By Katie Quaranta
The Budget Planning Council today endorsed measures designed to decrease the university's health care expenses and to support the implementation of several wellness initiatives. Members also heard more aggressive contingency scenarios that could be enacted to reduce health care costs once university officials know more about the state budget.
Because of the economic downturn, the BPC had charged the Health Benefits Committee -- a group that works to strengthen communication between the university and constituency groups on subjects related to health benefits -- to develop scenarios to reduce health care costs by $1 million, $3 million and $5 million.
The BPC passed a resolution to support the changes recommended at the $1 million level regardless of the university's economic situation because they would create significant cost savings with minimal impact on employees.
These changes would require employees to order maintenance drug prescriptions by mail and to purchase generic drugs when available. The university also would require employees to pay a $50 monthly surcharge to cover a spouse who has insurance available through his or her employer. Additionally, if both spouses work at the university, the higher salary would be used for calculating the monthly premium.
"I think the consensus of everyone around this table was these are changes with very little impact on our employees," Senior Vice President for Finance and Administration Bill Decatur said after the BPC met this morning. "In fact, the mandatory generic drugs and the mandatory mail order for maintenance drugs are no cost to our employees, and it saves the university a projected $800,000. The other two changes are just fundamental fairness issues."
The resolution calls for using a portion of those savings to fund Healthy Ohio wellness initiatives in the next fiscal year, including health risk appraisal, disease management measures and Wellworks membership incentive programs. These measures would cost about $400,000, but, according to Director of Benefits Greg Fialko, would generate significant future savings.
"We're investing in employee health for a return on investment down the road," Fialko said.
Under the $3 million and $5 million scenarios, employees' premium, co-insurance and co-pay costs would rise. Fialko said the committee, in recommending that increases be distributed across all of these costs, wanted to balance the amount that everyone would have to contribute against what would be borne only by those who use the benefit. The committee advocated keeping increases to co-pays small so that no one would be discouraged from visiting a doctor, he added.
Decatur stressed the importance of having these contingencies in place in light of unprecedented state revenue shortfalls.
"This is a first step. We're not going to know the true budgetary challenge until we see the governor's budget, and even then it's important to emphasize that the budget's not done until the House and Senate pass it and the governor signs it," he said.
"I think it's important to recognize that there are tradeoffs with all of these," he said. "Depending on the size of the budget reductions required, we're talking about jobs. Increasing health care costs for all of us is a shared sacrifice to preserve the jobs of others."
In addition to the reduction scenarios, the committee also presented recommendations for increasing the quality of health care. These include suggestions for improving vision, dental and mental health coverage and an expansion in coverage for dependents who are full-time students from age 23 to age 25 with a $50 monthly surcharge.
The committee further recommended adding benefits or enhancements that employees could pay for themselves, such as higher life insurance benefits and short-term disability or long-term care coverage.
Members of the BPC were asked to share the recommendations with their respective constituencies. After the governor releases his budget next week, the BPC will work to make a recommendation by the end of February to President Roderick J. McDavis about which of the many contingencies should be implemented.
Decatur emphasized that the health care recommendations are among many options on the table to help the university face budgetary challenges in the next fiscal year. The university also will consider, among other things, recommendations from the executive staff and academic deans' working groups for increasing efficiencies and planning-unit reductions if necessary.
"All these things that we're looking at are giving us a menu of alternatives to help us balance our budget," he said. "We've been planning for the worst and hoping for the best. Next week (with the release of the governor's budget), we'll find out what the situation is."
See the full range of Health Benefits Committee recommendations here in PDF format.