1998 health care rates are adopted for endowed faculty and staff

Through an analysis of last year's health care costs to Cornell, and using the guiding principles for determining health care changes that were adopted several years ago, the 1998 health care rates for endowed faculty and staff have been determined.

The new rates increase single coverage biweekly by $1.09 in Managed Choice and $1.37 in the 80/20 Plan. Family coverage increases biweekly by $2.30 in Managed Choice and $2.77 in the 80/20 Plan.

"We are definitely making strides in containing the health care costs," said Mary George Opperman, associate vice president for human resources. "The introduction of Managed Choice has helped, to be sure, and I believe that people are much more actively involved in managing their own health care and using the preventive services available. But our costs continue to rise faster than the national average, and they represent a larger and larger portion of the total compensation package."

The rates for 1998 represent the final phase of a gradual move toward a premium cost-sharing model that was developed in 1994. In that model, the university made a commitment to assume 90 percent of the cost of the health-care premiums for single coverage and 75 percent of the cost for family coverage. Faculty and staff assume the remaining 10 and 25 percent, respectively. Because the university is self-insured, the biweekly health care contribution rates represent a percentage of the total projected costs of health care for the coming year.

"The cost of health care for Cornell faculty and staff in 1998 will reflect a model widely used across the nation," Director of Benefit Services Paul Bursic said. "Getting to this point has been a four-year sojourn. The university has strategically moved toward this goal, taking incremental steps each year since 1994."

Cornell's endowed health-care options include enrollment in either the Endowed 80/20 Health Care Program or the Managed Choice Health Care Program. The chart below illustrates 1998's costs for both options and compares them to those for 1997.

"The university is committed to providing a quality, well-rounded benefits package and to its goal of realizing the guiding principles governing the pricing of Cornell's health care options," Opperman said. (See guiding principles, below.) "We must continue to seek ways to offer high quality health care at affordable prices," she added.

This year's open enrollment period begins Nov. 1 and ends at 5 p.m. on Dec. 5, 1997. Open enrollment materials have been sent to home addresses. Bursic said it is important for each faculty and staff member to read and respond to the materials. By law, changes in health insurance coverage and enrollment in Select Benefits can only happen during this annual enrollment period. Changes made during open enrollment are effective for the paychecks of Jan. 8, 1998, for non-exempt employees and Jan. 15, 1998, for exempt employees.

Principles guide pricing of health care options

Here are the guiding principles, established in 1994, that are the basis for the 1998 rate development in Cornell's endowed health-care program.

• The university plans to continue to offer a choice of health care plans within the endowed health-care program.
  
• Premiums for the Endowed 80/20 Plan and Managed Choice for endowed faculty and staff will be comparable.
  
• The value (as measured by cost per person) of benefits provided under the two programs will be comparable.
  
• To maintain choice within Cornell's endowed health-care program, it is necessary to enroll a minimum of 20 percent of the university's faculty and staff in any one program.
  
• The endowed health-care program should be priced as a true self-insured arrangement and should be self-supporting over time.