Health Benefits Update
NOTE: these are preliminary numbers and final amounts will be determined and released hopefully in early/mid June.
The Health Benefits committee met on May 16th to learn about the Medical and Dental plan rate renewals for 2013-14 that will start on Oct. 1. 2013. Consultants from Alliant Insurance Services, Employee Benefits division, came to the meeting to provide details about current and future medical insurance plans, as well as some options to modify plans, should Cabrillo decide to do so. These consultants work for Cabrillo as part of our contract with SISC (Self Insured Schools of California), the insurance pool that Cabrillo belongs to and through which we purchase health and dental insurance. It is estimated that the Dental plan will go up by 3%. The rest of this update is focused on the Medical plans.
Overview of renewal rates for current plans
Currently, Cabrillo offers two Blue Shield HMO plans, named the HMO High plan and the HMO Low Plan. The HMO Low Plan is the plan that is used to calculate the dollar amount of the stipend that Cabrillo pays toward health coverage for full-time faculty members. As of last year’s contract agreement, faculty pay 50% of the rate increases for 2012-2013 (over the ‘11-12 baseline), and cumulatively for 2013-2014. The rate increase for the HMO Low plan for ‘13-14 is 6%, so faculty will pay a 3% increase over this year and so will the District. Dental rates have not been released yet, so the out-of-pocket cost was also based on a 3% increase to dental. Once dental rates are received, the final stipend amount for ‘13-14 will be determined.
Based on current information, the estimated tenthly (per month/10-month) employee contribution to maintain the HMO Low plan will be: $38.48 for Single, $65.26 for Employee + 1 and $100.10 for Family coverage. The District tenthly contribution for the full benefits package (medical, dental, life and disability) is estimated at: $962.12 for Single, $1,845.43 for Employee +1 and $2,577.29 for Family.
In addition to the HMO plans, Cabrillo currently offers three Blue Shield PPO plans, known as the PPO High, PPO Med and PPO Low/High Deductible plans. SISC will no longer be offering the existing PPO High and Med plans, so Alliant presented information about the proposed new PPO plans. These plans are fairly similar to existing plans and reflect a decision by SISC to discontinue plans with too few participants. The PPO Low plan would remain the same. Renewal rate increases for these plans are: 10.3% for the new PPO High, 11.8% for the new PPO Med and 6.7% for the PPO Low plan.
Part-timers who are eligible for health insurance receive a stipend that covers part of their benefits cost and may elect to buy into any of the plans offered by paying the difference.
Proposed Changes for 2013-14
In light of the increasing “out of pocket” (OOP) share of cost for medical insurance, the Benefits committee discussed the merit of adding a third HMO plan that would cost less than the current HMO Low plan and would allow interested faculty to elect a plan with no OOP cost. This plan would be offered in addition to the current HMO Low plan and would not change the agreements about how the district stipend and share of cost are calculated.
The proposed “No OOP” HMO Plan would offer virtually the same medical benefits as the current HMO Low plan, but would cost the user more primarily in the following ways. The Office Visit Co-Pay would increase from $25 to $30. Inpatient Hospital Stay would have a 20% Co-insurance instead of $500, up to the Calendar Year maximum of $1,500 per member (instead of Co-insurance maximums of $2,000 for individual and $4,000 per family in the HMO Low plan.) Other details about plan differences are available upon request.
The Benefits committee also discussed whether to modify the PPO High and PPO Med plans to mitigate increasing OOP costs. Active employees pay considerable OOP costs for the PPO plans. Under the current contract, for faculty hired before 2008, eligible early retirees (under age 65) receive health benefits without paying any OOP cost. All others receive the stipend amount.
With Blue Shield increasing the HMO plans by 10-12% next year, the estimated tenthly OOP cost for active employees to purchase these plans would range from $265 per month for a single on the PPO Med to as high as $1007 per month for a family on the PPO High. The consultants from Alliant will bring back options for either combining the PPO Med and High plans into one PPO plan with more reasonable OOP costs, or two PPO plans with a wider spread between them, allowing for more meaningful choices by the users. Final decisions about the PPO plans are expected at the May 30 benefits meeting.
Final decisions and estimated plan costs should be available to the college community early in June. An open enrollment period will take place in August during Flex Week. All plan participants may elect to change plans at that time.
by Debora Bone