UA’s Health Care Costs Continue to Rise
More cost-containment needed, management says
If UA’s health care plan remains unchanged, costs are expected to double within seven years. That means total health-care costs will go from the $65 million to an estimated $131 million by Fiscal Year 2017.
“It’s not a sustainable trend. We’ve known that for some time, and as a result over the past several years we’ve been making plan changes, asking employees to pay a larger share, as well as utilizing over-recoveries from past years to help smooth out employee increases,” said UA Director of Benefits Mike Humphrey. “The over recovery is now gone and more needs to be done.”
A number of possible changes in both the pharmacy plan and medical plan are being considered and discussed by the Joint Health Care Committee and Staff Health Care Committee, which are important advisory groups to UA leadership.
The 10-member Joint Health Care Committee, made up of unionized faculty and staff from across the UA System as well as management and governance representatives, has been digging into details for months. The Staff Health Care Committee, made up of non-unionized staff members, has been equally involved.
“The Joint Health Care Committee and Staff Health Care Committee are both very aware of the situation and are fully participating in the review of possible plan changes and will be providing recommendations to UA leadership,” Humphrey said.
But he and others are concerned that a larger group of UA employees do not understand the magnitude of the problem or that a major effort is being made to address it.
Beth Behner, UA’s chief human resources officer, agrees. “Ultimately, some tough choices are ahead,” she said.
To help with the analysis of complex benefits issues, the UA administration has retained the Lockton Group, a benefits consulting firm. Lockton has worked with UA’s committees since August to provide regular updates on health care costs, utilization patterns and to recommend plan modifications. Lockton recently provided UA President Pat Gamble and key members of the UA administration, including the chancellors and cabinet members from UAA, UAF and UAS, with an overview of UA’s health plan challenges and possible solutions.
Several issues rise to the top. One is that UA’s medical and pharmacy claims per employee are among the highest Lockton has ever seen among any group they’ve ever worked with, they said. Very few employees opt out of the plan compared to other employers, meaning a number of employees are double covered, driving up overall costs. Another factor is that many of the most expensive claims are in areas largely affected by lifestyle choices, such as heart disease, obesity, diabetes, high blood pressure and high cholesterol.
Compounding the difficulties is national health care reform. Starting July 1, 2011, offspring up to age 26 (regardless of whether they’re students, married, working or living in Alaska) are eligible to be on their parent’s health-care plan. This federal change is expected to increase UA costs by at least $2 million after it goes into effect in July, 2011. Currently UA’s health plan provides that a son or daughter can remain on a parent’s plan until they’re 19 if not a student and 24 if they are.
In addition, in 2018 the federal “Cadillac plan tax” will take effect. All of UA’s current plans—the Deluxe, Standard and Economy—would be considered “Cadillac plans” under the new federal law taking effect in 2018. The Cadillac plan tax will add an estimated $4 million to plan costs.
The consultants praised UA’s wellness program run by WIN for Alaska. Participants in the Individual Health Program (IHP) and other wellness efforts are seeing true benefits, including improved overall health and reduced risk factors. Within a three-year period, IHP participants:
• Lost at least 10 pounds (116 people)
• Reduced total cholesterol by at least 40 points (121 people)
• And reduced blood pressure to normal levels (147 people)
“We can talk about things like the cost-sharing (currently at 83 percent-UA and 17 percent- employee) but the major focus must be on changing our employees’ and their dependents’ overall state of health,” Behner said. “It’ll take all of us working together to ensure the university can afford to offer a good health care plan into the future.”
In addition, Humphrey and Lockton will update the UA Board of Regents’ Human Resources Committee at 1 p.m. Thursday, Dec. 9, in Room 109 of the Butrovich Building. The board meets in Fairbanks Dec. 9 & 10.
