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Healthcare Provider Update: Healthcare Provider for Cummins Inc. Cummins Inc. primarily administers its employee health benefits through major insurance providers, including UnitedHealthcare and Anthem Blue Cross Blue Shield (BCBS), among others. Potential Healthcare Cost Increases in 2026 As Cummins Inc. anticipates significant healthcare cost increases in 2026, employees should prepare for potential spikes in premiums driven by a combination of factors. A projected rise of up to 8.5% in employer-sponsored insurance costs, alongside the potential expiration of enhanced ACA subsidies, may lead many employees to see their out-of-pocket expenses grow considerably. With certain states experiencing premium hikes exceeding 60%, comprehensive financial planning, including the strategic use of Health Savings Accounts (HSAs), will become essential for mitigating the anticipated financial impact on individuals and families. Click here to learn more
What Is It?
Due to you being an employee at Cummins Inc, let's assume you are a car owner. You're concerned about who will pay your medical bills if you have an accident. You have a personal auto policy (PAP). The 'med pay' portion of your PAP pays the medical expenses for you or your family members involved in a car accident regardless of fault.
The purpose of med pay is to provide payment for immediate medical treatment of people injured in an auto accident without waiting to see who is at fault and ultimately liable. Medical payments coverage is located in Part B of your PAP and contains the following sections: the Insuring Agreement, Exclusions, Limit of Liability, and Other Insurance.
The Insuring Agreement
In General
As Cummins Inc employees and retirees, we don't expect you to be experts on insurance agreements and all their nuances. The insuring agreement is the most important part of each section of your PAP. It sets forth the circumstances under which the insurer will pay benefits to you, or on your behalf, for med pay coverage. Your med pay coverage typically pays reasonable expenses incurred for necessary medical and funeral services because of 'bodily injury' caused by an accident that is sustained by an 'insured.' The benefits of med pay coverage are available up to the specified limit per person.
Time Limit
We feel that it is important to remind all Cummins Inc employees and retirees that there is a time limit factor associated with these types of insuring agreements. The insuring agreement also imposes a time limit after which the med pay coverage is no longer available. The time limit is typically one to three years after the accident. Check your policy for the specific time limit.
Insurance companies impose a time limit on med pay for two reasons: (1) closure--the insurer wants to know what the total payments are in a reasonable amount of time, and (2) protection against fraud--after a number of years it may become difficult to determine whether the treatment requested is for the covered injury or for a later-occurring injury that is not covered. A time limit gives insurance companies some protection on med pay claims.
Definition of 'Insured'
It's crucial that we make the definition of 'insured' very clear for our Cummins Inc clients. Whether a person is insured determines if they are covered under your policy. The med pay section of your PAP has its own definition of 'insured.' It typically defines 'insured' as:
-
You or any 'family member':
- While 'occupying' 'your covered auto'
- As a pedestrian when struck by a motor vehicle designed for use mainly on public roads or a trailer of any type.
- Any other person while 'occupying' 'your covered auto': As in Part A: Liability Coverage, 'you' refers to you as the named insured and your spouse. 'Family member' is defined as any person related to you who lives in your home. 'Your covered auto' is any vehicle that is listed on the Declarations Page of your PAP.
To be covered by med pay, you have to be a person occupying a motor vehicle. The key term is occupying. Not surprisingly, there has been plenty of litigation surrounding the interpretation of that term. Your PAP probably defines 'occupying' as 'in, upon, getting in, on, out, or off' a motor vehicle at the time of the accident.
Med pay coverage is also extended to any pedestrian who is hit by 'your covered auto.' This reflects the no-fault nature of med pay coverage. If anyone is injured by your vehicle, med pay will cover his or her medical bills no matter who is at fault. The definition itself limits coverage to vehicles designed for use mainly on public roads. Therefore, Part B does not provide coverage for injuries inflicted by bicycles and many other types of vehicles.
Exclusions
In the spirit of due diligence, we want to educate all Cummins Inc employees and retirees on the exclusions section of your insurance policy.
In General
The exclusions section of your insurance policy specifically sets out the limitations and restrictions on the coverage provided by the insuring agreement. Your PAP excludes med pay coverage for 11 specific causes of loss. Generally, coverage is excluded to avoid duplication with other, more suitable insurance coverages, for business uses, and to eliminate nonstandard (even catastrophic) risks.
Workers' Compensation
Since many Cummins Inc employees are covered by workers' compensation, we feel it's valuable to mention how Med pay handles injuries that are covered by workers' compensation. Med pay coverage typically will not cover 'bodily injuries' sustained by an insured that is covered by workers' compensation. Workers' compensation is better suited to cover such losses.
Business Use
Generally, med pay will not cover you for 'bodily injuries' sustained while using a vehicle for business purposes. Commercial policies are better suited for that type of coverage. The business exclusions in the PAP include:
- Your PAP will not provide med pay coverage when you are occupying 'your covered auto' as a public or livery conveyance (i.e., transporting people or goods for a fee).
- Med pay excludes coverage for injuries sustained while occupying a vehicle when it is being used in the business of an insured. This exclusion does not apply to injuries sustained in:
- A private passenger auto
- A pickup or van that you own
- A 'trailer' being used with one of the above
Example(s): Hal has a PAP and uses his pickup truck for his job as a copier technician. The job requires Hal to drive from site to site servicing copiers. Hal has an accident and sustains 'bodily injury.' Result: Hal is eligible for med pay coverage under the preceding exceptions.
