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Memo Regarding Benefits Proposal and Comment Period

From: Traci Nordberg
April 6, 2010

BENEFITS PROPOSAL

In his February 8, 2010, message to the Dartmouth Community, President Kim outlined a series of savings and revenue targets for fiscal years 2011 and 2012, including a reduction of $13m in annual benefits and compensation budgets. The College Benefits Council (CBC), which includes both faculty and staff in hourly and salaried positions from all divisions, was charged with identifying approximately $9m in benefits-specific savings.

In March 2010, based on their analysis and study, the CBC made recommendations to adjust the health and retirements benefits. The CBC, as well as faculty committees, determined that these changes were preferable to a salary cut or furlough.

  • The health benefits plan has two parts that can be adjusted: the premium cost-sharing formula and the design itself, including deductibles, coinsurance, copays, and maximum out-of-pocket costs.
  • The CBC recommended eliminating the $800 per person/per year health plan opt-out payment.
  • To address unanticipated catastrophic health expenses, the CBC recommended creation of a fund to support eligible employees.
  • Finally, a recommendation was made to add a retirement contribution level and to adjust the contribution level for employees aged 35 and above.

Material describing the health and retirement proposals in more detail is available on line at http://www.dartmouth.edu/~hrs/news/benefits_changes.html. The site contains summaries of each plan--the POS (Blue Choice), PPO (Preferred Blue), and Indemnity ($1500 deductible)--with descriptions of the "current" and "proposed" state.

Additionally available are sample scenarios that show expected costs for employees with minimal, moderate, and catastrophic health events at various salary levels. These examples contain outlines both of premium and of estimated out-of-pocket costs (e.g., hospitalization, therapy, prescriptions).

The Web site features an online estimator to assist with understanding the potential change in plan cost if applied to current annual pay and plan selection.

The estimator tool is available at http://www.dartmouth.edu/~hrs/benefits/premium_cost/estimator/.

ABOUT DARTMOUTH'S HEALTH PLAN

Substantive changes have not been made to Dartmouth's health plan since the 1980s.

Our health insurance is self-insured; Dartmouth uses Anthem Blue Cross Blue Shield, a non-profit administrator, to oversee the plan. We pay a flat administrative fee, and Anthem does not receive a percentage of what we spend on our claims. They negotiate with the healthcare providers on our behalf as well as on those of other employers. We renegotiate our contract with Anthem on an annual basis.

The annual plan costs (both the College and employee portions) total approximately $46m. Hewitt Consulting assisted the CBC and Administration by providing peer data, modeling, and design options.

LOOKING AHEAD

The proposed design puts us in a position to incorporate innovative features that reward healthy behaviors and to continue addressing the overall costs of healthcare. Additionally, the new plan design allows us to remain competitive as an employer both in the Upper Valley and with our national higher-ed peers.

Those who participate in the PPO plan often do so to access providers outside of New Hampshire. The proposed POS plan will expand the providers who are "in network" to all New England states, and many employees may decide to change to the less expensive plan for that reason. The College will also benefit from discounts for using this new network.

Plan designs are the same for all faculty and staff. Employees would not be grandfathered into past plans (health or retirement).

COMMUNITY COMMENT PERIOD

Comments and suggestions are welcome at http://www.dartmouth.edu/~hrs/benefits/premium_cost/comments/.

The comments period will run through Friday, April 23, 2010. Professor Rich Howarth, chair of the CBC; Traci Nordberg, Chief Human Resources Officer; and Steve Kadish, Senior Vice President, will review and evaluate all the comments and suggestions before a final decision is made.

Information sessions will be offered next week for faculty and staff who would like assistance with the online estimator or to gain more understanding of the plans. A D2U will go out with the days/times/locations. If there is more interest than capacity, we will add more sessions.

Questions and comments should be routed through the Web site, to the HR email human.resources@dartmouth.edu, on paper to the HR office, or at the information sessions.

Last Updated: 4/6/10