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Proposed Benefit Design Changes Faculty and Staff Brown Bag Luncheon October 13, 2010.

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Proposed Benefit Proposed Benefit Design Changes Design Changes Faculty and Staff Brown Bag Faculty and Staff Brown Bag Luncheon Luncheon October 13, 2010 October 13, 2010
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Proposed Benefit Proposed Benefit Design ChangesDesign Changes

Faculty and Staff Brown Bag Faculty and Staff Brown Bag LuncheonLuncheon

October 13, 2010October 13, 2010

Timeline Timeline Spring 2010 – Subcommittee recommended the Spring 2010 – Subcommittee recommended the

following goals:following goals:– 0% cost increase for University paid benefits0% cost increase for University paid benefits– Consider options for family-friendly medical plan designsConsider options for family-friendly medical plan designs

Summer 2010 – Benefits Consultant (JW Terrill)Summer 2010 – Benefits Consultant (JW Terrill)– Summary of Findings: Summary of Findings:

Above average benefit plan designs compared to Above average benefit plan designs compared to marketmarket

Very generous cafeteria plan funding Very generous cafeteria plan funding Very generous paid sick leave benefitsVery generous paid sick leave benefits

BenchmarkingBenchmarkingEmployee Contribution PercentageEmployee Contribution Percentage

Timeline (continued)Timeline (continued) Summer 2010 – Benefits Consultant (JW Terrill)Summer 2010 – Benefits Consultant (JW Terrill)

– Recommendations:Recommendations: Consider family-friendly medical plan optionConsider family-friendly medical plan option Implement employee contribution for the low deductible Implement employee contribution for the low deductible

medical planmedical plan Reduce paid leaves and include a paid time off leave bankReduce paid leaves and include a paid time off leave bank Reconfigure paid sick leave program and implement a Reconfigure paid sick leave program and implement a

short term disability planshort term disability plan August 2010 – Request for Proposals (RFP’s)August 2010 – Request for Proposals (RFP’s)

– Medical/Rx, dental and vision insurance coveragesMedical/Rx, dental and vision insurance coverages– Medical/Rx RFP results: Medical/Rx RFP results:

Anthem: proposed cost increaseAnthem: proposed cost increase Two other bidders: proposed cost decreasesTwo other bidders: proposed cost decreases

Recommendations:Recommendations:Medical InsuranceMedical Insurance

Change to United Healthcare Change to United Healthcare – 13% decrease in employee only premium13% decrease in employee only premium– Reduces Pre-Medicare retiree premiums to the Reduces Pre-Medicare retiree premiums to the

active employee premium - 43% decrease in active employee premium - 43% decrease in premiumpremium

United Healthcare proposal overview:United Healthcare proposal overview:– Same deductible/cost share levelsSame deductible/cost share levels– Rx copaysRx copays– Good provider network Good provider network – Health Savings Account (HSA) banking optionHealth Savings Account (HSA) banking option

Recommendations:Recommendations:Medical InsuranceMedical Insurance

Convert Medical Plan B into Base PlanConvert Medical Plan B into Base Plan– Employee premium 100% paid by UniversityEmployee premium 100% paid by University– $750 in cafeteria plan funding$750 in cafeteria plan funding– After $1,500 deductible…$10/$30/$50 Rx After $1,500 deductible…$10/$30/$50 Rx

copayscopays– Implement University supplement for Implement University supplement for

dependent premiumsdependent premiums Spouse = $75/month supplementSpouse = $75/month supplement Child(ren) = $100/month supplementChild(ren) = $100/month supplement Family = $200/month supplementFamily = $200/month supplement

Recommendations:Recommendations:Medical InsuranceMedical Insurance

Convert Medical Plan A into Accelerated PlanConvert Medical Plan A into Accelerated Plan– Employee contribution to employee only premium Employee contribution to employee only premium

based on your previous year’s reported Form W-2 based on your previous year’s reported Form W-2 Medicare wages (box 5) Medicare wages (box 5)

– $250 cafeteria plan funding$250 cafeteria plan funding– $10/$30/$50 Rx copays, not subject to deductible $10/$30/$50 Rx copays, not subject to deductible

or cost shareor cost share– MRA will be availableMRA will be available

<$27,000 $27,000 -$44,999

$45,000 -$69,999

$70,000 +

$22/month $45/month $67/month $90/month

United Healthcare United Healthcare 20112011 EmployeeEmployee Monthly Monthly

PremiumsPremiumsBase Plan

(Formerly Plan B)Accelerated Plan (Formerly Plan A)

Monthly Premium Monthly Premium

Employee $0.00 * Employee $22.00 **

Spouse $331.13 Spouse $527.00 **

Child(ren) $232.29 Child(ren) $435.18 **

Family $501.50 Family $894.27 **

* 100% Paid by University ** Employee only contribution will (Dependent rates are net of range from $22 to $90 per month University supplement.) based on salary.

