4/17/97 Contact: Joyce Predmore, Ohio University, 614/593-1647
ATHENS, Ohio -- Ohio University benefits officials are circulating a proposal on campus to change employee health benefits from a traditional noncontributory indemnity plan to a program offering three coverage options, two of which would include employee contributions.
Officials predict savings to the university of up to $1.3 million in fiscal year 1997-98, but caution that estimated savings for the first year are difficult to make before tracking employees' enrollment patterns.
"We had various goals, including maintaining options and enhancing benefits," said Joyce Predmore, University Human Resources assistant director for benefits.
"A positive feature with this change is that all university employees will be able to choose the coverage that is best for them and their families, and the entire university will share in the future cost avoidance," Predmore said. The options are Catastrophic, Comprehensive or Open Choice Preferred Provider Organization (PPO) packages.
Though officials already were considering adding more managed care options to employee benefits, the proposal largely responds to a projected 30 percent increase in health care costs during this fiscal year and next under the current plan structure.
Vice President for Administration Gary North said the university has been prudent in managing the overall benefits program, and noted that officials returned cost savings from the program to employees via two rebates and a 2 percent base salary increase in recent years.
"We've always taken pride in our benefits program," North said. "We have a goal of providing a comprehensive and high-quality health care benefits program to our employees and their families. We recognize the importance of a quality benefits package in recruiting and retaining employees."
The proposal was developed after months of weekly meetings of the Benefits Advisory Committee, which includes representatives from campus constituency groups. Officials expect to receive input on the proposal during spring quarter and make final decisions about next fiscal year's employee health benefits plan by June. Any new plan would become effective Jan. 1, 1998.
The single noncontributory plan currently available for all employees has a deductible based on employee salary; 80 percent coverage of eligible charges after the deductible; an annual out-of-pocket maximum of $500/$1,000 (individual/family); and between 100 percent and 80 percent reimbursement on preventive care, with no deductible applied.
The proposed plans include major medical and hospitalization, utilization review, preventive care, prescription, hearing, mental health and substance abuse benefits. The plans are:
Catastrophic Plan: This noncontributory indemnity plan design includes a $750/$1,500 deductible. After the deductible is met, the plan pays 70 percent of eligible charges. The out-of-pocket maximum is $2,500/$5,000. Preventive care coverage is paid at 70 percent. The copay with a prescription card is $15 for generic and $25 for brand name drugs. The copay for the mail order option is $10 generic, $20 brand.
Comprehensive Plan: This is a contributory indemnity plan. Separate contribution rates for the 1998 calendar year (on a 12-month basis) would be set for an employee at $27.36 monthly, employee plus one dependent at $54.72 monthly, and employee plus more than one dependent at $82.08 monthly. The deductible is determined by the employee's base salary, beginning at $100/$200 and increasing by $50/$100 increments based on a salary schedule. After the deductible is met, this plan pays 80 percent of eligible charges. The out-of-pocket maximum ranges from $500/$1,000 to $1,250/$2,500 based on salary. Preventive care coverage is paid at 80 percent. The copay using a prescription card is $5 for generic and $10 for brand name drugs. The copay for the mail order option is $4 generic, $8 brand.
Open Choice PPO: This is a contributory preferred provider plan. Contribution rates for the 1998 calendar year (on a 12-month basis) would be set for an employee at $8.38 monthly, employee plus one dependent at $16.76 monthly, and employee plus more than one dependent at $25.14 monthly. The plan has two levels of benefits: one for when a network provider is used and one for when a provider who is not in the network is used. A summary of some benefits: There is no deductible for visiting network providers; in-network out-of-pocket annual limits are $500/$1,000; office visits require only a $15 copay; and the plan pays 90 percent for surgery. For visits to non-network providers, a $400/$800 deductible exists; the out-of-pocket maximum is $1,500/$3,000; the plan pays 70 percent on office visits; and the plan pays 70 percent for surgery. Network providers may vary for special categories, such as accidents, transplants, physical therapy, occupational therapy and home health care. Preventive Care coverage is available and paid at 100 percent for in-network and 70 percent for out-of-network. The copay using a prescription card is $5 for generic and $10 for brand name drugs. The copay for the mail order option is $4 generic, $8 brand.
Though contracts with providers have not been signed, Predmore said targeted network providers so far include most physicians in the Athens area and a number of hospitals and physicians in Lancaster, Parkersburg, W.Va., and Columbus. Among those under consideration are the newly formed Southeastern Ohio Health Alliance, and Grant/Riverside Methodist Hospitals and the Arthur G. James Cancer Hospital in Columbus.
The overall employee contribution to each plan's total premium cost is estimated at 15 percent for the Comprehensive Plan and 5 percent for the Open Choice PPO plan, but Predmore said those percentages could change in future years. Employee payments are pre-tax contributions.
To ensure employees make informed health care decisions and receive the maximum benefits from their plan, the university's Utilization Review provider must be contacted for review and prior authorization of certain services, including hospitalizations, specific elective surgical procedures, and specific diagnostic tests and procedures.
"The Utilization Review is designed to make these plans more user-friendly by guiding employees in their decision-making. We've worked very hard to try to reduce the pain of change in the benefits packages," Predmore said.