While CU administrators continue to finalize moving to self-funding most health care benefits for employees, progress has been slowed somewhat by the state of Colorado's own consideration of two bids for health plan administration for state employees. The state's decision, expected in April, will factor in determining the final rates for classified employees and, by extension, to faculty and exempt professionals.
In recent weeks, E. Jill Pollock, senior associate vice president and chief human resources officer, has been discussing with governance groups the university's move in July to health plan self-funding. The approach, which would allow the university to better manage health benefit plans, could cut costs over time from 3 percent to 7 percent annually, according to a 2008 report to the university by Mercer Consulting, a national total compensation consulting firm. Self-funding also would allow the university to tailor health plans to fit the needs of its employees.
One element of self-funding is an ability to link the utilization of benefits across the plans for annual rate setting; doing so might smooth the cost spikes in a particular plan in a year due to unusual medical expenditures. At its March 18 meeting, however, the CU Faculty Council approved a resolution on the matter: "The Faculty Council expresses concerns about proposed processes in rate setting for the CU health plans."
Said Pollock, "We appreciate the Faculty Council's concern about rates. It's the same concern we have. We want to deliver the best plan choices at the lowest costs, but we also do not want to cause, by highly differentiated individual plan pricing, a shift of, say, healthy participants to a single plan. The result would be a significant cost increase for the other plans in the following year.
Â "With self-funding, we hope to reduce, over time, the rise of health-care costs to all employees."
The university also is focused on a wellness and prevention program as a key component of all health plans that would begin with a voluntary health-risk assessment that employees could complete online. Pollock has said that studies show such assessments, along with medical management programs, can reduce health costs over time by up to 3 percent, slow the rate of increase in health plan rates and cut down on absenteeism. About 1 percent of the money received from employee and employer medical contributions would fund the wellness and prevention program.