Friday, October 24, 2014

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University Employees Will See Significant Changes to Health Plan This Year

Major changes are coming to the University of Virginia health plan.

With U.Va. facing rising health care costs, spiking expenses of high-dollar claims and looming fees and taxes connected with federal health reform, the modifications are designed to maintain the quality of the plan and contain costs in the years ahead.

“Employees will continue to receive excellent coverage at affordable prices,” Vice President and Chief Human Resources Officer Susan Carkeek said. “We will continue to have a health plan that plays a key role in the University being the employer of choice for the region and state. The significant changes reflect difficult decisions in some cases, but in all cases the modifications are being made with an eye on long-term strategic results.”

The University’s self-funded health plan covers more than 13,600 employees, plus family members, with annual premiums that have tracked well below the national and state average.

“The modified plan will provide new options and reward those who participate in wellness programs,” Carkeek said. “But we must make adjustments or face millions of dollars in rising costs, fees and taxes that would be passed along to employees.”

Among the major changes:

  • Emphasis on wellness: Plan premiums will rise about $40 a month this year. Employees, however, can avoid increases by completing two components of U.Va.’s Hoo’s Well program – a biometric screening and an online health assessment.
  • New plan option: The University is adding a third plan option, featuring low premiums and a high deductible. A “Health Savings Account,” included as part of the new option, will receive $1,000 at the start of each year from U.Va. to help pay for eligible medical expenses.
  • Working spouse provision: Starting Jan. 1, spouses who have access to coverage through their own employer will no longer be eligible for coverage under U.Va.’s plan. Spouses who do not have coverage elsewhere can remain on the employee’s plan, and coverage of children is not affected.
  • New dental plans: Beginning in 2014, dental coverage will be separated from the health plan. Employees will have options including no dental coverage, a basic plan, and an enhanced plan that includes some coverage of orthodontia.
  • Tobacco-free rewards: This year, employees can earn $10 per month if the employee certifies that all adults in the household are tobacco-free.

Open enrollment also is changing. The process of signing up for benefits or making changes to your plans will occur in October rather than November.

What isn’t changing? For one, co-payment amounts in all plans will stay the same as in the current plan. Preventive care, such as annual wellness exams, mammograms, etc., will also continue to be fully covered in all plans.

“The changes to our plan will protect the quality of benefits for the majority of our enrollees,” Carkeek said. “That’s our priority.”

Rising Costs

U.Va. is the only state agency that funds its own health plan, rather than participating in a state-operated health plan. This strategy over the years has proven wise. U.Va.’s health plan premium per employee cost an average of $9,270 in 2012, compared with $10,522 for the national average and $13,249 for the state average.

In all cases, those costs have marched steadily higher annually. U.Va. anticipates its medical plan costs to rise by about 6.8 percent each year. Total medical claims have increased from $99 million in 2008 to $127 million in 2012, an increase of 28 percent.

One major factor in rising medical bills to U.Va. is the “high” claims category. These claims, which typically reflect very serious medical conditions and treatments, exceed $100,000 for a single enrollee. The number of high-cost claims at the University has increased from 44 in 2008 to 104 in 2012 – and the cost of those claims has jumped from $7 million to $24 million.

“Placing more emphasis on wellness for all of our employees should help prevent some health issues from developing into very serious problems,” Carkeek said. “Even with the benefit of prevention and screening, we know that high claims are likely to increase and we must take steps to be in the best position to manage the costs associated with them.”

Impact of Health Reform

Provisions of the federal Affordable Care Act are projected to add $7.3 million to the cost of the University health plan in 2014 alone. Federal health care reform will create new costs related to the “individual mandate” that requires all Americans to have health care coverage (or pay a penalty).

In future years, U.Va. could face millions more in taxes through the act if the cost of its plans passes certain thresholds.

“Ironically, by providing generous benefits, the University becomes exposed to a federal excise tax known as the ‘Cadillac tax,’” Carkeek said.

