University of Kentucky
Health Benefits Task
Force
Preliminary
Recommendations
Core
Recommendations
Core Recommendations
1. The University should increase
its support for health benefits in
Fiscal Year 2003 (July 1, 2002-June
30, 2003).
Core Recommendations: Increased
support
a. In addition to funding the
underlying increase in cost of
health benefits, dedicate $5
million in net general fund dollars
and proportionate amount for
employees with health credit
from other sources, estimated
total $9.6 million.
Core Recommendations: Increased
support
Use some funds to improve current
benefit structure according to
following recommendations, but
majority of funds to increase
University’s contribution
Core Recommendations: Increased
support
b. For FY 2003,
i. No employee contribution
increase for any UKHMO family
composition tier;
ii. Employee contribution to UKHMO
employee-child(ren) and family
tiers should decrease.
Core Recommendations: Increased support
c. Family composition tier ratios:
i. Employee plus child(ren): 1.5
times employee-only rate
ii. Employee plus spouse: 2 times
employee-only rate
iii.Employee plus spouse and
child(ren): 2.5 times employeeonly rate
Core Recommendations:
Increased support
o These ratios generally reflect
norms among the University’s
benchmark institutions.
o Current family:single ratio is
1:2.79.
Core Recommendations:
Increased support
d. In FY 2003, with the change in family
composition tier ratios, keeping a
uniform contribution will move the
University towards the 90%
contribution goal, but in future years,
dependent coverage will require a
higher employer contribution.
Core Recommendations:
Increased support
e. Minority report: three task force
members support a salary reduction
of 0.5%-1% to provide more
dependent premium support in FY
2003. A salary reduction of 1% is
estimated to raise the employer
contribution to family coverage to
over 70%.
Core Recommendations
2. The University should set a goal of
funding 90% of individual, couple,
employee-child(ren), and family
coverage under a designated health
plan within 5 years.
The current median institutional
support of HMO family premiums in
our benchmark institutions is 89.1%.
Core Recommendations:
90% in 5 years
a. In addition to funding the year-to-year
increase in cost of health benefits,
the University should dedicate one
percentage point of funds available
for raises to additional employer
contribution until it is achieved.
b. Under no circumstances should
employee-only coverage be funded at
less than 90%.
Core Recommendations:
90% in 5 years
c. After FY 2003, achievement of
the 90% goal will require
University contribution to the
cost of dependent coverage
that is higher than the
contribution for employee-only
coverage.
Core Recommendations:
90% in 5 years
d. The University should monitor
benchmark health benefits to
maintain parity during and after
the achievement of 90%
funding.
RATIONALE
*Inadequate funding of dependent
coverage has impeded recruitment and
retention at all levels.
*Inadequate funding has also caused many
employees to drop coverage of their
dependents, making the remaining group
older and less healthy.
RATIONALE
*The current budgetary situation of
the University and the state makes
immediate achievement of this goal
unrealistic.
*Reaching the 90% funding level is
critical to the University’s goal of
becoming a top research institution.
Core Recommendations
3. The University should offer a
lower benefit option at an employee
premium rate at least 20% lower
than UKHMO in order to provide
more affordable dependent
coverage before the 90% contribution level is achieved.
Core Recommendations:
Low Option
a. Use managed care strategies
rather than significantly higher
copayment levels to avoid
over-utilization.
b. Possibly allow out-of-network
utilization at high out-of-pocket
cost such as 50% coinsurance.
Core Recommendations: Low
Option
c. Impose annual or lifetime
benefit limit.
d. Possibly exclude some benefits
that are now covered.
e. Limit impact on cost of care for
children
Core Recommendations:
Low Option
f. Impose copayment for adult outpatient
primary care provider visits other than
annual preventive care visit to discourage
unnecessary physician office visits, lower
the cost of the plan, and offset the cost of
other benefits that have been retained.
Core Recommendations:
Low Option
g. This offering would disappear when
parity with benchmarks is achieved
at the 90% employer contribution
level.
