range of benefit options. Each of these benefit options is highlighted below.

MEDICAL COVERAGE
Three (Before-Tax) Plan Options For You and Your Family

Under Choices, you may select from three Medical options. Each option covers many of the same services, including prescription drugs. The plans differ, however, in terms of the amount of your annual deductible and out-of-pocket maximum, and the monthly cost of coverage. You may select one of the following plans:

  • $400 Deductible Premium Plan ($800 Family Deductible): In exchange for the lower deductible and out-of-pocket maximum under this plan, you'll pay a higher monthly cost for coverage than under the $500 Deductible Basic Plan.
  • $600 Deductible Basic Plan ($1200 Family Deductible): This plan covers the same services as the $350 Deductible Premium Plan. It has lower monthly costs, however, because the annual deductible and out-of-pocket maximum costs are higher.
  • CHO (Not available in all areas): This plan requires co-pays for various services plus a $300 deductible ($600 family) for lab, x-ray, diagnostic and hospital services.

Note: The plan year and the benefit year is July 1 through the following June 30.

Choices offers you the advantages of selecting . . .

  • Separate Medical and Dental plans. If, for example, dental coverage is not especially important to you, you may choose the less expensive Basic Plan for dental and combine it with the higher cost $350 Deductible Premium Plan for medical coverage.
  • Different coverages based on your dependents' needs. Your spouse may, for example, have medical coverage available from his or her employer. In that case, you may decide to enroll for Employee Only Medical coverage and Employee & Spouse Dental coverage.

DENTAL COVERAGE
Two (Before-Tax) Plan Options For You and Your Family

Choices includes two Dental plan options which include preventive coverage for your eligible children. You may select either of the following plans:

  • Premium Plan: This plan covers preventive and restorative dental services for you and your enrolled spouse. In addition, your enrolled children are covered for preventive care only purposes.
  • Basic Plan: This lower cost plan covers preventive care services only -- for you and your enrolled spouse and children.

Keep in mind, your dental enrollment decision is in effect
for two years--  unless you have a relevant change
in family or employment status.

LONG-TERM DISABILITY
Three (Before-Tax) Plan Options For You

Choices Long Term Disability (LTD) coverage can help fill the gap between the income you need and the income you could otherwise expect if you become disabled and unable to work.

  • Your Choices LTD coverage options differ based on the percentage of your pay that is replaced and when benefits become payable, as follows:
    • 60% of pay after a six-month waiting period of disability (the same as your current coverage)
    • 66-2/3% of pay after a six-month waiting period of disability
    • 66-2/3% of pay after a four-month waiting period of disability
  • Benefits from the LTD Plan coordinate with other disability benefits you may qualify to receive-- including Workers' Compensation and Social Security -- to total the amount of disability income you have chosen.

BASIC EMPLOYEE LIFE/AD&D INSURANCE
Two (Before-Tax) Plan Options For You

Employee Life Insurance can provide financial protection to your family in the event of your death from any cause. Accidental Death & Dismemberment (AD&D) coverage can add to life insurance benefits that may become payable in the event of your accidental death. Full or partial AD&D benefits are also paid for certain other accidental injuries, including, for example, loss of a limb, or loss of your sight or hearing.

  • To help ensure that you have at least a minimum level of protection, Choices offers you a choice among two Basic Life/AD&D Insurance Options:
    • $10,000 each of Basic Life Insurance/AD&D coverage; or
    • $20,000 each of Basic Life Insurance/AD&D coverage.
  • The cost per $1,000 of Basic Life/AD&D Insurance coverage is the same for all employees, regardless of age.

OPTIONAL EMPLOYEE LIFE INSURANCE
Eight (After-Tax) Plan Options For You

You may choose to add to your Basic Life Insurance coverage with Optional Employee Life Insurance.

  • You may enroll for one of the following amounts of coverage:
    • $25,000
    • $50,000
    • $75,000
    • $100,000
    • $125,000
    • $150,000
    • $175,000
    • $200,000
  • The cost per $1,000 of this coverage is based on your age as of July 1. It is paid on an after-tax basis.
  • Under Choices, you may keep the same amount of coverage you have now. You may increase one level of coverage during annual enrollment without proof of insurability, if you are in an active work status. Of course, you may also choose a lower amount of coverage.
  • New employees may elect any option.

