Due to COVID-19, HCA’s lobby is closed. Learn more about your customer service options.

Premiums and premium surcharges

Applicable to

All employers that participate in the Public Employees Benefits (PEB) program with the Health Care Authority (HCA).

Updated: 11/21/2020

Premiums  

  • Premiums pay for a full calendar month of coverage. Premiums cannot be prorated for any reason.
  • State agencies and higher education institutions – There are no employee premiums for dental, basic life insurance, and basic LTD insurance.
  • Political subdivisions, educational service districts with non represented employees (not on SEBB), and K-12 school districts school board members participating in PEBB benefits determine the employee premiums for medical and dental.

Employer contribution

Employee eligibility for PEBB benefits equates to being eligible for the employer contribution. View WAC 182-08-190

The employer contribution is set by the HCA and paid to the HCA for PEBB insurance coverage for all eligible employees and their dependents. The employer contribution includes an amount determined by the HCA to pay administrative costs.

Each employee of a state agency eligible under WAC 182-12-114,  WAC 182-12-131, or eligible on leave under the federal Family and Medical Leave Act (FMLA) or the paid family and medical leave program per WAC 182-12-138 is eligible for the employer contribution.

Employees of employer groups, eligible per criteria specified under contract with the HCA, are eligible for the employer contribution.

The entire employer contribution is due and payable to the HCA, even if PEBB medical is waived per WAC 182-12-128.

Employee contribution

State agency and higher-education employee monthly premiums are available on the PEBB website.

In addition to the monthly premiums, employees may have to pay for the following:

  • Deductibles
  • Coinsurance
  • Copayments
  • Supplemental:
    • Life insurance
    • Accidental death and dismemberment (AD&D) insurance
    • Long-term disability (LTD) insurance

Faculty employed at more than one institution of higher education

If the employee is eligible due to the employment of a single institution, that institution will pay the entire cost. View WAC 182-08-200 (2)

  • This also applies for faculty during summer or off-quarter/semester eligibility and for those using two year averaging.

If the employee is not eligible due to the employment of a single institution, each institution pays its percentage of the employee’s total work at all institutions:

  • During the anticipated work period, or
  • Throughout the instructional year or equivalent work nine-month period – for summer or off-quarter/semester eligibility, or
  • Through the two preceding academic years – for two year averaging

The institution with the greatest percentage coordinates collection of payment from the others and is responsible for sending the total premium payment to HCA.

Payments

Premiums and applicable premium surcharges are due from the subscriber for the entire month of insurance coverage and will not be prorated during any month. View WAC 182-08-180 (1)

If an employee elects optional coverage as described in WAC 182-08-197 (1)(a) or (3)(a), the employee is responsible for payment of premiums from the month that the optional coverage begins.

Unpaid or underpaid accounts must be paid, and are due from the employing agency, subscriber, or beneficiary to HCA.

  • If an employee's account is past due and HCA determines that full payment in a lump sum would be considered a hardship, HCA may develop a reasonable repayment plan with the subscriber or beneficiary upon request. Refer to WAC 182-08-180 for more details.

Refunds

PEBB premiums will be refunded by the following methods: View WAC 182-08-180 (2)

When an enrollment change affects employee or dependent eligibility:

  • HCA may allow up to three months of accounting adjustments.
  • HCA will refund to the individual or the employing agency any excess premiums and applicable premium surcharges paid during the three month adjustment period, except as indicated in WAC 182-12-148 (5).

When a subscriber, dependent or beneficiary submits a written appeal per WAC 182-16-2010:

  • Showing clear and convincing evidence of extraordinary circumstances, such that the subscriber could not timely submit the necessary enrollment change information within sixty days after the event that created a change of premium, then
  • The PEBB deputy director, the PEBB director's designee, or PEBB appeals unit may:
    •  Approve a refund not to exceed 12 months of premium
    • Approve the enrollment change that was originally requested and which forms the basis for the refund

HCA errors will be corrected by returning all excess premiums and applicable premium surcharges paid by the employing agency, subscriber or beneficiary.

