PPSA Questions and Answers on Benefits Redesign

The following exchanges took place Monday, February 17, at a membership meeting of the Penn Professional Staff Assembly. Some 200 members attended the meeting where Human Resources Vice President Clint Davidson and members of the HR staff responded to questions. Part I below shows a compilation of questions shown as overhead slides at the meeting. Part II gives questions that members sent to the podium on cards during the meeting. Some questions have been condensed for space. The answers in Part II are based on notes taken by several PPSA members, and may not be verbatim but have been reviewed with members of HR for technical accuracy. Brackets are used where there has been significant editorial paraphrase, or updating after review .--Ed.

Part I: Advance Queries

  1. Are there decisions about my benefits I need to make now? If not, when?
    Answer: You do not have to make any decisions about your benefits until open enrollment.

  2. I'm interested in understanding, in detail, what my benefit options will be and what decisions will be best for me. When will I receive that information?
    Answer: Detailed and personalized information will be mailed to all faculty and staff during the first week of April. In advance of the open enrollment period of April 21st to April 30th, numerous workshops and information sessions will be held so that employees can make informed decisions by April 30th.

  3. This is a lot of information and some of it seems complex, particularly the health care options. How do I get detailed information?
    Answer: You will get detailed information during the first week of April when the materials for open enrollment are released.

  4. If I have questions or feedback for consideration, what do I do?
    Answer: You should send all your questions and feedback to the e-mail address given in the Almanac article. While much study, analysis and consideration went into the review and resultant recommendations, other insights and perspectives are welcome and will be considered in making final decisions.

  5. When will these changes become effective?
    Answer: All of the changes will be effective by July 1, 1997 except for the changes to the graduate tuition benefit which will apply to those not enrolled in the program by the fall semester of 1998.

  6. Will I have a chance to consider changing my health care option before July 1, 1997?
    Answer: All changes in the health care options will be effective on July 1, 1997.

  7. When will the salary increase that is equivalent to life insurance net flex credits be implemented, and how do I know how much it will be?
    Answer: Your salary increase will be equivalent to what would have been your net flex credits on July 1, 1997. We are still evaluating alternative ways of processing the additional pay.

  8. Will this increase reduce my annual salary increase due July 1, 1997?
    Answer: This one-time adjustment will not affect your annual merit increase.

  9. Will there be further benefit changes and additional cost increases next year?
    Answer: Benefit programs are subject to annual reviews because of legal and market changes as well as budget considerations. It is difficult to predict the changes that may be recommended for next year.

  10. Is there a relationship between these changes and the staff classification and pay study?
    Answer: These changes, as well as the staff classification and pay study, will be reviewed in the context of total compensation.

  11. Are part-time benefits competitive with the regional market?
    Answer: An extensive review of local employers determined that, in fact, Penn is generally competitive when compared with local employers, both profit and non-profit.

  12. Has a phasing approach been considered for implementation of these benefit changes?
    Answer: Yes, this was reviewed and considered by the committee. However, in light of health care trends, it was recognized that future cost increases could exacerbate the problem and make it more difficult rather than less.

  13. . Will any one group of individuals be affected more than others?
    Answer: The committee extensively sought to balance the impact of these changes over all groups. Every effort has been made to provide both choices and low-cost options, including costs for health care that are on the low side of the competitive market.

Part II: From the Floor

  1. Why didn't you grandfather the tuition remission, graduate level, for dependent children?
    Answer: The benefit is partially grandfathered, in that admission open until September 1, 1998, and students have until 2002 to finish. The federal government will end any funding of graduate tuition remission as overhead recovery in the year 2000, placing the full cost--now at $1.7 million/year--on the University. Morever, few others offer such a benefit.

  2. What were the criteria for your comparisons with other nonprofit and profit institutions/companies? Did you consider benefits and salaries?
    Answer: If I were to give the local companies we included, it would be a list of all the major employers in the region; we didn't ask the same things of every one, however. We asked a whole range of universities, large and small, and all of the Ivies; and we found we were competitive with all of them.

  3. What is going to happen to New Jersey HIP? It is not mentioned. How many are in it?
    Answer: We are keeping the plan. [ From Fina Maniaci, Benefits Accounting: "It has about 50 people in it."]

  4. Will the 40% tuition remission for children of staff not attending Penn remain in effect?...the 75% tuition for children attending Penn?
    Answer: Yes to both. Those are undergraduate, and not affected.
  5. In my department there is no Masters Degree program and one must be a full-time student to work on a Ph.D.; but Ph.D. students cannot be full time employees. So there's no benefit unless I wished to study in Education or Wharton, which would lead to my leaving Penn. No benefit to Penn!
    Answer: That is true. There is not necessarily a program readily available in every field, so the benefit is not an advantage to everyone.

  6. Why is PennCare going to be more expensive than an HMO? Aren't Penn's health-care facilities cost-competitive?
    Answer: The differences in premium costs reflect differences in levels of benefit and the degree of managed care. When PennCare was set up about 18 months ago, it wasn't clear how they should price it; but the idea was to adjust cost in the light of experience; it was felt that in the future the cost could come closer to that of the HMOs. We're not sure what the pricing may be in the future; it's complicated. But basically, the more choice you have, the more you pay.

  7. What happens to the FlexDollars for medical benefits? [A separate question "What tax liability will occur when flex credit dollars are added to income?" is also covered here.]
    Answer: There will be no more FlexDollars; it all returns to pay, where it is subject to taxation unless you put it in a before-tax health care account or use it to buy additional life insurance [ Ms. Maniaci adds that about 700 faculty/staff presently take no health care through Penn, and receive the cash equivalent already.]

