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NEBA Policies and Procedures Manual

NEBA POLICIES AND PROCEDURES MANUAL
March 2006

1.  Preface

The NASA EMPLOYEES BENEFIT ASSOCIATION (NEBA) is an employee operated association established in 1952 that exists for the sole purpose of providing low cost, high quality life insurance for you, the NASA employee or military detailee.  The NASA Employees Benefit Association (NEBA) Policies and Procedures Manual has been updated to reflect changes to streamline and reduce the administration of the program.  Payment of a biweekly payroll deduction, re-competition and selection of a new carrier has resulted in improved coverage options, changes to NEBA accounting, internal control, and reporting requirements.

The NEBA Policies and Procedures Manual is intended to provide in one concise publication NEBA’s bylaws, operating procedures, and audit procedure guide. This manual is not a substitute for (1) the NEBA charter established by the Administrator in NPC 3871.1, (2) the actual insurance policies as maintained by the carrier, or (3) the administrative agreements entered into by the chairperson of NEBA and the carrier. In cases of doubt, or if sections II and III of this manual and the documents in (1) to (3) differ, the latter shall govern. Each NEBA chapter should maintain an up-to-date copy of these documents in its files. This manual was approved by the board of directors on xx, xx, xxxx. It supersedes the NEBA Policies and Procedures Manual dated June 15, 1998.

NEBA is a non-appropriated fund instrumentality of the Federal Government authorized by the National Aeronautics and Space Act of 1958, as amended, 42 U.S.C. 2451 et seq., and NPC 3870.13, NEBA.

2.  Definitions

2.1  Basic annual earnings—Annual compensation fixed by law or administrative action exclusive of overtime or other compensation (e.g., awards and bonuses). The basic annual earnings and age determine the NEBA member’s insurance class.

2.2  Board of Directors—Governing body of NEBA. The board is composed of the chairperson and vice chairperson appointed by the NASA Administrator, and the installation chapter officers appointed by their center directors.

2.3  Carrier—Company underwriting the NEBA group life insurance

2.4  Central fund—Bank account maintained by the NEBA chapter at Glenn for the payment of NEBA expenses.

2.5  Chapter officers—For each center, optimally, there should be a president, vice president, and secretary-treasurer, or at minimum two officers to represent the membership. At least one officer should be selected from the Financial Management Office or from the Human Resources Office.

2.6  Coverage—Amount of life insurance.

2.7  Eligible employee—Any NASA employee occupying a full or part-time permanent position or a term appointment, Co-ops, and certain military reimbursable detailees.

2.8  FPPS – Federal Personnel Payroll System provided by the Department of Interior that NASA selected as their consolidated payroll agency.  FPPS replaced the former NASA unique NPPS (NASA Personnel Payroll System).

2.9  Insurance policy fiscal year—May 1 to the following April 30.

2.10  Key records—Records that should be maintained permanently by each chapter. They include originals held by the carrier as well as secondary copies maintained by the chapters and transferred to the receiving chapter when members transfer.

2.11  Master policy—Current policy with the carrier. A copy will be maintained on the NEBA website.

2.12  Member—Individual who has applied for and been granted insurance coverage offered by the carrier under the group plan.

2.13  Mike Cushman Award – The award was established in 1990 to recognize the achievements of individual NEBA officers and others who have significantly contributed to the enhancement of the NEBA program. The award is usually presented annually at the NEBA Board of Directors Meeting.  The award is named after Mr. Mike Cushman, the highly respected, long time Chairman of the NEBA Board and NASA’s first Procurement Officer.  Chapter Officers are polled, and a selection committee makes a recommendation to the Chair.  The award consists of a wooden plaque which contains the NASA insignia and an engraved plate.

2.14  NEBA—NASA Employees Benefit Association.

2.15  New enrollee---New NASA employee entitled to enroll within 60 days without proof of insurability.

2.16  Premium—Amount paid each biweekly pay period for insurance coverage.

2.17  Premium Stabilization Reserve (PSR) --- Association reserves maintained by the carrier to stabilize insurance rates.

2.18  Refund of Premium – A refund of premium to members of record, for a specified period of membership, to maintain the PSR at a recommended level.  Refund amounts are determined by the Board at an annual meeting, and are based on the current level of the PSR and experience against the plan.

