Three years ago, I accepted the recommendations of a University-wide task force to make significant changes in our health care benefits offerings. Our goals were to provide a wide range of plans with benefit design options that suit our diverse workforce, to keep costs as affordable as possible for everyone, to encourage healthy behaviors, and to use faculty and staff feedback to improve our offerings. We also sought to find ways to temper steep cost increases borne by the University which threaten our ability to invest and grow as an academic and clinical care organization.
Within the next week, University of Rochester faculty and staff will receive at our homes the annual informational packet to guide us through the selection process during open enrollment for health care plans. Please pay close attention this year because there are a number of changes that affect pricing, benefits design, and options for saving money and improving health.
Cost increases
Costs for each of the plans have increased again this year, and at a rate somewhat higher than in the last few years. The University’s decision to self-insure its plans and to introduce new health plans has significantly slowed the rate of cost increases for employees over time, when compared with other plans in our community. In fact, in the two years since the new health plans have been introduced, there has been a sizeable difference in the increase in our rates and those of the community: in 2009, our premiums increased by 2 percent versus a 13.6 percent increase in the community; in 2010, our premiums rose by 5.4 percent compared with a 14.5 percent increase in the community plans. Since salaries were frozen in 2010, the University absorbed the increase for the first six months, making the increase paid by employees 2.7 percent.
This year, however, the nationwide increase in health care costs along with new coverage mandates driven by health care reform are forcing increases that, although still lower than other plans in the community, are high enough to require us to pass along cost increases to employees.
These increases also reflect our effort to have employees share more fully in the cost of their health insurance. We believe that sharing costs gives us all an incentive to help keep costs down.
Three years ago we set a goal of having employees pay 20 percent of the full premium for their coverage, with the University picking up the remaining 80 percent. This decision was made after a study by the benefits consulting firm, Mercer, noted that the University was paying a higher portion of employees’ health care costs than our peer institutions. Over the last three years, we have been working toward that 20:80 cost-sharing ratio. With this year’s increase, we will reach the 20 percent goal. So if, for example, an employee is paying $1,656 for a family plan, the University is contributing another $6,624 toward the full cost of the coverage.
These cost increases come at a time when most families are beginning to emerge from an uncertain economy. If the economic recovery continues and the University remains fiscally stable, I am confident that we’ll be able to continue annual pay increases. In addition, to ensure that all employees can afford health care coverage, we will subsidize an additional portion of the costs for health care plans for those full-time employees making less than $44,100 per year.
It’s more important than ever to choose a plan that suits your individual circumstances. The University doesn’t prefer one plan over another; its costs are consistent for all of the plans. But many employees are choosing plans that may not be optimal for them. Today, 60 percent of our employees are choosing the traditional co-pay plan when the high-deductible or low-deductible plan may be the wiser, or lower cost, choice. I urge you to examine all four plans closely and determine what is best for you.
We have a variety of ways to help you make the right choice, including open enrollment educational sessions at which Human Resources, Aetna, and Excellus representatives will be available to work with you individually. Because our plans are self-funded, the insurance companies have no incentive to recommend anything except the plan that’s best for you. Human Resources can show you how to use your own family’s health care usage history to select the best plan. I also encourage you to use our improved on-line health plan cost estimator tool which will estimate your annual costs for each of the four health care plans based on your family’s needs to help you select the right plan. More information on these tools will be included in your packet or online at www.rochester.edu/working/hr/benefits/health/plan.
More ways to save
All of our plans continue to provide fully paid coverage for all in-network preventive services. We feel strongly that the best way to control health care costs is to help employees stay healthy and avoid the need for health care services. That’s why we’ll also continue to emphasize personal health assessments, biometric screenings, lifestyle and disease management programs, Employee Assistance Program, and an always expanding menu of options through Well-U and the Healthy Living Center. Cash incentives from many of these programs can help offset your bimonthly/monthly contributions. You may be contacted directly from the outside vendor (Carewise SHPS) to learn more about how you can enroll in these programs. I strongly urge you to participate in these wellness programs.
New dental plans
Also new this year are changes to both the Traditional and Medallion dental plans, a direct response to feedback from employees. Both of these plans require an employee contribution toward the premium. More information will be provided in your annual informational packet.
Other changes
New health care reform legislation makes it possible for individuals to cover on their health insurance policies dependent children up to age 26 who do not have access to other employer coverage. Your enrollment package includes information on this as well as other changes to Flexible Spending Accounts and Health Savings Accounts.
In April, we will begin contracting solely with Excellus to manage pharmacy benefits. Those enrolled in Aetna plans will want to be aware of this change as they calculate their contributions, if any, to a Flexible Spending and/or Health Savings Account.
Next week, a special issue of Currents will provide more information to help you learn about your options and review what’s changed since last year. Although we can’t completely control the factors that are driving cost increases, I am confident that the University is offering plans that provide faculty and staff with competitive health benefits at a reasonable cost.