Core Recommendations
4. The University should identify
alternative benefit designs that
better meet the needs of Medicareeligible retirees.
a. Continue to contribute the same
dollar amount to retiree coverage as
to employee-only coverage
Core Recommendations:
Retiree Coverage
b. Explore ways to lower retirees’
exposure to high out-of-pocket costs
for prescription drugs
c. Retain protection against catastrophic financial loss
d. Retain coverage for medically
necessary and preventive services
not covered by Medicare
Core Recommendations:
Retiree Coverage
e. Explore effect of actuarially rating
Medicare-eligible retirees separately
from the active employee group
f. Support appointment of a retiree to
the University’s Employee Benefits
Committee
Core Recommendations:
Retiree Coverage
g. Support surviving spouses’
coverage at the same percentage
rate as family coverage for active
employees, i.e., up to 90% support
when that level is achieved for family
coverage
Core Recommendations
5. Corrections to UKPPO plan design
a. 100% coverage of screening
mammograms after $20 copayment
b. Coverage of laboratory services with
an outpatient visit at same level
whether the service is performed by a
laboratory classified hospital-based or
outpatient
Core recommendations
6. Network expansion and enrichment
a. CHA Health network (for UKHMO
Regional Service Area), and Humana
network (for UKPPO) should be
encouraged to expand to new
counties and add to networks in
counties already served so that as
many major hospitals as possible are
included
Core recommendation:
Network expansion
b. Specific standards should be
set for network adequacy and
it should be assessed carefully
in future negotiations.
Core recommendation:
Network expansion
c. Preferred participating pharmacies
issue
i. Need to provide other employees with
equal prescription drug benefit
ii. Kroger, Kentucky Clinic, Appalachian
Regional Healthcare available in only 45
counties and limited in 3 more
Core recommendation:
Network expansion
Alternatives:
o make preferred participating
pharmacies available within a
reasonable driving distance, or
o waive the additional $5 copayment
at participating non-preferred
pharmacies
Core recommendations
7. UKHMO issues
a. Access to primary care physicians:
i. determine ratio of primary care
provider appointment hours to adult
and child membership
ii. set goal and timetable for
improvement, using national
standards
iii. incorporate in subsequent UKHMO
contracts with the University
Core recommendations:
UKHMO issues
b. Monitor primary care and specialty
clinics for timeliness of patient care
i. both time to get an appointment and
waiting room time
ii. report problems and correction plans
quarterly to the Employee Benefits
Committee
Core recommendations:
UKHMO issues
c. Annual quality of care selfassessment
i. report to University administration
and the Employee Benefits
Committee
ii. using the National Committee for
Quality Assurance’s Health Plan
Employer Data and Information Set
(HEDIS) as a model
Core recommendations:
UKHMO issues
d. The benefits office should perform an
annual UKHMO member satisfaction
survey and report to the Employee
Benefits Committee.
e. UKHMO should assure that all
departments communicate the
departure of primary care physicians
to their patients in a timely manner.
Additional
Recommendations
Additional recommendations
8. Issues for off-campus employees.
Employees who do not have UKHMO
as an option where they work or
live pay more for their health
benefits in both premiums and outof-pocket costs than employees in
UKHMO counties.
Additional recommendations:
Off-campus employees
a. Employees outside the UKHMO
Lexington Service Area should be
allowed to enroll in UKHMO RSA or
UKPPO if it is offered in the county
where they work (currently limited
to plans offered in the county
where they live)
Additional recommendations:
Off-campus employees
b. Until UKHMO is available statewide,
consider increasing the University
contribution to their coverage so that
the employee share of the premium for
the least expensive option (other than
the low option described in #3)
available to the employee is equal to
the UKHMO rate.
Additional recommendations
9. To address the widespread call
for increased employee choice and
access to additional health care
providers, the University should
explore the option of offering a high
option plan with a more comprehensive statewide network than is
currently available.