3.  Bylaws

3.1  Authority - The Bylaws as set forth herein are in consonance with the authority vested in the board of directors by NPG 1000.3, 6.15, NASA Employees Benefit Association (NEBA).

3.2  Board Meeting

3.2.1  The board of directors shall hold an annual meeting, and an annual video conference.

3.2.2  Special—Special meetings of the board of directors may be held upon the call of the chairperson of the NEBA board of directors. Special meetings of the board may be held when required to obtain the board’s position under emergency or short notice circumstances. The vote of each board member authorized to vote on the matters at issue shall be documented.

3.2.3  Quorum—A quorum consists of two-thirds of the board members authorized to vote.

3.2.4  Voting—Every chapter officer present at a meeting is entitled to express his or her opinion on all matters brought up for action. However, only one vote may be cast by a chapter. The chapter president shall cast the chapter vote. Actions of the board shall be decided by majority vote. Amendments to these bylaws require approval by two-thirds of the members present at any board meeting who are authorized to vote.

3.3  Membership Dues

3.3.1  Amount—The amount of dues to be assessed individual members shall be the amount of premium payment.

3.3.2  Frequency of payment—Dues shall be paid by biweekly payroll deductions or direct payments to the carrier.  Biweekly deductions are processed and paid under the control and oversight of the Federal Personnel/Payroll System (FPPS).

3.4  Insurance Policy Fiscal Year – NEBA operations are based on a fiscal year beginning each May 1 and ending on April 30.

4.  Central Fund

4.1  The Central Fund is a savings and checking account maintained at the Glenn Chapter.

4.2  The account is used for NEBA operating expenses and should not exceed $5000.

4.3  When necessary, funds are received from the PSR to operate the program

4.4  Funds will only be disbursed from the Central Fund with the approval of the Chairman or as voted by the Board.

4.5  Checks must be signed by two officers of the Glenn Chapter

4.6  A comprehensive audit of the central fund records and accounts will be performed by a certified public accountant when the chairperson determines that this is needed.

4.7  All requests made to the carrier for money to be withdrawn from the Premium Stabilization Reserve (PSR) for operating expenses other than those approved at the annual board of directors meeting will be made as a written request to the carrier signed by the chairperson of the board and sent to the custodian of the NEBA Central Fund at the Glenn chapter.

4.8  The Secretary Treasurer of the Glenn Research Center Chapter shall provide a financial report of the Central Fund at the annual meeting.

5.  Premium Stabilization Reserve (PSR) HOLD UNTIL PSR AGREEMENT IS FINALIZED.

6.  Responsibilities, Functions, and Duties of Chapter Officers

Chapter officers—Optimally, three NASA employees (but no less than two), who are members of NEBA, shall be appointed by each center director—as president, vice-president, and secretary-treasurer of the center chapter—to assume the responsibilities, functions, and duties prescribed by this manual. At least one officer should be selected from the Financial Management Office or from the Human Resources Office.

6.1  The president shall:

(a)  Preside at meetings of the center chapters
(b)  Supervise chapter operations
(c)  Devise methods of encouraging membership in the NEBA group life insurance plans
(d)  Certify the all death claims at his or her center chapter

6.2  The vice president shall

(a)  Preside at chapter meetings in the absence of the president, act for the president in his or her absence or when requested by that officer to do so
(b)   Perform other duties that may be assigned from time-to-time by the president

6.3  The secretary-treasurer shall

      1. Record minutes of all chapter meetings
      2. Maintain a record of all chapter correspondence
      3. Maintain enrollment and insurance reports. (until Records Retention Register is approved)
      1. (c)Forward approved bills to the Central Fund for payment
      1. Act for the president in the absence of the president and vice president
      1. The secretary-treasurer shall submit refunds to the central fund as required.
      1. The secretary-treasurer at the Glenn Chapter will maintain the Central Fund Accounts and report annually at the Board of Directors Meeting on the status of those accounts.