Effective in 2018, the 40 percent tax would apply to the cost of an individual plan with average premiums per employee topping $10,200, or $27,500 for a family plan.

If the University made no changes to address rising costs or the impact of the Affordable Care Act, employee premiums would have risen a projected 12 percent to 13 percent this year.

Role of Wellness

By increasing focus on the Hoo’s Well program, the University is empowering employees to take steps that will protect both their pocketbook and their personal health. At the same time, increased participation in wellness programs will help with the rising costs of claims over time.

For U.Va. plan enrollees to avoid premium increases this year, they must complete two steps by Oct. 31:

  • Health assessment: Aetna’s online confidential health assessment asks questions about your general health, lifestyle and habits. Find the assessment at www.aetna.com by logging in and clicking “Take the Health Assessment.”
  • Biometric screening: Employees have three ways to complete the biometric screening, which gathers information such as blood pressure, cholesterol and blood sugar. Appointments on Grounds may be scheduled at www.hooswell.com any time through Oct. 11. Employees may instead use lab results from their physician obtained between Jan. 1 and Oct. 31, 2013. Find the form at Hooswell.com. Enrollees also may use lab results recorded in the U.Va. Health System’s My Chart medical record system to satisfy the biometric screening requirement.

Aetna keeps details about individual employees participating in Hoo’s Well confidential and the University reviews only aggregate data about enrollees.

Having the information will help the University better understand and manage health risks over time. Based on the data from the last two years, Hoo’s Well knows the biggest drivers of health costs, for example, are diabetes, heart disease and cholesterol.

“Individual privacy is very important,” Carkeek said. “The University is committed to maintaining that and will only use aggregated data with no employee names. These data help us identify trends and guide our wellness efforts.”

The required screenings are just a part of the Hoo’s Well program. Employees can qualify for a $100 reward by participating in the Wahoo Fitness Challenge or the Beginning Right Maternity Program, or receive half off the cost of Weight Watchers. Details about these and other My Rewards programs are available at www.hooswell.com.

Working Spouse Provision

Changes to the plan that affect working spouses of U.Va. employees will take effect Jan. 1. On that date, all spouses of covered employees will no longer be covered by the University plan unless the employee has provided certification of the spouse’s continued eligibility.

Spouses who have access to “affordable health care that provides minimum value,” as defined by the Affordable Care Act, through another employer will no longer be eligible for the U.Va. plan. More details about how the Act defines those qualifying terms can be found here.

To maintain an eligible spouse on the U.Va. plan, employees will be required to complete an affidavit during open enrollment (Oct. 7 to Oct. 25) that asserts that the spouse does not have access to affordable care through another employer or that the spouse is eligible for U.Va. coverage as a benefit-eligible employee at the University or the U.Va. Health System.

Children can continue to be covered under the U.Va. Health Plan, even if coverage is available for them through a spouse.

A spouse who loses employment or health coverage during the plan year may be added to the U.Va. plan by entering the request in the benefits system within 60 days of the qualifying event.

“Employees should carefully review the details of this plan change. It requires specific actions during open enrollment to ensure that eligible spouses will be covered after the new year,” Carkeek said.

New Plan Names

Along with the introduction of a new, third-plan option this year, University Human Resources has renamed the plans available to eligible employees. The plan names are “Basic,” “Value” and “Choice.”

The plan new for this year – which includes coverage with low premiums and high deductibles, accompanied by a Health Savings Account – is known as the Basic plan.

The former Low Premium has been rebranded as the Value plan, and the former High Premium plan will appear as an option during open enrollment as the Choice plan.

“The new names are intended to offer clarity about the plans,” Carkeek said. “They reflect the fact that employees have several options to let them decide the appropriate level of coverage and costs based on their own needs. Significantly more details will be provided prior to and during open enrollment, both through mailings, online and through email communications to employees.”

For information about the plan changes and new options, click here.

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