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Q. I just had a baby…what do I need to do to add him/her to my insurance?
A. You have 30 days from the date of birth to add the baby to your insurance. You will need to complete, and turn into HR, an insurance change form to "add a dependent" and attach a copy of the birth certificate or verification of birth letter that you may receive from the hospital. The baby's coverage becomes effective on his/her date of birth.
Q. How do I add my new spouse to the plan? When will his/her coverage start?
A.You have 30 days from the date of the marriage to add your new spouse to your insurance. You will need to complete, and turn into HR, an insurance change form to "add a dependent" and attach a copy of the marriage certificate. Your spouse's coverage will become effective on the first day of the next month.
Q. I'm leaving the hospital…how long will I have insurance? When will my PTO be paid out to me?
A.Your insurance coverage will end on the last day of the pay period in which you terminate, assuming that all of your insurance premiums have been paid and are up-to-date. If your premiums are behind, for any reason, you will be given the option to pay back the missed deductions so that your coverage will end on the last day of the pay period that you terminate in. If the missed deductions are not paid back, your insurance end date will be adjusted to when the last full premium was received.
When you terminate from the hospital, you will receive your final pay check for hours worked, and since you are still accruing PTO for that pay period, your PTO bank will be paid out to you on the following pay period.
Q. I'm going part time…how does that affect my insurance?
A. Your new Standard Hours of employment will determine your benefits eligibility. For instance, if you move from a lower payroll deduction amount to a higher payroll deduction amount, you can cancel the benefit plan. However, any changes to your enrollment must be within 30-days of the qualifying event.
Q. I'm going from part time to full time…how do I get the benefits?
A. Once HR has processed your hours increase to full time, you will be mailed an insurance packet that contains the enrollment forms for everything that you are eligible. You have 30 days from the effective date of your hours increase to enroll in any of the benefits that you want to participate. Your coverage would become effective on the first day of the next month, or on your 61st (for health and dental) or 91st (for all other benefits) day of employment.
Q. How long can my child stay on my insurance?
A. Dependent children can stay on your insurance up to the age of 19, or up to the age of 23 if they are enrolled in an accredited college as a full time student. If your child is a full time student over the age of 19, you will be required to show proof of their student status to the insurance carrier every semester.
Q. How many credit hours does my child need to be enrolled in to be considered a full time student?
A. A student needs to be enrolled in at least 12 credit hours, at an accredited college, each semester to be considered a full time student and to remain eligible for the insurance.
Q. What happens if my child decided to take a semester off from school? Can I pick them back up next semester?
A. If a student isn't full time for a semester, or decides to take a semester off, they will not be eligible for the insurance plan and will be dropped at that time and offered COBRA. If they enroll as a full time student the next semester (assuming they are still under the age of 23) they can be picked back up on your insurance plan by providing proof of their full time student status.
Q. When can I drop my insurance?
A. Insurance changes and cancellations can only be made during the annual open enrollment period, unless there is an approved qualifying event that would warrant the changes to be made outside of the open enrollment period.
Q. When is open enrollment?
A. The annual open enrollment period for most benefit plans is held in the fall of each year. Any plan changes that are elected during the fall open enrollment period will take effect on January 1st.
Q. What are the qualifying events that allow me to make changes to my insurance outside of the open enrollment period?
A. The qualifying events are outlined by the Section 125 Federal Guidelines. These events have been approved as reasons for you to make changes to your insurance plans outside of the annual open enrollment period. They are:
- increase or decrease in hours that changes your status from Full-Time to Part-Time, or Part-Time to Full-Time status or;
- a change in your legal martial status (such as marriage, death of a Spouse, divorce, legal separation, or annulment) or;
- a change in the number of your Dependents (such as the birth of a child, adoption or placement for adoption of a Dependent, or death of a Dependent)or;
- gaining or losing other insurance coverage or;
- formation of a qualifying Domestic Partnership (with approved registration) or dissolving of a Domestic Partnership or;
- any of the following events that change the employment status for you, your Spouse, or your Dependent(s) and that affect benefits eligibility such as:
- termination or commencement of employment
- a commencement of or return from an unpaid leave of absence
- switching from salaried to hourly-paid
- an event that causes your Dependent to satisfy or cease to satisfy an eligibility requirement for a particular benefit (such as attaining a specific age, ceasing to be a full-time student, or a similar circumstance)
