Agenda Item No. V. A. 4.

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, 2001. Attachment 1 is a summary sheet and comparison of the proposed rates of the three plans; as well as proposed options. Attachment 2 is a comparison of the changes in coverage for each option.

The Benefits Committee has reviewed a number of options for the purpose of minimizing the increase in costs for both the University and employees. Of the options considered, the Committee recommends Option A1 (changes only in the drug costs and the University contyribution toward the Plan III family coverage).

Option A1 is being recommended for several reasons. First, it continues to give employees choices about the level of drug coverage they obtain. Second, while options A, A1 and B give the employee a choice in levels of drug coverage, and Option B aactually has lower increases in premiums across the Board, Option B raises the deductibles and co-pays to levels that will create hardships for some employees. Finally, increasing the amount the University contributes toward the family coverage on the Plan III will help offset the largest premium increases for the lower compensated employees, and make the increases comparable to the other plans.

The renewal rates are based upon continuation of the three previously approved health plans (I -- Shared Pay, II -- Comprehensive, and III -- Blue Select). Premium costs are based upon continuation of the University paying the single premium at the Plan II rate, and a portion of the family health premiums for those employees with annual salaries less than $45,750.

 

FINANCIAL IMPLICATIONS:

The estimated FY 2002 costs are approximately $2,722,700 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.

____________________ ___________________________

(date) Jerry B. Farley, President

 

