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April 15, 2010

Health insurance cost here going up 2.5%

Open enrollment will run from April 21 to May 12 at 5 p.m.

Information packets with details of Pitt’s benefits plans, including vision and dental plan options, and long-term care and life insurance choices, are expected to be mailed during the week of April 19.

Employees who do not receive their informational packets should contact Benefits at 412/624-8160.

Pitt health insurance premiums are going up slightly next year, but at a rate lower than the national average, officials here say. Co-pays on non-generic drugs also will increase.

The overall cost increase of Pitt’s medical plans, which are administered by UPMC Health Plan, is 2.5 percent for the health plan year that begins July 1, according to Benefits director John Kozar.

For example, Panther Gold enrollees, who make up about 90 percent of the approximately 23,000 plan members (employees, spouses/domestic partners and children), will see their premiums rise for individuals from $55 a month to $57; for parent/child(ren) from $136 a month to $140; for two adults from $203 a month to $208, and for family coverage from $285 a month to $290.

That compares to a projected national average of 7-8 percent increase, Kozar said. “We think this is good news for faculty and staff and good news for the University.”

Last year employee health insurance costs at Pitt rose 6.6 percent, he noted.

Pitt’s overall health care costs for the coming plan year are projected to be roughly $100 million, up from about $97 million for the current plan year. The University will continue to absorb 80 percent of the annual rate increase to the medical programs covered under the UPMC medical plan options. Kozar said.

Employees who elect to maintain their current benefits need not take any action; all others must make changes during the open enrollment period. Changes must be made electronically by following the online enrollment procedure, which will be accessible beginning April 21 at by clicking on the “open enrollment” link. An instruction sheet for online enrollment also will be provided in the printed enrollment materials.

A confirmation letter will be sent to the employee’s home address within a few days of changes being made, according to Human Resources.

To keep the increases in health plan rates relatively low, Kozar said, the University is making two plan design changes.

The co-payment for generic drugs will remain the same: a $10 co-pay for a 30-day supply. However, the co-pay for preferred brand drugs will go from $30 to $32 and for non-preferred brand drugs will rise from $60 to $64 for a 30-day supply.

Plan members can save on co-pays by purchasing a 90-day supply of prescription drugs at the Student Health Service pharmacy or Falk Pharmacy at a discount. The savings is equal to one co-pay.

For example, the co-payment for a 90-day supply of a generic drug at Falk Pharmacy is $20; at a retail pharmacy it is $30.

“The prescription drug inflation rate nationally is also 7-8 percent, so the $2 increase for the preferred drug co-payment and the $4 increase for the non-preferred, non-formulary brand medications is really just keeping up with inflation,” Kozar pointed out.

More than 60 percent of all prescriptions filled are for generic drugs, he noted. “We always urge members to consider taking advantage of generic drugs where they are available,” Kozar said.

The second plan change involves inpatient hospitalizations for Panther Gold enrollees receiving health care benefits through Pitt.

“Currently, we have a $100 co-pay and you can incur a maximum of four co-pays a year. That’s a maximum of $400 out-of-pocket. We’re changing it to be a $250 co-pay, with a maximum of two co-pays out-of-pocket. So the maximum you’d pay in a year is $500,” Kozar explained.

Those two plan changes brought costs down from a potential 3.5 percent increase to 2.5 percent, he said. “There’s no magic behind it, it’s simply looking at claims experience. They’re all trade-offs. We try to manage the overall increase because it does impact employees when money comes out of their pay check and we’re always concerned about that.”

Plan options continue to be Panther Gold (HMO), Panther Premium (PPO), Panther Plus (PPO) and Panther Basic (PPO).

Details on premium rate increases are included in the informational packets.

All plans will continue to waive co-pays and deductibles for age-related wellness and preventive services completed in-network, such as pediatric immunizations, mammography, colonoscopy, Pap tests and prostate exams.

Pitt is continuing to offer nutritional counseling with a registered dietician, something normally not covered in other health insurance plans unless it is related to a diabetic condition, Kozar said.

The service, available up to six times per plan year, can be accessed at 1-800/807-0751.

The University will continue to offer optional dental and vision coverage.

For dental coverage, Pitt is entering the final year of a three-year contract with United Concordia, which offers three plan options. The plan designs remain the same, but under terms of the contract, employees can expect a 3.5 percent increase in premiums, which Kozar said is consistent with dental inflation.

