Yudof Looks to Secure Employee Health Care

    The University of California will adjust its budget to support the rising cost of employee health care under a new plan for the 2009-10 fiscal year unveiled by university officials last week.

    Designed to protect UC employees from rising health-care costs through a special, one-time subsidy, the plan will employ a continuation of the current salary-scaled approach in hopes of preventing an increase in employee out-of-pocket fees.

    “We recognize how important good health-care benefits are for our employees and their families, especially our lower-paid employees who are hit hardest by escalating health care costs, and we continue to work very hard to ensure they have access to quality health benefits,” UC President Mark G. Yudof said.

    He added that under the plan, the university would take on additional costs in an effort to minimize the burden on lower-paid employees.

    “In addition to continuing to pay the majority of employee health insurance premium costs, as further protection for our employees we are also defraying a portion of employees’ increased share, which cuts in half the percentage increases our lower-paid employees would otherwise see for Health Net, our largest medical plan,” he said.

    One of the most notable aspects of the plan, according to university officials, is that it will be utilized during a time of economic hardship when many employers are attempting to control rising costs by reducing or eliminating medical and dental benefits. Studies have suggested that 2009 employee monthly premiums will increase by 8 percent to 10 percent, while costs are expected to rise 8.9 percent.

    The university will continue to pay an average of 87.5 percent of employee monthly premium costs. As for the roughly 42,000 UC employees earning $46,000 or less, the university will continue to cover 93-percent to 96-percent of their monthly medical premiums.

    Many of the university’s existing benefits packages — including programs for employee wellness, behavioral health and preventive care — are also maintained in the 2009 plan. Employee dental and vision benefits will continue to be completely covered by the UC system. Additionally, employee co-pays and deductibles will not increase in 2009, and lower-paid employees will continue to pay lower monthly premiums than other UC employees due to the university’s sliding, salary-based approach to health care.

    University officials claim that roughly 36,000 UC employees covered by university medical plans will see a decrease in their 2009 net monthly rates from those of the previous year. As a prime example of the decreased rates of lower-paid employees, officials cite the 2009 UC Kaiser plan, which awards those earning under $46,000 a 6.8-percent reduction for single coverage, and a 17.9-percent decrease for family coverage. The special one-time subsidy is a major contributing factor to this rate decrease.

    The effects of the new plan on the university, however, will be costly. UC officials expect to pay approximately $972 million in total premium costs — an 8.9-percent increase from 2008 — with $967 million going to employee health benefits and $5 million to the special one-time subsidy.

    UC Office of the President spokesman Paul Schwartz said the new plan is primarily concerned with maintaining adequate health benefits for university employees.

    “The plan is designed to protect employees, particularly lower-paid employees,” he said.

    Schwartz stressed that the 2009 plan takes into consideration the importance of ensuring continued employee access to quality health care. One of the most important features of the plan, he said, is that it does not reduce any current benefits.

    He added that the salary-based approach and special subsidy will, in some cases, significantly reduce the potential for cost increases in 2009.

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