The University is trimming the fat off of employee health care benefits.
Currently, University of Alaska employees aren’t required to provide documentation for their claimed dependents to receive medical benefits. As of July 1, they’ll have to break out the birth certificates to prove that their kids are their kids.
Under the new documentation plan, ConSova, a Colorado-based auditing company, claims that UAA stands to save between $500,000 and $1 million this year by weeding out ineligible dependents.
But that’s not all: Beth Behner, Chief Human Resources Officer for the University of Alaska, announced in a recent memo that deductibles and out-of-pocket expenses will double, triple, and in some cases, quadruple from their current prices.
Employees who make the least will see the biggest changes in the form of increased premiums, whereas the highest-paid employees will see the least relative change. UA Benefits Director Mike Humphrey said the cuts represent what is industry standard for insurance.
“Look at auto, or long-term life insurance. The rates aren’t based on income,” Humphrey said.
But the rate chart says otherwise: Pay cuts and deductibles rise with income, regardless of spouses or dependents.
Faculty Senate Vice President, Prof. Nalinaksha Bhattacharyya, says that the new health care plan has not been well received amongst faculty. He wants to see where the new figures are coming from.
“I explicitly asked to see the consultant’s report,” he said, speaking of the data that would numerically justify the soon-to-be skyrocketing rates. When he received no reply, he went out and found the numbers himself.
Looking at the national Gross Domestic Product data, Prof. Bhattacharyya found the average increase in rates to be about 6 percent nationwide. On the new UA plan, they’re 10 percent. When he asked again where these figures came from, he still received no answer.
“Until I see the data underlining that estimation, it is just an unsupported opinion,” he said of the figures that employees will be paying out for health care.
Of course, if an employee forgoes the UA health plan, they don’t pay anything extra.
The current health care budget is $65 million, and is expected to rise quickly over the next few years. In her memo, Behner says that the major increases will help stabilize rates. If the changes were more modest, another increase would have to take effect as soon as 2013.
There are also a few fine-print changes being made that require some extra attention – the consequence for employees paying even more cash out of pocket.
Non-smokers beware: everyone enrolled in the benefit plan is assumed to be a smoker – and therefore subject to an automatic $50 per month surcharge – unless they sign a form stating they are not tobacco users. Smokers must be tobacco-free for one year before that fifty-buck-a-month charge goes away.
Mike Humphrey, UA’s Benefit Director in Fairbanks, says that the tobacco clause is still in flux, but if it goes into effect, employees will be notified via email. He added that he will be out personally telling employees about it.
Another kicker of the new plan is that it would double copays for filling retail prescriptions, if members don’t use mail order for refills on maintenance medications.
Behner believes higher costs will make people rethink their definition of ‘convenient.’
The new health care plan for UA employees goes into effect on July 1, 2011, which is the same day that new federal laws will allow parents to add children up to age 26 on their insurance plans.