UR will begin to move away from local insurance health plans and offer a self-insured program to its 12,690 employees beginning July 1. The change will not effect students, who are currently covered by Blue Cross/Blue Shield. The effect in later years on student tuition costs is yet to be determined.
The university’s new self-funded plans will be modeled after the plans now offered. The process of choosing a third-party adminstrator is expected to be completed soon, from among bids submitted by four companies.
UR, which is the second largest employer in Rochester, decided that self insurance was the best hope for controlling costs after years of increasing premiums, said Ronald Paprocki, senior vice president for administation and finance.
“We expected there to be savings from day one,” Paprocki told the Rochester Democrat and Chronicle. “I won’t get into specific numbers, but it will be significant.”
During the last four years, the insurance premiums paid by UR and its employees rose from $25.5 million to $50.8 million.
“The magnitude of benefit program costs for the university and its employees shows why we have had to carefully scrutinize our options for the future,” Paprocki said.
“To remain a sound and thriving institution, and thus make our largest contribution in the long-term to the local and national communities, we must make good, prudent business decisions about our operations in support of our core missions as a university.”
The concept of self-insuring, also called self-funding, means UR will pay its employees’ medical expenses, rather than pay premiums to an insurance carrier.
A letter announcing the change was mailed to all university employees March 23.
The change will affect about 19,600 people, which includes employees, dependents and retirees.
Hildebrandt can be reached at firstname.lastname@example.org.