7.  Records Retention

7.1  Records in this series may include but are not limited to the following NASA Employees Benefit Association (NEBA) general correspondence currently maintained by all Centers: Claims related to Life/Travel, copies of enrollment forms, beneficiary designations, applications and approval notifications, and bi-weekly summary reports.  At Glenn in addition: bank statement, meeting minutes and audit reports.  All are considered Permanent Records and cannot be destroyed.         

8.  Financial/internal controls

8.1  Each chapter is responsible for the establishment and maintenance of financial/internal controls over the activities of that chapter. Disbursements will be made from the Central Fund, and by checks signed by two Glenn chapter officers.

8.2  Claims will be filed directly with the carrier and shall be verified by a chapter officer.  The Carrier will send checks directly to the beneficiary. The local chapters will receive a Notice of Claim Payment from the carrier that the claim has been processed.

9.  General

9.1  Correspondence with the carrier shall be subject to the following restrictions: Matters that may have Agency-wide application, including policy interpretation, shall be handled by or through the chairperson of the board of directors.

9.2  Routine correspondence (i.e., processing of death claims, etc.) shall be submitted directly to the carrier by the center chapter.

9.3  At the annual meeting, the board of directors shall review income and expenses for the previous insurance policy fiscal year and shall determine the amount of premiums to be assessed individual members for each class of life insurance during the ensuing insurance policy fiscal year.

9.4  Amendments to these bylaws require approval by two-thirds of the members at any board meeting who are authorized to vote.

10.  Premiums

10.1  All premium payments will be made by biweekly payroll deductions. FPPS has been programmed to deduct the premium from each NEBA member who has been approved for and has been granted coverage under the group plan. The carrier transmits these collection amounts to the Department of Interior, National Business Center.  The premium payment is reflected as Association Dues on the employees Leave and Earning Statement.

10.2  Premium rates are based on the members age for basic, spouse and optional coverage.

10.3  The rate for dependent children is based at $.05/thousand/month

10.4  The amount of the biweekly payroll deduction can be determined by multiplying age based monthly premium rate by the employee’s annual salary rounded to the next $1,000, to determine the monthly premium.  Multiply that amount by 12 and divide by 26 for the biweekly premium rate.

11.  Eligibility

11.1  Any NASA employee occupying a full or part-time permanent position or a term appointment, and certain military reimbursable detailees who are actively at work.

11.2  The lawful spouse of an eligible employee

11.3  The natural, adopted, foster, stepchild or any child under the employees custody who is at least 15 days old, unmarried, under age 25 and a full time student.

12.  Enrollment

12.1  All employees who were members of NEBA as of April 30, 2005 were grandfathered in with the current carrier, MetLife, as of May 1, 2005 without proof of insurability.

12.2  All other employees are eligible for coverage, but, must complete the enrollment process at the www.metlife.com/mybenefits web site.  This enrollment process will require proof of insurability.  Spouse and dependent coverage can also be completed at this time, again, with proof of insurability.

12.3  New employees may enroll within 60 days of their appointment without proof of insurability.  This is completed through the www.metlife.com/mybenefits web site.

12.4   Employees with a qualifying life event may enroll within 60 days of the event to request a change.  Qualifying events include:  marriage; birth, adoption or placement for adoption of a dependent child; divorce, legal separation or annulment; or the death of a dependent.

13.  Annual Enrollment Drive

13.1  On an annual basis, each chapter will hold an enrollment drive for basic and optional insurance.

14.  History

14.1   Early in March of 1952, a group of NACA (National Advisory Committee for Aeronautics—NASA’s predecessor) Lewis Laboratory employees felt the need for low-cost life insurance coverage. At that time, there was no Federal Employees Group Life Insurance. They found that Federal Law and existing regulations permitted the head of an Agency to enter into such an arrangement for its employees, provided the plan was on a voluntary basis.

14.2   Proposals were accordingly solicited from various carriers and Home Life Insurance Company of New York was selected as the carrier offering the most advantageous program to the NACA employees.

14.3   The NACA Employees Benefit Association was established by Dr. Hugh L. Dryden, Director.  The charter stated, “The Association shall be conducted for the mutual benefit of its members and their beneficiaries and not for profit.”  The charter also provided for a board of directors consisting of a chairperson appointed by the director, and a similar appointment to the board of directors. The officers of each local insurance chapter were to be a president, vice-president, and secretary-treasurer, appointed by the NACA official in charge of the activity.

