University of Kentucky Health Benefits Task Force

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University of KentuckyHealth Benefits Task Force

• Preliminary Recommendations

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Core Recommendations
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1. The University should increase its support for
health benefits in Fiscal Year 2003 (July 1,
2002-June 30, 2003).
Core Recommendations
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Core Recommendations Increased support
a. In addition to funding the underlying increase
in cost of health benefits, dedicate 5 million
in net general fund dollars and proportionate
amount for employees with health credit from
other sources, estimated total 9.6 million.
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Core Recommendations Increased support
Use some funds to improve current benefit
structure according to following recommendations,
but majority of funds to increase Universitys
contribution
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Core Recommendations Increased support

• b. For FY 2003,
• No employee contribution increase for any UKHMO
  family composition tier
• Employee contribution to UKHMO employee-child(ren)
  and family tiers should decrease.

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Core Recommendations Increased support

• c. Family composition tier ratios
• Employee plus child(ren) 1.5 times
  employee-only rate
• Employee plus spouse 2 times employee-only rate
• Employee plus spouse and child(ren) 2.5 times
  employee-only rate

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Core Recommendations Increased support

• These ratios generally reflect norms among the
  Universitys benchmark institutions.
• Current familysingle ratio is 12.79.

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Core Recommendations Increased support

• d. In FY 2003, with the change in family
  composition tier ratios, keeping a uniform
  contribution will move the University towards the
  90 contribution goal, but in future years,
  dependent coverage will require a higher employer
  contribution.

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Core Recommendations Increased support

• e. Minority report three task force members
  support a salary reduction of 0.5-1 to provide
  more dependent premium support in FY 2003. A
  salary reduction of 1 is estimated to raise the
  employer contribution to family coverage to over
  70.

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Core Recommendations

• 2. The University should set a goal of funding
  90 of individual, couple, employee-child(ren),
  and family coverage under a designated health
  plan within 5 years.
• The current median institutional support of HMO
  family premiums in our benchmark institutions is
  89.1.

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Core Recommendations 90 in 5 years

• a. In addition to funding the year-to-year
  increase in cost of health benefits, the
  University should dedicate one percentage point
  of funds available for raises to additional
  employer contribution until it is achieved.
• b. Under no circumstances should employee-only
  coverage be funded at less than 90.

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Core Recommendations 90 in 5 years

• c. After FY 2003, achievement of the 90 goal
  will require University contribution to the cost
  of dependent coverage that is higher than the
  contribution for employee-only coverage.

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Core Recommendations 90 in 5 years

• d. The University should monitor benchmark health
  benefits to maintain parity during and after the
  achievement of 90 funding.

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RATIONALE Inadequate funding of dependent
coverage has impeded recruitment and retention at
all levels. Inadequate funding has also
caused many employees to drop coverage of their
dependents, making the remaining group older and
less healthy.
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RATIONALE The current budgetary situation of the
University and the state makes immediate
achievement of this goal unrealistic.
Reaching the 90 funding level is critical to
the Universitys goal of becoming a top research
institution.
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Core Recommendations
3. The University should offer a lower benefit
option at an employee premium rate at least 20
lower than UKHMO in order to provide more
affordable dependent coverage before the 90
contribu-tion level is achieved.
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Core Recommendations Low Option

• a. Use managed care strategies rather than
  significantly higher copayment levels to avoid
  over-utilization.
• b. Possibly allow out-of-network utilization at
  high out-of-pocket cost such as 50 coinsurance.

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Core Recommendations Low Option
c. Impose annual or lifetime benefit limit. d.
Possibly exclude some benefits that are now
covered. e. Limit impact on cost of care for
children
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Core Recommendations Low Option

• f. Impose copayment for adult outpatient primary
  care provider visits other than annual preventive
  care visit to discourage unnecessary physician
  office visits, lower the cost of the plan, and
  offset the cost of other benefits that have been
  retained.

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Core Recommendations Low Option

• g. This offering would disappear when parity with
  benchmarks is achieved at the 90 employer
  contribution level.

