President Gamble Calls for More Discussion

From Juella Sparks

As chair of Staff Alliance I meet regularly with President Gamble and last Friday, November 30 our discussion centered around concerns regarding the impact of no longer allowing employees to opt out of the health care benefit in FY14. I am pleased to announce that because of the concerns we’ve raised, President Gamble intends to call for more discussion and numbers on the issue. He indicated that yes, Donald Smith will begin reviewing how to make this change to the health plan but that the decision is NOT FINAL YET.

Thank you for your input! Please continue to make comments here or email your governance leaders directly on the proposed changes to our health care plan mentioned below.

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19 Comments

Filed under Benefits, Policy and Regulation

19 responses to “President Gamble Calls for More Discussion

  1. John

    Are there any numbers to support the benefits of the opt out restriction? Given that the university would need to pay the lion’s share of these unwanted insurance policies it seems that it would cost both the UA system and the people that are opting out significantly more while only providing modest savings to the rest of the participants.

  2. Candi Dierenfield

    I have a major concern regarding the suggested guidelines for union/faculty that will be forced to have the UAF health insurance beginning in 2014. I was completely unaware that this was even on the table again – as I fought against this policy in 2004 when I started with UAF. While I firmly believe that everyone should have health insurance, I also firmly believe that it is completely unfair to require an employee to take a cut in pay to pay for insurance if the employee already has health coverage.
    My husband served our country for 20 years. One of the benefits extended to retiree service members – because of their service and sacrifices – is health coverage for life for them and their spouse. Due to my health needs, my husband continuing to stay in the service allowed a huge financial burden to be taken off our shoulders.
    If I am forced to pay for UAF health insurance, this insurance will become our primary insurance. What does this mean? It means that we will have double coverage which in the end will cost our family $1000s a year. Dual insurance does not mean an increase in coverage and no out-of-pocket expenses. It means paying the difference between what the UAF insurance would cover and what Tricare would allow. In many cases I have experienced this to be an average of $50-$100 per visit. Because I see a Dr. twice a month for my medical condition, I would be forced to pay a monthly premium plus, a co-pay and this difference in what the UAF health insurance would not pay as Tricare’s allowance for the visit will be less than the UAF health insurance where if I were just to have Tricare, the entire amount would be covered. This would be an extra $2400 a year in medical expenses just for my “normal”healthcare needs, plus whatever the monthly premium would be as well as any other unexpected illnesses.
    We have MANY UAF employees who already have health insurance through Tricare or a Native organization. How is this fair to put those employees who have earned the right to these insurance coverages in a position where they will be negatively impacted because of who they are or what they have done through service to our country? We would be discriminated against because of this. If the reason behind this is budget shortfalls, there has to be another option. Is there anyone on the committee that represents employees who are military or Native or from other families who already have health coverage? Has this discrimination issue been addressed?
    How many others will be in the same boat as me where my health care coverage will be reduced while the cost increases?

  3. Carol

    I agree totally with Candi. These are some of the most ridiculous ideas I think I have heard yet at UAA. Do you want to consider charging bi-weekly for family pets now? And can they opt out?

  4. Brenda Henderson

    I agree that the option of opting out should be left on the table. Employees still have to show they have other health coverage, so it isn’t like they are going without medical care to save money. They are using another health insurance plan. This saves the University money in that you don’t have to pay the premiums for those opting out, creates good morale for those who don’t want to be “double covered” (as Candi mentioned, it isn’t really double coverage; it’s double premium payments), and allows choices in health care. Since premiums have continued to rise significantly, I think the more options employees are offered for coverage, the better off everyone is.

  5. Shauna Grant

    Agree with Candi, and while my family has chosen to use both Premera and Tricare, the choice will be reconsidered based on the spouse surcharge. On opt out, my understanding is UA is considered a military friendly institution yet this move becomes a burden for many active duty and veteran military families, not a benefit. The nature of the word “benefit” is something that is bestowed on the employee and used as a boon, not an obligation that becomes too expensive for the employee to bear. Do we really want to punish employees who are just doing what is best for thier families? Need to rethink this one.

  6. Chris

    Opting out of UA provided health coverage should remain an option for employees. I am already covered under my spouse’s health insurance – a benefit of a long and dedicated law enforcement career. If I am required by my employer to take on as primary coverage a new health insurance plan, I will be paying out of a small paycheck to begin with, additional premiums and deductibles for coverage I do not need for a health plan that provides markedly less and costs much more than my current coverage. My original health coverage through my spouse will become my secondary coverage with continued costs to me as well as to the State of Alaska in the form of their share of providing that coverage. I also strongly support the increase of staff representation on the Joint Health committee and any other groups addressing employee issues. I strongly encourage increased, full and much more timely coverage of these issues affecting employee pay, benefits and morale by the UA administration.