Employing agency errors will be corrected by returning all excess premiums and premium surcharges paid by the employee or beneficiary as described in WAC 182-08-187 (4) and (5) to the employee or beneficiary who paid them.

Premium surcharges

The Legislature requires two premium surcharges that employees will pay for, if applicable, in addition to their monthly medical plan premium. View WAC 182-08-185

Tobacco use premium surcharge

A monthly $25-per-account surcharge will apply if the employee or any dependent (age 13 or older) enrolled on their PEBB medical coverage uses a tobacco product. Tobacco use is defined as any use of tobacco products within the past two months. Refer to the Premium Surcharge Help Sheet for definitions and examples of what is, and what is not, considered to be "tobacco products".

The following employees must attest via either the Employee Enrollment/Change form, or the Employee Enrollment/Change form-Medical Only, no later than 31 days after becoming eligible for PEBB benefits:

  • Newly eligible
  • Regaining eligibility
  • Returning from waived status
  • Enrolling a dependent age 13 or older in PEBB medical

Defaulting

The employee will be defaulted to incur the premium surcharge if:

  • Employee does not attest, or
  • Submits an incomplete attestation form, or
  • Employee does not include an attestation for a dependent, age 13 or older.

The tobacco use premium surcharge does not apply if

  • Employee is waiving PEBB medical.
  • Dependents are not enrolled in PEBB medical.
  • Dependents are enrolled in PEBB medical but under the age of 13.
  • Employee or dependent is enrolled in their PEBB medical plan’s smoking cessation program - they can attest "no".
  • A dependent between the ages of 13 and 17, and uses tobacco products, accessed the information and resources aimed at teens at teen.smokefree.gov .

Reattesting

The employee can change their attestation (reattest) at any time:

  • By submitting the Premium Surcharge Change form to their personnel, payroll or benefits office.

If the reattestation results in the employee incurring the surcharge:

  • Change is effective the first of the month following the status change
  • If the date of the status change is the first of the month, then it begins that day

If the reattestation results in the removal of the surcharge:

  • Change is effective the first of the month following receipt of the form
  • If the form is received on the first day of the month, the change begins that day
  • If an employee requests reimbursement from previous months, they can appeal

Spouse or state-registered domestic partner premium surcharge

Employees may pay a $50-per-month surcharge, in addition to their premium, if covering a spouse or state-registered domestic partner in PEBB medical who has chosen not to enroll in medical coverage comparable to UMP Classic through their employer. All employees who enroll a spouse or state-registered domestic partner on their PEBB medical coverage must attest.

Newly eligible employees, and employees regaining eligibility, or adding a spouse or state-registered domestic partner in PEBB medical must attest on the Employee Enrollment/Change form, or the Employee Enrollment/Change form-Medical Only.

Existing employees reattest by completing the Premium Surcharge Change form.

The Premium Surcharge Help Sheet  is designed to assist employees in determining if the spouse or state-registered domestic partner premium surcharge will apply to them.  Employees do not need to submit this help sheet with their enrollment form or Premium Surcharge Change Form.

  • There are six questions on page two of the Premium Surcharge Help Sheet that the employee must answer.
  • If they answer "no" to any of the six questions, they do not have to pay the surcharge.
  • If they answer "yes" to all of the questions, the employee needs to:
    • Obtain a Summary of Benefits and Coverage (SBC) document from their spouse or state-registered domestic partner’s employer for all plans that:
      • Serve the county or residence for the spouse or state-registered domestic partner
      • Have a monthly premium of less than $108.31 per month for 2020
    • Use the SBC to answer the questions on either the:
      • Spousal Plan Calculator tool online, or the
      • Spousal Plan Calculator paper version (PDF)
  • The online tool will provide a "yes" or "no" response. The employee will enter the response on their enrollment form or the Premium Surcharge Change form (if reattesting)
  • If the employee fails to provide or does not timely provide an attestation, they will incur the surcharge.

