University of KentuckyHealth Benefits Task Force Preliminary Recommendations
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, employee-child(ren), and family coverage under a designated health plan
OverviewCore 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.
OverviewCore 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.
OverviewAdditional 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 compre-hensive statewide network than is currently available.
OverviewAdditional 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
OverviewAdditional 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
OverviewAdditional 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
1. The University should increase its support for health benefits in Fiscal Year 2003 (July 1, 2002-June 30, 2003). Core Recommendations
Core Recommendations: Increased support a. In addition to normal funding increase for inflation, earmark $5 million in net general fund dollars and proportionate amount for employees with health credit from other sources, estimated total $9.6 million. Use some funds to improve current benefit structure, but majority to increase University’s contribution.
Core Recommendations: Increased support Use some funds to improve current benefit structure according to following recommendations, but majority to increase University’s contribution.
Core Recommendations: Increased support • b. For FY 2003, • No employee contribution increase for any UKHMO family composition tier; • Employee contribution to UKHMO employee-child(ren) and family tiers should decrease.
Core Recommendations: Increased support c. Family composition tier ratios: • Employee plus child(ren): 1.5 times employee-only rate • Employee plus spouse: 2 times employee-only rate • Employee plus spouse and child(ren): 2.5 times employee-only rate These ratios generally reflect norms among the University’s benchmark institutions.
Core Recommendations: Increased support • These ratios generally reflect norms among the University’s benchmark institutions. • 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 normal funding for health benefits, one percentage point of funds available for raises should be made available for this purpose 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% contribu-tion 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 Medicare-eligible 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 catastro-phic 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 • Need to provide other employees with equal prescription drug benefit • Kroger, Kentucky Clinic, Appalachian Regional Healthcare available in only 45 counties and limited in 3 more
Core recommendation: Network expansion Alternatives: • make preferred participating pharmacies available within a reasonable driving distance, or • waive the additional $5 copayment at participating non-preferred pharmacies
Core recommendations 7. UKHMO issues • Access to primary care physicians: • determine ratio of primary care provider appointment hours to adult and child membership • set goal and timetable for improvement, using national standards • incorporate in subsequent UKHMO contracts with the University
Core recommendations: UKHMO issues b. Monitor primary care and specialty clinics for timeliness of patient care • both time to get an appointment and waiting room time • report problems and correction plans quarterly to the Employee Benefits Committee
Core recommendations: UKHMO issues c. Annual quality of care self- assessment • report to University administration and the Employee Benefits Committee • 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 departure of primary care physicians to their patients in a timely manner.
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 out-of-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 compre-hensive statewide network than is currently available.
Additional recommendations 10.Plan design suggestions: a. Restructure prescription drug benefit design with the following goals: • Cost containment • Copayment schedule that more accurately reflects the costs and benefits of specific drugs • 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 medication for children diagnosed with attention deficit disorder with or without hyperactivity; evaluate cost after one year.
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
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.