  7. David Lewis

    I agree especially since I’m cover twicw why do I need a third.

  8. Theresa Hofstetter

    I agree that I would like to see the numbers. I find it hard to believe that there is sufficient reason to require employees who have other coverage to pay for and participate in the UA insurance plan. They are not going uninsured and they are not currently a burden to the system.

    On one hand, you are penalizing spouses who use UA insurance with the spousal surcharge and then forcing those who are not currently covered under UA insurance to participate. These seem like two opposing positions. Is the plan better off over-all or have everyone participate or not? I would like to see the numbers on both of these scenarios.

    I do support the tiered costs for children. It seems much more reasonable, while capping it at 3 prevents it from being too much of a burden.

    I am very concerned with the biometrics and HRA being used to set insurance pricing. While I have found the WIN program to be very beneficial and it has helped me meet my wellness goals and become healthier, possibly resulting in less use of the insurance plan, it is discrimination to restrict access to health care coverage based on standardized scores of wellness. This will certainly result in lower costs to the plan but at a terrible cost to employees, financially, emotionally, and health-wise.

    I have not complained about cost increases – I understand that costs are going up everywhere. We have one of the better health care plans available these days and I appreciate that. I hope that the concerns of UA staff will be considered when making decisions that are critical to our health and well-being and which ultimately affect how we do our jobs.

  9. Jess Paden

    Until I saw motion #6 I was under the impression that I worked at a military friendly institution. I understand that for many families double coverage provides additional savings and protection, but for military families it would only provide an additional bill. As a military spouse I have full health coverage through TriCare, it’s not free, my husband pays for it with year-long deployments and daily risks. Adding insurance through UAA would cost us thousands. Why would I pay for something I already have? Furthermore, why on earth would my employer make my family pay for something we have already earned? I don’t think that I am going too far in saying that passing this motion would discourage military dependents and retirees from taking jobs within the UA system.
    UAA is a military friendly school for our students; I hope that it can be a military friendly workplace as well.

  10. Jamie

    Thank you to the staff alliance representatives who are keeping us informed on this latest round of health care changes. It was distressing to find out about the last major changes from the Fairbanks Daily News Miner rather than an internal memo that I would be paying significantly more for health care starting in July 2012. (FYI: I check my UAA email every day. I promise I *even* read the memos.) I’m for more staff representation on the JHCC. If you can make that happen, then hurray! Now, buckle up for a little math roller coaster:

    In FY11, health care costs for me and my family (spouse + one child) were $85.10/month or roughly 2.6% of my gross monthly income. Reasonable. BUT the $1,200/per person deductible (High Deductible Health Plan) put visits to the doc completely out of reach for us beyond preventive care.

    In FY12, health care costs (still just me, spouse and child) shot up to $315.56/month or roughly 9.2% of my gross monthly income. YUCK. That same $1,200/per person deductible plus an additional out-of-pocket monthly expense of $230 ($315.56-$85.10=$230.46) means doc visits for injuries and illness are out of the question for us AND we get to buy fewer groceries and scale way back on “luxuries” like gas for the car.

    BUT, there was a step increase in July on the heels of the health insurance cost increase. Hurray! And then I crunched the numbers… Even with the increase, I was bringing home $128 fewer dollars per month.

    I consider my benefits to be part of my total compensation package as do most of my colleagues. When in the course of a single year the deductibles skyrocket and the employee contributions more than triple, my health benefits don’t feel very beneficial. This feels like a slippery, eroding slope. I’m for more transparency and communication in the process as well as more representation.

  11. Brenda

    Based on the new information send out in The Statewide Voice, wherein Chief Human Resources Officer Donald Smith has endorsed the motions, one of the questions I now have is, will we ever see the numbers on how opting out impacts the plan, whether negatively or positively? Also, will the employees who have opted out previously be forced to re-join? If you’re spreading the plan cost among all employees, it would seem that all employees have to be back in. I’m hoping to see numbers, because I’m not convinced that forcing me to be in the plan is going to help anyone, especially if I develop a catastrophic illness or injury and actually have to use my insurance. I’d must rather be allowed to opt out.

  12. Nancy Richmond-Bentley

    With regard to:
    Motion #6: Elimination of Opt Outs
    “Approximately 10 percent of eligible employees waive UA coverage, leaving the remaining 90 percent to cover the total employee contribution obligation. This proposal would eliminate the choice to opt out. Having more employees in the plan will increase overall claims costs. However, the additional employee contributions are expected to reduce contributions for all employees, and the university is working to estimate how much.”