  8. As a result of benefit cuts, will there be an increase in yearly salaries? Benefits were closely tied to salary increase.
    Answer: Only what comes from the life insurance change, when Flex Dollars are converted to cash and added to base pay.

  9. Did you discuss the possibility of "selling" back a week's vacation for medical benefits costs? What about unused vacation? [A later question about donating unused sick leave to others received an answer similar to this one.]
    Answer: That's a very creative suggestion, and we will take a look at it. The federal government is considering some new legislation for buyback of vacation in the retirement program, and a suggestion was made [Speaking Out, Almanac January 28] for being able to donate time to a colleague who had run out of disability; we should look at that seriously.

  10. Will specific coverages be changed, particularly with PennCare, Blue Cross or POS plans--i.e., will we have to read the fine print to find out that "xyz" is no longer covered [cites other examples ]?
    Answer: Absolutely not. We are changing the materials to increase the clarity; they are hard to understand. Bruce Fisher [ Employee Communications] is redesigning all of them to make them easier to use.

  11. The party line when hiring has always been "Penn may not pay as well as other institutions, but our benefits are better than most." Now that our benefits are decreasing, e.g., time off, what is the benefit to working at Penn now? How are we staying competitive? Will we be getting more holidays to compete with other institutions?
    Answer: This is not not about equity, point by point, with the competition; but when you balance it all out our package a superior one, and even with the changes Penn will still be competitive in the marketplace.

  12. If life insurance changes from approximately 3.5 times annual salary to 1 times annual salary, is salary being increased to make up the difference? Will the amount increase annually as you get older and insurance goes up?
    Answer: You'll have a one-time increase in your base salary [ as FlexDollars are applied]. Overall, since other benefits such as social security and retirement are calculated on that higher base, you gain something for the long term. We ran a model for people in various age groups to verify this assumption.

  13. Now that time off is being simplified, will Penn keep track of time balances for monthly paid employees and print it on pay stubs like HUP does?
    Answer: At Penn this whole program of timekeeping and tracking needs to be upgraded--for monthly and for hourly-paid as well. Systems are in place but are not used. We see departments where there is no leave time recorded all year. If records are not kept properly people who are ready to leave the institution find that they can't be credited for vacation days.

  14. Is there a possibility of grandfathering QualMed? Or setting criteria for them to improve?
    Answer: We've had many, many discussions with them about faculty and staff complaints; and I know there are people who are very satisfied with QualMed, but we were unable to get the reassurance or change of behavior we felt we should have. [ He later clarified that the service has been dropped. ]

  15. How many employees are affected by the termination of QualMed?
    Answer: 1100.

  16. Can we access the list of institutions with which Penn was compared in your studies?
    Answer: I can give the names but not the information they provided. We asked different things of different institutions. (See also Q#2.)

  17. I currently get FlexDollars for not enrolling in any of the University's health-care plans. Will I lose this money?
    Answer: No. You'll get it all back.

  18. I am an A-1 employee who started this year. I will have accrued 22 vacation days as of July 1. Will I receive fewer days in years 2 through 5 of my employment at Penn?
    Answer: No. Present employees get the old or new, whichever is better. New hires will only get the new plan.

  19. Can you clarify the time limitation for the graduate tuition for dependents?
    Answer: By June 30, 2002, wherever you are, this benefit ends. September 1, 1998, is the last date you can enroll. If you are in the program, you have until June of 2002 to finish.

  20. How long before the part-time employee benefits program will be implemented?
    Answer: July 1, 1997.

  21. Please discuss the University's policy regarding flex-time for work hours. Is this a formal policy for Penn? What are the options?
    [Answer was to the effect that supervisors have always had the option to consider flexible schedules where workable, and these may be a variety of arrangements more suitable to individual needs than summer hours. It's to the benefit of both the University and the employee that those who value flexible work schedules look at this. But there's a lot to worry about, including system interface problems. It should be a higher priority. ]

  22. Why, when tuition is cheaper at local schools such as Temple, is Penn not taking advantage of potential savings by making tuition transferable for employees?
    Answer: That would mean letting real dollars go out of the institution, and that is different from internal transfers; we try not to write checks to other institutions.

  23. Why doesn't Penn offer a discount if we decide for PennCare? K-Mart gives discounts to their employees!
    PennCare may or may not be recovering all its costs even now [see also Q #6]. PennCare rates are actually very attractive, but if you start with no charge and go to some charge you see a real cost increase.

  24. Why does Plan 100 go up by $5-$6, and PennCare from $0 to $104? Is there anything in place that will help offset this cost?
    Answer: [See under Q # 23.] As for offsetting: Pre-tax health care accounts could help. We hope some of our health promotion and wellness programs will help reduce medical plan costs in the long run. These are things Marilyn Kraut [ HR Faculty/Staff Recognition Programs] is working on.

  25. Will the Benefits-at-a-Glance booklet be updated soon?
    Answer: Yes. We are redesigning all the material, and it should be out by late March.

  26. Why doesn't Penn give employees more affordable child care options? Why is this not part of the benefits package?
    Answer: I can't tell you historically, but it is one of the options that ought to be there.

  27. There appears to be a "flattening" of benefits to A1s and A3s. A3s are the winners as they still are eligible for overtime pay and compensatory time. A1s get less [time off] but aren't compensated for routine 10 to 14-hour days.
    Answer: We may have to take a look at this, but we tried not to think in terms of who's winning or losing so much as making the best benefits package for all.



Almanac Between Issues. Friday, February 21, 1997.

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