Q. What is a 403(b)?
A. The 403(b) is a tax deferred retirement plan available to employees of educational institutions and certain non-profit organizations as determined by section 501(c)(3) of the Internal Revenue Code. Contributions and investment earnings in a 403(b) grow tax deferred until withdrawal (assumed to be retirement), at which time they are taxed as ordinary income. See IRS Publication 571 for details, or call 800.829.3676.
Q. Who can contribute to the Hospital 403(b)?
A. All Bloomington Hospital employees are eligible to participate from a payroll deduction standpoint, but there are specific criteria for being eligible for employer contributions (annual BASE and MATCH contributions).
Q. Why Contribute to a 403(b)?
A. A healthy retirement! Relying solely on Social Security may not be enough income to live as well as you need or would like. A 403(b) plan can provide a healthy supplement to any other retirement funds you may have or may serve as your primary account.
Additionally, a 403(b) contribution lowers your taxable income. Generally, if you contribute $100 a month to a 403(b) plan, you've reduced your Federal income taxes by roughly $25 (assuming you are in the 25% tax bracket). In effect, your $100 contribution costs you only $75. The tax savings are magnified as your 403(b) contribution increases. Further, any dividends, interest and capital gains accumulate in a 403(b) account on a tax-deferred basis. This means your potential earnings will grow tax-free until time of withdrawal - hopefully at retirement when you are in a lower tax bracket.
Q. How does a 403(b) plan work?
A. You set aside money for retirement on a pre tax basis through a salary reduction agreement with Bloomington Hospital. You choose from one or more of the 28 investment funds offered by the Plan. The money remains tax free until withdrawal at retirement.
Q. Will participation in a 403(b) plan reduce Social Security benefits?
A. No. Salary reduction contributions to a 403(b) reduce taxable compensation for federal (and in most instances, state) income tax purposes only. Those contributions do not reduce wages for the purpose of determining FICA taxes or determining social security benefits.
Q. Are part time employees eligible to contribute to a 403(b)?
Q. What does a 403(b) plan cost and who is paying for it?
A. The Hospital's 403(b) plan costs are shared between BH and the employee. A quarterly plan service fee of .01% of your account balance, as of the last day of each Plan quarter, will be deducted from your account in the following month. For example, if your account balance on March 31 (end of the first quarter) was $1000, .10 cents would be withdrawn by Diversified. Contact Diversified for more information about which investment funds the plan service fee applies.
Q. How much can I contribute annually?
A. For 2009 workers are able to contribute the smaller of:
- the elective deferral limit of $16,500 (increased by $1000 from 2008), or;
- up to 92% of includable compensation (must be less than the elective deferral limit), or;
- for those with employer matches or other employer contributions, limits are $49,000 or 100% of compensation (whichever is less). The employee is still limited to the employee elective deferral limit ($16,500 for 2009). An employer can add up to another $32,500.
In addition, if you are 50 or older at any time during 2009, you may contribute an additional $5,500.
Note: There is a provision of the Internal Revenue Code that temporarily increases the elective deferral limit for those eligible employees. This increase is known as the 15-year-rule. This special provision increases your elective deferral limit by as much as $3,000 more than the current $16,500 limit (as of 2009). To qualify you must have completed at least 15 years of service with the same employer (years of service need not be consecutive), and you cannot have contributed more than an average of $5,000 to a 403(b) in previous years. The increase in your elective deferral limit cannot exceed $3,000 per year under this provision, up to a $15,000 lifetime maximum. If you have 15 or more years of service with your employer, it is highly recommended that you consult with a tax professional concerning the limits on your contributions. Note that if you are eligible to contribute to both the age 50 catch-up and the 15-year-rule the IRS will first apply any contribution above normal limits to the 15-year-rule.
Q. What investment options are available to 403(b) participants?
A. The Hospital's 403(b) plan offers 28 funds in which the employee may invest. Please visit divinvest.com for a complete list.
