Leaders of the university’s Human Resources (HR) office are meeting this month with faculty and staff regarding changes in medical benefits for 2012. Fast-rising health care expenses, coupled with looming new taxes on benefits, have prompted a search for options to slow the pace of cost increases.
“Our goal is to ensure the sustainability of our benefits program and preserve the elements that our faculty and staff say are most important to them,” said Carolyn Gregory, vice president for Human Resources. “We recognize that these changes will pose challenges, and have done all that we can to moderate their impact on individuals.”
Over the past four years, the university’s claim costs have risen 45 percent. Over the same period, sponsored research funding has climbed just more than 4 percent and undergraduate tuition rates increased by 14 percent. Insurance consultants the university retained forecast a 43 percent increase in university claim costs over the next four years if the university took no action.
In addition, the federal health reform law passed in 2010 includes a tax on plans deemed too generous. The tax, scheduled to go into effect in 2018, equals 40 percent of the value above the government’s caps per insured individual. A recent national survey found that 88 percent of all employers reported taking steps this year to begin to mitigate the impact of this so-called “Cadillac plan” penalty. With no changes, Case Western Reserve will exceed the limits well before 2018. By the time 2018 arrives, the university would face costs of at least several hundred thousand dollars, likely well over $1 million.
“In this context,” Gregory said, “we felt an obligation to begin acting now.”
This spring, Human Resources staff held a series of open meetings regarding potential benefits changes, and also conducted an online survey that drew 986 responses. Two points became clear from the feedback received:
- Employees value choice among physicians and medical institutions.
- Employees want to have as much certainty as possible about total potential costs.
To that end, the new benefits program maintains most existing options, and includes explicit caps on expenses. In addition, the plan includes a lower ceiling on costs for hourly employees and those earning less than $50,000 per year.
Information regarding the pending changes is available at hr.case.edu/2012OE. This site also has a list of times and dates for meetings the HR staff will have across campus to provide information and answer questions. Employees also can submit questions electronically at the website.
Benelect enrollment materials will be sent to your campus address. Finally, employees will receive personalized mailings at their home address. These packages will provide information to allow individuals to make their own financial comparisons among the plans being offered in 2012. The enrollment period for medical benefits will run from Nov. 7 through Nov. 30.
Meanwhile, HR also is working to expand and enhance wellness initiatives that started in 2011. For more information on those initiatives, please see case.edu/finadmin/humres/benefits/wellness/.
Below are the primary elements of the proposed plans:
Unchanged:
Preventive Services: The university will continue to cover 100 percent of the costs of preventive services such as vaccinations for children, mammograms for women 40 and over, and colorectal screenings for adults over 50.
Employee Share of Premiums: These fees will continue to average 15 percent of the costs of single-person coverage and 30 percent of family coverage.
Copayments: The amount of copayments for physician visits and prescriptions will continue. They are:
- For visits: $20 Primary Care Physician/$30 Specialty Care Physician
- For prescriptions: $15 generic/$30 brand formulary/$60 brand non-formulary
Flexible Spending Account: This is a personal account funded through pre-tax contributions. The dollars in the account may be used to cover qualified medical expenses.
Kaiser HMO: The university will continue to provide the Kaiser HMO as an insurance option without any changes to the benefits it provides or the costs employees bear for those benefits.
Anthem High Deductible Health Plan: The university will continue to provide this program, with a federal Health Savings Account option.
Anthem Blue Access PPO and Medical Mutual SuperMed PPO: The university is continuing to offer both of these programs, but participants will have to pay additional out-of-pocket costs for their services (details are below in the section labeled “Changed”).
Eliminated:
Medical Mutual of Ohio Traditional Plan: This plan placed no limits on providers a participant could see, but also provided no coverage until the participant met a deductible. Closed to new members in 2011, this is among the most costly plans the university had offered – for both employer and employee. In calendar year 2011 it enrolled fewer than 100 participants, and will be discontinued in 2012.
Changed:
(All changes detailed apply only to the Anthem and Medical Mutual PPOs, not Kaiser or the Anthem High Deductible plans):
Deductible Added: Participants now will have to pay a deductible of up to $250 for an individual and $500 for family coverage before the insurance provider begins to pay a portion of medical costs. That said, the costs the individual bears will be the fee that the insurer has negotiated with that provider, not another higher rate.
Coinsurance Added: Once the participant has paid the deductible total in a particular year, then the participant shares the cost of service with the insurer—in our case, the division is 20 percent participant, and 80 percent insurer. This coinsurance provision applies up to a specified dollar cap (which does not include the deductible payments already made). Those caps are listed below.
- For employees earning $50,000 or more per year: $1,500 for individual coverage, and $3,000 for family coverage.
- For hourly employees and those earning less than $50,000 per year: $750 for individual coverage, and $1,500 for family coverage.