HSTA VB Active – Premium Conversion Plan

State of Hawaii Employees Only

Premium Conversion Plan (PCP) is a voluntary benefit plan, administered by the Department of Human Resources Development (DHRD) that allows employees to pay their health benefit plan premiums on a pretax basis and is being offered pursuant to Section 125 of the Internal Revenue Code. For more information, go to the DHRD website at http://dhrd.hawaii.gov.

By electing to participate in the PCP, please note that:

  1. Your authorization will automatically continue year-to-year for the duration of the plan until you change or cancel your participation in the PCP during the Open Enrollment period or as provided under number 2 below.
  2. If you have an allowable change in status event (e.g., marriage, birth or adoption of children, divorce, etc.), you must complete/file all the required PCP forms within 90 days of the event, to change or cancel your reduction in pay (otherwise, changes can be made only during the Open Enrollment period). Please note that you must notify the EUTF within 30 days of the event in order to make the change in coverage.
  3. Allowable changes/cancellations shall become effective as soon as administratively possible, on a prospective basis, after you file your forms (e.g. the beginning of the pay period following receipt of your form). To avoid the risk of losing money, you need to file the forms as soon as possible. Changes in pre-tax payroll deductions are always done after receipt of the PCP-2 forms; never retroactively.
  4. Your PCP payroll deduction, in the absence of a PCP allowable change in status, cannot be changed for the current plan year.
  5. If you change/cancel your health insurance plan coverage, but your PCP change/cancellation is not allowable, your PCP payroll deduction will remain in effect through the end of the plan year and your payments will be forfeited until PCP change/cancellation forms are filed and approved during the next Open Enrollment period.

PCP Example #1:

  • Employee’s divorce is effective August 2, 2014, and moves from a 2-party to self only plan.
  • Employee has 30 days to submit an EC-1H requesting to remove his/her ex-spouse.
  • Employee submits an EC-1H and DPO completes “Date EC-1H Received in Employing Office” section on August 18, 2014.
  • EUTF changes coverage effective August 15, 2014 (end of pay period in which event occurred)
  • CP allows payroll deduction change to occur on September 1, 2014 – prospective (next pay period) from the date the DPO receives the EC-1H.
  • Employee suffers one pay-period forfeiture (08/16/2014 – 08/31/2014).
  • If employee had turned in EC-1H and the DPO completed the “Date EC-1H Received in Employing Office” section on or before August 15, 2014, there would be no forfeiture.

PCP Example #2:

  • Employee acquires health coverage through spouse’s plan, effective July 1, 2014.
  • Employee has 30 days to submit EC-1H form to terminate coverage.
  • Employee submits an EC-1H form and the DPO completes “Date EC-1H Received in Employing Office” section on July 7, 2014.
  • EUTF terminates coverage effective June 30, 2014.
  • PCP allows payroll deduction change to become effective July 16, 2014, prospective (next pay period) from the date the DPO receives the EC-1H.
  • Employee suffers one pay period forfeiture (07/1/2014 – 07/15/2014).
  • If employee had submitted their EC-1H form and the DPO completed the “Date EC-1H Received in Employing Office” section on or before June 30, 2014, there would be no forfeiture.

Note: The PCP Election Change Form (PCP-2) must be submitted with the EC-1H form. The date the DPO completes the “Date EC-1H Received in Employing Office” section is the key date used to determine the PCP effective date.

County Employees Only

Please contact your department personnel office for more information on available options.