Deadline extended to Nov. 20 for open enrollment for health care benefits

Deadline extended to Nov. 20 for open enrollment for health care benefits

As you know, enrollment continues for St. Thomas employee benefits, and a number of you have expressed concerns and have had questions about the changes in St. Thomas' benefits plan, particularly our health care offerings.  

Because of these changes, all employees must re-enroll in order to have coverage in 2008. The original enrollment deadline, Nov. 16, will be extended to 11:59 p.m. on Tuesday, Nov. 20, to complete your enrollment online.

Information sessions: I also encourage you to attend the remaining Benefits Information Sessions scheduled on two campuses: 10 a.m. Monday, Nov. 12, in O'Shaughnessy Educational Center auditorium; 9 a.m. Tuesday, Nov. 13, in Room 201, Opus Hall; and 11 a.m. Thursday, Nov. 15, in Room 155, Murray-Herrick Campus Center. Seven of these sessions already have taken place over the past two weeks.

Health plan panel: Further, a panel discussion, "Why Did St. Thomas Change Its Health Care Plan?" will be held from noon to 1 p.m. Wednesday, Nov. 14, Room 304, Murray-Herrick Campus Center. Panelists will include various campus representatives and members of our Fringe Benefits Advisory Committee, who will discuss a wide range of issues related to employee benefits. I hope you can attend.

Meanwhile, here are answers to some of the questions you have raised. If you have others, you are welcome to call one of the benefits team members: Peter Ronza, (651) 962-6521; Stephanie Monogue, (651) 962-6519; or Jeanne Kittleson, (651) 962-6497.

Questions and answers

Q. Why did St. Thomas change its health care plan?

A. There are two primary reasons: to control costs and to offer employees more options for coverage and premiums they pay for that coverage.

For the past 10 years the Fringe Benefits Advisory Committee – a group of 11 university faculty and staff members – has worked with professional employee benefits consultants, The Brehm Group, to monitor health care expenditures, prepare budget projections and develop strategies to provide the best, most cost-effective coverage available in the local market that aligns with St. Thomas' benefits philosophy.

As most of you know, the cost of health care has risen dramatically over the past several years. At St. Thomas, for example, the fiscal year health care budget increased by 36.2 percent in FY 2004, 24.8 percent in 2006 and 17.4 percent in 2007.  Costs decreased by 11.2 percent in 2005. The projected budget increase for the 2008 plan year is 14.5 percent – much smaller than the 19.7 percent increase first projected. One reason that the higher percentage didn't come to pass was that this year the university, for the first time in many years, asked providers to compete for its health care business; Health Partners, Medica and Blue Cross Blue Shield submitted bids. Because of the added competition, BCBS reduced its administrative fees significantly. In addition, changes in coverage enabled UST to contain its budget increase – and employee premiums.

The resulting health plan has four "tiers" so that employees can choose a plan based on their unique needs and preferences. It was important to the Fringe Benefits Advisory Committee, the President's Staff and Human Resources to provide plans giving employees a range of choices of coverage and costs. The addition of "employee plus one" coverage also was attractive here, given the demographics of our current employee base, an opportunity to pass along an additional opportunity for cost savings, and the questionable justice in charging employees the same cost for covering a family of two that we do for covering families of 10.   Currently, there are 167 employees who only cover one dependent; yet, in 2007 and in previous years, these employees paid the same monthly premium as a family of five or 10 members.

Q. Did St. Thomas reduce health care subsidies for its employees?

A. Absolutely not. St. Thomas continues to subsidize its health care plan and does so in two ways.

St. Thomas pays, for each employee subscriber, between 58.5 and 79.5 percent of health care premiums depending on plan selection and based on employee-only coverage. Please see Page 10 of your 2008 Employee Benefits Guide for a chart that lists the cost of each plan, the university's contribution and your cost.

The university also continues to provide employees who enrolled before April 1, 2007, in its health care plan $1,000 – an amount that used to be called a "flex credit." On April 1, all employees who had received the credit and who were enrolled in UST's health care plan, began receiving this amount in the form of salary. This conversion has additional benefits for these employees: Since future salary increases and university retirement contributions are based on your wages, these amounts will be higher as well.  (For details, please refer to the March 30 Bulletin Today article announcing this change.)

When taking into account this $1,000 subsidy, St. Thomas' contribution to its employees' health care plan increases to 74.7 percent for single coverage in the Platinum Plan and 101.2 percent for single coverage in the Bronze Plan.

Q.   How do ACTC health subsidies compare to their counterparts at MPCC schools?

A.   Extremely well. In a 2007 ACTC total compensation survey in which 16 of the 19 MPCC schools participated, the average percentage contribution paid by employer and employee for health care coverage was as follows:

Employer % Contribution Employee % Contribution ACTC members 65% 35% MPCC members 75% 25%

An inherent difficulty in health care plan cost comparisons is that it is unknown as to which plans this level of contribution applies. As you know, the employee and employer contributions vary among St. Thomas plan options.

Q. What's an easy way for me to compare the total cost of each plan?

A. It's wise to look beyond the payroll contribution. The total cost of a medical plan includes what you pay out of each paycheck as well as your out-of-pocket costs. Here's a formula to use:

Out-of-pocket costs + annual payroll deductions - $1,000 "flex credit" salary conversion = Annual health care premiums.