Defaulting

An employee will be defaulted to incur the premium surcharge if they have a spouse or state-registered domestic partner on their PEBB medical coverage and:

  • Does not attest, or
  • Submits an incomplete attestation form, or
  • Attests after:
    • 31 days from their date of eligibility, or
    • 60 days from a special open enrollment event occurring

Reattesting

Employees may only reattest to the spouse and state-registered domestic partner premium surcharge during specific times of the year:

  • When adding a spouse or state-registered domestic partner to PEBB medical
  • During annual open enrollment
  • When there is a change to the spouse or state-registered domestic partner’s employer-based group medical insurance

If the reattestation results in the employee incurring the surcharge:

  • Change is effective the first of the month following the status change
  • If the date of the status change is the first of the month, then it begins that day

If the reattestation results in the removal of the surcharge:

  • Change is effective the first of the month following receipt of the form
  • If the form is received on the first day of the month, the change begins that day
  • If an employee requests reimbursement from previous months, they can appeal

Rates information

PEBB offers two rate structures: Tiered and Composite. Current and historical PEBB program rates, broken down by rate structure and type of employer, can be found on the PERSPAY website rates information page. The page includes information regarding:

Types of employers

  • State agencies, higher education institutions, and commodity commissions
  • K-12 school districts with school board members on PEBB
  • Educations service districts (ESD) with non represented employees who are not on SEBB
  • Counties, municipalities, other political subdivisions, and Tribal governments (which are subject to the “employer surcharge”).
  • Other PEBB employer groups (which are not subject to the employer surcharge).

Employee/retiree rates associated with

  • Life and LTD insurance
  • Retirement
  • COBRA and leave without pay (LWOP)

Other topics

  • Breakdown of tiered rates
  • K-12 retiree subsidy instructions/worksheet
  • Tax issues related to non tax-qualified dependent insurance
  • W-2 reporting
  • Medical Flexible Spending Arrangement (state agencies and higher education institutions only).
  • Cockle rates – state agency employer payment amounts for health care benefits

State agencies and higher education institutions only

Paying for premiums with pretax dollars (IRC Section 125)

Section 125 of the Internal Revenue Service code allows the employer to deduct money from the employee's paycheck before certain payroll taxes and income taxes are calculated. This rule allows for deductions to include monthly premiums for medical coverage and for the state's Medical FSA and DCAP programs.

If employees have questions on how this will affect their future social security benefits, they should contact the Social Security Administration and request an estimate. For further information, refer to the paying for benefits page.

Subscribers may change their premium payment status during annual open enrollment or if a qualifying event triggers a special open enrollment. Premium Payment Plan Election/Change form

Premium payment plan (IRC Section 125) State of Washington payroll rules FAQ

  1. How will an employee on paid annual or medical leave be handled under the premium payment plan?

    Payroll contributions for employees on annual or medical leave will be treated no differently than other active employees.

  2. How will employees on LWOP be treated?

    Employees who self-pay for coverage while on leave status will be covered under the employer coverage upon the date of return. The employee contribution will begin the first of the month in which the employee returns to work with eight or more hours of pay status. The employee will be reimbursed any self-pay premium paid for that month.

  3. How will premium deductions for employees on FMLA be handled?

    Employees may prepay to employers, but prepayment should not cross plan years. Employer contributions will continue up to the first 12 weeks of approved family leave. Employees must also continue to pay the employee premium contribution to maintain eligibility. HCA cannot track prepayment on an employee-by-employee basis. Arrangements for prepayment will be made between the employer's payroll office and the employee. The HCA's eligibility system will not reflect the arrangement.

  4. What will be the effective date of transfers between employers?

    The employer losing an employee will use an effective date of the last day of the month in which the transfer occurred. The losing agency is responsible for the employer contribution for the entire month. The gaining agency will use the first of the month following the transfer.

  5. How will the higher education institutions handle employee premium deductions for summer coverage?

    The method used will be driven by the employer. The payroll contribution system will be that used for FMLA.

  6. How will employee’s (on workers compensation) active claims be treated for payroll contributions and the premium payment plan?

    Implementation of payroll contributions will have no impact on the rules for eligibility for those on worker’s compensation coverage.