FY12 grid increase for non-represented staff
A letter fom Chief HR Officer Beth Behner
Dear UA Staff Member:
I'm writing to let you know that the Board of Regents has included in the FY12 proposed operating budget a 2 percent grid increase for non-represented staff, to go into effect the first full pay period of July 2011, followed by a 1 percent step increase during the first full pay period of January 2012.
A portion of the 2 percent (60 percent) will be included in UA's general fund request submitted to the state, with the remainder (40 percent) funded out of university receipts. The 1 percent step in January will be funded internally through reallocation at each MAU. This budget plan now goes to the governor and Legislature for consideration.
During the discussion at the board meeting about compensation for non-represented staff, you should know that President Gamble, the chancellors and board members spoke highly of you, as a group of employees. The message from the UA leadership was clear; you are valued, and this budget proposal recognizes that. The contributions you make to the overall mission of the University of Alaska are important---thank you.
There will be challenges ahead in terms of ongoing work of UA’s Health Care Committees in finding cost efficiencies and savings in our health-care plan. Some of the ongoing increases in the plan are beyond our control, and are part of a nationwide trend. Other health care costs are more related to lifestyle, which we can tackle in a proactive manner, to help offset increases elsewhere. Together, we'll continue to work on this important and oftentimes vexing issue.
Our other employees who are members of five different unions are currently in contract negotiations, so the board couldn't include salary adjustments for those groups at this time in the FY12 budgeting process. They are, of course, very valued employees as well. For our non-represented staff, I'm pleased the board arrived at what most consider a reasonable increase that recognizes your hard work and dedication. Thank you for your service to the University of Alaska.
Chief Human Resources Officer
2011 W-4 Federal Withholding Information
The information you provide on your W-4 form determines the amount of federal income tax withheld from your pay.
You are required to complete a new W-4 for 2011 if:
- you claimed "Exempt" status on your 2010 W-4***
- your exemption allowances have changed since you filed your last W-4
***Note: If a 2011 W-4 form claiming "Exempt" is not submitted by Feb. 15, 2011, the federal filing status will default to "Single, with zero withholding allowances."
If any of the above conditions apply to you, please file an amended W-4 form with your campus Human Resources office by Friday if you want the changes to be in effect for the first payday of 2011.
For more information, contact your campus Human Resources office at the number below or refer to the W-4 Information page at http://www.alaska.edu/hr/procedures/payroll/w4info.xml.
Changes to flexible spending accounts
There is a significant change to the medical flexible spending accounts due to national healthcare reform. Effective Jan. 1, 2011, medical flexible spending accounts will no longer be permitted to reimburse expenses for over-the-counter medicines or drugs unless you have a prescription from your health care provider. Exceptions include insulin and medical items (first aid magnifying readers, incontinence items, canes, etc). For more information please contact Statewide Human Resources. This notice was provided in the recent health newsletter sent to employee home mailing addresses as well.
Holiday Health Screening
Give yourself the gift of a healthy holiday season.
Stop by for a free holiday health screening and enter to win a Nintendo® Wii Sports Resort and Wii Fit Plus! Then, double your chances to win by entering your name again when you register for an IHP Initial Session onsite.
UAF: Thursday, December 2
9:00 am - 1:00 pm
Butrovich 109 – A/B
UAA: Thursday, December 2
9:00 am - 1:00 pm
Rasmuson Hall Lobby
Free Health Screening Includes:
- Body composition analysis
- Blood pressure check
- Waist measurement
Wellness consultants will be available to answer your health screening questions and provide information about the IHP program.
Introducing the WIN-WIN Program
WIN for Alaska, Inc. (WIN) presents the Weight Inspiration Network (WIN) - it’s a WIN-WIN Program. WIN-WIN is a 16-week program specifically designed to help you lose weight and stay healthy.
Beginning in January, attend WIN-WIN weekly meetings and receive:
• Weekly weigh-ins to track your progress
• Expert guidance from WIN for Alaska, Inc. Wellness Consultants
• Strategies for a healthful lifestyle that work
• Support from fellow participants
• Information about the latest in exercise and nutrition
• Tips to help you get moving and stay active
• Inspiration that'll keep you going!
