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Sustainable Benefits
Task Force
Town Hall Meetings
April 2011
Town Hall Agenda
• Review SBTF Membership & Charge
• Outline what we have learned:
• Cost of USF Benefits
• Healthcare Reform
• Comparative Data
• USF Survey
• Other practices & market trends
• Present options under consideration
•Q&A
"Let me state unequivocally that the university
administration has no pre-conceived notions about
how to address the skyrocketing cost of our benefits
package. We have convened the 17-member
Benefits Task Force as a first and vital step in helping
the university provide a solid benefits package that
helps us recruit and retain talented faculty and staff,
and one that is sustainable long-term, which the
current benefits package is not.“
— Stephen A. Privett, S.J. , President
Who are we?
SBTF Membership
Job Title
Sal Aceves
Annmarie Belda
Shawn Calhoun
Sr. Ellene Egan, RSM
Beth Forest
Blake Grenier
Judith Karshmer
Kim Kvaal*
Gary McDonald
Shirley McGuire*
Elliot Neaman
Terry Patterson
Sheila Sullivan
Marlene Tom
Mary Wardell
Brian Weiner
Paul Zeitz
Vice Provost
Program Assistant
Associate Librarian
Assistant Professor
Senior Systems Analyst
Senior Director, Operations
Dean
Associate Vice President
Associate Vice President, Public Relations
Professor
Professor
Professor
Executive Director, Undergraduate Programs
Director, Web Communications
Associate Vice Provost
Professor
Professor
Division / College
Planning and Budget
Arts and Sciences (OPE Rep)
Gleeson Library
Nursing
ITS
School of Law
School of Nursing
Business and Finance
University Advancement
Arts and Sciences
Arts and Sciences
School of Education
BPS
Academic and Enrollment Services
Diversity, Engagement, & Outreach
Arts and Sciences
Arts and Sciences
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* co-chairs
SBTF Staff
Staff to the Task Force
Donna Davis
Martha Peugh-Wade
David Philpott
Diane Sweeney
Mary Kay Lopez
General Counsel
Assistant Vice President, Human Resources
Director, Employee and Labor Relations
Assistant Director, Compensation & Benefits
Senior Consultant
Office of the General Counsel
Office of the General Counsel
Office of the General Counsel
Office of the General Counsel
Towers Watson
What is our charge?
SBTF Charge
The Task Force will recommend actions with a
goal of maintaining a competitive employee
benefits package for full-time faculty and staff at
a lower cost to the University.
SBTF Charge
Specifically, by May 2011, the task force will:
•Gather input from the community
•Review benefits data
•Make recommendations to the President’s
Cabinet consistent with the following principles:
• Competitive
• Innovative
• Financially Sustainable
What have we learned:
Benefits costs
Benefit Cost
The cost of benefits has grown disproportionally to
salaries over the last ten years.
On average, salaries have increased by 6.07%
annually, while benefits have increased by an
average of 9.03% annually.
Currently, USF spends 39 cents on benefits for
every $1 of salary for full time faculty and staff.
What have we learned:
Health care reform
HC Reform: Three critical time periods
Pre-Exchange
2010 – 2013
Compliance and
Compliance
and
Opportunity Assessment
Opportunity
•• Comply
withwith
mandates and
Comply
Assessment
reporting
mandates and
• Quantify impacts
• reporting
Examine opportunities
– Mitigate cost
trend
• Quantify
impacts
– Optimize value
• Examine
– Consider accelerated exit
for retirees
opportunities
– Positioning for 2014 and
2018
Post-Exchange
2014 – 2017
Excise Tax
2018
Redefining the
Revisit Plans
Redefining
the
Delayed
Exit or
Employer Role
Employer Role
Differentiated Play
•• Play
or Pay plans are • Excise tax
Employer
– Pay — and revisit total
evaluated
in terms
exacerbates plan
rewards plus workforce
resources
ofhealth
“value”
and
costs
– Play, but with a tests
“affordability”
• Employers may
differentiated view
• Employers
may
revise plans
• Low-wage workers
revise
plans
• Dependent
subsidization
– Execute retiree strategy
What have we learned:
Comparative data
Comparative Data: Study 1
Overall Findings from Aon Consulting Study comparing
USF to 12 other universities:
USF offers a very competitive benefits program.
USF's overall benefits are substantially better than the
peer group.
Comparative Data: Better than Peers
Medical Plans:
•Legally Domiciled Adult (LDA) eligibility
•HMO/Kaiser – fully insured plan
• family tier employee contribution
• hospital coinsurance
• Rx drug benefit & Rx drug mail order plan
•PPO/Blue Cross – self insured plan
• employee-only tier and family tier contribution
• plan deductible
• overall plan design, including co pay and coinsurance
• out-of-pocket maximum (best in peer group)
• Rx drug benefit & Rx drug mail order plan
Comparative Data: Better than Peers
Dental Plan
• Employee contribution
• Overall plan design
