University Times

Pitt employees will see some increases in health insurance costs and co-pays in the coming plan year along with some decreases in premiums for those who carry optional life or accidental death insurance.

Details on changes to the University’s benefits package were sent to employees’ campus office addresses last week as the annual open enrollment period for benefits coverage began.

No response is needed from employees who make no changes to their benefits, but those who wish to change their coverage for the plan year that starts July 1 must submit their choices online by midnight May 13.

Pitt’s self-service open enrollment site can be accessed through www.hr.pitt.edu by selecting “2009-2010 open enrollment.” Confirmation of changes in benefits selections will be mailed to employees’ home addresses after the open enrollment period closes, according to Human Resources.

Following two years of relatively low increases, Pitt’s health insurance premiums will increase 6.6 percent for the plan year that begins July 1.

Last year, costs rose 1.5 percent, following a 3.9 percent increase in fiscal year 2008.

A local annual employee benefits survey produced by consultants Cowden Associates reported an average 7.2 percent increase for tri-state area employers, slightly higher than the national average of 6.8 percent.

University Senate President John J. Baker said, “The University’s health care costs are expected to increase 8.8 percent in fiscal year 2010 compared to fiscal year 2009. To meet the challenge of these rising costs as equitably as possible, the medical advisory committee agreed to make up about 2.2 percent of the projected shortfall by increasing some of the co-pays for plan services, and the remaining 6.6 percent by increasing plan premiums.”

The medical advisory committee is composed of faculty, staff, Human Resources representatives and a health care consultant, who work together to make recommendations related to the University’s health care benefits.

Rich Colwell, Staff Association Council president, said: “Together we are working hard to keep the costs down as much as possible without decreasing health care availability.

“Any increase in the cost of health care affects lower paid staff. It is felt, and felt hard especially with no salary increase this year.” However, Colwell said, compared with other employee groups in the area, “We got a good deal.”

Baker said, “It’s unfortunate that this increase has come in a year when faculty and staff salaries are frozen due to the severe recession our nation is experiencing, but it was unavoidable and our health plan is still a bargain compared to other health plans in the area and nation. We are fortunate to have it and our Benefits department has done a good job of managing it.”

The University expects health coverage costs to total about $92 million this year, up about $5.7 million from $86 million last year. Medical inflation — simply the increasing cost of medical care — largely is driving the increases, said John Kozar, director of Benefits.

“We try to keep the medical rates as affordable as possible,” Kozar said, noting this year’s discussions were complicated by the fact that Pitt is expecting no increase in state funding in the coming fiscal year. “It’s a dilemma for everyone,” he said.

Kozar noted that Human Resources is seeing an increase in subscribers for insurance coverage — an indication that layoffs and job losses elsewhere are impacting families’ insurance coverage.

Kozar agreed that the University is doing well in managing its health care costs. Several factors impact the bottom line: aggressive management of the program, the early impact of the Fitness for Life initiatives that started five years ago and even simple luck, he said.

Kozar said signs that Fitness for Life is having an effect are largely anecdotal. “You can’t look at utilization and find the heart attack that never happened.”

He noted that utilization of primary care physicians (PCPs) is up 22 percent. Exactly why people are seeing their doctors more is unclear, but “it’s probably good news,” Kozar said.

Not only are PCPs less expensive than other forms of care, people who visit their PCP stand a better chance of managing any health condition or potential health condition they may have, Kozar said.

He said the Benefits office plans to better promote preventive care that is covered under the insurance plan with no co-pay or deductible required. Among the services are wellness visits to a PCP, wellness-related blood tests, mammograms, colonoscopies, prostate screenings, immunizations and phone-based nutrition counseling.

In addition, efforts also are being made to continue Fitness for Life competitions such as weight races and walking challenges with fewer gaps between the activities; ideally, to have one or more fitness-related activities underway year-round.

• Health insurance

As in past years, Pitt will pick up the tab for 80 percent of the health insurance cost increase while employees cover the remaining 20 percent.

For an individual covered by the UPMC Health Plan’s Panther Gold HMO option, starting July 1 the monthly contribution will be $5 more, up to $55. An employee’s share for family coverage will go up $13, rising to $285 a month. Panther Gold is the most popular option among Pitt’s health plans, with about 88 percent of health plan participants choosing the option, said Kozar.

Panther Gold participants also will see the cost of doctor visits rising. Co-payments in the HMO plan will rise to $15 — up from $10 — for doctor’s office visits; to $25 for specialist office visits — up from $20, and will double for outpatient facility services, rising from $50 to $100.

• Prescriptions

Participants in all Pitt health plan options will see some prescription co-pay increases. Generic prescription co-pays will remain at $10 for all plans, but co-pays will rise $2 — from $28 to $30 — for brand name medications, and $4 — from $56 to $60 — for non-formulary medications.

Prescription co-pays last increased in July 2007, Kozar said. He noted that prescription costs make up about 22 percent of Pitt’s overall benefits expenses.

