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Board hears health care changes effective in 2004
In addition to the announcement by President James C. Garland at the trustees meeting Dec. 6 of a $5 million gift, trustees also received a report on health care changes to be implemented Jan. 1, 2004.
Trustees had directed the administration to develop a proposal to shift some of the estimated $18 million a year Miami spends on health care benefits to employees.
Richard M. Norman, vice president for finance and business services, presented the plans for implementing increased cost sharing to the board and to the finance committee Dec. 5.
"I’m pleased that the university is taking this important first step. Spiraling health care costs are rapidly becoming one of the most important issues for any employer, whether that employer be corporate or nonprofit," said Fred Wall, a trustee and chair of the university’s finance committee.
Most of the changes being implemented are consistent with those proposed by the Advisory Committee on Health Care Cost Sharing and presented to the university earlier this semester.
Norman said he concurs with the faculty/staff advisory committee that the recommendations "effectively balance the need for cost sharing with sensitivity to our employees."
The advisory committee recommendations that will be implemented starting in 2004:
• Expanding coverage options from the current two-tiered approach (single or family) to a four-tiered approach (single, family, employee plus child or children and employee plus spouse).
• Introducing a premium contribution for medical coverage based on salary.
• Providing a one-time base pay increase of $100 for all benefit-eligible employees. This will help offset the co-pay for those current employees least able to afford the premium contribution, said Norman. The increase will completely offset the cost of any coverage level (from family to single) for employees who earn $20,000 or less. It will also completely offset the employee health care contribution for employees who choose single coverage and earn up to $40,000 a year.
• Introducing a three-tier drug program. The advisory committee recommended the tiered drug approach, which includes co-pay incentives for the use of generic drugs and mail order service for maintenance medication.
In an effort to offset the possibility of any employee who is a heavy user of the prescription benefit from experiencing a financial hardship, Norman has additionally recommended a $1,000 out-of-pocket maximum per covered individual (limited to prescription drug coverage).
Norman explained that the change to the advisory committee’s recommendations regarding prescription drugs reflected input received at various university-wide forums and from University Senate.
• Increase the number of visits for chiropractic coverage under the Point of Service (POS or "new plan") from 12 to 20.
• Make mental health benefits under the POS plan in-network. Currently, POS enrollees can only access mental health benefits on a non-network basis subject to deductible and co-insurance.
• In addition, the committee had recommended phasing out the Preferred Provider Option (PPO or "old plan") for all new hires. Norman said that enrollment in the PPO plan has decreased to the point where it no longer makes sense for Miami to support this option and effective Jan. 1, 2004, the PPO plan will be phased out for all employees. Effective Jan. 1, 2003, the PPO plan will not be available to new employees.
In other action, trustees:
• Aproved revisions in the Enabling Act of the University Senate that had been approved by Senate in September.
• Approved proceeding with the purchase of two properties at 15 University Ave. and 21 University Ave. in Oxford. The homes are adjacent to Lewis Place, home of Miami’s presidents, and the purchase will mean that Miami will owns the block bounded by High, University, Church and Bishop.
Funding for the purchase will be from the university’s endowment. Neither tax nor tuition dollars will be used, Norman said.
• Elected the current slate of board officers to serve in the same roles in 2003 including Roger Howe, chair; Fred Wall, vice chair; Chandra Shah, treasurer; and Laurel Dawson, secretary.
Date Published: 12/12/2002