• Individual plan deductible
Vision Plan
• Family tier contribution
• Overall plan design
Tuition Remission
• Overall plan design
• Dependent and LDA coverage
•Type of degrees
• # of degrees
• Waiting period
Comparative Data: Better than Peers
Short Term Disability
•Benefit percent
•Total benefit
Long Term Disability
•Monthly benefit maximum
Employee Assistance Program
•Number of sessions
Retirement
•Contribution formula
Comparative Data: Comparable to Peers
Life Insurance
Vacation and Holiday Benefits
Comparative Data: Less than Peers
Medical Plans
•Types of plans and plan choices
•Waiting period
Long Term Disability
•Benefit percent
Retirement
•Vesting period
Comparative Data: Study 2
Towers Watson health care study:
• Providing PPO and HMO options is in line with
other institutions, but Account Based Health Plans
are becoming more prevalent.
• More employers are using four tiers to spread the
costs of contributions more equitably, compared to
USF’s three tiers.
Comparative Data: Study 3
The Advisory Board Company analyzed 2 yrs of USF
medical claim data for the Blue Cross plan
• USF is higher than higher ed (by 65%) and national (by 108%)
benchmarks in spending/person on medical and pharmacy costs
• Significant variability in USF medical costs due to high cost claims
• Use of specialty drugs (prescriptions that cost over $600 each)
increased by 33% in one year
• Use of generic (or therapeutic equivalent) drugs is lower than
other universities
What have we learned:
USF Benefits Survey
USF Benefits Survey
•
•
•
•
•
Conducted by Towers Watson Consulting Group
Dates: January 31st to February 13th
Number of respondents = 660 or 57%
91% of surveys passed a validity test
600 responses included in final analyses
USF Benefits Survey: Conjoint Qs
• Highest relative sensitivity to changes in:
– Health care plan deductible
– Health care plan contribution
• Moderate relative sensitivity to changes in:
– Health care plan provider network
– Health care plan type
– Retirement contributions and matching
• Lowest relative sensitivity to changes in:
–
–
–
–
Health care plan pharmacy limits and co-pays
Wellness program incentives
Health care plan spousal/LDA surcharge
Tuition remission limits
USF Benefits Survey
• Avg. satisfaction rating of USF benefits package = 8.6
• 95% = satisfied with the current USF benefits
• 82% = USF benefits comparable to other organizations
where they could find a job and package is competitive
• 86% = benefits package an important reason why they
stayed at USF
• These results were consistent across the different
demographic groups.
USF Benefits Survey
• 56% = little interest in a high-deductible health plan
• 68% = interest in plan w/no co-pay for maintenance
medications + a disease management program
• 51% = interest in reduced heath care provider
network + reduced their payroll contribution
• 62% = interest in revised dental plan that includes
coverage for adult orthodontia and implants
USF Benefits Survey
Top rankings for benefits in the “other” category:
– Long-term disability and Vision (Tied for 1st at 65%)
– Long-term care insurance (46%)
– Commuter checks and Emeriti retiree health (Tied for 3rd at
39%)
– Tuition exchange (33%)
– Additional life insurance (28%)
**Child care subsidy was inadvertently excluded from the survey**
What have we learned:
Other practices and
market trends
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Practices and Market Trends
Changes that employers are considering include:
– Consolidation or replacement of vendors
– New financial or performance standards for their health
plans
– Introduce high deductible plan (e.g., Account Based Health
Plan)
– Increase the percent share of premiums paid by employee
and dependents
– Increase deductibles, co-pays, coinsurance, out-of-pocket
limits
– Use of spousal waivers or surcharges
Practices and Market Trends cont.
–
–
–
–
Increasing the # of tiers in health plans
Increase employee’s cost of brand and generic drugs
Participate in pharmacy purchasing collaborative
Reducing/eliminating employer subsidy for retiree medical
coverage (esp. those eligible for Medicare)
– Offering an employer match in retirement
– Automatically enrolling employees into 403(b) retirement
plans
– Provide incentives to engage in health-related programs
(e.g., wellness, target behavioral outcomes, health risk
assessment, & disease management)
Options
under consideration
by the USF SBTF
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Options: Health Care
Add an Account Based Health Plan option
• Cover 100% of preventive care
• High-deductible that could be offset with Health
Savings account (which the employee owns and
balance rolls over)
• Coinsurance after deductible + maximum for out-ofpocket expenses offers protection to those with
serious conditions
Options: Health Care
Add an Account Based Health Plan option
Impact:

