University, Committees Work to Create Health Plans
Article Two in the Series on Health Care
by Rachel Voris
To grasp the entire scope of health care is nearly impossible, but the Joint Health Care Committee (JHCC) and Staff Health Care Committee (SHCC) are two groups within the university working hard to make progressive moves regarding health care and overall cost reduction.
The second installation in the series “Health Care Reform and How It Affects the UA,” is designed to help employees understand the nuts and bolts of the complicated process of preparing UA for health care reform and the key players at work within it. This article is longer in response to feedback that requested more depth into the health care issues at hand.
The workings in the university system are complicated. At the end of my sixth week of work, I am just now getting a handle on the major players, how they work together and how this all translates to my position. I finally can wrap my head around the health care communication system enough to jot down my thoughts on a crinkled piece of paper (image above). I consider that progress.
Joint Health Care Committee
There is much I still don’t know, but it is crucial that we all realize that health care is important and it is equally important to have a voice in it. These two committees and governance groups allow for this voice, which has served instrumentally in some of the decisions made regarding health care.
The Joint Health Care Committee (JHCC) is a 17-member group comprised of members from four unions. The unions, each with local chapters, include: International Association of Firefighters, the Alaska Higher Education Crafts and Trade Employees, United Academics and the University of Alaska Federation of Teachers. Each union has three voting seats on the committee.
Two members of Staff Alliance and three university administrative staff members also have voting seats on the committee as well as a non-voting ex-officio officer, detailed in union collective bargaining agreements. The ex-officio officer helps in providing information for the meeting agenda and shares background reports typically conducted by Lockton, a consulting firm for the university.
The committee discusses a variety of items related to health care including plan cost for the university and employees and plan design. Then, they pass a motion of recommendation for change to the chief human resources officer, who is also a member of the JHCC committee, and then the chief officer accepts or vetoes the recommendation.
To make plan recommendations, the committee hears from a variety of sources, including staff from the benefits and accounting department and the Director of Payroll and Benefit Accounting Department Michelle Pope. Pope’s department does an analysis of the cost of the health plans each fiscal year. They determine the costs of health care for that year.
If the cost of health care for all university employees fell below projected cost and the employer contributed more then was needed, the overage is applied towards future health plan years. The analysis of the funds plays a significant role in keeping employee rates as consistent as possible, Pope said. The costs and figures are then presented to the JHCC to make further recommendations.
“The Joint Health Care Committee has been instrumental in years where we spent less than was estimated (an over recovery),” Pope explained. “The committee helps determine how much of that over recovery the university applies towards the following year and how much is reserved for a future year.”
The over recovery funds are used to help with years of over expenditures. For example, 2011 was a very high cost year with more “high dollar claims” than usual. High dollar claims are when a person has more than $50,000 in paid claims in a plan year. Careful management of over recovery funds keeps employee rates more constant.
Once the committee knows the “actuals,” or the dollars that were actually spent on health care in a year, the group discusses steps that can be taken to control health care cost increase for the following year, including controlling the high risk factors. High-risk factors are health risks, like stress, that increase health care costs.
The UA human resources department once assessed the top health risks for employees. In those top factors were poor nutrition, inactivity, and stress, according to Erika Van Flein, director of benefits at the Statewide Benefits Office. These risk factors, compounded, can lead to various diseases.
“The thought is, if you put your focus on making the population healthier by reducing risk factors, you also reduce your risk of high dollar claims in your population,” Van Flein said.
After processing and analyzing the information, the committee has a more complete picture of healthcare costs and contributing high risk factors. They discuss measures that can be taken with the plan design the following year to deal with costs.
All decisions on plan design changes must be done by Dec. 31 at the latest, Van Flein explained. The university needs about four months to work with health care vendors in order to implement design changes, which are introduced during open enrollment in mid-April and become effective on July 1.