14.4   The first schedule of coverage provided for seven classes, ranging in coverage from $1,000 to $10,000.  Today there are 12 classes, ranging in coverage from $26,250 to $100,000.

14.5  Langley, Ames, Wallops, and Armstrong Flight Research centers soon thereafter became a part of the plan and were joined later by Marshall, Goddard, Kennedy, and Johnson when NACA was absorbed into NASA in 1958.

14.6    The next milestone was in October of 1961, when double indemnity for accidental death was added to the plan. This was first initiated on an optional basis and later made standard.

14.7    On November 1, 1963, NEBA furthered their protection service by offering a separate travel accident policy. The first policy covered only official-business travel and provided for only two classes—one for the principal sum of $50,000 and the other for $100,000.

14.9    On May 15, 1968, dependent life insurance coverage was added to the life insurance plan on an optional basis. The original plan provided for three classes. All classes provided $1,000 for each child. In October 1970, the classes were reduced to two. For those members earning less than $12,000, spouse coverage was $2,500 and for those above $12,000, spouse coverage was $5,000. The quarterly flat rate for the $2,500 coverage when the provision was added was $3.70.

14.10  On July 1, 1972, a 1-year 10-percent free bonus increase of life and accidental death benefits was approved as an additional benefit to participants.

14.11  On July 1, 1973, this bonus coverage was continued for another year.

14.12  On July 1, 1974, the bonus coverage was increased to 25 percent, and the life rate was reduced by $0.10 per thousand per quarter.

14.13  On July 1, 1975, the 25-percent bonus coverage was continued for 1 year and the employee coverage rate was reduced to $1.20 per thousand per quarter. Effective October 1, 1975, NEBA instituted free coverage for new employees from their first day at work until the beginning of the following insurance quarter.

14.14  On July 1, 1976, the bonus coverage was extended to October 1, 1976. Then it was incorporated into the permanent schedule and the billing rate was established as $0.88 per quarter per thousand dollars of coverage. The dependent coverage was changed to $5,000 for classes 1 to 5 and to $10,000 for classes 6 to 11, including $2,000 for child coverage and a guaranteed $5,000 conversion privilege for children at age 19.

14.15  Effective October 1, 1978, the schedule of insurance was increased to 12 classes, and the rate was reduced to $0.80 per thousand per quarter. The age-19 conversion privilege was increased from $5,000 to $10,000.

14.16  Beginning October 1, 1979, the dependent schedule of insurance provided three levels of coverage: classes 1 to 5 were insured for $5,000 for $3.75 per quarter; classes 6 to 10 were insured for $10,000 for $7.00 per quarter; and classes 11 to 12 were insured for $15,000 for $10.25 per quarter. Children were insured for $2,000, with a guaranteed conversion privilege to $10,000 at age 19. The employees of the NASA Johnson Space center did not receive this additional coverage until October 1, 1980, because of Texas laws governing dependent insurance coverage.

14.17  In May 1980, a new chapter was established at the National Space Technology Laboratories in Bay St. Louis, Mississippi (later renamed the Stennis Space Center).  That increased the number of chapters to 11, including the NASA Headquarters chapter.

14.18  The rate was reduced to $0.65 per thousand per quarter beginning October 1, 1980. In addition, a 25-percent bonus protection plan was put into effect for one year.

14.19   Beginning October 1, 1981, a new schedule of insurance was adopted, incorporating the 25-percent bonus into the basic coverage, bringing the coverage to approximately 2 times the employee’s salary. The premium rate of $0.65 per thousand remained the same.

14.20  At their 1983 meeting, the board of directors decided to hire an independent insurance consultant competitively to review the NEBA plan and recommend any necessary changes. At a special board meeting convened at Johnson early in 1985, Buck Consultants presented their findings, which were basically very positive but suggested changes.

14.21  Optional insurance was offered to NEBA basic plan members in January 1984.

14.22  Travel insurance premiums were decreased by 15 percent for the insurance year beginning May 1, 1985.

14.23  In January 1986, the under-40 basic life insurance premium rate was lowered to $0.35 per thousand, and a fourth age group, ages 40 to 44, was established with a premium rate of $0.75 per thousand. Dependent coverage rates for the three classes were reduced to $2.95 per thousand for $5,000 coverage, $5.75 per quarter for $10,000 coverage, and $8.30 per quarter for $15,000 coverage.