Q. When can 403(b) money be accessed without penalty?
A. Generally, penalty-free distribution from a 403(b) cannot occur until the participant:
- Reaches age 59 1/2
- Separates from service in the year turning 55 (and must be retired)
- Retire before age 55 — eligible for Substantially Equal Periodic Payments (SEPP). Participants who have retired early (before age 55), but want access to their 403(b) without penalty can do so using SEPP. This provision requires that you take a series of substantially equal periodic payments. The key is that once you start these payments they must continue for five years or until you reach 59 1/2, whichever takes longer. If you start at age 58 you must continue until you are 63 (minimum 5 years).
- Becomes disabled (as defined in section 72(m)(7) of the Internal Revenue Code)
Consulting a tax professional before accessing 403(b) money is highly recommended.
Q. How do I enroll in the 403(b)?
A. We make that easy! When you join the Hospital, you will be automatically enrolled in the 403(b) at a 3% deferral rate. You can choose to opt out upon hire or increase or decrease your contribution. After the first week of hire, you can change your contribution rate to between 0% and 92% at any time by logging into your account at Diversified Investments at divinvest.com.
Q. Can I change the amount I contribute?
A. Yes. You may change your contribution rate at any time. Log into your account at divinvest.com and there you can change your contribution to any percentage -- up to 92% of your eligible compensation. Note: Changes may take up to two pay periods to be in effect.
Q. Can I stop contributing altogether?
A. Yes. You may stop contributing at any time. Log into your account at divinvest.com and change your contribution percentage to 0%.
Q. How is a 403(b) different from a 401(k)?
A. The 401(k) is a tax-deferred retirement plan for private sector employees, while the 403(b) is a tax-deferred retirement plan for employees of educational institutions and certain non-profit organizations.
Q. How long after my 403(b) contribution is deducted from my paycheck should it take to be credited to my 403(b) account?
A. Employers are required to transmit employee contributions to retirement plans as soon as they can reasonably be segregated from the employer's general assets, but not later than the 15th business day of the month immediately after the month in which the contributions were withheld or received by the employer. Bloomington Hospital transmits 403(b) contributions every pay day. Once received, Diversified credits accounts within a few business days.
Q. Under what circumstances may a hardship withdrawal be made?
A. This provision allows withdrawal of funds from a 403(b) if under severe financial distress. The participant must have no other resources available. A hardship withdrawal may be made for:
- Un-reimbursed medical expenses of the participant or his/her spouse and dependents.
- Down payment on primary residence.
- Tuition and fees for higher education needs, and only for the next 12 months.
- To avoid eviction from or foreclosure on your primary residence
- Funeral expenses for your deceased parent, spouse, children or dependents
- Unreimbursed expenses for the repair or damage to your principal residence that qualifies for the casualty loss deduction under IRS Code Section 165.
WARNING: Hardship withdrawals are not exempt from an IRS 10% penalty. Furthermore, withdrawals are subject to ordinary income taxation in the year withdrawn (currently law is to withhold 20%). To qualify you must certify that you have no other recourse, including the possibility of taking a loan. You also are prohibited from contributing to a 403(b) for the next six months. The IRS makes it tough to access money this way for a reason: they don't want you to use the 403(b) as a form of short term savings. For exact details on your situation it is recommended that you contact Diversified Investment Advisors and a tax professional before proceeding.
Diversified is responsible for making hardship withdrawals. They will approve the hardship, based on written information provided by the employee as to the nature of the hardship. Diversified will determine, based on the facts, whether the employee has an "immediate and heavy financial need."
Consulting a tax professional before making a hardship withdrawal is highly recommended.
Q. What are the options for a 403(b) when switching jobs?
A. You have the following options:
- Move the money into your new employer's retirement plan, if they accept rollovers. You should check with your employer (former and present) and plan provider (former and present).
- Roll it into an Individual Retirement Account (IRA).
- Leave it where it is, especially if you like your investment choices. However, if the balance is greater than $1000 but less than $5,000 the money must be distributed. If you fail to move your 403(b) funds, they will be transferred to a rollover IRA within Diversified. If your account balance is less than $1000, it will be automatically paid directly to you. Taxes and penalties may apply.
