Proposed Benefit Design
Changes
Faculty and Staff Brown Bag Luncheon
October 13, 2010
Timeline

Spring 2010 – Subcommittee recommended the
following goals:
– 0% cost increase for University paid benefits
– Consider options for family-friendly medical plan designs

Summer 2010 – Benefits Consultant (JW Terrill)
– Summary of Findings:
 Above average benefit plan designs compared to market
 Very generous cafeteria plan funding
 Very generous paid sick leave benefits
Benchmarking
Employee Contribution Percentage
Timeline (continued)

Summer 2010 – Benefits Consultant (JW Terrill)
– Recommendations:
 Consider family-friendly medical plan option
 Implement employee contribution for the low deductible
medical plan
 Reduce paid leaves and include a paid time off leave bank
 Reconfigure paid sick leave program and implement a short
term disability plan

August 2010 – Request for Proposals (RFP’s)
– Medical/Rx, dental and vision insurance coverages
– Medical/Rx RFP results:
 Anthem: proposed cost increase
 Two other bidders: proposed cost decreases
Recommendations:
Medical Insurance

Change to United Healthcare
– 13% decrease in employee only premium
– Reduces Pre-Medicare retiree premiums to the active
employee premium - 43% decrease in premium

United Healthcare proposal overview:
–
–
–
–
Same deductible/cost share levels
Rx copays
Good provider network
Health Savings Account (HSA) banking option
Recommendations:
Medical Insurance

Convert Medical Plan B into Base Plan
– Employee premium 100% paid by University
– $750 in cafeteria plan funding
– After $1,500 deductible…$10/$30/$50 Rx
copays
– Implement University supplement for
dependent premiums
 Spouse = $75/month supplement
 Child(ren) = $100/month supplement
 Family = $200/month supplement
Recommendations:
Medical Insurance

Convert Medical Plan A into Accelerated Plan
– Employee contribution to employee only premium
based on your previous year’s reported Form W-2
Medicare wages (box 5)
<$27,000
$27,000 $44,999
$45,000 $69,999
$70,000 +
$22/month
$45/month
$67/month
$90/month
– $250 cafeteria plan funding
– $10/$30/$50 Rx copays, not subject to deductible or
cost share
– MRA will be available
United Healthcare
2011 Employee Monthly Premiums
Base Plan
Accelerated Plan
(Formerly Plan B)
(Formerly Plan A)
Monthly Premium
Employee
$0.00 *
Monthly Premium
Employee
$22.00 **
Spouse
$331.13
Spouse
$527.00 **
Child(ren)
$232.29
Child(ren)
$435.18 **
Family
$501.50
Family
$894.27 **
* 100% Paid by University
(Dependent rates are net of
University supplement.)
** Employee only contribution will
range from $22 to $90 per month
based on salary.
Recommendations:
Medical Insurance

Base Plan: How University supplements
and Cafeteria Plan Funding apply
Spouse Coverage
Children Coverage
Family Coverage
$406.13 premium
- $75.00 Supplement
- $62.50 Cafeteria Plan
$268.63 Adjusted premium
$332.29 premium
-$100.00 Supplement
- $62.50 Cafeteria Plan
$169.79 Adjusted premium
$701.50 premium
- $200.00 Supplement
- $62.50 Cafeteria Plan
$439.00 Adjusted premium
(34% premium savings)
(49% premium savings)
(38% premium savings)
United Healthcare
2011 Retiree Monthly Premiums
Base
Plan
(Formerly
Plan B
Current
Premium
Base
Plan
Accelerated
Plan
Accelerated
Plan
New
Premium
Current
Premium
New
Premium
Pre-65
Retiree
$683.42
$369.22
*
*
$800.93
$459.09
Spouse
$683.46
$406.13
*
$800.93
$505.00
Children
$512.63
$332.29
*
$600.69
$413.18
$1,196.07
$701.50
*
$1,401.64
$872.27
Post-65
Retiree
n/a
n/a
*
*
$404.90
$387.29
Spouse
n/a
n/a
*
$404.88
$426.02
Children
n/a
n/a
*
$303.67
$348.56
Family
n/a
n/a
*
$708.57
$735.85
Family
(Formerly
Plan B)
(Formerly
Plan A)
(Formerly
Plan A)
Recommendations:
Medical Insurance

Due to significant cost decrease in
UnitedHealthcare’s proposal, eliminate
University subsidy for pre-Medicare retiree
premiums.
– Current retirees receiving these subsidies will
be grandfathered
Recommendations:
Dental and Vision Insurance

Dental Insurance
– Continue with Delta Dental of Missouri
– Same coverage levels
– 6.6% premium increase
– One year rate guarantee

Vision Insurance
– Continue with Vision Service Plan (VSP)
– Same coverage levels
– 6% premium increase
– Four year rate guarantee
Recommendations:
Paid Leaves – Effective 1/1/2011

Implement Paid Time Off (PTO) System
– Retain current paid energy conservation days
– Retain current paid vacation accrual schedule
– Combine energy conservation days and
vacation days accrual into PTO
– PTO accrual maximum at 240 hours
– Provides employee flexibility
No change in paid holidays
 Eliminate vacation buyback

Recommendations:
Paid Leaves – Effective 1/1/2011

Implement Paid Sick Leave Accrual System
– Starting banks based on past 10 years’ sick
leave usage, up to 120 hours per year credit
with 1,040 hours maximum
– Unverified Sick Leave
 Staff: Accrue 8 days annually
 Faculty: Accrue 6.64 days annually
 Unused leave each year to carry over into verified
sick leave bank
– Qualifies for up to 6 months of
additional service credit under
MOSERS
Recommendations:
Paid Leaves – Effective 1/1/2011

Implement Short Term Disability Plan
– To be administered by a Third Party Administrator
– 30 Day Elimination Period (use Verified Sick Leave
and PTO)
– Followed by Short Term Disability Paid Sick Leave at
60% pay
– Transition plan for current employees will apply
Calendar Days
30
Days
Elimination
Period
60
Days
90
Days
120
Days
150
Days
180
Days
Short Term Disability Paid Sick Leave
@ 60% Pay
Projected Cost Savings
Action
Amount
Medical Insurance:
Reduced Employee Medical Premiums
$1,638,887
University Supplements
($703,345)
Approximate Medical Insurance Savings:
$935,542
Paid Leaves:
Short Term Disability program and administration
cost
Eliminate Vacation Buyback
$130,392
$85,000
Approximate Paid Leaves Savings:
$215,392
Less MOSERS increase for FY12
($80,000)
Approximate Total Net Savings:
Total Net Savings is equivalent to an approximate
$6-$7 per hour incidental fee increase for students.
$1,070,934
Next Steps
Date
Action
October 22, 2010
Board of Regents Meeting
Week of October 25, 2010
Award medical, dental and vision
insurance contracts
Weeks of November 1 and 8, 2010
Employee and Retiree Benefits Open
Enrollment Meetings
November 15-30, 2010
Benefits Open Enrollment Period
December 2010
Submit enrollment files to insurance
carriers
January 1, 2011
Benefit plans effective date