The 12,000 faculty and staff members currently insured by UR-sponsored health insurance are preparing for the complete plan overhaul that will go into effect Jan. 1, 2008.
Last January, in the face of rising healthcare costs and the ever-increasing size of the University, UR President Joel Seligman created the Task Force on Employee Health Insurance Plans. He charged them with the task of addressing what the structure and design of University health insurance plan should be in regards to its employees as well as local and national norms.
The task force came back with its recommendations and, on Aug. 6, they were adopted by Seligman. The result was a major overhaul in plan design and pricing, as well as a new emphasis on preventative care and employee wellness.
Health care costs at UR have risen from $17 million in 1997 in 1998 to $64.5 million in 2007. While about 30 percent of that increase can be attributed to the expanding size of University staff, with that amount subtracted from the total health insurance costs had risen to $45 million or 265 percent. According to Seligman, these costs represent the fastest-growing cost component in the University budget.
The new health insurance programs aim to reset the cost-sharing relation between the University and its employees.
According to Associate Vice President for Human Resources Chuck Murphy, UR takes on a higher percentage of the insurance premium than both its peer institutions and other local institutions. Nationally, the employer absorbs 80 percent of healthcare expenses and, regionally and locally, the employer absorbs even less. UR currently pays 84 percent. However, at the beginning of next year, when the new health insurance plan is put in place, UR will still incur 83 percent of the cost.
“However, there are also other potential risks employees may be exposed to other than the monthly premium,” Murphy said.
The new plan also lays out a set of rates with different pricing for employees making different salaries. There are four bands of premium costs: employees making $40,000 or less, employees making $40,000 to $100,000, employees making $100,000 or more and employees working part-time. There are also different plans for employees willing to accept different amounts of risks, with different pricing for singles, families, employees with children and employees with spouse or domestic partner.
For a single person, the price can range from $6.70 a month for the lowest cost plan for a person in the lowest salary range to $141.83 a month for the most expensive plan for a person in the highest salary range.
The other major component of the new plan is the wellness and preventative care measures that will be taken. According to Murphy, rather than approaching healthcare as the treating of illnesses, the University is trying to promote improving the overall wellness of its employees.
“Refocusing on wellness, we believe, will result in lower costs than we would have otherwise incurred,” he said.
One way the University plans to do this is by gathering data on the workforce by performing a health risk assessment. Early next year, employees will be provided with a $100 incentive to complete a confidential online survey on their personal wellness and health care. That data will then be used in aggregate to figure out what the next step will be in encouraging healthy behavior.
“We believe wellness is the right approach and that we are on the front end of this wave,” Murphy said.
On Tuesday afternoon, the Faculty Senate held a meeting for faculty and staff to discuss the changes to employee health insurance. About 80 employees attended as well as many University representatives such as Seligman, Murphy and the two chairs of the Task Force, Senior Vice President of Health Sciences and Chief Executive Officer of URMC Bradford Berk and Senior Vice President for Administration and Finance and Chief Financial Officer Ronald Paprocki.
The meeting began with a presentation that addressed some of the questions collated by the Faculty Senate ahead of time and was followed by an extensive question and answer session.
“The questions were all over the place – many people were asking for clarifications,” Associate Professor at the Simon Graduate School of Business Administration and Co-chair of the Faculty Senate Harry Groenevelt said. “There were many concerns about the employee contribution structure, particularly for part-time employees and part-time employees who make a salary less than $40,000 because they will be paying more than they used to.”
According to Groenevelt, employees understand healthcare costs are rising drastically and changes must be made, but are nonetheless skeptical. “People generally recognize changes are inevitable, but it’s still a source of worry and anxiety,” he said.
According to UR Security Officer Adam Potter, the changes to health insurance will have a significant effect on what security officers pay.
“Our payments will be going up significantly from what we pay now,” he said. “Generally, security officers go with either the family plan or the single plan, which used to be free. UR is the area’s largest employer, and they should set an example in taking good care of their employees or they will lose them.”
According to Murphy, there has been a significant reaction from those losing their free single plans.
“There are about 4,300 who receive free health care to single plans that will have to pay under the new plan,” he said. “The reaction, in general, is very sophisticated. Employees understand it is necessary and that we’ve taken great pain to evaluate all alternatives. There is concern about the unknown, but they understand the reasons we made the change and accept the alternatives.”
Groenevelt, however, thinks there are still adjustments to be made. “It is the primary goal of the new plan to put healthcare on a footing that is sustainable in the long run,” he said. “I would certainly hope that certain aspects are fine tuned and adjusted, but that a drastic redesign won’t be necessary – we’ve had enough change.”
Jarrett is a member of the class of 2009.