Prescription plan participants will have the new option to obtain a 90-day supply of maintenance medications at retail pharmacies. Three months’ co-pay still would be required, making the change simply a matter of convenience.

• Dental coverage

Pitt employees who opt for dental coverage face an increase in premiums. Inflation is pushing dental HMO plan contributions up 5.5 percent and standard care (Flex I and Flex II) plans up 3.3 percent.

• Life and insurance accidental death insurance

Those who opt for additional life insurance or accidental death and dismemberment (AD&D) insurance may see decreases in their costs: Life insurance premiums in most age brackets have fallen.

In addition, dependent life insurance premiums decreased 19 percent and AD&D coverage premiums fell 17 percent, according to Human Resources figures.

The decreases are due in part to the fact that Pitt has been with the same insurer, Aetna, for four years, giving the company some history on which to better assess the group’s risk, Kozar said. In addition, as people are living longer, life insurance rates are decreasing accordingly.

For most, the decrease is only a few pennies per $1,000 of coverage, but for those who carry significant amounts of additional insurance, it may offset, at least in part, the increase in health insurance contributions, Kozar noted.

Employees in the age brackets between 45 and 64 will see a decrease of about 25 percent in their coverage costs. For instance, those in the 45-49 bracket will pay 18 cents per $1,000 in life insurance, compared to the current rate of 24.1 cents per $1,000; 60-64 year-olds will pay 69 cents per $1,000, down from 92.1 cents.

Faculty and staff in their 30s are the only ones seeing an increase in premiums, but the increased costs aren’t likely to break the bank: Employees in the 30-34 age range will pay 8 cents per $1,000 of additional coverage, a 27 percent increase. Those in the 35-39 age bracket will see an increase to 9 cents per $1,000, a 6 percent change.

Aetna is piloting an interactive online tutorial to help Pitt employees consider their life insurance needs. The tool can be accessed at http://openenroll.hr.pitt.edu/advisor.htm. Participants can click to interact with “Dave,” a computerized insurance expert who directs them through a 10-minute customized evaluation of how much additional life insurance they may wish to consider taking. “It’s well worth the time,” Kozar said, noting that the tutorial presents food for thought that everyone should consider.

• Vision coverage

A second Davis Vision plan has been added. In addition to a basic vision option, the expanded plan gives participants additional flexibility in eyeglass frame choices covered under the plan as well as lens options such as tinting, coatings and some special lenses at no additional cost. Kozar noted that Pitt’s vision plans have wide participation with about 70 percent of those eligible for coverage opting to take it. “It’s a very good value,” he said, noting that the annual premium cost is roughly equivalent to the cost of an eye exam.

Vision insurance costs will remain steady for three years, Kozar said. The new plan year marks the start of a three-year contract with the insurance provider, so employee premiums will not increase during that time.

• Long-term care insurance

Unum, the University’s provider of long-term care insurance, is offering open enrollment this year. Faculty and staff who wish to purchase long-term care insurance and who have not previously been declined coverage are eligible to enroll without completing an evidence of insurability application. Current enrollees also may increase their coverage during the open enrollment without completing the form. The opportunity was last offered in 2006.

—Kimberly K. Barlow

Prescription cost savings

The University’s prescription coverage plans continue to offer a 90-day supply of maintenance medication for the cost of two co-pays if prescriptions are filled by mail order or through the Falk or Student Health pharmacies. For example, said John Kozar, director of Benefits, filling a generic prescription with a monthly $10 co-pay would total $120 a year. Having a 90-day supply filled cuts the annual cost to $80.

Flexible spending accounts

“If someone told me I could decrease my out-of-pocket expenses by 30 percent, I’d jump at the chance,” Kozar said, encouraging faculty and staff to consider setting aside pre-tax dollars in flexible spending accounts for health care, dependent day care or commuter expenses.

Federal regulations limit the maximums that can be set aside. The government also stipulates that the money set aside in such flex accounts is “use it or lose it,” meaning that careful consideration must go into the decision when committing money to flex accounts. Kozar said there are options in place to reduce the risk of losing money.

At Pitt, the health care flex account is most popular, with some 3,000 employees participating, Kozar said. (About 500 have flex accounts for day care and 200 for commuter expenses.) Health care flex participants can contribute between $10 and $416.67 a month to cover expenses such as co-pays, prescription costs, insurance deductibles, over-the-counter medications, orthodontics and prescription eyeglasses.

The money is made available on a “Benny” card — essentially a debit card, which Kozar said can be used not only in doctor’s offices or at the pharmacy. The card also can be swiped at the grocery or drugstore cash register and eligible items will be deducted from the Benny balance. “The easier it is the less chance you’ll forget about filing a claim,” he said.

For those who need to submit claims for medical expense reimbursement, claims can be filed electronically, although receipts still must be faxed to the account administrator, Kozar said.

Information on flex accounts is available at www.hr.pitt.edu/benefits/flexible.htm.

—Kimberly K. Barlow