OPTIONAL DEPENDENT LIFE INSURANCE
Four (After-Tax) Plan Options For Your Family

Choices includes Life Insurance options for your eligible dependents. Dependent Life Insurance is an optional benefit available only if you enroll for Optional Employee Life Insurance coverage. If you decide to purchase life insurance coverage for your dependents:

  • You may enroll for one of the following coverage amounts:
    • Spouse: $2,500 / Child(ren): $1,250
    • Spouse: $5,000 / Child(ren): $2,500
    • Spouse: $10,000 / Child(ren): $5,000
    • Spouse: $25,000 / Child(ren): $5,000
  • The cost of coverage is the same regardless of the number of children enrolled.
  • Your cost will be paid on an after-tax basis, due to Internal Revenue Service (IRS) rules.

OPTIONAL ACCIDENTAL DEATH & DISMEMBERMENT (AD&D) COVERAGE
Eight (Before-Tax) Plan Options For You and Your Family

Optional Accidental Death & Dismemberment -- or AD&D -- coverage available under Choices can supplement your Life/AD&D coverage in the event you or a family member die in an accident. Full or partial AD&D benefits may also be paid in the event of certain severe accidental injuries.

If you decide to purchase optional AD&D coverage:

  • You may enroll yourself only or yourself and your entire family.
  • You may choose coverage for yourself from $25,000 up to $300,000. This amount may not exceed ten times your annual salary.
  • The amount of AD&D coverage available to your family is a percentage of the amount you select for yourself, based on your family structure at the time a claim is made.
  • AD&D benefits are paid -- in addition to any life insurance benefits that may be payable -- in the event of accidental death or other specified losses.

OPTIONAL REIMBURSEMENT ACCOUNTS
Two (Before-Tax) Ways to Reduce Your Health Care and Dependent Care Expenses

Choices includes two special benefits which can reduce the financial impact of health care and dependent care services for you or your family. These Optional Reimbursement Accounts -- the Health Care Reimbursement Account and Dependent Care Reimbursement Account -- take advantage of tax rules which allow you to be reimbursed on a before-tax basis for many of these expenses.

Each year, you may allocate from a minimum of $120 a year ($10 a month) to $5,000 ($461.66 a month) to each account -- including any remaining Flex Credits that are allocated to your Health Care Reimbursement Account by Montana University System.

  • You may enroll in one, both or neither of these Reimbursement Accounts during open enrollment each year.
  • If you enroll in the Health Care Reimbursement Account, you may be reimbursed for most health care expenses -- including annual deductibles and prescription drug copayments -- that are not fully covered or not covered at all under the Medical, Vision, or Dental Plans.
  • If you enroll in the Dependent Care Reimbursement Account, you may be reimbursed for many dependent care expenses necessary for you -- and your spouse, if married -- to work or look for work.

Choices Eligibility
And Enrollment Facts

Here are some important facts you should know about participating in Choices:

  • You're eligible to participate in Choices if you meet the current eligibility requirement for benefits. Generally, this means that you must be a full-time or part-time faculty or staff member scheduled to work 20 or more hours a week and at least six months a year. You are also eligible if you are an academic or professional staff member with a contract which provides for eligibility or are covered by a collective bargaining agreement which provides for eligibility.

  • If you're eligible, you may enroll your spouse and unmarried dependent children.

  • You must enroll during the annual enrollment period held each year to receive the benefits of your choice. The exception is dental coverage, which is a two-year commitment.

  • If you don't complete and return an enrollment form during the annual open enrollment period, you'll be assigned "default" coverage for the next 12 months. This does not include a flex election ... flex elections require completing and returning the enrollment form.

  • Your enrollment choices are in effect for the next 12 months -- except dental which is a two-year commitment -- unless you have a change in employment or family status. "Changes in employment or family status" include marriage or divorce, birth or adoption of a child, death, or change in your spouse's employer provided coverage.