    The first sentence of Motion #6 is based upon an entirely false premise. The 10 percent of employees who opt-out cannot have any effect on cost of an insurance pool of which they are not a part. What drives up the cost of insurance is the age of the people in the pool and how often they use the insurance. The only uninsured people who actually drive up the cost of insurance, are those who go to the emergency room and then force hospitals and caregivers to charge the rest of us more, so that they can continue to make a profit.
    I think UA should look more closely at user costs, and how to reduce those. Some employers have a surcharge for smokers, or educate employees in how to use healthcare more responsibly, and access lower-tiered, less costly providers. Also, how about opening the pool to adjunct faculty and other part time employees who might very well jump at the chance to have insurance?
    The third sentence is even more befuddling. If, “additional employees in the plan will increase overall claims costs,” then pardon me for asking, but why was this recommended? The next sentence then seemingly refutes the previous statement, by stating that additional employee contributions are expected to reduce “overall costs”, and that the University is trying to “estimate how much”. If the cost is not even known yet, then again, why is this even being proposed?. I hope that the University will study this, instead of summarily enacting it. Please have an insurance actuary study this particular proposal more closely.
    Going off on a knee jerk-tangent can be very expensive in the long run. Some private companies that have forced opt-out employees into an insurance risk pool that may have sounded great to begin with, are now having second thoughts. If you bring in an older and unhealthier pool of people into your group, everyone will have increased costs no matter what. The old saw, “Just be careful what you wish for.”, would apply here.
    My interest in this is that I am indeed one of those “opt-outs”, and I have an excellent insurance plan with a very low deductible, and co-pays. This low-cost insurance is what enables me to work at UAA for a lower rate of pay than I would be earning in the private sector. My family is on a very tight budget in this economy, and asking me to take on this sort of extra burden will further reduce my take-home pay. I respectfully request that this be studied further and that employees be given more time to comment.

  13. Juella Sparks

    Thanks everyone for your comments! Keep them coming and suggest your colleagues post here as well. Share the impact of these proposed changes and whether or not you are faculty or staff.

  14. Emily

    I seem to be completely missing the point as to why you need the additional members (who are currently opting out). UA mentioned in their statement “Approximately 10 percent of eligible employees waive UA coverage, leaving the remaining 90 percent to cover the total employee contribution obligation”. Since I am not a “user” of the healthcare system because I opted out, so this statement doesn’t make any sense….. the 90% is not covering my health care costs because I have none.

    I would think that adding these additional members will then increase the University cost of defined contribution (~$12,000 per employee?) to be on the plan instead of not contributing anything because we opt out. In addition, they will then have to pay for any claim costs or preventative benefits.

    Other Universities actually give incentives (like money) for employees to opt out: How exactly is UAF different from these Universities? I still can’t understand why I am being forced to buy something that is not needed because I have other insurance and I demand that UA provide additional information on their decision making process.

    Examples of other organizations that pay their employees to opt out:
    http://www.kent.edu/hr/benefits/medical-insurance.cfm
    http://www.buffalostate.edu/offices/hr/optout.asp

    It seems that the root of the problem is the rising costs of healthcare in Alaska and the community and State of Alaska need to determine ways to minimize these costs should be the number one priority. A few of these motions don’t seem well thought out or analyzed. It seems very short sighted (to solve year to year shortfalls?) and I haven’t seen any detailed analysis as to how they came up with these recommendations. This is supposed to be a University full of smart people, and I would like to see how much will lower everyone’s costs and whether the University is actually trying to identify & try to solve the root of the problem. Where are the data and analyses?

    The UAF insurance plan is no longer considered a “benefit” to me. The costs of the current plans are too high and I would even consider leaving the UAF system for a job elsewhere with better health benefits/lower insurance costs (such as State of Alaska). I chose to opt out because the three plans offered by UAF aren’t at all different and they are too expensive, especially since I am able to get much better insurance through my husband’s employer. Really, the 3 plans are close to identical, it is just a matter of how you manage your money (pay it in premiums or pay it in the deductible). If there was another option, I might consider re-joining, if it is equal to or better than my current plan through my husband’s employer.

    For example, the State of Alaska ASEA union health benefits trust (I used to work for State of Alaska), which manages the State of Alaska health insurance plan for the majority of staff, offers a true High Deductible Plan. UAF could consider something like this option. This is a $10,000 per family deductible, with extremely low monthly premiums (like ~$30 per month per family) and they actually give the family $1000 towards a Health Reimbursement Account (that rolls over each year) AND they allow you to set up and contribute to a HCRA. This is a good option and I would likely rejoin the UA plans if they offered a similar plan and the monthly premiums were reasonable. The State of Alaska also offers a supplemental plan that covers 20%, if you would like to join your spouses plan, this plan picks up the remainder 20%. I would also consider joining this one, I could continue to be on my spouses as secondary but buy into this plan cover 20% of the cost.

