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February 15, 1996

Dental, vision plans being considered

Pitt faculty and staff may have three new fringe benefits options, effective July 1:

* A dental insurance plan.

* Vision insurance.

* The ability to borrow money from basic TIAA retirement accounts.

Also, retired faculty and staff may gain a new medical insurance option — SecurityBlue, a managed care plan that retirees could choose as a money-saving replacement for Medigap and major medical coverage.

Employees who chose dental and/or vision coverage would pay monthly premiums. The plans would cost the University nothing except for minor administrative expenses such as processing paperwork and explaining the new options to employees.

To give employees the option of taking out loans from their TIAA accounts, Pitt's administration would merely have to grant its permission. Faculty and staff would deal directly with TIAA in acquiring and repaying loans.

Pitt's Human Resources office staff did most of the legwork of soliciting bids from vendors and negotiating for rates and coverage, said James Holland, co-chairperson of the University Senate benefits and welfare committee.

Holland reported on the proposed new benefits at Faculty Assembly on Feb. 6 and Senate Council Feb. 12. Assembly members voted to endorse the new options. Senate Council put off voting until a future meeting, to give administrative members of Council time to study the proposals.

Interim Chancellor Mark Nordenberg said he and his fellow senior administrators knew the benefits proposals were in the works but had not seen detailed, written descriptions until the Council meeting. Afterwards, Nordenberg said: "I'm not prepared to make a final statement with respect to any of the proposals, but I would say that I'm generally sympathetic to the goals that they were designed to advance." Holland said his committee hopes that Senate Council and the senior administration will approve the benefits in time for Pitt's next open enrollment period. During the annual open enrollment period, faculty and staff may choose among optional fringe benefits. Changes in benefits go into effect July 1, the beginning of Pitt's fiscal year.

If the new benefits gain approval, employees will receive detailed information about them during open enrollment. The following are brief descriptions: Dental insurance Coverage would be offered by Prudential DMO (dental maintenance organization), with care provided by Prudential's network of dentists. Prudential has agreed to include in its network dentists from the Pitt dental school practice plan.

The monthly premium for individuals would be $11.54. The family premium would be $30.01. Benefits would include diagnostic and preventive care (100 percent coverage), basic restorative (80 percent), major restorative (50 percent) and orthodontia (50 percent) with no deductibles, no annual maximum, and no lifetime orthodontia maximum.

Prudential has agreed to offer its DMO plan at Pitt without requiring that a minimum percentage of employees enroll — a requirement that killed efforts to introduce dental insurance at Pitt during the 1980s.

Ron Frisch, Pitt director of Compensation and Benefits, said the University is working with Prudential to ensure that faculty and staff at the University's four regional campuses would have a sufficient number of Prudential network dentists to choose from.

Vision insurance Coverage would be offered by network doctors of Blue Shield PPO (preferred provider organization), with monthly premiums of $3.30 for single employees, $6.60 for an employee plus a spouse or other individual, and $8.21 for family coverage.

In-network benefits would include 100 percent coverage of eye exams, frames, single vision lenses, bifocal lenses, trifocal lenses, lenticular lenses and contact lenses. Medically necessary contacts would not be covered because they already are covered by Pitt Blue Cross plans.

For out-of-network care, Blue Shield PPO would pay allowances ranging from $24 for frames and single vision lenses to $72 for lenticular lenses.

Participating employees could obtain eye exams, frames and contacts once every 24 months.

Human Resources is working with Blue Shield PPO to ensure coverage at the regional campuses.

TIAA loans Currently, Pitt TIAA-CREF enrollees may borrow money from Supplemental Retirement Accounts but not from their basic accounts. Faculty Assembly is asking Pitt to grant employees the latter option.

If approved, the plan would allow employees to borrow from $1,000 up to $50,000 or 45 percent of their accumulated TIAA funds, whichever amount is lower. The employee's TIAA account would be collateral on the loan — yet, employees would continue to earn interest on the total amount of their TIAA accumulations held prior to the loan, even as they were repaying their loans.

Loans would be available only from TIAA accumulations, not from CREF funds, but employees could transfer money from their CREF accounts to TIAA to increase the amount of money available for a loan.

Employees would have five years to pay back the loan, or 10 years if the loan is used to buy the employee's primary residence. Loans would have to be repaid immediately if the employee left the University.

Married employees would need their spouses' consent to take out a loan. Repayment would be quarterly by check or automatic transfer from the employee's bank account. Interest rates would be based on Moody's Corporate Bond Yield Average, which generally is lower than the interest rates charged by banks for personal and home equity loans.

For the time being, University Senate leaders are not recommending that employees be given the option of taking out loans on their Vanguard mutual fund retirement accounts. According to benefits and welfare committee chairperson Holland, that's because Vanguard has more restrictive loan requirements than TIAA. Because Vanguard is a mutual funds plan, it is covered by different IRS rules than TIAA-CREF.

For example, Vanguard would charge employees fees for initiating loans, plus annual fees. Also, Vanguard would calculate loan interest rates differently; they probably would be higher than TIAA loan rates, Holland said. And Vanguard would require loans to be repaid through payroll deduction, which would add to the workload of Pitt's payroll office.

"We may want to recommend a loan arrangement with Vanguard in the future, but not this year," Holland said.

SecurityBlue If approved, this Blue Cross Medicare health maintenance organization would provide Pitt retirees with a managed care alternative to Medigap and major medical (which would continue to be offered here, under the University Senate's proposal).

Both retirees and the University would stand to gain financially from SecurityBlue.

The federally subsidized plan charges no premiums, either to the retiree or the University. That's in contrast to the major medical coverage that Pitt provides for its retirees, and to employee-purchased Medigap plans. Under Medigap, retirees pay monthly premiums ranging from about $40-$120 for supplemental coverage beyond that offered by basic Medicare.

For some retirees, SecurityBlue also would offer slightly better coverage than they get under their major medical and Medigap plans, Holland said — no annual maximum on prescription drugs, for example, and more long-term care coverage.

The potential downside of SecurityBlue for some retirees is that the plan would pay only for services provided by SecurityBlue network physicians. The network includes virtually all doctors who are members of Blue Cross's Keystone and SelectBlue plan networks. "It's a huge network," Holland said.

Currently, SecurityBlue is offered in only six Pennsylvania counties — Allegheny, Arm-strong, Beaver, Butler, Washington and Westmoreland — so it would not be an option for most employees at the Bradford, Johnstown and Titusville campuses. However, Blue Cross plans to extend the plan this spring to the Johnstown and Titusville areas; Bradford still would be shut out, Holland said. But he noted that Blue Cross of Western Pennsylvania is trying to develop cooperative arrangements with other Blue Crosses nationwide. If that happens, SecurityBlue would be available to all Pitt employees.

— Bruce Steele

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