By DAVID BELFIGLIO
Contributing Writer
Allegheny’s employee health insurance plan will likely see significant changes in the next fiscal year, beginning July 2014. Within a month, a subcommittee that has been exploring various options to deal with rising health care costs hopes to make a recommendation to the Finance and Facilities Committee, co-chaired by Executive Vice President Sue Gaylor and Professor of English James Bulman, which will decide whether to endorse that recommendation and send it to the administration. Bulman and Gaylor are also members of that subcommittee.
In the past year, Allegheny has been able to negotiate modest annual premium increases with Highmark, its Pittsburgh based health insurance provider. Gaylor cites competition between Highmark and rival insurers, such as UPMC, as working in the college’s favor.
But during the past two years, Allegheny employees have collectively claimed more in benefits than they have paid in premiums, putting Highmark in a position to demand significant concessions. Gaylor said in an email that Highmark initially quoted a 37 percent premium increase to maintain the same plan. The subcommittee instead opted for modest cuts in coverage. Gaylor estimates that premiums will increase an average of 10 percent, similar to the increase for the past four years.
Employees will likely be offered a choice of two plans, Bulman says, one is a Preferred Provider Organization (PPO) and the other a Qualified High Deductible Health Plan (QHDHP). The college currently offers a PPO in which 100 percent of healthcare expenses are covered when plan members use providers in Highmark’s network, though copays ranging from $10 to $30 (and $100 for emergency room visits) are charged for some services, according to Allegheny’s website. Copays for prescriptions drugs range from $10 to $100.
“It’s a very rich plan,” Bulman said, “better than almost all of the plans offered by our comparison schools.”
For employees who stick with a PPO, next fiscal year’s plan would have some modifications. Though no final recommendation has been made, Bulman said that it might only cover 90 percent of healthcare costs. Employees might also have to meet a deductible before coverage kicks in by paying the full cost of some services. Costs to employees with higher health care expenses would likely be restrained by an out-of-pocket maximum, where the plan would cover 100 percent of costs after an employee has paid a certain amount for services.
A QHDHP has a high deductible and employees would have to pay the full cost of all healthcare expenses until they met it, but the premium would likely be lower. After that it would cover a significant portion of healthcare expenses, and would also have an out-of-pocket maximum.
Employees who chose a QHDHP would have a Health Savings Account, where they could put money which would not be taxed and later use it to help meet their deductible and other healthcare expenses. The college might also make a contribution to employees’ HSAs.
Bulman acknowledged the complexity of the situation.
“It’s Byzantine,” he said, explaining that the subcommittee has examined at least a dozen plans over the last five months, looking at each plan’s impact on different salary levels.
“One of the things that’s been of great concern to the subcommittee is not disadvantaging lower income employees here,” Bulman said. He explains that employees pay between 5 and 25 percent of the cost of their premiums depending on their salary level, with lower-paid employees paying less. The college pays the rest of the premium.
“Our mentality is Marxist enough to that we want to make sure that everybody who works here has enough to be able to get good health coverage without having to make draconian choices,” Bulman said.
Employees will have several opportunities to learn more about their insurance options, starting with open forums in December and visits by the college’s insurance broker, Henderson Brothers, between January and March. Henderson Brothers has a computer program which will help employees make a decision based on their specific medical information.