    But for those who are already covered under another plan, it does not make sense for them to be forced into coverage on the UAF plan. This is a huge waste of money for me and not a “benefit” because I can be covered under my spouse’s plan. The country seems to be leaning toward “choice” of insurance, and shopping for insurance that suites them, and this requirement conflicts with that direction.

    Perhaps those who live a healthy lifestyle should be rewarded with a discount in premiums. For those who are chronically sick or have high medical expenses that cost UAF alot of money: pay for them travel to the lower 48 (i.e. Seattle) for cheaper medical care. I recently traveled to the lower 48 for some health care in order to save costs to myself (I have not yet met my deductible). The cost was less than half the price than in Alaska. Additionally, if I am forced to opt back in, I will certainly max out the preventative screening options, which are covered 100%, in order to actually get a little out of what I am paying for.

    The spousal surcharge does not make sense either. Using this rational, should there also be a children’s surcharge if they have other options (i.e. if they qualify for Denali Kid Care, but do not join because they can be on their parents UA plan)?

    Perhaps UAF should manage its own plan similar to how the State of Alaska ASEA union runs its plan and keeps costs low and provides multiple options, all of which are more affordable than UAF’s plans.

  15. Jeff Baxter

    I currently choose to opt-out because I have more than adequate insurance through my spouse’s employer as well as a secondary through the military (I’m retired). To remove the opt-out is to force me to purchase something I don’t want and don’t need.

    Forcing opt-outs in is hardly a way to gain resource. On the surface having 10% more people paying premiums sounds lucrative, but bear in mind that employees pay 18% of the cost of health care through premiums. The other 82% is covered by UA. So stated another way, UA is gaining 82% more liability on every employee that opts-in. It is reasonable, therefore, to ask the administration for the numbers that back-up their claim.

    I did have direct contact with a UA administrator who took the time to explain the fact that UA is self-insured and also explained the process for determining the cost of premiums. That was appreciated–and I confess that President Gamble’s remarks, at least in my case, were accurate–there was ignorance on my part which led to cynicism on the blog (in the reply section, not the blog itself). I apologize for that.

    It seems the problem UA is facing is high health care costs, period. The bill is divided between UA and the employee, 82/18, which seems fair. However, I’m not confident that forcing people to purchase a ‘benefit’ will help resolve the issue, especially when UA will gain such a high liability.

    I contacted two other Alaska employers myself (in Fairbanks), both are self-insured, one employs 375 people, the other 1,900. They face the same high health care costs we do–yet they allow opt-outs and offer policies at a significantly lesser cost (for whole-family coverage, one is under $3K/year, the other is under $2K/year vs. UA’s over $3K/year) with significantly lower deductibles (both had $200/yr deductible vs. UA’s 750/yr). One had a spousal surcharge ($2,800/yr), the other did not.

    Something is just not adding up. Other employers are offering health care at a lower cost with a lower deductible without forcing their employees to buy in. UA needs to find a way to do it, too.

  16. John

    Fundamentally it seems like there are two issues with eliminating opt-outs. The first is economic. If the University forces everyone to join its plan,the size of the risk pool will increase a bit. But, having a larger risk pool doesn’t automatically change the actuarial risk or improve the financial outlook of the healthcare plan. More people would be paying into the system, but more would be filing claims (taking money out of the system) as well. At best, that seems like a wash.

    The second problem, which I find more troubling, is that this punishes those with outside insurance. Military families (among others) have earned a healthcare benefit; it’s part of the compensation package promised to them. U.S. soldiers were _promised_ this benefit for their families in return for their service to our country. By forcing military families to pay for unneeded coverage, the University is effectively saying, “We don’t care if you’ve already paid for your families healthcare, we’re going to make you pay for it again.” By removing the opt-out, the University is effectively stepping in and eliminating benefits given to military families by the federal government. They can market this however they want, but the bottom line is this punishes anyone who has already earned a healthcare benefit. This should trouble everyone, not just those in the military.

  17. Sarah

    Up until last year, my family had UA primary insurance and state secondary (20%) insurance. We rarely had to worry about a bill balance, but prescription reimbersment was complicated and I had to hand submit all these. When UA premiums and decuctables lept this year we opted out and I signed up for the medical expense cafeteria plan. This pretax cafeteria plan has been so much easier to work with. I can do everything on line instead of through the mail. Since I am handling every bill ( and I know that there is a limited amount of money per year ) I’m scrutinizing the bills more than I did previously. I do like the idea of increasing the yearly amount that can be put in these accounts and having them roll over.

    If I had stayed in the UA plan it would have been a steep paycut and lots more out of pocket. Requiring UA insurance AND charging extra for my spouse on a family plan is just insulting.

    If you are wanting to lure back the 10% of employees then why not offer an option where UA can be the secondary insurance? ( at of course a much smaller premium. )

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