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4. The University should identify alternative
benefit designs that better meet the needs of
Medicare-eligible retirees.
Core Recommendations

• a. Continue to contribute the same dollar amount
  to retiree coverage as to employee-only coverage

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Core Recommendations Retiree Coverage

• b. Explore ways to lower retirees exposure to
  high out-of-pocket costs for prescription drugs
• c. Retain protection against catastro-phic
  financial loss
• d. Retain coverage for medically necessary and
  preventive services not covered by Medicare

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Core Recommendations Retiree Coverage
e. Explore effect of actuarially rating
Medicare-eligible retirees separately from the
active employee group f. Support appointment of
a retiree to the Universitys Employee Benefits
Committee
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Core Recommendations Retiree Coverage

• g. Support surviving spouses coverage at the
  same percentage rate as family coverage for
  active employees, i.e., up to 90 support when
  that level is achieved for family coverage

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Core Recommendations
5. Corrections to UKPPO plan design
a. 100 coverage of screening mammograms after
20 copayment b. Coverage of laboratory services
with an outpatient visit at same level whether
the service is performed by a laboratory
classified hospital-based or outpatient
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6. Network expansion and enrichment
Core recommendations

• a. CHA Health network (for UKHMO Regional Service
  Area), and Humana network (for UKPPO) should be
  encouraged to expand to new counties and add to
  networks in counties already served so that as
  many major hospitals as possible are included

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Core recommendation Network expansion

• b. Specific standards should be set for network
  adequacy and it should be assessed carefully in
  future negotiations.

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Core recommendation Network expansion

• c. Preferred participating pharmacies issue
• Need to provide other employees with equal
  prescription drug benefit
• Kroger, Kentucky Clinic, Appalachian Regional
  Healthcare available in only 45 counties and
  limited in 3 more

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Core recommendation Network expansion

• Alternatives
• make preferred participating pharmacies available
  within a reasonable driving distance, or
• waive the additional 5 copayment at
  participating non-preferred pharmacies

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7. UKHMO issues
Core recommendations

• Access to primary care physicians
• determine ratio of primary care provider
  appointment hours to adult and child membership
• set goal and timetable for improvement, using
  national standards
• incorporate in subsequent UKHMO contracts with
  the University

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Core recommendations UKHMO issues

• b. Monitor primary care and specialty clinics for
  timeliness of patient care
• both time to get an appointment and waiting room
  time
• report problems and correction plans quarterly to
  the Employee Benefits Committee

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Core recommendations UKHMO issues

• c. Annual quality of care self- assessment
• report to University administration and the
  Employee Benefits Committee
• using the National Committee for Quality
  Assurances Health Plan Employer Data and
  Information Set (HEDIS) as a model

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Core recommendations UKHMO issues

• d. The benefits office should perform an annual
  UKHMO member satisfaction survey and report to
  the Employee Benefits Committee.
• e. UKHMO should assure that all departments
  communicate the departure of primary care
  physicians to their patients in a timely manner.

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Additional Recommendations
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8. Issues for off-campus employees.
Additional recommendations

• Employees who do not have UKHMO as an option
  where they work or live pay more for their health
  benefits in both premiums and out-of-pocket costs
  than employees in UKHMO counties.

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Additional recommendations Off-campus employees

• a. Employees outside the UKHMO Lexington Service
  Area should be allowed to enroll in UKHMO RSA or
  UKPPO if it is offered in the county where they
  work (currently limited to plans offered in the
  county where they live)

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Additional recommendations Off-campus employees

• b. Until UKHMO is available statewide, consider
  increasing the University contribution to their
  coverage so that the employee share of the
  premium for the least expensive option (other
  than the low option described in 3) available to
  the employee is equal to the UKHMO rate.

