University employees can expect a change in cost with their health benefits starting during January 2013.
An email was sent to all employees last week from University President Troy Paino, which notified Truman State’s approximate 750-person staff of the changes that are being implemented to the majority of the health insurance benefit packages to help combat a potential 20 percent increase in insurance rates.
“Since 2006, the University’s health insurance premiums have increased almost 34 [percent],” Paino said in the email.
“The national average is closer to $90 or $100, and we’re moving to $20 per month,” he said. “If you put that in the larger context, you can see that we’re still holding the line pretty well here.”
The $20 cost, Paino said, applies to “Plan A,” which is one of the three plans. Within each plan there are four categories: employee only, employee and spouse, employee and children, and family. The $20 per month charge would only apply to the employee only category within the Plan A.
Paino said this was a decision that no one wanted to make, but compared to the overall insurance packages available at other institutions of higher learning and businesses, he expects Truman will continue to remain competitive.
What plan each employee chooses is based on the individual.
The idea for changing the benefits package came after the University’s benefits consultants from Gallagher Benefits told them about the 20 to 21 percent increase in costs, Paino said.
“Basically, the University has been shouldering the burden of these cost increases for a long time,” he said. “Unfortunately, 20 to 21 percent was too high so we had to ask some of the employees to help shoulder the burden as well.”
Paino said the University still is covering 10 percent of the estimated 20 percent increase. He said between insurance and an increase in the Missouri State Retirement program, the University is seeing an additional $1.5 million increase in costs next year.
The effects of the benefit changes on the other categories are more complicated to assess, said Sally Herleth, executive director of Human Resources. She said the increases for the other plans depend on the dependents of the person who the employee’s plan is covering, though most likely the cost increase will be greater than the $20 for employee only plan.
“We also implemented, as part of a wellness program, a surcharge of $20 per month [for employees who are] tobacco users,” Herleth said.
The $20 for the tobacco users is independent from the $20 increase for employee only benefits, she said.
Currently, of the roundabout 750 employees at the University, Herleth said she expects 75 to 100 of them smoke. She said employees who participate in smoking cessation classes on campus will not have to pay the surcharge.
This is a long-term problem, which is why we’re trying to help employees to quit smoking and encourage them to lead a healthier lifestyle,” Paino said. “In the long haul it’s going to lower our cost if we have a healthier workforce. It’s not the only answer to the problem, but it’s part of it.”
History professor David Robinson said this is the first time during 22 years that his benefits have been changed, and though it’s a small amount now, he expects it could grow throughout the future.
“It doesn’t deter me from carrying on with my job,” he said. “But it worries me about the morale of the faculty and ability to attract anyone to come to Truman in the future.”
He said that Truman already has one of the lowest salary rates across the state, and has lower benefits than other universities, but now it could make the benefit package seem even less appealing.
Robinson said that during the last few years he has worked with several selection committees for potential new employees and has seen several interested people end up not taking the position because of the benefits package, causing the selection committee to have to choose candidates that weren’t their first choice.
During the last few months, Herleth said the administration has been working to minimize the financial impact on employees as much as possible.
“Our premiums are a result of our claims, and our claims and premiums are going up pretty dramatically every year,” she said. “This is just the way the industry is, and our claims in general.”