Salary > 43,000 ($45,750) Current No Change Option A Option A1 Option B
0% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 505.27 589.63 16.7% 548.03 8.5% 548.03 8.5% 531.91 5.3%
Family - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 445.65 525.78 18.0% 487.23 9.3% 487.23 9.3% 462.51 3.8%
Family - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
0% Univ.
Family - employee payment 352.75 504.88 43.1% 445.98 26.4% 445.98 26.4% 424.61 20.4%
Family - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
Salary <= 43,000 ($45,750) Current No Change Option A Option A1 Option B
10% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 460.70 537.05 16.6% 499.31 8.4% 499.31 8.4% 485.66 5.4%
Family - university payment 334.40 403.10 20.5% 373.54 11.7% 373.54 11.7% 354.59 6.0%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 401.08 473.20 18.0% 438.51 9.3% 438.51 9.3% 416.26 3.8%
Family - university payment 334.40 403.10 20.5% 373.54 11.7% 373.54 11.7% 354.59 6.0%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
12% Univ.
Family - employee payment 308.18 452.30 46.8% 397.26 28.9% 387.51 25.7% 378.36 22.8%
Family - university payment 334.40 403.10 20.5% 373.54 11.7% 383.29 14.6% 354.59 6.0%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
Salary <= 37,000 ($39,500) Current No Change Option A Option A1 Option B
20% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 416.14 484.47 16.4% 450.58 8.3% 450.58 8.3% 439.41 5.6%
Family - university payment 378.96 455.68 20.2% 422.27 11.4% 422.27 11.4% 400.84 5.8%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 356.52 420.62 18.0% 389.78 9.3% 389.78 9.3% 370.01 3.8%
Family - university payment 378.96 455.68 20.2% 422.27 11.4% 422.27 11.4% 400.84 5.8%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
24% Univ.
Family - employee payment 263.62 399.72 51.6% 348.53 32.2% 329.04 24.8% 332.11 26.0%
Family - university payment 378.96 455.68 20.2% 422.27 11.4% 441.76 16.6% 400.84 5.8%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
Salary <= 31,000 ($33,000) Current No Change Option A Option A1 Option B
30% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 371.57 431.90 16.2% 401.86 8.2% 401.86 8.2% 393.16 5.8%
Family - university payment 423.53 508.25 20.0% 470.99 11.2% 470.99 11.2% 447.09 5.6%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 311.95 368.05 18.0% 341.06 9.3% 341.06 9.3% 323.76 3.8%
Family - university payment 423.53 508.25 20.0% 470.99 11.2% 470.99 11.2% 447.09 5.6%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
36% Univ.
Family - employee payment 219.05 347.15 58.5% 299.81 36.9% 270.58 23.5% 285.86 30.5%
Family - university payment 423.53 508.25 20.0% 470.99 11.2% 500.22 18.1% 447.09 5.6%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
Salary <= 25,000  ($26,750) Current No Change Option A Option A1 Option B
40% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 327.01 379.32 16.0% 353.14 8.0% 353.14 8.0% 346.91 6.1%
Family - university payment 468.09 560.83 19.8% 519.71 11.0% 519.71 11.0% 493.34 5.4%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 267.39 315.47 18.0% 292.34 9.3% 292.34 9.3% 277.51 3.8%
Family - university payment 468.09 560.83 19.8% 519.71 11.0% 519.71 11.0% 493.34 5.4%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
48% Univ.
Family - employee payment 174.49 294.57 68.8% 251.09 43.9% 212.11 21.6% 239.61 37.3%
Family - university payment 468.09 560.83 19.8% 519.71 11.0% 558.69 19.4% 493.34 5.4%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
Salary <= 19,000 ($20,500) Current No Change Option A Option A1 Option B
50% additional paid by University 2000-01 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr 2001-02 pct incr
Plan I
Single - employee payment 21.13 25.54 20.9% 24.32 15.1% 24.32 15.1% 19.70 -6.8%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 310.96 376.06 20.9% 349.14 12.3% 349.14 12.3% 328.04 5.5%
Family - employee payment 282.44 326.74 15.7% 304.41 7.8% 304.41 7.8% 300.65 6.4%
Family - university payment 512.66 613.41 19.7% 568.44 10.9% 568.44 10.9% 539.60 5.3%
Total Monthly Premium 795.10 940.15 18.2% 872.85 9.8% 872.85 9.8% 840.25 5.7%
Plan II
Single - employee payment 0.00 0.00 0.0% 0.00 0.0% 0.00 0.0% 0.00 0.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Family - employee payment 222.82 262.89 18.0% 243.61 9.3% 243.61 9.3% 231.25 3.8%
Family - university payment 512.66 613.41 19.7% 568.44 10.9% 568.44 10.9% 539.60 5.3%
Total Monthly Premium 735.48 876.30 19.1% 812.05 10.4% 812.05 10.4% 770.85 4.8%
Plan III
Single - employee payment -30.94 -8.36 73.0% -16.50 46.7% -16.50 46.7% -15.16 51.0%
Single - university payment 289.83 350.52 20.9% 324.82 12.1% 324.82 12.1% 308.34 6.4%
Total Monthly Premium 258.89 342.16 32.2% 308.32 19.1% 308.32 19.1% 293.18 13.2%
60% Univ.
Family - employee payment 129.92 241.99 86.3% 202.36 55.8% 153.64 18.3% 193.35 48.8%
Family - university payment 512.66 613.41 19.7% 568.44 10.9% 617.16 20.4% 539.60 5.3%
Total Monthly Premium 642.58 855.40 33.1% 770.80 20.0% 770.80 20.0% 732.95 14.1%
All University premium payments are based upon the Plan II level premiums
*Additional University payment toward family premiums is based upon employee salary.


  Current Option A Option A1 Option B
Plan I          
Deductible none none none none
Copay 50% to 250/500 no change no change 50% to 500/1000
Drugs 3/5 - 3 5/15 - 10/30 5/15 - 10/30 5/15 - 10/30
Plan II        
Deductible 200/400 no change no change 400/800
Copay 20% to 400/800 no change no change 20% to 500/1000
Drugs 5/10 - 5 10/20 - 20/40 10/20 - 20/40 10/20 - 20/40
Plan III        
Deductible 100/200 no change no change 200/400
Copay 20% to 500/1000 no change no change 20% to 1000/2000
Drugs 5/15 - 5 15/30 - 30/60 15/30 - 30/60 15/30 - 30/60
Option A increases drug costs on each plan
Option A1 increases drug costs on each plan and University contribution toward Plan III family coverage
Option B increases drug costs, deductibles and copays on each plan
Definitions: Deductible - individual/family
Copay - % paid by insured to max - max for individual/family
Drugs - generic/name brand - mailorder (generic/name brand)

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