In addition to HMO & PPO -> provides more choice

Allows flexibility

Consumer-driven -> accountability & efficiency

Portable

High deductible could be difficult for those with limited
funds

Education about health care choices needed

Savings for USF depends on migration into the plan
Options: Health Plans
Increased co-pay for lab work at hospital
instead of low cost lab (PPO/Blue Cross only)
Impact:
• Provides choice
• Greater efficiency
• Consumer driven approach
• Can lead to savings for USF and employee
• Potential higher cost for employee
• Inconvenience
• Administrative burden on USF to manage lab contract
Options: Health
Create “High” and “Low” plans for Blue Cross
– High:
• Higher paycheck contribution
• Lower deductible, coinsurance, & annual OOP max
– Low:
• Lower paycheck contribution
• Higher deductible, coinsurance, & annual OOP max
Impact:
• Provides more choice
• More contribution -> richer plan
• Increase in administrative burden
Options: Health
Consider a spousal/LDA surcharge for using
USF benefits for those with healthcare
coverage options outside of USF
Impact:
• Still allows access to USF plan
• Cost savings for USF
• Reduces overall USF medical claims
• Potential higher cost for employee
• Increase in administrative burden
Options: Health
Add a fourth tier to benefits coverage:
– Keep “Employee”
– Keep “Employee + spouse/LDA”
– Divide “Employee + family” into
• “Employee + children”
• “Employee + spouse/LDA + children”
Impact:
– Contributions based on family size -> more equitable
– Contribution will decrease “E + children” and increase
for “E + spouse/LDA + children”
Options: Health
Simplify employee contribution methodology
through standardizing rates and salary bands
Impact:
• Equality and balance
• Decrease administrative burden
• Contributions will change, with some increasing and
others decreasing
• Require working across multiple groups to bring the
rates together
Options: Health
Bring USF employee contributions for health
plan closer to market value
Impact:
• Will increase employee contributions for some
• Cost savings for USF
Options: Health
Create pharmacy formulary with co-pay
differential for drugs
Impact:
• Cost savings for USF
• Consumer driven
• Education about plan is needed
• Individual with serious conditions may pay more for
existing drugs
Options: Health
Introduce step therapy for drugs (w/MD ability to
override use of generic)
Impact:
• Consumer driven
• Potential to lower employee and USF costs
• Education needed about plan
• Inconvenient for some – includes more steps
Options: Health
Change the heath plan waiver to encourage
those with other coverage options to migrate
out of USF plan
Impact:
• Savings through migration
• Could reduce cost claims in future
• Some options require initial USF costs until break
even point
Options: Health
Make USF employee contributions for dental
plan closer to market value
Impact:
• Will increase employee contributions
• Cost savings for USF
Options: Health
Create “High” and “Low” plans for Dental Plan
– High:
• Paycheck contribution
• Increased plan annual maximum + provide adult
orthodontia and dental implant benefits
– Low:
• No paycheck contribution
• Current plan with narrower provider network
Options: Health
Create “High” and “Low” plans for Dental Plan
Impact:
• Provides more choice
• Higher contribution -> richer plan
• Add benefit while controlling USF costs
• Increase in administrative burden
• Network restricted for some
Options: Health
Provide a wellness strategy and incentives
administered by third-party to ensure
confidentiality
Impact:
• Encourages engagement in healthy behavior
• Long-term savings through better employee health
• Few short-term savings
• Cost of incentives
• Added administration costs
Options: Health
Increase life insurance
Impact:
• Additional coverage for employee
• Additional cost to USF
Options: Tuition Remission
Require a waiting period & remove payback
Impact:
• Ensures stability/tenure prior to benefit
• Inline with other institutions
• Current employees could be impacted
• Influence employee recruitment
• Removing payback -> administratively easier, but
USF loses investment
Options: Tuition Remission
Consider limiting eligibility (e.g., type of
program, # of degrees, benefit amount) for
employee and/or their dependents
Impact:
• Cost savings to USF
• Brings USF in line with peer institutions
• Could influence employee retention
• Could influence employee recruitment
Options: Other
Change income basis for child care subsidy
from employee salary to family income
Impact:

More equitable distribution of benefit

Some employees could lose benefit

Could influence retention & recruitment

Concerns regarding privacy & administration
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Options: Other
Reduce funding amount for child care subsidy
Impact:
• Cost savings for USF
• Reduction of benefit for employee
Options: Other
Provide funds for secondary caregiver
Impact:
• Added coverage for employee
• Cost to USF
• Increase in administrative burden
Options: Other
Require employee participation in commuter
check benefit and add direct deposit to Clipper
Card which is used to pay for Bay Area transit
Impact:
• More efficient
• Aligns benefit with use
• Cost to USF
• Employee must participate through pre-tax payroll
deduction
• Decrease in administrative burden with Clipper Card
Options: Retirement
Add auto enrollment for employees (with or
without auto escalation)
Impact:
• Potential for increased savings for employee
• More employee participation
• Employee will need to opt out to stop contribution
• Increase in administrative burden
Options: Retirement
Consider increasing benefit through adding
employer match and/or employee contribution
Potential Impacts:

Higher retirement balance for employee

Reduced employer contribution
Additional Considerations
Heath:
• Systematically continue to review health plan
providers and practices
• Investigate on-campus health services in
connection with student health initiative
• Review LDA definition
Retirement:
• Investigate other vendors
• Review # of investment options
l
Q&A
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