  7. Will we need to track whether people elected the premium payment plan on the insurance system?

    The intention is to track people only on payroll systems. This means that when the HCA's insurance system creates payroll contribution levels for payroll systems, it cannot indicate which of these payroll contributions are for nonpremium payment plan contributions.

  8. What are the rules for when an employee can change premium payment plan status, and how will the employee make the change?

    An employee can only change his or her premium payment plan status during annual open enrollment each year, unless there is a qualifying event that triggers a special open enrollment (see PEBB Policy addendum 45-2A). PEBB may also remove an employee from the premium payment plan deduction, with notice, when it is necessary to prevent excess tax deferral.

  9. Will premium payment plan benefits affect deferred compensation allowable maximums?

    Maximum allowable deferred compensation levels for certain employees at the lower end of compensation levels may be reduced under various pretax deferral programs such as Sections 457 and 403B.

Personal checks considered taxed employee contributions

Even though an employee chooses the pretax option for health insurance payroll deductions, if the employee is not on an active payroll (which can sustain the pretax deductions), personal check payments will be treated as taxed employee contributions.

Examples of this include:

  • An employee remains on pay status while on leave, using eight hours of paid status per month to maintain benefits.
    • If the employee's pay does not cover the pretax insurance deduction, the employee needs to send a personal check to maintain the insurance.
    • This personal check will be considered an after-tax employee contribution.
  • An employee is on the employer's payroll for nine months (for example, faculty or a seasonal employee), and the employee authorizes pretax premiums to be collected in advance by payroll deduction for the summer or "off season" months.
    Note: Prepayment of health coverage by payroll deduction cannot cross the plan year.
    • If the payroll office forgets to take the deductions the employee sends a personal check to pay for his or her coverage.
    • Adjustments should be made in the payroll system to convert the personal check to pretax status.

De minimis default policy for terminated employees

When a pretax health insurance payroll deduction has been improperly taken from a terminated employee no longer on an agency's payroll, this deduction should be refunded at the deduction gross amount.

For example:

  • A pretax deduction of $16 may only cost the employee $10.30 after saving income tax, OASI, and Medicare.
  • Agencies may refund the entire $16 and not change the pretax federal reporting already completed.
  • Refund this amount from the account that retains health insurance deductions until paid to HCA.

The administrative costs to make extensive corrections and complete changes for federal depositing and reporting outweigh the very minimal future benefits for employees and lost tax revenue to IRS. This policy has been reviewed by the IRS and is in compliance with IRC Section 125.

FMLA premium payment options and tax treatments

In conjunction with IRS proposed regulations, payment options may be offered under an IRC Section 125 to an employee who chooses to continue group health coverage while on unpaid FMLA leave. For purposes of PEBB benefits, employers may offer either of the following options:

Prepay

  • This option allows the employee to pay the insurance premiums due during the FMLA leave in advance.
  • These may be made on a pretax or after-tax basis, depending on the employee's premium payment plan status for the plan year.
  • No pretax advance payments may be made for any time period in the next plan year (plan year runs January—December), nor may an employer require an employee prepay for the leave period.

Pay-as-you-go

  • Under this option, employees may make premium payments on the same schedule as if they were not on leave or by the date premiums are due to HCA.
  • These contributions are made on an after-tax basis unless they are taken from any taxable compensation paid the employee during the leave period.

Reporting on premium payment plan participation

Individual payroll systems are responsible for submitting information to the HCA on an annual basis. The HCA will provide a form for you to input this information. The HCA compiles and submits this information to the Internal Revenue Service (IRS) via form 5500 Annual Return/Report of Employee Benefit Plan.

The HCA input form will require the following information:

  • Number of total employees
  • Number of employees eligible to participate in the plan
  • Number who actually participated
  • Total cost of the fringe benefit plan (total payroll contributions qualifying under the plan)

The form and instructions will be sent to payroll system offices by October 31 of each plan year. Copies of the completed forms will be due to the HCA by January 31 for the prior calendar (plan) year.