As the open enrollment period begins, employees will see changes resulting from the federal Health Care Reform legislation approved last March and the University’s continuing efforts to control costs in an environment where they are constantly escalating.
“The overall costs of health care continue to rise and, like most institutions, we work hard to find the balance between keeping health care costs affordable for our employees and their families and balancing the University’s needs to control its costs and grow as an organization,” says President Joel Seligman.
"Prevention, rather than treatment of disease is not only a less expensive approach, but a smarter way to deliver care. Early diagnosis is one of the best ways to avoid chronic disease and all the costs associated with it.”
—Chuck Murphy, associate vice president for human resources.
“While we have had to increase costs for employees, we have also tried to keep the increases manageable and to offer plans and services that are competitive, if not a significant improvement, over those offered by our peers,” Seligman says.
Health insurance costs for the University rose from $17 million to $84.3 million from 1998 to 2010. The University’s employment base increased substantially during that time, accounting for about 45 percent of the increase. But even with that subtracted from the total, health care costs still grew from about $17 million to $58 million during that period—the fastest growing costs in the University budget.
However, the University has been making progress in slowing the growth of health care costs. From 1998 to 2007, health insurance costs, excluding the impact of population growth, grew at an annual rate of almost 13 percent. With the implementation of new health care plans and wellness initiatives, the annual cost increase has slowed to just over 5 percent since 2007.71
Adding to the pressure on costs is the provision under the federal Health Care Reform legislation passed in March allowing adult children without access to other coverage to be covered under their parents’ health insurance plans until the age of 26. According to national estimates, about 30 percent of young adults under the age of 26 have no health insurance at all.
In addition to these changes, the University will reach the goal it announced three years ago of gradually increasing employee contributions to about 20 percent of health care costs. Employee contributions, which currently fund about 18.8 percent of the overall health care costs, will increase to about 20 percent.
“This cost-sharing percentage is consistent with other major employers in the community,” Seligman says.
While costs have increased, the University’s move to self-insurance has helped protect it from some of the larger increases seen in community-rated plans, he says.
For employees who earn less than $44,100, the University will provide an increased subsidy for health care costs to ensure that those employees can receive health insurance if they need it at affordable rates.
As it works to control costs, the University is putting extra focus on prevention and wellness initiatives.
“Prevention, rather than treatment of disease is not only a less expensive approach, but a smarter way to deliver care,” says Chuck Murphy, associate vice president for human resources. “Early diagnosis is one of the best ways to avoid chronic disease and all the costs associated with it.”
Access to preventive care is a key component of the University health plans. All plans will continue to provide full coverage for all in-network preventive care. In addition, the University is offering financial incentives for participation in prevention and wellness initiatives. Faculty, staff members, spouses or domestic partners, and non-Medicare eligible retirees who are enrolled in a University health care plan may be eligible for:
Those who complete the confidential programs offered through Carewise Health, a health management program, may be eligible to receive up to $300 per covered individual (or $600 per family).
Employees also have an opportunity to receive discounts on prescription medications to treat related conditions. They can continue to receive free biometric screenings and participate in lifestyle management programs offered by the Healthy Living Center.
“We want employees to receive the incentives and support so they can take whatever steps they need to make changes, whether it’s smoking cessation, nutrition, or weight management,” Murphy says.
Besides wellness incentives, employees will have the opportunity to choose from two modified dental plans (Traditional Dental Assistance Plan and the Medallion Dental Plan). Both plans will require employee contributions.
“Improving dental care is all part of maintaining good health and wellness,” Murphy says.
Employees can choose from a menu of low-cost or higher-cost plans, based on their own needs and how they decide to structure their costs. “It’s important to look carefully at your health care costs, including how much in the way of out-of-pocket expenses you have had over the last year or two as well as the needs of your dependents,” Murphy says.
“If you’re in a copay plan now—and your family has moderate to high health care and pharmacy expenses—you might have higher expenses than you would if you were in a deductible health care plan with the protection of an out-of-pocket maximum,” he says.
As you plan, you should note additional changes in Flexible Spending and Health Savings Accounts, as well as changes in the pharmacy benefit program aimed at improving coverage.
“To help you plan, we also urge you to use the Health Care Plan Estimator Tool found on the benefits Web site (https://yourhealth.rochester.edu) or call ASK-URHR.