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Monday, Jun. 18, 2007

UK Adopts Sponsored Dependent Coverage Plan

Full text of Monday's University of Kentucky news release:

LEXINGTON, Ky. (June 18, 2007) – The University of Kentucky today announced the creation of a Sponsored Dependent Coverage plan that will offer health care coverage to dependents residing with UK employees.

The new plan is in response to a recent Attorney General's opinion that questioned the constitutionality of UK's plans to offer Domestic Partner Coverage. Under the new plan, a UK employee may extend coverage to one qualifying adult and/or children in their household.

"This plan is responsive to the concerns articulated in the Attorney General's opinion and, we believe, addresses the legal issues raised," said UK President Lee T. Todd Jr. "As importantly, it honors our goal of trying to provide affordable health care coverage to our employees and their dependents as part of our efforts to create an attractive and more competitive compensation package for our faculty and staff."

Open enrollment under the new plan will take place over the next two weeks, leading up to July 1. In addition, enrollees who planned for coverage under the university's previous Domestic Partner Coverage must re-apply for coverage under the new plan.

One other significant change is that the cost of the plan will be paid for completely with private dollars from unrestricted gifts to the university. UK officials don't anticipate that the new plan will increase the university's $68.2 million budget for health insurance.

Under the terms of the new plan:

The Sponsored Dependent must share a primary residence with a covered UK employee and have lived with the employee for at least 12 months prior to the effective date of coverage.

The Sponsored Dependent -- who must be legally responsible for themselves, the so-called "age of majority" -- also cannot be a relative and not be employed by the UK employee.

A child being provided coverage must be the natural born or adopted child of an Adult-Sponsored Dependent and be under the age of 25.

Other conditions that must be met to receive coverage can be found on the information sheet below. Following more than a year of intensive study and input from faculty and staff, the UK Board of Trustees approved a comprehensive package of work-life and benefits changes at its April meeting. That package included expanded educational benefits, child-care options and expanded health-care coverage, among other initiatives.

As part of the effort to become a Top 20 public research institution by 2020, the university has been focused on creating a more comprehensive benefits and compensation package to allow UK to be more competitive in the recruitment and retention of faculty and staff.

The new insurance coverage plan is an administrative change and will not require a vote by the Board of Trustees.

Sponsored Dependent Coverage

Under the “Sponsored Dependent” program, employees may provide benefits to persons who reside in their households. Employees must provide residency documentation for dependents who are not their spouse or child(ren).

Adult-Sponsored Dependent

• Shares primary residence with covered UK employee, and has lived with UK employee at least twelve months prior to effective date of coverage

• Is at least the age of majority

• Is not a relative. Definition of relatives: Parents, children, husbands, wives, brothers, sisters, brothers- and sisters- in law, mothers- and fathers- in law, uncles, aunts, cousins, nieces, great nieces, nephews, great nephews, grandmothers, grandfathers, great grandmothers, great grandfathers, sons- and daughters-in law and half- or step-relatives in the same relationships.

• Note- Children for whom the employee has legal guardianship continue to be eligible for the current Medical Benefits Plan.

• Is not employed by the UK employee

• Is not eligible for Medicare

Children of Adult-Sponsored Dependent

• Shares primary residence with UK-covered employee and Adult-Sponsored Dependent and has lived with UK employee at least twelve months prior to effective date of coverage

• Is under the age of 25

• Is the natural born or adopted child of Adult-Sponsored Dependent

• Is unmarried

• Is not a relative of the covered UK employee (see the definition of relative above)

General Information

Adult-Sponsored Dependent cannot be covered on an employee’s benefit plans if a spouse is already covered. Only one Adult-Sponsored Dependent is eligible to be on an employee’s benefit plans, in addition to their eligible dependents. Unless the Adult-Sponsored Dependent and/or his or her child(ren) are eligible for tax-free health coverage as defined by the IRS, the employee’s payroll deductions for adult-Sponsored Dependent coverage will be made on an “after-tax basis” and employer contributions for Sponsored Dependent coverage will be taxable income to the employee

Residency with a UK employee cannot be established for the primary purpose of obtaining benefits.