- Take a lump sum payment, but beware that there can be substantial taxes and penalties when doing so.
For more detailed information refer to IRS Publication 571. You can obtain this document by calling 800.829.3676 or it may be downloaded by clicking on IRS Publication 571 at irs.gov.
Q. What happens to 403(b) money in the event of a divorce?
A. Generally, distributions of funds in a salary reduction 403(b) are restricted by section 403(b)(11) of the Internal Revenue Code. In order for a distribution to take place, a qualifying event must occur. These events include death, disability, severance of employment, or attainment of age 59 1/2. However, a distribution to an "alternate payee" will be permitted if pursuant to a qualified domestic relations order (QDRO).
A QDRO is a decree, judgment or order that meets the qualification requirements of the Internal Revenue Code. Those requirements include:
- The order must have been issued under a state's community property or other domestic relations law; and
- It must relate to the provision of alimony, child support or the property rights of a spouse, former spouse, child or other dependent (alternate payee); and
- It must assign to the alternate payee the right to receive all or a portion of the participant's plan benefits, and;
- It must clearly specify (1) the names and addresses of each alternate payee, (2) the amount or percentage of the participant's benefit to be paid to each alternate payee, (3) the period of time over which the order applies and (4) each plan to which the order applies.
If a distribution is made to a spouse or former spouse under a QDRO, the distribution may be rolled into a qualified plan or IRA that the spouse or former spouse has. Distribution to any other alternate payee is not eligible for rollover.
Q. What happens to 403(b) money in the event of death?
A. Death benefits to be paid under a 403(b) plan depend on when death occurs and who is the designated beneficiary on the plan. Different rules apply to death benefits depending on whether or not death occurs before the required beginning date. Please contact Diversified Investors or the IRS for more information.
Q. How will distributions from my 403(b) be taxed?
A. In most cases, the payments you receive, or that are made available to you from a 403(b) are taxable in full as ordinary income. However, if you are not at least age 59 1/2 and your take a lump sum distribution, the funds are also subject to a 10% penalty. In general, the same tax rules apply to distribution from a 403(b) that apply to distributions from other retirement plans. For more detailed information refer to IRS Publication 571. For your specific situation it's recommended that you consult a professional tax advisor.
Q. Can I leave my money in the plan indefinitely?
A. No. The federal government will allow you to put off paying taxes on the money for only so long,. The Internal Revenue Code states that distributions generally must be made from a 403(b) plan by the participant’s required beginning date, which is April 1 of the year following the year in which the participant attains age 70 1/2.
Q. Can I contribute to a 403(b) and a Roth IRA?
A. Yes. However, the Roth IRA has Adjusted Gross Income (AGI) limitations. See your tax advisor for details or visit irs.gov.
Q: How does the Hospital decide what jobs get a “Market Adjustment” increase and others don’t?
A. Each fall/winter, the Human Resources department participates in numerous professional third-party salary surveys. These surveys collect data from Hospitals primarily in central-Indiana, but also on a Regional and National basis. By paying the survey participation fees and providing our current data, we receive the detailed survey results. We then enter the survey results into an extensive database that allows us to review and determine an average pay range (Minimum – Midpoint – Maximum) and average rate of pay. We then compare the results to where we currently have a position/job code assigned to in the BH Pay Schedule. If the current pay range for the position/job code is still competitive to the survey results, the position/job code stays in that same range for the next year. If the survey results indicate that the position/job code has fallen behind the survey results, Human Resources recommends a new pay range that ensures it is competitive. Once the list of positions/job codes recommendations has been created, the list is provided to the Payroll Department perform calculations that estimates the additional amount of wages it would cost the Hospital budget. Once that effort is completed, the list and associated costs are closely reviewed and finalized by the Senior Leadership Group. They will inform Human Resources of the approved job codes, new pay grade, and effective date.
Q: If my job code is on the Market Adjustment list, how do you determine my new pay rate?