Additional recommendations
10. Plan design suggestions:
a. Restructure prescription drug benefit
design with the following goals:
i. Cost containment
ii. Copayment schedule that more
accurately reflects the costs and
benefits of specific drugs
iii.Consideration for those whose
health conditions require the use of
expensive drugs
Additional recommendations: Plan
design suggestions
b. UKHMO primary care physician office
visit copayment for adult visits other
than annual preventive care visit
c. Cover treatment and medication for
children diagnosed with attention
deficit disorder with or without
hyperactivity; evaluate cost after one
year
Additional recommendations
11. The University should provide
financial support for the College
of Pharmacy proposal (attached)
at a rate proportional to UKHMO’s
utilization of Kentucky Clinic
pharmacy services.
Additional recommendations
12. The University should support
the proposal of the Wellness
Program (attached) in the areas
of preventive service analysis,
wellness initiatives, and
improved member education.
Additional recommendations: Wellness
a. Wellness Program staff should work
with University administrators to
identify ways to encourage healthy
lifestyle practices among employees
and students.
b. The task force supports appointment of
Wellness Director ex officio to the
Employee Benefits Committee.
Additional recommendations
13. Customer service and management
capacity should be enhanced.
a. More staffing and information
technology for benefits office and selffunded plan management to provide
more in-house expertise, improve
timeliness and accuracy of communication, and enhance member education
Additional recommendations:
Customer service
b. Proactive monitoring of UKHMO of
service capacity, timeliness, office
staff interaction with members instead
of relying on members to bring
problems to plan’s attention
Additional recommendations:
Customer service
c. Better customer information about
how to contact health plans
d. Consistency, timeliness, and
accuracy of response to member
inquiries
e. Complete and up-to-date website
materials
Additional recommendations:
Customer service
f. Timely and accurate plan
documents, identification cards,
and other personal materials
g. More comprehensive
information for new retirees
Additional recommendations:
Customer service
h. Better employee orientation to
health benefits, encouraging early
selection of a primary care provider
(for UKHMO members), using a
variety of approaches such as online training and interactive kiosks
as well as traditional lecture format
Additional recommendations
14. Eligibility issues
a. The University should allow samesex domestic partners to be covered
under University health benefit plans
if they meet criteria similar to those
used by other universities for such
coverage
Additional recommendations:
Eligibility issues
b. After the 90% contribution goal is
achieved, the University should
explore the cost and benefit of
making a proportional contribution to
coverage for employees who work
more than 20 hours per week but less
than the hours necessary to qualify
for current University contribution.
Overview
Core Recommendations
1. Increase University contribution to
health benefits in Fiscal Year 2003
(July 1, 2002-June 3, 2003)
2. Set a 5-year goal of funding 90% of
individual, couple, employeechild(ren), and family coverage
under a designated health plan
Overview
Core Recommendations
3. Offer a lower benefit option at
employee rate at least 20% lower
than UKHMO
4. Identify alternative benefit designs
that better meet the needs of
Medicare-eligible retirees.
Overview
Core Recommendations
5. Correct UKPPO plan design problems that
cause unexpected out-of-pocket costs
6. Expand geographic coverage and enrich
networks of UKHMO Regional and UKPPO.
7. Address UKHMO access and service
issues.
Overview
Additional recommendations
8. Make health benefits more
equitable for employees outside
central Kentucky.
9. Explore the option of offering a high
option plan with a more comprehensive statewide network than is
currently available.
Overview
Additional recommendations
10. Investigate cost and feasibility of
certain modifications to health plan
design
11. Provide proportional financial
support for College of Pharmacy
proposal to avoid unnecessary
increases in prescription drug cost
Overview
Additional recommendations
12. Support Wellness Program
proposal for preventive service
analysis, wellness initiatives, and
improved member education
13. Enhance UK benefits office
capacity for customer service and
management
Overview
Additional recommendations
14. Eligibility issues: Make
qualified domestic partners
eligible for coverage and
explore cost of some
contribution for those working
20 or more hours/week