_by Helen Gonzales
Vice President, Human Resources
Daily Lobo Guest Columnist_
The Daily Lobo’s Aug. 29 article “Staff Health Care Costs on the Rise” reported on a topic of campus-wide concern. However, the article requires amplification on critical points concerning employee health care.
The Daily Lobo suggests that recent modifications to the self-insured health care plan are “sudden changes,” and that the University community was not informed of basic changes to plan design. This is incorrect. The Division of Human Resources sent 11 separate email messages to benefits-eligible employees regarding the anticipated plan changes.
In addition, articles appeared in UNM Today and UNM News Minute, and a home-address mailing went out in April. There were 10 presentations across campus, including at the Regents’ Budget Summit. The plan design changes were presented to the Faculty-Staff Benefits Committee and there were six open-enrollment vendor sessions where employees could seek information about the individual and family effects of proposed plan changes.
These communications with the University community began in early March 2011. The impetus for these plan changes bears repeating.
UNM provides health care coverage to its employees through a self-insured health care plan. Under this model, UNM — not an insurance company — is responsible for paying the health care claims of its employees from premiums paid by individual employees and the University’s contributions on their behalf. There are only two ways that a self-insured employee health care plan can respond as the cost of health care continues to sharply outpace economic growth: increase premiums or change plan design.
The recent changes addressed in the Daily Lobo article reflect the latter approach. Actuaries for the UNM self-insured health plan, based on available data and forecasts, projected roughly an 8 percent increase in the cost of employee health care.
LoboCare’s cost of claims substantially exceeded this projection.
After supplementing employee health care with more than $2 million from plan reserves and $800,000 from Health Care Reform rebates, the UNM self-insured plan had available only the two options to offset dramatic cost increases. Given the wage erosion affecting employees after three years without salary increases, as well as the erosive effect of the Legislature’s ERB “swap,” the University opted to make modifications to its plan design with regard to LoboCare rather than increase employees’ monthly costs.
Effective July 1, 2011, the LoboCare Network portion of the UNM Medical Plan changed to more closely mirror the plan design used for the last four years by the in-Network providers, Lovelace and Presbyterian. This design uses the concepts of deductibles, co-insurance and out-of-pocket maximum regardless of who provides the service, allowing employees more flexibility for receiving health care services. In addition, these plan changes should help minimize the impact of anticipated rising health care costs on premiums charged to employees.
However, this does mean that out-of-pocket costs for some health care services received through the LoboCare Network under the UNM Medical Plan will increase. Some examples of the cost impact of these plan changes on UNM employees cited in the Daily Lobo article are simply incorrect, and recently announced Medical Plan Communication Sessions will provide accurate information to all interested employees.
Employers nationally are using cost-sharing techniques to encourage employees to be cost-sensitive health care consumers. At UNM, we have done better than most: Our total increase in employee health care premiums over the last four years has been approximately 4 percent, compared to close to 30 percent nationally.
Get content from The Daily Lobo delivered to your inbox
While it may be true that other New Mexico public employers have lower premiums, those employers do not directly provide health care coverage to their retirees nor do they take into account different factors that affect health care costs, such as average employee age and flexible choice of provider network each time you receive services.
UNM is proud to have been able to continue this benefit to its retirees, which present employees will appreciate when they retire. We continue to actively manage our health plans and to share all information with our employees.
