October 7, 2013
The Ball State Board of Trustees today approved proposals designed to manage costs for both employees and the university in the employee health care plan as well as ancillary benefit programs.
The board voted to award a new contract for all of the university’s ancillary benefits to a single vendor, The Hartford. By aligning the terms of several contracts and bidding them out together, the university anticipates nearly $850,000 in savings each year for both the university and its employees. The university and employees will share in the savings in the same 75 percent/25 percent proportion each pays for health care and ancillary benefit premiums, except for voluntary life insurance. Employees pay the premium for voluntary life insurance.
The Hartford offered the best overall package of rates and services in its proposal. Ancillary benefits include life insurance for active and retired employees, accidental death and dismemberment, long-term disability, short-term disability and voluntary life insurance.
“Our goal is to be very strategic in how we purchase and administer university benefits,” said Randy Howard, vice president for business affairs and treasurer. “Any savings we can produce are available to be reinvested in critical areas such as retaining talented faculty and staff, strategic initiatives and cost containment that benefits students.”
The board also approved the university’s 2014 health care plans, with an average increase in premiums of 8.1 percent. National surveys suggest employee premiums will increase between 6 percent and 10 percent next year. Depending upon which of three plans and service levels an employee chooses, total medical and dental premiums will increase between 5.9 percent and 14 percent. Plan deductibles will increase by $100 per year in two plans. Out-of-network, out-of-pocket maximums for the HSA Qualified plan will also increase to keep pace with IRS allowable maximums for plans of this type. To reduce confusion with its other high deductible plan, the university renamed the “High Deductible/HSA Qualified” plan to the “HSA Qualified Plan.”
For employees who do not use tobacco, the university will increase its tobacco-free health care premium discount from $600 to $900 annually. Last year, 30 employees and spouses completed tobacco cessation education, qualifying them for the tobacco-free premium discount. Smoking cessation classes and medication will continue to be provided to employees and their spouses.
Howard said that Ball State’s employee health care premiums have increased at only one third the rate as national trends. Since 1999, workers’ contributions have increased 180 percent, while Ball State employee contributions have increased 60 percent over the same time period.
Howard also discussed findings from the recent Employee Benefits Survey and Peer Benchmarking study. The study revealed that the value of the university’s benefits is similar to its peers and competitors. The survey showed that Ball State employees place the highest value on health coverage and want to keep their health insurance premiums as low as possible.
A comparison with peer institutions showed that most universities no longer offer retiree life insurance, and this benefit was not one of the most valued benefits in the employee survey. The retiree life insurance benefit will continue to be offered to benefits-eligible employees. However, in 2015 the university plans to restructure and phase out the retiree life benefit for its future retirees, subject to union negotiations. Any savings will be reinvested into salaries, more attractive benefits and strategic plan initiatives. Such actions also help the university maintain affordability for students and their families.
In other business, the trustees approved an increase to the maximum employee life insurance benefit from $75,000 to $125,000. Howard said that while most employers do not offer retiree life insurance, they do offer larger amounts of life insurance for active employees.