Insurance change to save Southeast Missouri State University $1.1 million

A change in health insurance providers will save Southeast Missouri State University more than $1 million next year, but it comes at some cost for the institution's employees.

The university's board of regents last week awarded the 2011 medical insurance package to United Healthcare, a bid that came in $1.6 million cheaper, or 13 percent lower, than Southeast's current employee health plan under Anthem Blue Cross and Blue Shield. After factoring in the costs of employee plan subsidies, the total savings is about $1.1 million.

Next year, U.S. employers are expected to see an average premium increase of 8.8 percent, according to a survey by human resources consultant Hewitt Associates. Southeast's current provider quoted a 6 percent increase for next year, above this year's approximately $7 million health care plan.

"The good news is we are able to put $1.1 million toward our budget-cutting goals to deal with declining state budget appropriations and at the same time we haven't had to make drastic changes to our employee benefits," said Kathy Mangels, vice president for finance and administration.

Under the new coverage plan, the university will continue to provide 100 percent of employee premiums, Mangels said. Southeast employs about 1,100 faculty and staff members. The plan still includes a health savings account, or cafeteria plan dollars to be used for medical incidentals or to help pay down the deductible. For employees with the higher deductible Plan B, the account would cover $750 of the $1,500 individual deductible. The accelerated Plan A has a $500 deductible.

Striving to lure more families into the system, the university will offer premium supplements -- $75 a month for spouses, $200 monthly for family coverage. Currently, 44 families are enrolled between the university's two medical insurance plans. The insurance subsidies should serve as a faculty recruitment tool, university officials say, and building enrollment can only drive down costs.

"From a long-term strategy perspective, if you can expand the group you cover and bring in younger folks, children tend to be healthier, you don't have as many claims. So utilization goes down, and that helps control premiums over time," Mangels said.

Southeast also will invest a portion of the insurance premium savings into supplementing employee costs in upgrading plans. For instance, employees earning less than $27,000 per year would pay 25 percent of the difference in premiums in moving from Plan B to the lower deductible Plan A, or about $22 a month.

Amy Wallhausen is in that income category. The Department of English secretary said she's disappointed that she has to pay more out of pocket, but she said she's paying for a preference.

"You're going to pay for it somewhere or another," Wallhausen said. "Me personally, I'd rather pay it a little bit monthly to have a lower deductible."

When the university is forced to trim its budget by more than $7 million in the next two years and students are seeing increased fees, it's the employees' turn to feel some of the pain, she said.

And more hurt is expected. Paul Wagner, deputy commissioner of the Missouri Department of Higher Education, in August warned that higher education should expect to lose as much as $250 million in next year's budget.

Southeast history professor Eric Clements agreed rising employee costs are a reality of health care. A Kaiser Family Foundation survey found employees' share of premiums for a family plan this year is up an average 14 percent, to $3,997.

"I do have a job. With 10 percent unemployment, at some level, I have to be optimistic about that," said Clements, a new member of Southeast's Faculty Senate. "There's going to be some sacrifice."

The real sacrifices under the plan will be in the depth of hospital providers. United Healthcare's network includes Southeast Missouri Hospital but not Saint Francis Medical Center, while the previous provider had both. Two regents with ties to Southeast Missouri Hospital, Al Spradling III and Jim Limbaugh, abstained from the vote.

The board of regents also approved changes to sick leave and other employee benefits. The university will move from basic sick leave to an accrual system, a move that could diminish short-term disability income for some employees. Like a growing list of employers, the university is moving to a paid time off system, rolling time into one bank.

Southeast has scheduled a series of meetings with employees over the next couple of weeks.

mkittle@semissourian.com

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