For more information, contact United Concordia at 1-877/215-3616 or visit

The Davis Vision three-year contract is entering its second year. The program will maintain its current rates and plan design.

Pitt also is making a change to comply with the Mental Health Parity Act, which requires that the co-payment for behavioral mental health visits be on par with other benefits. Kozar explained that Pitt had been using a $20 co-payment for behavioral mental health visits. That will go down to $15 co-pay per visit, putting it on par with the primary care physician’s visit co-pay, the most prevalent co-pay among plan members.

Kozar noted that recent federally mandated changes in health care insurance that do not go into effect until October will not be available to Pitt employees during the next plan year. “The legislation is written so that the changes cover health plans that begin after the October effective date,” he said.

In a benefit-related development, Pitt is changing the administration of its flexible account spending plan from EBDS to UPMC Health Plan, effective July 1.

“One of the advantages will be that if you are enrolled in UPMC Health Plan coverage and you have a spending account, your new [health plan] ID card also will be your stored-value card. So when you show it to your provider to show your membership in UPMC Health Plan, they can swipe it for your co-pay,” Kozar said.

He said more details on the flexible account administrative switch will be disseminated early next month.

Kozar noted that the medical insurance decisions are made with input from faculty and staff on the medical advisory committee, working with Buck Consultants, an employee benefits and human resources consulting firm.

“We go through survey data, utilization data, medical inflation data,” Kozar said. “We rely on national survey data to get a hint of where we are. But this year we also for the first time developed our own benefits survey and sent it out to roughly 45 schools, peer institutions nationally,” gathering comparative data on PCP and other visit co-pays, prescription drug co-pays, premiums and benefits and services offered, he said.

Kozar said Benefits would continue to perform the survey each year to gather peer health insurance data.

Michael Pinsky, president of the University Senate who sits on the medical advisory committee, told the University Times, “I’m very pleased with the results of our committee’s work this year. The meetings were serious and constructive. I was the only [medical] doctor in the room and I was deferred to often. We established certain priorities, No. 1 of which was not to raise the co-payments for generic drugs. The administration was very supportive of our recommendations.”

Patricia Weiss, also a member of the committee and chair of the Senate’s benefits and welfare committee, commented, “Benefits prefers to absorb costs with small rate increases, rather than keeping rates flat for a while only to raise them dramatically later.

“Keeping the increase below 3 percent — considerably below the national average — was this year’s goal. Benefits proposed half a dozen specific coverage changes and showed projected savings for each. The medical advisory committee discussed pros and cons of the changes and gave feedback about their relative palatability.”

Weiss continued, “It’s a data-driven process. The part you don’t see in the numbers is the dedication of Benefits director Kozar and Associate Vice Chancellor [Ron] Frisch, who understand that these decisions make a difference in employees’ lives and want to make choices we can all live with. Keeping rate increases down stabilizes the benefits portion of employee compensation — especially valuable to all of us in shaky economic times.

“Pitt continues to offer an HMO-style basic plan — Panther Gold — while other institutions have turned away from this model. It is also bucking the trend with member contributions in the form of service co-pays rather than deductibles and flat drug co-pays rather than charges based on a percentage of drug cost.”

Staff Association Council President Gwen Watkins, who is on the advisory committee, said, “The 2.5 percent composite increase was the general consensus of the medical advisory committee in a genuine effort to keep medical costs for Pitt staff at a minimum. The 2.5 percent amounts to an increase that will run between $2-$5, depending on what plan you have.

“The medical advisory committee and the administration have worked diligently to maintain health insurance benefits that are beneficial and affordable to the staff. During these difficult economic times, I am pleased that the University maintains the 80 percent [share it pays of Pitt’s health insurance costs].”

More information on Pitt’s health care and other employee benefits can be found at

Human Resources will hold benefits fairs on Pitt’s five campuses. Faculty and staff will be able to meet with representatives from each of the insurance carriers.

• Pittsburgh:

noon-3 p.m. April 26 and 27, William Pitt Union lower lounge; noon-3 p.m. April 29, Room 1105 ABC Scaife Hall.

• Johnstown:

10:30 a.m.-1:30 p.m. May 3, Student Union Cambria Room.

• Greensburg:

11 a.m.-1:30 p.m. May 4, 101 and 118 Village Hall.

• Bradford:

11 a.m.-2 p.m. May 5, Frame-Westerberg Commons, Mukaiyama University Room.

• Titusville:

10:30 a.m.-1:30 p.m. May 6, Haskell Memorial Library.

—Peter Hart

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