Agenda Item No. V. A. 1.

Washburn University Board of Regents



SUBJECT: University Health Plan Renewal



DESCRIPTION:



The University's Health Programs plan year with Blue Cross Blue Shield of Kansas is from November 1 to November 1 each year. The University has received the new renewal rates to become effective November 1, 2003. The University will continue a four tier premium schedule which, in essence, provides income adjusted family coverage based upon salary to assist lower paid staff afford family medical coverage. The university will continue two options - a base option and a buy-up option.



The Benefits Committee, along with the Consultant, Peoples Benefit Group, has reviewed the renewal information from Blue Cross/Blue Shield, and is recommending two changes to the existing coverage:



1) Current retail drug costs for Base Plan are $5 generic/$30 brand-name co-pay. It is recommended to add or 30%, whichever is greater to both the generic and name brand options. For example, if a name-brand drug costs $50, employee pays $30; $100, employee pays $30; $150, employee pays $45. The same percentage is recommended for the Buy-up plan where current retail drug costs are $5 generic/$25 brand-name.

2) Increase the Deductible, on the Buy-up plan only, from $200/$400 to $250/$500.



Recommended rates for the non-income adjusted rate tier are:





 

Renewal (recommended 2004)





 











 

Base



Buy-up





Deductible

$500/$1000



$250/$500





Coinsurance

$1000/$2000



$1000/$2000





OV Copay

$20



$15





Generic RX

$5 or 30%*



$5 or 30%*





Brand RX

$30 or 30%**



$25 or 30%***





Total Premium

 



 





Employee

$353.24

8%

$379.24

7%



Employee/Child

$693.38

8%

$739.38

7%



Employee/Spouse

$758.91

8%

$814.28

7%



Family

$1,094.08

9%

$1,168.74

7%



 











*Copayment equals $5 or 30% if greater than $5







**Copayment equals $30 or 30% if greater than $30







***Copayment equals $25 or 30% if greater than $25





The university has an active effort to manage health insurance premium evaluation. The Benefits Committee of the university enjoys the expertise of faculty conversant with insurance, long experience in benefits managements and the assistance of a trusted consultant. The adjustments to the plan are modest to control costs and the increases are comparatively low given the recent pace of escalating health insurance rates.





FINANCIAL IMPLICATIONS:



The estimated FY 2004 costs are approximately $3,689,211 and the amount budgeted is adequate to fund the increase.





RECOMMENDATION:



President Farley recommends Board of Regents approval to renew the University's health plans as modified.







____________________ __________________________

(date) Jerry B. Farley, President


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