A. If a position/job code is approved for a Market Adjustment (MA), any employee that has that job code assigned to their 1st, 2nd, or 3rd rate of pay will receive a pay increase as of the approved effective date. The primary factor in determining the new rate is the difference of the current pay grade and the newly approved pay grade. In most cases it is a one pay grade increase, which is usually around 3% per pay grade. With that information, the other important factor is maintaining the employee’s same “range penetration” percentage from the current pay grade to the new pay grade. Here is an example:
An employee has a rate of $15.00 per hour. Their job code is in a current pay grade that has a range (Min - Max) of $10.00 - $20.00. That means the employee, with a current pay rate of $15.00 has a range penetration of 50% (half-way from the range). Now let's say the job code of the employee is on the Market Adjustment list. The new range that the job code will be placed into is: $10.30 - $20.60. A calculation is accomplished to maintain the employee at the same range penetration of 50% into the new range, which means the new rate of pay will be $15.45.
Q: What is the definition of “Top-of-Scale”, and how does an employee get to Top-of-Scale?
A. When an employee is at Top-of-Scale (TOS), it means they have a pay rate for their position/job code that is at the Maximum of the range for their position (as in the: Minimum – Midpoint – Maximum). In other words, they have obtained 100% range penetration. The way that an employee eventually gets to TOS is from receiving the annual “Meets” merit pay increases. When an employee receives a 2.0% - 3.0% pay increase, it pushes their rate further into the range. In most cases it takes over 20-years of job specific work experience to reach TOS. Once an employee reaches TOS for their position/job code, they will always be at TOS for that position/job code. If a Market Adjustment is given for their position/job code, the employee will get the pay rate increase that still has them at the new Maximum rate for the new pay range.
Q: If I’m at Top-of-Scale, and everyone else gets a “Meets” percent increase to their pay rate, how do you determine my Top-of-Scale Lump Sum amount?
A. If an employee is at Top-of-Scale (TOS) they won’t get a pay rate increase, since they are now at 100% range penetration. Instead, the Hospital has a policy to provide employees a TOS Lump Sum payment. The lump sum amount should be equal to getting the pay rate increase for their specific position/job code, as long as their hours worked (excluding overtime hours) in the coming year will be similar to what they worked in the prior year. The TOS lump sum is available for the job code associated with the 1st, 2nd or 3rd rates of pay. The lump sum is calculated by determining what the pay rate increase amount would have been if it had been allowed to be added to their pay rate, then multiplied by the work/PTO hours for that job code in the prior year. Provided below is an example:
An employee has a 1st rate of pay at $20.00 per hour. Their job code is in a current pay grade that has a range (Min - Max) of $10.00 - $20.00, thus the employee is at TOS for their 1st position/job code. For the prior year, the employee had a total of 2,000-hours for their 1st position/job code. The Hospital provides a 3.0% Meets merit increase to employees. If the employee could have received the 3.0% to their pay rate, it would have been $20.00 x 3.0% = $.60 per hour. The TOS Lump Sum amount calculation is $.60 x 2000-hours = $1,200.00. This is taxable income.
Q: If I apply for a Transfer, and get the new job, how do you determine my new pay rate (promotion, demotion, lateral)?
A. The decision of the new pay rate for the employee is determined by utilizing the Human Resources Pay Administration manual. The manual is a very detailed document that ensures all employees are treated on a consistent, objective and reasonable basis. In regards to an employee transferring to a new position/job code, their new pay rate depends upon the current position held by the employee and their new/future position. Each position/job code is located in a pay grade of the BH Pay Schedule. If an employee is transferring to a position that is in a higher pay grade, which has a higher pay range (Minimum – Maximum), then it is considered a Promotion. If it is a promotion, the Human Resources Pay Administration manual has specific instructions that are followed to provide a new pay rate. In nearly all cases, there will be some type of pay increase.
If the employee is transferring from their current position/job code to a position/job code that is in a lower pay grade, which has a lower pay range (Minimum – Maximum), then it is considered a Voluntary Demotion. If it is a Voluntary Demotion, the Human Resources Pay Administration manual has specific instructions that are followed to provide a new pay rate. In nearly all cases, there will be some type of pay decrease.