Nonstandard Risks
It's important for all Cummins Inc employees and retirees to understand that there are some nonstandard risks that your insurer does not intend to cover. Your med pay policy excludes many nonstandard risks that you could subject yourself to. Med pay coverage is excluded for:
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- Unlawful use--Anyone who uses your vehicle without a reasonable belief that they are entitled to do so is not covered (e.g., when a thief or joyrider steals your car).
- Vehicles with fewer than four wheels--Med pay will not provide coverage for any injuries you sustain while 'occupying' a vehicle with fewer than four wheels. Vehicles such as motorcycles present additional risks that your med pay does not intend to cover. You can purchase additional insurance to cover these types of risks.
- Vehicles located for use as a residence or premises--If you are injured in the equivalent of someone's 'house,' your auto insurance isn't really the best place to look for payment. A homeowners insurance claim may be more appropriate. For example, coverage is excluded if you are injured in a trailer that has been set up as a campsite.
- Autos not listed on the PAP--Any auto that you own or that is owned by a family member not listed on your PAP Declarations Page is not covered under med pay. This exception does not apply to you (or your spouse) if you're in a vehicle that is owned by a different 'family member.'
Example(s): Your son Pat owns a car. He is 18, lives with you at home, and has his own insurance. If you take the car for a test ride around the block and have an accident, your medical expenses are covered under your own med pay policy. If Pat's friend, Bobby, has an accident while taking the same test ride, your med pay coverage will not cover him for his medical expenses.
Insurers can calculate risks only on your known vehicles. If a vehicle is not listed on your policy, injuries sustained while using it will not be covered.
- Racing--You guessed it: no med pay coverage when you compete in, practice, or prepare for any prearranged or organized racing or speed contest. If you're a race-car driver you should purchase insurance that is designed to cover the obvious risks of race-car driving.
Catastrophic Exposure
The med pay section of your PAP also excludes coverage for various catastrophic exposures that cause 'bodily injury' to an insured. These are so catastrophic that calling them 'nonstandard risks' just doesn't seem to be appropriate. They are:
- Discharge of a nuclear weapon, a nuclear reaction, radiation, or radioactive contamination (even if accidental)
- War (declared or undeclared)
- Civil war
- Insurrection
- Rebellion or revolution
These exceptions are designed to protect the insurer from a situation in which a large number of claims result from a single catastrophic incident. Although most Cummins Inc employees generally don't need to be concerned with this part of the agreement, it helps illustrate a full picture of the agreement
Limit of Liability
One extremely important thing for Cummins Inc employees and retirees to keep in mind is the Limit of Liability part of their agreement.
In General
Your PAP is not an unlimited source of funds for you to draw on in case of an accident. There are limits to how much coverage your insurer will provide. The limit of liability for med pay coverage is listed on the Declarations Page of your PAP. It can be in any dollar amount but is typically $5,000 or $10,000. This limit is the maximum amount of med pay coverage that will be paid by the insurance company, per person, for any one accident.
Total Per Accident
The med pay limit on the Declarations Page is the maximum dollar amount that the insurance company will pay any one person for any one accident. It's the most the insurance company will pay regardless of the number of:
- Insureds
- Claims made
- Vehicles or premiums shown on the Declarations Page or
- Vehicles involved in the auto accident
The insurance company is responsible for paying up to the specified limit and no higher. That limit does not change depending on how many insureds there are or how many of your covered vehicles are involved in the accident.
No Duplicate Damages
Cummins Inc employees and retirees should know that the insurer will not pay med pay benefits when some other person or organization will do so. The first example of this is when other sections of your PAP cover the loss. You will not receive duplicate med pay payments for the same loss that is covered under Part A Liability, Part C-: Uninsured Motorist (UM) Coverage, or any underinsured motorists coverage provided by your PAP. The same rule applies to duplicate med pay benefits under another person's policy.
Example(s): You are injured as a passenger in Ron's car. You receive $5,000 in med pay coverage from Ron's PAP. Later, it is proven that Ron is liable for your injuries. Any amount you are awarded from the Part A: Liability section of Ron's policy will be reduced by the amount you were paid under the med pay coverage.
Other Insurance
In General
When you're in a car accident, it's likely that more than one auto insurance policy is in effect. The other insurance clause limits your insurer's liability when there is another policy that might also cover your loss. Generally, your PAP insurer will pay its pro rata share of the loss. That share is the proportion that your policy's med pay limit bears to the total amount of any other med pay policies in effect.
Example(s): Ron is a passenger in Tammy's car when she has an accident. Tammy's policy provides $10,000 per person in med pay coverage. Ron is considered 'insured' under Tammy's policy because he's in her car. Let's say that Ron has his own PAP that provides med pay coverage of $5,000. Which policy pays, and how much? The total amount of med pay is $15,000. Each has to pay only their pro-rated fair share of any losses that are less than the total. Tammy's share is two-thirds ($10,000 of $15,000) and Ron's share is one-third ($5,000 of $15,000). So, under the general rule, if Ron's medical bills add up to $6,000, Tammy's insurer has to pay $4,000 (two-thirds) and Ron's insurer has to pay $2,000 (one-third).
The second part of the other insurance clause limits liability even further. When your insurer is providing med pay coverage for a vehicle that you do not own, it will make payment only if the primary med pay coverage on the vehicle is insufficient. In the preceding example, Ron's med pay coverage will have to pay only his medical bills that exceed Tammy's med pay limit of $10,000.
How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.
Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.
What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.
Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.
In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.
Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.
How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.
Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.
What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.
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How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.
Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.
What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.
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What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.
Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.
How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.
Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.
How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.
Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.
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