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Summary of Dartmouth College Benefits Changes

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) was charged with identifying approximately $9m in benefits-specific savings.  Core guiding principles were established as part of the decision-making process.  After thoroughly reviewing the CBC's recommendations and more than 400 comments from the Dartmouth community, the College will implement the following benefits changes effective January 1, 2011.

Principles

  • Align premium with pay level.
  • Develop a design that is contemporary and in line with peers.
  • Ensure competitive position not harmed.
  • Distribute reductions fairly and broadly.
  • Support (financially) employees who experience catastrophic health events.
  • Position plan design to allow for further improvements and cost-savings for all.
  • Secure the quality of the College’s health care and retirement plans.

Benefits Changes

  • Update the premium cost-sharing formula.
  • Revise the plan design (e.g., deductibles, co-pays, maximum out-of-pocket costs).
  • Eliminate the $800 annual opt-out payment.
  • Create a catastrophic health fund.
  • Extend $250 Flexible Spending Account (FSA) benefit to all employees earning $60,000 or less annually.
  • Offer a Health Savings Account (HSA) to Indemnity Plan participants.
  • Reduce the College contribution for employees aged 35 and over.

Overview of Changes

Premium Cost Sharing

Health premium cost changes, to be effective January 1, 2011, are as follows:

  • The sliding scale for premium costs will remain, but credits will continue to decrease from the current cap of $60k to a new cap of $200k.
  • Employees with individual coverage will pay in proportion to those of 2 person and family.
  • The employee portion of the premium cost will range from 2.85% to 45%, depending on salary, FTE, and the plan selected.

Plan Design

Highlights of the plan design, to be effective January 1, 2011, are as follows:

  • Use of deductibles, co-insurance, and adjustment co-pays to be in line with peer benefit plans. Click here for term definitions.
  • “In Network” coverage will be expanded to include other New England states.
  • Those employees who use the mail order option and request generic drugs (when possible) will see the greatest prescription savings.
  • Preventive Care will remain free.

Elimination of the Health Plan Opt-out Payment

Dartmouth will eliminate the annual $800 payment for those employees who opt out of coverage with the College because they have coverage from another source.

Flexible Spending Account

A Flexible Spending Account (FSA) allows an employee to set aside a portion of his or her earnings to pay for qualified medical and/or dependent care expenses. Money deducted from an employee's pay into an FSA is not subject to payroll taxes, resulting in a substantial payroll tax savings.  A $250 FSA benefit will be available to all employees whose base pay is $60,000 or less annually.

Health Savings Account

A Health Savings Account (HSA) is a tax-advantaged medical savings account available to employees who are enrolled in a High Deductible Health Plan. The funds contributed to the account are not subject to federal income tax at the time of deposit and the funds roll over and accumulate year to year if not spent. HSA's are owned by the individual, and funds are used to pay for qualified medical expense.  The HSA will be available to those employees who are in the Indemnity Plan.  To meet federal regulations for an HSA, the deductible for the Indemnity Plan has been raised (see Plan Design Details).  

Catastrophic Health Fund

Dartmouth will provide financial assistance to eligible employees who face unanticipated catastrophic medical expenses.

Retirement Benefits

The College retirement contribution levels for employees aged 21–29 and 30–34 will remain the same, at 3% and 5%. A new level is introduced for employees aged 35-39 with a contribution level of 7%. For those aged 40 and up, the contribution will be 9%.

o 21-29    3%

o 30-34    5%

o 35-39    7%

o 40+       9%

Additionally, the College will provide a 457b retirement savings option to eligible employees, which will allow eligible employees who reach the current IRS maximum on supplemental retirement savings to contribute additional pre-tax dollars to their accounts. 

Plan Design Details

Employee Contribution Estimator

Memo Regarding Benefits Changes

Sampling and Summary of Comments on Proposed Benefits Changes

Peer Comparison: Costs of Health Plan Features

*Please note that these changes apply to all actively enrolled employees.  Employees will not be "grandfathered" into previous health or retirement benefits.

Last Updated: 10/26/10