Health Plan rates are approved; open enrollment period is coming

New health-care premium rates, effective Jan. 1, 1999, were recently approved for the endowed health care Managed Choice and 80/20 plans for faculty and staff. The new rates (shown in the box at end of story) reflect the increase in health care costs that Cornell has experienced this past year.

The rate increases are proportionately the same for both Managed Choice and 80/20 plan participants. Single contribution rates will increase by 60 cents biweekly for those in Managed Choice and 82 cents biweekly for those in the 80/20 plan. Family rates will increase by $3.87 biweekly for those in Managed Choice and $4.37 biweekly for those in the 80/20 plan.

Please note, however, the columns of rates in the chart that are based on 24 payments: Because exempt staff and faculty will be moving to a semimonthly pay schedule beginning in 1999 (see accompanying letter), their contributions will be deducted over 24 instead of 26 pay periods. Thus, their per-paycheck rate amounts are slightly higher than those shown for nonexempt staff. Nonexempt staff will continue to experience deductions based on 26 biweekly paychecks annually. The total amounts deducted annually are identical for faculty, exempt and nonexempt staff.

In setting the new rates, Cornell assumed a comparable increase in the amount it pays toward supporting faculty and staff health care. On average, for each dime that a single staff or faculty member spends on health care, Cornell spends 90 cents; for each quarter a family spends on health care, Cornell pays 75 cents towards that same family's health care. The total the university is spending on faculty and staff health care premiums is now over $21 million, and if the past half year is any indicator, these expenditures will continue to rise.

The new rates are reflective of a national trend of rising health care costs, which Cornell already has begun to experience. This past year, costs of Cornell health care rose by over 11 percent. A recent federal study predicts that health care expenditures today will double by the year 2007. Familiar causes are cited in the report: rising costs of treatment with the use of new, expensive technologies; greater use of outpatient services where there is less effective utilization management; and greater use of drug therapies, the fastest rising cost factor in health plans today.

"Setting rates for calendar year 1999, we judged that this upward trend must be anticipated in the rates to adequately cover the costs employees and their families will encounter," said Paul Bursic, director of Benefit Services.

Mary George Opperman, vice president for human resources, expressed concerns that national trends may be reflected in our local health care delivery systems, but she is optimistic that Cornell can hold its increases down to below the national average in future years.

"We are working with the local hospital and physicians to hold down cost increases in Tompkins County," she said. "I am hopeful that this collaboration will give us a way to maintain quality care at a reasonable cost. Our employees and Cornell University simply cannot afford to ride this trend upward to the year 2007, if that is the prediction. We will watch the cost of services and the use of the plan very closely."

The two plans Cornell offers also provide a measure of relief.

"We still see a cost advantage to participants in the Managed Choice plan over the 80/20 plan," Bursic continued. "Managed Choice has no deductibles, and it only costs the employee or a covered family member a flat rate of $10 per routine office visit."

Staff and faculty will have an opportunity to review their health plan coverage during the upcoming open enrollment period. This year, open enrollment for endowed faculty and staff will run from Nov. 1 to Dec. 4. 1998. Employees will receive an open enrollment packet in their home mail later this month. This annual enrollment period is the only time during the year that participants may change health coverage options. All Select Benefit participants should review their needs for 1999 at this time and be ready to re-enroll.

Due to federal regulations, the absolute closing date for the receipt of open enrollment changes for endowed health and endowed and statutory Select Benefits will be the close of business Friday, Dec. 4, 1998. Forms sent through the U.S. mail will be accepted if they bear a postmark on or before Dec. 4.

Employees of statutory colleges and administrative units share the Nov. 1 through Dec. 4, enrollment period for Select Benefits, but their health plan open enrollment will probably be scheduled as usual for the month of December. New York state determines the health plan rates for the Empire Plan; these rates are usually released in mid-to-late November.

All faculty and staff -- endowed and statutory -- are encouraged to consider their needs for the coming plan year, 1999, as soon as possible and to send their forms to Benefit Services early.

"Most people seem to wait for the time around the Thanksgiving holiday to get their forms to us," Bursic said. "This year, with the implementation of the new PeopleSoft system, it would really help us if staff and faculty could get their forms to us before then. Our staff will be very busy converting to the new system for all of December."