Recommendations:Recommendations:Medical InsuranceMedical Insurance

Base Plan: How University Base Plan: How University supplements and Cafeteria Plan supplements and Cafeteria Plan Funding applyFunding apply

Spouse Coverage Children Coverage Family Coverage

$406.13 premium- $75.00 Supplement- $62.50 Cafeteria Plan $268.63 Adjusted premium

(34% premium savings)

$332.29 premium-$100.00 Supplement- $62.50 Cafeteria Plan $169.79 Adjusted premium

(49% premium savings)

$701.50 premium- $200.00 Supplement- $62.50 Cafeteria Plan $439.00 Adjusted premium

(38% premium savings)

United Healthcare United Healthcare 2011 Retiree Monthly Premiums2011 Retiree Monthly Premiums

Base Plan

(Formerly Plan B Current Premiu

m

Base Plan

(Formerly Plan B)

New Premiu

m

Accelerated Plan

(Formerly Plan A)

Current Premium

Accelerated Plan

(Formerly Plan A)New

Premium

Pre-65 Retiree

$683.42 $369.22 **

$800.93 $459.09

Spouse $683.46 $406.13 * $800.93 $505.00

Children

$512.63 $332.29 * $600.69 $413.18

Family $1,196.07

$701.50 * $1,401.64 $872.27

Post-65 Retiree

n/a n/a **

$404.90 $387.29

Spouse n/a n/a * $404.88 $426.02

Children

n/a n/a * $303.67 $348.56

Family n/a n/a * $708.57 $735.85

Recommendations:Recommendations:Medical InsuranceMedical Insurance

Due to significant cost decrease in Due to significant cost decrease in UnitedHealthcare’s proposal, UnitedHealthcare’s proposal, eliminate University subsidy for pre-eliminate University subsidy for pre-Medicare retiree premiums.Medicare retiree premiums.– Current retirees receiving these Current retirees receiving these

subsidies will be grandfatheredsubsidies will be grandfathered

Recommendations:Recommendations:Dental and Vision InsuranceDental and Vision Insurance

Dental InsuranceDental Insurance– Continue with Delta Dental of MissouriContinue with Delta Dental of Missouri– Same coverage levelsSame coverage levels– 6.6% premium increase6.6% premium increase– One year rate guaranteeOne year rate guarantee

Vision InsuranceVision Insurance– Continue with Vision Service Plan (VSP)Continue with Vision Service Plan (VSP)– Same coverage levelsSame coverage levels– 6% premium increase6% premium increase– Four year rate guaranteeFour year rate guarantee

Recommendations:Recommendations:Paid Leaves – Effective 1/1/2011 Paid Leaves – Effective 1/1/2011

Implement Paid Time Off (PTO) SystemImplement Paid Time Off (PTO) System– Retain current paid energy conservation daysRetain current paid energy conservation days– Retain current paid vacation accrual scheduleRetain current paid vacation accrual schedule– Combine energy conservation days and Combine energy conservation days and

vacation days accrual into PTOvacation days accrual into PTO– PTO accrual maximum at 240 hoursPTO accrual maximum at 240 hours– Provides employee flexibilityProvides employee flexibility

No change in paid holidaysNo change in paid holidays Eliminate vacation buybackEliminate vacation buyback

Recommendations:Recommendations:Paid Leaves – Paid Leaves – Effective 1/1/2011 Effective 1/1/2011 Implement Paid Sick Leave Accrual SystemImplement Paid Sick Leave Accrual System

– Starting banks based on past 10 years’ sick Starting banks based on past 10 years’ sick leave usage, up to 120 hours per year credit leave usage, up to 120 hours per year credit with 1,040 hours maximumwith 1,040 hours maximum

– Unverified Sick LeaveUnverified Sick Leave Staff: Accrue 8 days annuallyStaff: Accrue 8 days annually Faculty: Accrue 6.64 days annuallyFaculty: Accrue 6.64 days annually Unused leave each year to carry over into verified Unused leave each year to carry over into verified

sick leave banksick leave bank

– Qualifies for up to 6 months of additional Qualifies for up to 6 months of additional service credit under MOSERSservice credit under MOSERS

Recommendations:Recommendations:Paid Leaves – Effective 1/1/2011 Paid Leaves – Effective 1/1/2011

Implement Short Term Disability PlanImplement Short Term Disability Plan– To be administered by a Third Party To be administered by a Third Party

AdministratorAdministrator– 30 Day Elimination Period (use Verified Sick 30 Day Elimination Period (use Verified Sick

Leave and PTO)Leave and PTO)– Followed by Short Term Disability Paid Sick Followed by Short Term Disability Paid Sick

Leave at 60% payLeave at 60% pay– Transition plan for current employees will applyTransition plan for current employees will apply

Calendar Days

30 Days

60 Days

90 Days

120 Days

150 Days

180 Days

Elimination Period

Short Term Disability Paid Sick Leave

@ 60% Pay

Projected Cost SavingsProjected Cost SavingsAction Amount

Medical Insurance:

Reduced Employee Medical Premiums $1,638,887

University Supplements ($703,345)

Approximate Medical Insurance Savings: $935,542

Paid Leaves:

Short Term Disability program and administration cost

$130,392

Eliminate Vacation Buyback $85,000

Approximate Paid Leaves Savings: $215,392

Less MOSERS increase for FY12 ($80,000)

Approximate Total Net Savings: $1,070,934

Total Net Savings is equivalent to an Total Net Savings is equivalent to an approximate approximate

$6-$7 per hour incidental fee increase for $6-$7 per hour incidental fee increase for students.students.

Next StepsNext StepsDate Action

October 22, 2010 Board of Regents Meeting

Week of October 25, 2010 Award medical, dental and vision insurance contracts

Weeks of November 1 and 8, 2010

Employee and Retiree Benefits Open Enrollment Meetings

November 15-30, 2010 Benefits Open Enrollment Period

December 2010 Submit enrollment files to insurance carriers

January 1, 2011 Benefit plans effective date


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