11/4/97

ATHENS, Ohio -- On Monday (11/3/97) the university and union reached impasse on consideration of new health care options for approximately 630 AFSCME employees. Ohio University was told by leadership of AFSCME Local 1699 that the union will retain its current indemnity health insurance coverage and that it has rejected the university's offer to extend the new health insurance options offered to all other university employees to union members.

"The Preferred Provider Organization option will save many employees money, and I had hoped that employees covered by the AFSCME contract would have the choice to select the PPO," said Terry Conry, assistant director for employee and labor relations with University Human Resources. "The university offered AFSCME employees the option of staying with their current plan or choosing the PPO, but now they won't have that option. Beyond saving money, the PPO offers a paper-free process and managed care features which help to improve the employee's experience with the health care system."

"We regret this rejection by the AFSCME leadership," said Jim Kemper, director of University Human Resources. "Union leadership made the decision without allowing union members to have a voice on the new options, to decide for themselves. Union leaders said they wanted union members to have a choice between the current plan or the PPO but without employees paying a premium. On the one hand, they said they didn't want the $300 insurance offset being offered all other employees, and on the other hand they said that after all other employees start receiving the insurance offset in January, they will file a grievance saying their members are entitled to it, as well.

"This university is not an island," said Kemper. "The dramatic escalation of health care costs has had to be addressed by public and private institutions throughout the nation. With this decision, the university will pay more for health care costs. AFSCME members will find that because most Ohio University employees are choosing to be part of the Preferred Provider Organization, higher medical charges will be made to employees in indemnity plans, such as they have."

Joyce Predmore, assistant director for benefits, said that employees with traditional indemnity plans are finding their costs increasing significantly, not only at Ohio University but throughout the nation, during this time of transition in the health care industry.

"In other words, AFSCME employees can continue to make no annual contribution and pay 20 percent of medical bills after meeting their deductible -- but because the cost from their health care provider are increasing as providers adjust to dealing with PPOs and health maintenance organizations, this option in the long run will be more expensive than joining the PPO," Predmore said. "This decision by AFSCME leadership will not only cost AFSCME employees more, it will cost the university more because it diminishes the university's bargaining clout with health care providers."

Predmore said she also was "disappointed to hear that AFSCME rejected a plan design with higher coverage, including higher life insurance -- which would increase from $24,000 to $50,000 -- and long-term disability coverage for which AFSCME members are currently not eligible. I am concerned about the cost-shifting that will continue to occur to indemnity plans from managed care plans, Medicare and Medicaid. This will place employees at a greater risk of being responsible for balance billing due to charges being over customary and reasonable amounts."

Last March, AFSCME Local 1699 signed a three-year contract with the university that included the traditional indemnity insurance, with a clause stipulating that it would reopen negotiations on whether it wished to be included in insurance choices offered to all other university employees effective January 1, 1998.

Non-union employees have been asked to choose among three plans:

* Basic - traditional indemnity with high deductible, high out-of-pocket maximums but no employee contributions.

* Comprehensive - traditional indemnity with coverage 98 percent similar to current plan; but with employee contributions required.

* PPO - enhanced coverage for in-network services they have no deductible, low office visit co-pay, low contributions, and a wide network.

To ease the transition, the university has given a continuing $25 per month or $300 per year insurance offset to all eligible employees. The $300 offset is equivalent to the current annual premium for the family-level PPO option.

The deadline for choosing a health care option was October 31. The PPO option was selected by 84 percent of the more than 2,000 non-union university employees.