A few changes are coming for employee benefits, most taking effect Jan. 1

Following the recommendations of the university benefits committee (UBC) earlier this month, university administration approved several changes to employee benefits, most of which are effective Jan. 1. These are in addition to the changes announced before open enrollment in November.

The UBC has an advisory role on employee benefits, making recommendations to the senior vice president for finance. UBC chair Mark Power said the committee works closely with administration in challenging budget environments to manage benefit costs while maintaining quality. The changes taking effect in 2019 are meant to improve administrative efficiency, control costs, comply with industry practices and expand voluntary offerings.

"Importantly, ISU Plan medical and dental plan design and employee cost-share have remained unchanged for five consecutive years," said Power, University Professor of finance. "Benefit costs are dynamic and the UBC, in conjunction with university administration, must continue to embrace innovations to ensure benefit sustainability."

Long-term disability

The formula used to determine payments for employees on long-term disability has been 75 percent of the first $1,000 per month plus 60 percent of the gross income above $1,000. The insurer, Principal Financial, advised that most policies now use a single percentage to calculate payments, generally from 60 percent to 66.7 percent. Effective Jan. 1, the ISU plan will cover 63 percent of an employee's salary. Employees may notice slight changes to the deductions listed on their paychecks, but the premium remains 100 percent covered by ISU after the first year of employment.

A new voluntary group plan will be offered through Principal for employees who want additional long-term disability coverage to supplement the university-provided plan. Employees would enroll directly with Principal, paying after-tax premiums not set up through payroll deductions. It hasn't been determined when that policy will become available. University human resources (UHR) benefits staff and Principal will share information about the plan in early 2019.

New and departing employees

New employees currently are eligible for medical and dental coverage on their first day of employment, provided they take action to enroll in benefits. The university has covered the employee share of medical and dental premiums during the month of hire, unless the start date was the first day of the month. Beginning July 1, 2019, employees will continue to be offered immediate coverage but will pay their share of medical and dental coverage in their first month of employment. If the start date falls on the 14th day of the month or earlier, the employee will pay a full month's premium for the plans. Employees who start on or after the 15th will pay half of the monthly premium. Until July 1, the current practice will continue.

Beginning Jan. 1, the university no longer will offer the subsidized active-employee rate for health and dental coverage through the end of the month that follows the month in which employment ends. Instead, ISU active-employee coverage will extend until the last day of the month employment ends. Retiree and COBRA plans remain available for former employees who wish to keep their coverage. Opting to continue coverage requires departing employees to pay the full premium, beginning the first full month immediately after the separation date.

As part of this change, tenured faculty departing at the end of the academic year will no longer receive employee-rate coverage through the summer months.

Eligibility requirements

Employees must work at least half time to be eligible for non-retirement benefits, but a change effective Jan. 1 removes the requirement that the appointment be at least nine months. Temporary and seasonal workers will continue to be ineligible for benefits.

Eligibility rules for participating in the defined-contribution retirement plan also change Jan. 1, removing the current requirements for employees to be at least half-time, on an appointment of at least nine months and earning at least $7,800 per year. Due to those requirements, most employees who didn't qualify defaulted into the Iowa Public Employees Retirement System (IPERS), as long as they made $1,000 or more in two consecutive quarters. This change allows most new hires to choose between IPERS or the defined-contribution TIAA plan. State rules prevent employees from switching retirement plans after their initial choice.


Questions about any of these changes may be directed to the UHR benefits office at benefits@iastate.edu or 294-4800.