From staff reports
Tight budget times are prompting Ohio University officials to look at a wide range of ways to lower costs, including health-care expenses, which this year are projected to cost the university $36.5 million.
Among the possibilities are ways to save on benefits employees have, changing some offerings and adding new benefits.
"We are looking at all options to balance the fiscal 2010 budget, including savings that could be achieved through changes in health care benefits," Senior Vice President for Finance and Administration Bill Decatur said. "This is just one thing we can do to cut university costs to balance the budget and save jobs."
Associate Vice President for Finance and Administration for Human Resources Luis Lewin shared some of the possibilities Thursday with members of the university's Administrative and Classified senates. Among items under discussion at this time are:
- Specifying that plan holders use generic drugs when available; employees could opt for a name-brand drug at an additional cost. This would save the university about $400,000 annually.
- Calling on employees to order maintenance drug prescriptions via mail to take advantage of bulk rate discounts. This also would save about $400,000 per year.
- Implementing an employee deductible, whereby employees would expend a specified amount on health care before insurance benefits would kick in.
- Implementing a surcharge for employees and dependents who smoke. Lewin said the university would depend on an honor system to identify smokers who are covered by its health care plan and administer a surcharge in the range of $50 per year. Employees who quit smoking likely would receive a refund. Such a surcharge could generate about $200,000 annually.
- Increasing employee premiums and co-pays. Last fiscal year, employees contributed about $3.6 million in premiums and $3.5 million in co-pays, co-insurance and dental coverage deductibles, while the university paid $37.5 million toward employee health care benefits.
- Changing an employee's costs according to the amount of dependents.
Lewin said the university is not just looking to reduce employee benefits, but also to improve them where needed. He said areas of the health plan that could be added or enhanced include life insurance, adoption benefits, short-term disability, long-term health care and legal services.
Health Benefits Committee member Wendy Merb-Brown, past chair of Administrative Senate, and current senate Chair Brenda Noftz said Ohio University employees receive several benefits that employees of many other Ohio schools do not enjoy.
Several Classified Senate members voiced concern about the idea of a surcharge on smokers. Adam Yulish said he believes singling out smokers would lower morale; instead, any changes should affect all employees.
At the Administrative Senate meeting, Senator Eric Clift a surcharge on smokers begs similar additional fees tied to obesity or alcohol consumption.
In addition to considering adjustments in the benefits package, the university likely will participate in a new consortium to negotiate lower prices for prescription drugs, expected to about save $600,000 annually.
Decatur said that all these ideas are just that -- ideas. Health-care benefits are among many things that advisory groups have been asked to research and analyze to help the university prepare for budgeting in an uncertain environment.
"We wanted to get a menu of things to choose from so the university is in a position to make informed decisions about how to balance the budget using data, analysis and constituent input," he said.