Committee got a late start due to difficulty in recruiting
members and met only 4 times this year with a 5th meeting scheduled
April 15, 2003. The primary focus was dealing with the skyrocketing
healthcare costs as evidenced by required premium increases
for FY04. Also discussed were privacy, dental and
vision benefits attached to the HMO plans, and pre-tax spending
Care Costs and Insurance Premiums
increasingly larger component of healthcare costs is prescription
drugs. These have
increased by 20% over 2 years while overall healthcare costs
at Penn have increased by only 15%. Penn's benefits and subsidization
are slightly richer than our peers, local area, and national
comparators while our utilization is also somewhat higher.
The Committee did not, though, want to recommend decreasing
benefits. In particular Penn's mental health benefits are closer
to parity than those of other employers including our peers.
response to staff requests, it was decided to change from a
2-tier premium system to 3 tiers. Instead
of just Employee and Family rates the tiers will be Employee,
Employee plus 1 Dependent, and Employee plus 2 or more Dependents.
(An originally proposed 4th tier, Employee plus Spouse and
one Child was eliminated for this year at least because it
was thought to result in placing an unreasonably increased
burden on the already burdened larger families while only slightly
decreasing the expenses of the 4th tier families.
opt-out credit of $300, which was developed when healthcare
was subsidized at 100% or was at nominal cost to the employees,
will be eliminated for FY04.
order to provide for the financial needs of Penn, out-of-pocket
maximums and copays will be rising for all options, but more
so for out of network copays. Beginning July 1, 2003, the Pre-tax
Medical Spending Account maximum will increase from $3,000
to the Pre-tax Dependent Care Account by the highly compensated
participants (defined by the IRS as those making $90,000 and
above) will be limited to $3,500; the non-highly compensated
can continue to contribute $5,000.
continued to monitor the quality of service and costs provided
by the insurers. As
Penn is self-insured these costs are purely a reflection of
our utilization of services which is higher than average, and
the negotiated fees for administration.
enhancement in the group life insurance program will be an
increase in the multiple of pay that participants can elect
from 4 times to 5 times. In
addition, the combined benefit maximum will be increased from
$750,000 to $1,000,000.
major focus during the incoming years must be to slow down the
rate of increase in medical costs including prescription medicine.
The Committee discussed and received presentations on two ways
to do this. Caremark (our prescription manager) presented their
Disease Management Program which includes written and web-based
communications with both the patient and physician. As the
program has been effective elsewhere and was deemed appropriate
for Penn's personnel, the Committee recommended that such a
program be pursued in the near future. While
moderately expensive, Penn is not at risk as the fees are taken
from the first savings to accrue to the plan. Implementation
could occur within 60 days of negotiating and signing a contract.
second theoretical method to decrease costs is using preventive
measures such as emphasizing healthy lifestyles. At the final
meeting the Committee is scheduled to hear a presentation from
Independence Blue Cross on their program for doing this.
University as a whole continues to show progress on these issues. In
the healthcare arena, all but one of the health care providers
has eliminated the use of Social Security numbers as the employee
identifier. The one hold-out is Keystone. Keystone was waiting
until after HIPAA was instituted April 14, 2003, but still
will not commit to an actual date for compliance with this
requirement. Unfortunately Keystone insures a large
portion of our employees, but, while Penn is one of Keystone's
major purchasers, Keystone has numerous major other purchasers.
Committee also suggested further promotion of the Penn privacy
site at www.upenn.edu/privacy as
a source for information including links to credit reporting
discussed distribution of a total compensation statement to
will require further resources to implement because of the
need to improve systems in order to arrive at accurate information.
Specific Initiatives for Next Year:
Revisit the status of Long-Term Care insurance.
Retiree medical benefits need to be further examined. We could not get enough information needed to put this one on
the Committee's agenda but will aim to have
this by next academic year. Better communications regarding
these benefits would be useful. In the mean time, continued
one-on-one counseling will have to occur.
would like to acknowledge the support provided to the Committee
by Human Resources Staff, particularly Leny Bader, Executive
Director of Benefits, Geri Zima, Manager of Benefits Administration,
and Janice Gaspari, who provided staff support to the Committee.
B. Freiman, Chair
Council Committee on Personnel Benefits
B. Freiman (radiology); Faculty: David Asch (medicine), Charles Dwyer
(GSE), Laszlo Gyulai (psychiatry), Gerald Porter (mathematics),
Therese Richmond (nursing), Margaret Stineman (rehab medicine); Graduate/Professional
Students: Jeremy Korst (Wharton), PPSA: Linda Kristekas (Fiscal Operations),
Anna Loh (Wharton HR), Katrina Terrell (Housing & ConfSvcs.),
Michael Wisniewski (Van Pelt Library Acquisitions); WPSA: John Bell (Space Planning & Operations); Ex-Officio: Elenita Bader (Exec
Director, Benefits), Kenneth Campbell (Comptroller), John Heuer
(VP, Human Resources).
to Council Reports