University of Oklahoma
EMPLOYMENT BENEFITS COMMITTEE
NEL 215
July 16, 2015
Present:
Committee Members:
Don Clothier
Vincent Leseney
Tricia Rahal
Karen Rupp-Serrano
Gordon Shaw
Debbie Copp
Krista Petterson
Renda Passek
Will Wayne
Suzanne Harrell
Terri Lunday
Joel Burcham
Michael Kramer
Breion Rollins
Lindsay Mitchell
Les Hoven
Others:
Angela Hawpe
Jessica Cadotte
Approval of Minutes
(Leseney) Motion to approve minutes with correction.
(Burcham) 2nd the motion
Motion passed. Minutes approved.
MetLife Rate Letter
(Clothier) Some retirees received a letter from MetLife informing them of a rate increase. MetLife was
offered in conjunction through TIAA-Cref many years ago. However, the University was never involved in
this plan therefore we have no influence on rate changes.
(Hawpe) A similar letter has come through several other sources. It is likely that OU employees and
retirees will see letters from CNA next summer as well.
2016 Benefits
(Hawpe) At the end of June the reserve accumulation was over $10 million which was approximately $2
million above our projections. Norman claims exceeded $3 million in May and April, the majority of
claims were attributable to prescription drug claims. From 2014 to 2015 there has been a 19% increase
per member per month.
Utilization of generic drugs is increasing. Less than 0.5% of total claims account for more than 20 % of
the total spend. Specialty drugs for diseases such as high cholesterol and Hepatitis C are driving the cost
increase. We are considering strategy to extend partial fills for certain high cost drugs.
The annual benefit plan renewal for the PPO and High Deductible plans is projected increase around
4.1%. The Medicare plan is projected to increase 22% and the HMO is projected to increase 13.9%.
(Copp) Do these projections include claims experience from June?
(Hawpe) Those increases represent claims experience from January through May and do not include
June. May claims where around $3.3 million for Norman and $2.2 million for HSC in the PPO and High
Deductible plans. The HMO will see a significant increase this year and is expected to have more
migration out of the plan as a result.
The Dental Plan is performing well and the rates will continue to hold for the 2016 renewal. There is no
update for the renewals on the Vision, Life, AD&D and LTD plans as of yet.
The Benefits Office is looking at possible options for changing the health plans. These options could
include replacing the HMO with a copay based PPO and creating a hybrid plan design and converting the
current High Deductible HRA plan to an HSA option. The HSA would allow employees to save money for
medical coverage as it will roll over from year to year. The money would be fully portable and could also
be used as a funding vehicle for employee retirement medical costs. There is also a tax benefit to the
employee for utilizing the HSA plan option.
(Passek) Is there interest that can be earned on an HSA?
(Rollins) Interest could be earned if the plan was structured with an investment firm.
(Hoven) As we continue to expect more migration out of the HMO plan, it is helpful to understand that
there is also been a 10% decline in enrollment year over year within the HMO. One strategy that is being
considered would be to freeze the plan in 2016 thus not allowing new enrollments.
(Lunday) Is it better for the University to not have the HMO plan as an option?
(Hawpe) The University medical contributions are based on the PPO plan participation. The Benefits
Office must be thoughtful from every angle when considering plan changes. There will be a presentation
of possible options during next month’s EBC meeting. Benefits is also considering possible options to
narrow the networks with OU Physicians and the Norman Physician and Hospital Organization.
Benefits would also like to revisit the recommendation to eliminate the subsidy waiver this year.
(Clothier) Is there any anticipation that the University Dependent Tuition Waiver Program will have an
effect on enrollment?
(Hawpe) Yes. We suspect that the program with have an impact on enrollment for 2016.
Benefits is also considering pursuing a claims audit to ensure that claims are being processed and paid at
the correct level. This has potential to save on health care costs to the University.
Another option for potential health cost savings to the University would be to carve out the pharmacy
coverage from Blue Cross and issue an RFP for a separate pharmacy vendor. We don’t know what kind
of impact this would have on our administrative fees with Blue Cross. However, going out for bid would
give the University more transparency and control.
Benefits would also like to revisit the recommendation to apply the $25 Tabaco Surcharge.
(Rollins) Discouraging the use of Tabaco products is consistent with an “outcomes” based wellness
program.
(Hawpe) Benefits will begin a communications campaign to educate employees on their health plan
options, how they work and the coordination of their benefits, giving them the tools they need to be
aware of the value of their plans.
Maintaining a data warehouse is also key to managing our self-funded plans and Benefits is investigating
what options are available to the University. Utilizing data analytics will allow us to customize programs
tailored to the OU population.
Long Term Care
(Hawpe) CNA gave notice in January that they will no longer accept new enrollments under Group Long
Term Care (LTC) for 2016. As a result, premiums will not be deducted through payroll. Current
employees may enter the plan during Open Enrollment and new employees may sign up until February
2016. It is anticipated that rates will increase in 2016, after the group contract expires.
It is not cost effective to issue an RFP for LTC as part of the for OU employee benefits program’s. We will
pursue opportunities to educate OU employees on LTC before and during open enrollment.
Communicating the changes and educating employees will be a top priority.
Retirement Update
(Rollins) Data shows that more employees are staying longer with the University before they enter into
retirement. Models are available for individuals to project their Social Security income as they get closer
to retirement.
The percent conversion is finished at the Health Sciences Center and we have seen an increase in
employees raising their percentage contribution amounts. The conversion will begin for the Norman
campus on the July check.
The next RPMC meeting will be held in August.
Wellness Update
(Mitchell) Dental screenings will be added to the health screenings at no charge from Delta Dental. This
will begin in August for both the Norman and HSC campuses. Tulsa’s Dental Screenings will begin in
October.
The Standing Desk Program communication will be sent out at the end of July. There are 100 desks
available for both HSC and Norman and 30 desks for Tulsa. There is also a 10% discount if employees
would like to purchase one on their own.
The Fun Run is set for September and online registration begins August 1st.
Update from Director
(Hoven) The recent Supreme Court ruling on the ACA allows subsidies in states with a health care
exchange set up by the federal government. In the coming weeks, we will be finalizing benefit plan
changes and recommendations to be presented to the Board of Regents.
New Business
(Hawpe) Next meeting is scheduled for August 20th. We would like to have decisions and
recommendations made by the September Regents meeting if possible.
(Copp) Motion to hold the meeting with reservation to move on an as need basis.
(Leseney) Motion seconded.
(Clothier) Motion passed.
The meeting adjourned at 3:00 pm.