Faculty and staff question healthcare

By Doug Gillie
Contributing Reporter

Faculty and staff of the Reynolda Campus have been working collaboratively with the administration to amend a healthcare program that has left 216 university employees uncovered.

Some of these employees may have elected not to obtain the health coverage because they are already insured by another plan, such as that of their spouse. However, there are also those who have chosen not to receive the benefits of health insurance because, with a .56 campus minimum wage, they cannot afford the monthly premium.

After months of deliberation, Human Resources, the Ad Hoc Senate Committee on Healthcare, and AON Consulting agreed to a plan in which the university would become self-insured, claims are handled by ACS Benefit Services, a third party administrator. ACS is therefore responsible for the processing of all claims.

The greatest disadvantage in terminating QualChoice was the resultant 24 percent increase in the cost of monthly premiums. Because QualChoice had a long-term affiliation with the university, the discounts given by physicians and hospitals were substantial. When the administration was forced to abandon QualChoice, the loss of these discounts significantly increased the cost of healthcare.

The 24 percent increase was also the result of a general increase in the cost of healthcare throughout the United States. Pederson recognizes this pattern, and projects that the cost of healthcare will continue to increase at an approximate rate of 15 to 18 percent in ensuing years.

Several administrators have suggested that insurance-affordability can only be ensured through a change in the minimum wage. Ralph Pederson, director of Human Resources, said an eventual priority for the administration would be to increase the campus minimum wage. John Anderson, vice president for finance and administration, reiterated this possibility. "I have viewed the fundamental solution for our lowest paid employees to move our minimum wage up," Anderson said. "In the current economic climate, that will take some time. Last year we did increase the minimum hourly wage paid by in addition to increases by guidelines."

Representatives from the university's American Association of University Professors chapter maintain that changes can be made to the administration's health insurance policy without increasing the minimum wage.

One of the changes they said should be made is in the employer/employee contribution ratio. The Reynolda Campus has maintained a policy in which it funds 60 percent of its employees' monthly premiums, while the remaining 40 percent is funded by the employee. According to Anderson, "the 60/40 health care insurance division is a historical fact."

Carole Browne, a professor of biology, former AAUP president and current treasurer, said this ratio is relatively low when compared with other institutions. "Part of our feeling is that, as an academic institution, an institution of higher learning and scholarly activity, we should be setting an example to communities in the way we treat our employees. And the one thing that we should absolutely ensure is that our employees be insured," Browne said.

At the Bowman Gray campus, the institution funds 75 percent of the healthcare premiums. At other cross-admit institutions, such as the University of Richmond or the University of North Carolina, the employer covers 100 percent of its employees' monthly premiums.

This university aligns itself most closely with Washington and Lee University, which also funds 60 percent of the premium for a single person. Davidson University covers 92 percent of the premium for a single employee and 60 percent of a family premium and Duke University covers 85 percent of the single premium and 50 percent of the family.

The 60-40 policy results in a monthly premium of .54 for all Reynolda Campus employees, and an additional .65 if that person wishes to insure his or her family. In a recent study conducted by the AAUP, the monthly premium for Reynolda Campus employees is the most costly of eight comparable cross-admit institutions, while the family premium ranks seventh. Browne said employees who receive an hourly wage of .56 can not afford the university's health coverage.

Though the debate concerning health coverage has always been a significant concern on the Reynolda Campus, it became a hot topic when the university was forced to replace QualChoice, its long-time healthcare provider, by May 1, 2002. QualChoice, which was started by the Medical School in 1993 as a means of directing patients to their own doctors, went out of business last semester.

The human resources department, headed by Pedersen, worked cooperatively with the Ad Hoc Senate Committee on Healthcare and AON Consultants in an effort to attain the most affordable and beneficial plan for employees on the Reynolda Campus.

Win-Chiat Lee, an associate professor of philosophy and former Chair of the Ad Hoc Senate Committee on Healthcare, was satisfied with the group's final decision. "Unfortunately, we had to work under the budgetary guidelines given by the university and were also asked to stay within the 60 percent/40 percent employer-employee split of the cost of premiums," Lee wrote in an essay in The Senator, the newsletter of the university faculty senate. "We had to struggle with how to deal with the significant increase in costs under these constraints and still come up with a not-too-unaffordable plan that strikes some balance between increasing premiums and cutting back benefits, especially considering the low salary increase for faculty and staff this year."

Some were not satisfied with the result, though. "The current plan is far less efficient in my personal experience than under QualChoice," Charles Kennedy, current president of the university's AAUP chapter, said.

After months of deliberation, human resources, the Ad Hoc Senate Committee on Healthcare, and AON Consulting agreed to a plan in which the university would become self-insured, while overseen by ACS Benefit Services, a third party administrator. ACS is therefore responsible for the processing of all claims. "When we left QualChoice, we went to a self-insured plan," Pederson said. "Now, the nice thing about self-insured is that, if your claims are less than what you projected, than you have some savings, and we realize those savings. On the other hand, if we underestimated the cost of our claims, then probably the next year we will have to increase the cost of those premiums."

The greatest disadvantage in terminating QualChoice was the resultant 24 percent increase in the cost of monthly premiums. Because QualChoice had a long-term affiliation with the university, the discounts given by physicians and hospitals were substantial. When the administration was forced to abandon QualChoice, the loss of these discounts significantly increased the cost of healthcare.

The 24 percent increase was also the result of a general increase in the cost of healthcare throughout the United States. Pederson projects that the cost of healthcare will continue to increase at an approximate rate of 15 to 18 percent in coming years.

Pederson said there are several options that have been considered to make sure Reynolda Campus employees can afford the new premiums.

The administration has researched the validity of adopting the standards used at Bowman Gray campus-a 75-25 split between employer and employee-for the Reynolda Campus. The expected cost, approximately .5 million, was, according to Pederson, a fee the university could not afford.

Human resources also considered a sliding scale, through which employees in the lowest income bracket would receive a higher percentage of premium-payment from the university. This cost is estimated at somewhere between ,000 and .7 million.