14.24  In 1987, the guaranteed conversion privilege for children reaching 19 was increased to $25,000.

14.25  Beginning October 1, 1990, the maximum amount of basic insurance was raised from $85,000 to $100,000 for members under age 55, with a maximum of $85,000 for members age 55 and over. Spouse coverage was increased from $15,000 to $25,000, and dependent coverage for children was raised from $2,500 to $5,000.

14.26  In 1993, a refund of premium was issued to all members enrolled in basic only for a minimum of one year. The refund was equivalent to one quarter of the premium as of September 1992.

14.27  At the 1993 annual meeting, the board of directors decided to hire an independent consultant to review the plan and recommend areas of improvement or needed changes. Buck Consultants provided a report at the 1994 meeting, which included goals to simplify, streamline, and standardize operations.

14.28  On September 18, 1994, all chapters implemented premium payment through payroll deduction. Changes were made to the NASA Personnel Payroll System (NPPS), which generated biweekly payments and reports to Home Life and local chapter offices.

14.29  Beginning October 1, 1994, all current members were afforded free coverage for their children under age 19. Members who enrolled after October 1, 1994, would be provided free coverage for children pending approval of the Statement of Health to Insure Children form. At the same time, an accelerated death (living) benefit was started for all basic plan members.

14.30  In March 1995, another refund of premium was issued. This refund was equal to six pay periods of basic premium and was paid to all members of record in December of 1994. The rate structure was modified in September 1995 to reduce most rates for members 49 and younger.

14.31  Refunds of premium were again issued in 1998, 1999, 2000, and 2001.

14.32  The NEBA Web site was established in 1996 at http://neba.nasa.gov.

14.33  In 1999 the board agreed to accept a proposal to reduce optional rates by 25 percent for all members under 60 years of age and to increase the total amount of optional insurance available to members from $150,000 to $250,000. Other changes included increasing by $25,000 the current coverage of existing members who had $75,000, $100,000, and $125,000 of insurance. Members with $150,000 of optional insurance were increased to $200,000. This increase in coverage was a “guaranteed issue,” meaning members in these categories received the increase without further evidence of insurability.

14.34  Later in 1999, the board entered into an agreement with an outside consultant, Hewitt Associates, to review the overall plan.

14.35  In June of 2000, the board accepted a proposal from the carrier for a new child conversion at age 19 for a $25,000 term policy. The price for a nonsmoker was $17.94 per year up to age 35, with no evidence of insurability required. The price for a smoker was $21.84 per year.

14.36  June 30, 2002, Travel Accident Insurance coverage ended.  As a result of the tragic events of September 11, 2001, the market for travel policies was dramatically affected.  Thus, prompting the carrier and the Board to terminate Travel Accident coverage.  It was therefore decided to increase the Accidental Death and Dismemberment (AD&D) clause of the Basic plan at no additional cost.  In addition, the Board decided to issue another refund of premium in September, 2002.

14.37  Refunds of premium were again issued in 2001, 2002, 2003 and 2004.  The 2004 refund being the largest ever issued, equaling 20 pay periods of premium.

14.38  In May 2003 a team met at Ames Research Center to review status of the plan and how it met the Strategic Plan of the Agency.  The team developed recommendations to the Board and it was decided to recompete the plan.  At the 2004 annual meeting the Board developed the Statement of Work, and voted to hire Hewitt Associates to conduct the procurement process to select a new carrier.

14.39  Throughout the fall of 2004 and early 2005 a selection team of chapter officers met with Hewitt and the top 3 offerors and selected MetLife as the new carrier of NEBA.  A transition team was formed and was implemented May 1, 2005. 

15.  References

NEBA Website: http://neba.nasa.gov

NASA Employees Benefit Association, MetLife Employer Manual

MetLife Policy 117923-1-G

Paragon Policy Group Contract Number GU0233

MetLife, Your Benefit Plan, NASA Employees Benefit Association