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9. To address the widespread call for increased
employee choice and access to additional health
care providers, the University should explore the
option of offering a high option plan with a more
compre-hensive statewide network than is
currently available.
Additional recommendations
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10. Plan design suggestions
Additional recommendations

• a. Restructure prescription drug benefit design
  with the following goals
• Cost containment
• Copayment schedule that more accurately reflects
  the costs and benefits of specific drugs
• Consideration for those whose health conditions
  require the use of expensive drugs

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Additional recommendations Plan design
suggestions

• b. UKHMO primary care physician office visit
  copayment for adult visits other than annual
  preventive care visit
• c. Cover treatment and medication for children
  diagnosed with attention deficit disorder with or
  without hyperactivity evaluate cost after one
  year

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11. The University should provide financial
support for the College of Pharmacy proposal
(attached) at a rate proportional to UKHMOs
utilization of Kentucky Clinic pharmacy services.
Additional recommendations
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Additional recommendations

• 12. The University should support the proposal of
  the Wellness Program (attached) in the areas of
  preventive service analysis, wellness
  initiatives, and improved member education.

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Additional recommendations Wellness

• a. Wellness Program staff should work with
  University administrators to identify ways to
  encourage healthy lifestyle practices among
  employees and students.
• b. The task force supports appointment of
  Wellness Director ex officio to the Employee
  Benefits Committee.

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13. Customer service and management capacity
should be enhanced.
Additional recommendations

•    a. More staffing and information technology
  for benefits office and self-funded plan
  management to provide more in-house expertise,
  improve timeliness and accuracy of
  communica-tion, and enhance member education

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Additional recommendations Customer service

• b. Proactive monitoring of UKHMO of service
  capacity, timeliness, office staff interaction
  with members instead of relying on members to
  bring problems to plans attention

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Additional recommendations Customer service

• c. Better customer information about how to
  contact health plans
• d. Consistency, timeliness, and accuracy of
  response to member inquiries
• e. Complete and up-to-date website materials

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Additional recommendations Customer service

• f. Timely and accurate plan documents,
  identification cards, and other personal
  materials
• g. More comprehensive information for new retirees

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Additional recommendations Customer service

• h. Better employee orientation to health
  benefits, encouraging early selection of a
  primary care provider (for UKHMO members), using
  a variety of approaches such as on-line training
  and interactive kiosks as well as traditional
  lecture format

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Additional recommendations

• 14. Eligibility issues
• a. The University should allow same-sex domestic
  partners to be covered under University health
  benefit plans if they meet criteria similar to
  those used by other universities for such
  coverage

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Additional recommendations Eligibility issues

• b. After the 90 contribution goal is achieved,
  the University should explore the cost and
  benefit of making a proportional contribution to
  coverage for employees who work more than 20
  hours per week but less than the hours necessary
  to qualify for current University contribution.

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Overview Core Recommendations

• 1. Increase University contribution to health
  benefits in Fiscal Year 2003 (July 1, 2002-June
  3, 2003)
• 2. Set a 5-year goal of funding 90 of
  individual, couple, employee-child(ren), and
  family coverage under a designated health plan

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OverviewCore Recommendations

• 3. Offer a lower benefit option at employee rate
  at least 20 lower than UKHMO
• 4. Identify alternative benefit designs that
  better meet the needs of Medicare-eligible
  retirees.

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OverviewCore Recommendations

• 5. Correct UKPPO plan design problems that cause
  unexpected out-of-pocket costs
• 6. Expand geographic coverage and enrich networks
  of UKHMO Regional and UKPPO.
• 7. Address UKHMO access and service issues.

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OverviewAdditional recommendations

• 8. Make health benefits more equitable for
  employees outside central Kentucky.
• 9. Explore the option of offering a high option
  plan with a more compre-hensive statewide network
  than is currently available.

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OverviewAdditional recommendations

• 10. Investigate cost and feasibility of certain
  modifications to health plan design
• 11. Provide proportional financial support for
  College of Pharmacy proposal to avoid unnecessary
  increases in prescription drug cost

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OverviewAdditional recommendations

• 12. Support Wellness Program proposal for
  preventive service analysis, wellness
  initiatives, and improved member education
• 13. Enhance UK benefits office capacity for
  customer service and management

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OverviewAdditional recommendations

• 14. Eligibility issues Make qualified domestic
  partners eligible for coverage and explore cost
  of some contribution for those working 20 or more
  hours/week