One of the significant design changes includes the new high deductible health plan (HDHP), with a Health Savings Account (HSA), which is being proposed for the next fiscal year. There are very few public employers in Alaska with high deductible health plans, but we’re starting to see some plans moving to that,” Van Flein said.
As a part of the process in plan reform, the JHCC compares the University of Alaska against other similar institutions to determine if the plan is in line in terms of costs and quality or if the plans stick out negatively.
“If the university is different from other comparable institutions in higher cost and a lower quality, it can highly impact recruitment,” Van Flein explained. Potential employees may choose a different employer with lower costs, especially considering the high cost of living for an Alaska resident. “If a potential employee has a choice of bringing their family to Alaska with all of the associated high costs, and you have a plan that costs a lot more, the employee will not likely come and work for the university.”
Right now, the UA is considered to be cost competitive with its peer institutions. The JHCC works together to maintain competitive low costs while giving the best health care to university employees possible. The ultimate decision maker though, is the Chief Human Resource Officer (CHRO) Donald Smith.
The JHCC votes on recommendations to give to the university chief human resource officer. Smith has 20 days to either deny or approve a recommendation, and if no action is taken either way, the recommendation will become policy by default.
Staff Alliance and the Staff Health Care Committee
The staff is not without its voice. Through the work of governance groups and the staff health care committee, the staff is represented within the health plan.
Staff comprise between 60 and 70 percent of benefit eligible employees within the university. The two members of Staff Alliance on the JHCC play a vital role as information communicators.
Staff Alliance disperses the information from the JHCC to their governance groups at regularly scheduled meetings. Staff Alliance also relays information to a separate committee, the Staff Health Care Committee, to further inform staff about health plans costs and chances.
The SHCC is made up of eight voting staff members, two from each Major Administrative Unit (MAU).
The power of the staff and the SHCC was displayed through the response to the JHCC’s recent recommendation to drop the Wellness Initiative Network for Alaska (WIN) from the plan.
The SHCC helped organize a survey directed toward staff, which subsequently had a powerful response. WIN is still active as a result of these actions.
“The staff spoke and they wanted to keep the wellness program. The staff gave overwhelmingly positive testimonials to the governance groups. Some of those stories were downright emotional, heartfelt messages of the impact this program has made in improving lives, outlooks and giving hope for the future for individuals,” Van Flein said of the survey.
Melodee Monson, chair of the SHCC, Staff Alliance representative on the JHCC, UAA APT Council President and UAA Business Manager of the Department of Human Resources, said that they were successful in their efforts to communicate the desires of the staff. “By and large, the surveys and staff responses enabled us to show that WIN was a program that was valued by most of the staff. It was nice to have the administration acknowledge this and keep the WIN program.”
The SHCC serves an advisory function and does not have voting rights within the JHCC beyond the two staff representatives on the JHCC. “The overall goals of the SHCC are to give staff an opportunity to have input in health care decisions,” Monson said. “We don’t make the decisions, but we can offer input and make motions in regards to benefits packages and health care plans.”
The SHCC reports directly to Staff Alliance members who share the information with their local governance groups. Staff Alliance can make motions or resolutions which go to the president.
The SHCC was formed in fiscal year 2008 in effort to give staff a voice in the decision-making process for the health care plans. In the same year, the JHCC gave a voting position to Staff Alliance. In 2011, the union contract was rewritten in order for Staff Alliance to have one more seat on the JHCC. The university administration gave up two seats on the JHCC for this change to take place.
These groups are the foundation blocks used by the UA to build and sustain a viable health care plan for employees. As I gain further understanding of the separate cogs that allow the health care machine to run, we will be able to build upon these seemingly elementary subjects together.
The healthcare conversation continues in next month’s issue. Topics being covered include specific health care changes including: the health savings account, new high wage taxes, updated information on W-2 forms, and research fees.
All comments or issues related to health care are welcomed. Please contact me, Rachel Voris, directly to add your voice to this conversation and help guide it.