Iowa universities retool employee insurance plans

Increasing health insurance costs have led to some benefits changes at Iowa's three regent universities, and while some employees still pay nothing toward their insurance premiums, employees are paying more in other ways such as higher co-pays for office visits and higher out-of-pocket maximums.

The costs that the University of Iowa, Iowa State University and the University of Northern Iowa pay for employee health insurance premiums have increased, ranging from 32 percent to 74 percent, from 2005 to 2010. But officials say they think recent changes in benefits plans and more focus on wellness initiatives will help curtail those increases.

“We're just trying to slow down that curve,” Richard Saunders, UI assistant vice president of human resources, said. “Costs were escalating rather substantially in the last few years and that's why we decided to retool our benefits program.”

And despite the changes to the insurances plans, a sizable number of employees at the three universities pay nothing toward their single-coverage health insurance premiums. Employees who pay nothing toward single-coverage insurance premiums number 14 percent at ISU, 34 percent at the UNI and 41 percent at the UI this year.

The universities are self-insured, so cost increases and the amounts charged for different plans reflect claims history. Employees on single-coverage plans who pay nothing toward the premium, for example, are on plans that historically cost less for the university; plans that require employee contributions toward premiums historically have higher utilization, officials said.

“We feel like we're managing our plans well for both benefits of the employees and to manage costs,” Mike Otis, associate director of human resources services at ISU, said. “We do make changes we feel are necessary.”

Benefits to public employees has been a hot-button political topic in recent months, though that was mostly focused on unionized employees.

The percentage of the premiums employees pay ranges from zero to 25 percent at ISU and UNI, and from zero to 20 percent at the UI, depending on the type of plan and if it's a single or family plan.

Working Iowans on average paid 27 percent of premium costs for family-plan coverage while their employers picked up the rest, according to a 2009 study by the Kaiser Family Foundation.

A collective bargaining bill passed by the Iowa House that died in the Senate would have mandated that public employees pay at least $100 a month toward health insurance.

That debate focused more on state employees covered by AFSCME, but it's a question that should be extended to all public employees, said John Gilliland, senior vice president of government relations for the Iowa Association of Business and Industry. It's not an issue of calling those employees out or blaming them for their benefits, he said, but rather comparing contributions to the private sector.

“It's an issue of having taxpayer-supported employees who are really outside the norm,” Gilliland said. “All we're asking is that government as an employer provide some equity with the private sector.”

State Rep. Jeff Kaufmann, R-Wilton, said via email that requiring a minimum payment toward insurance by public employees could generate money to be invested back into the institutions and universities.

University officials and employees look at salary and benefits as a total package, so better benefits sometimes are a trade-off in salary, Saunders said.

“We have to mesh the two,” he said. “If the feeling is it's important to contribute at a level of 100 percent of the single plan here, that just basically is taken into account when we have a salary allocation.”

Good benefits can be a selling point for recruiting and retention, some officials said.

From fiscal 2005 to fiscal 2010, university costs for employee health insurance premiums grew 74 percent at the UI, 48 percent at ISU and 32 percent at UNI.

The UI had several high claim years that drove the higher increase, Saunders said. With a pool of more than 11,000 covered employees, it's not unusual to have more costly situations such as organ transplants or premature babies, he said.

The UI since 2005 has made changes to its health insurance plans, Saunders said, in part to help control the rising costs. The UI offers different plans to employees now - less of a cafeteria-style plan - than it did in 2005, making it hard to compare costs during that time, he said.

Those changes and a focus on preventive wellness for employees have helped control costs, Saunders said. The larger year-to-year increases - costs went up 24 percent from 2005 to 2006 - have given way to smaller increases: 3 percent from 2008 to 2009 and 4 percent from 2009 to 2010.

Year-to-year premium cost increases have mostly been in the single digits since 2005 for ISU and UNI, but officials at both universities also have made changes to control increases.

ISU last year said employees must work half time, rather than one-third time, to get benefits, and the university increased the office visit copay on its two plans.

UNI employees on the single-coverage plan will incur some premium costs next year unless they switch to a new plan being offered, under changes being implemented there, UNI Benefits Administrator Cindy Webb said. The employee contribution on some family plans will increase under the changes, from 25 percent now to 27 percent or 28 percent, Webb said.

UNI negotiates health insurance in bargaining with United Faculty, the union that represents faculty. ISU and the UI do not have unionized faculty, and plans are set with input from campus committees.

Merit employees at the universities are covered by the state health insurance plans negotiated with AFSCME. The universities pay the state for premium costs for those employees.

UNI United Faculty President Cathy DeSoto said many employees stated a willingness to pay more toward insurance premiums in order to keep the plan options they liked in the most recent negotiations.

“Our self-insured plan is actually very cost effective,” she said. “Our surveys indicate that all faculty seem fairly willing to pay some.”