The WIN-WIN Program is available in Anchorage, Fairbanks and Juneau, and is FREE to all UA benefits- eligible employees. Registration is required as space is limited. Look for meeting details, registration information and links in the December issue of UA Health Link HERE.
Winter Break 2010 and Option of Reduced Business Hours
This year, the UA System will have winter break between Dec. 23-31. Employees are expected to take annual leave or leave without pay Dec. 27-29. The other weekdays during this period are UA holidays. The UAF campus has identified two additional timeframes during which UAF departments may reduce business hours or have a “soft closure”: Dec. 20–22, 2010 and Jan. 3–7, 2011.
Unless a departmental supervisor notifies employees that their services are essential and leave cannot be taken, President Gamble has decided that Statewide employees will be permitted to use annual leave or leave without pay to extend their time off during Dec. 20–22 and/or January 3–7 to coincide with UAF's soft closure. No employee is required to utilize annual leave or leave without pay beyond the official days of winter break.
While some employees prefer to take leave without pay rather than use annual leave, PERS retirement is affected by the use of leave without pay for time periods in excess of 10 days per year. Employees may want to consult with Mike Humphrey or Erika Van Flein in HR Benefits for more information on the retirement impact.
Not too late for Fairbanks, Juneau IHP sessions
Sign up and participate in a series of six face-to-face health planning sessions with an experienced wellness consultant, who will customize a plan to help you achieve your personal health and wellness goals.Nearly 750 UA faculty and staff are now participating in the IHPs, with sessions in Anchorage and Mat-Su full. There's still room for IHPs in Fairbanks and Juneau.
IHPs are a benefit of your UA Health In Action program, provided at no out-of-pocket cost to you. Program participation is limited, and sessions do fill up. Register today by visiting www.uahealthinaction.com.
Fall (and winter) into Fitness
Fall and winter are great times to get fit, so your Health In Action Team has put together a variety of fitness activities to help you stay active during the chilly months. Some classes require registration, as class size is limited. To register, click on the link in your area below, or visit www.uahealthinaction.com.
Presented by WIN for Alaska, Inc.
Your UA Health In Action Wellness Program provider.
December and January training calendar
The Statewide Office of Human Resources, Training and Development calendar is posted at www.alaska.edu/hrtraining and identifies additional details about the following items:
Wednesday Webinars by ComPsych Corporation
The training calendar is posted at www.alaska.edu/hrtraining and has been updated to include webinars through March, 2011. The following webinars are scheduled for December 2010 and January 2011:
- Dec. 1, 11 a.m. – Handling Conflict and Managing Anger
- Dec. 15, 12 p.m. – The Successful Single Parent
- Jan. 2, 11 a.m. – Improving Your Memory
- Jan. 26, 11 a.m. – Friendly Persuasion: How to Get the Things You Want and Need
The webinars are generally 45 minutes in length and are open to University of Alaska employees system-wide. There are no fees to attend a ComPsych webinar, although supervisory approval is needed if the webinar takes place during the employee’s work hours. Employees may join these webinars from any computer and telephone. A toll-free number is provided to join the audio portion of the webinar.
To register for a webinar, select the desired training event on the training calendar and enter your name, email address, telephone number and click “submit.” Registered participants receive a reminder email and the webinar handouts 24-48 hours prior to the webinar.
If you have any questions about the above events or information, please contact Anne Sakumoto at (907) 786-1432 firstname.lastname@example.org or Nick Whitmore at (907) 786-1411 email@example.com
UA Health Link
Keep up-to-date on current wellness benefits and be inspired by healthy lifestyle tips through the UA Health Link. This online newsletter provides monthly updates on IHP programs, wellness breaks, current incentive programs and more. If you missed this month's issue, read it HERE.