From: Traci Nordberg
June 1, 2010
At the end of March, the College Benefits Council (CBC) completed its work and recommended a set of changes to our health and retirement benefits. The target of $9 million as part of the $100 million budget gap meant that an extensive review and redesign would be necessary. The subsequent comments period provided nearly 400 submissions and, along with feedback from 200 people in six open sessions, informed the final set of benefits changes to be implemented in January 2011. I want to thank the Dartmouth community for the constructive and thoughtful comments on the proposal. We’ve completed the comments period, and both Steve Kadish, Executive Vice President, and Richard Howarth, Professor of Environmental Studies and Chair of CBC, have personally reviewed all of them. We then returned to the College Benefits Council with a summary of the comments and our decisions about the final version of the benefits plan changes. President Kim accepted the recommendations of the College Benefits Council, along with some changes and additions generated by suggestions from the Dartmouth community.
Because substantive changes have not been made in our benefits plan design for over 20 years, there was room both to update design elements and to align our costs more closely with peers and organizations of our size. Maintaining our competitiveness was a key consideration. In addition, the Council and the senior leaders of the College remain committed to a model that considers the impact on our lower paid employees. In an effort to address the impact of change on both the lower and higher income levels, and to partner with employees on savings strategies, two adjustments will be made:
1. Hourly paid employees currently receive $250 deposited into a Flexible Spending Account (FSA) to use for uncovered medical costs such as co-pays and deductibles. At present, only half the employees use the accounts, and the money is returned to the College at the end of the year. Effective January 2011, the College contribution to the FSA will be extended to all employees with an annual income of up to $60,000, regardless of pay type (hourly or salaried). Not only will this defray the increased plan costs to employees, but it also will provide a pre-tax option to save money for reimbursement of eligible healthcare expenses.
2. More highly compensated employees, especially those who are hitting the IRS maximum on contributions to their supplemental retirement plans, expressed a desire to make up the reduction in retirement with their own funds. Therefore, the College will introduce a savings vehicle called a 457b to allow eligible employees to use pre-tax dollars to increase their maximum savings for retirement. The College will not contribute money to these funds.
Other improvements or support systems include expansion of the Blue Choice in-network to all New England states, a 2 for 1 prescription program for mail orders, continuation of free preventive care, and a catastrophic health fund.
The following describes the adopted recommendations to be implemented in January of 2011. Additional information, including plan design details and term definitions, is available via this link.
As the 7% payment/benefit is not part of the health and retirement benefits, the CBC did not review or make recommendations on it. (The 7% payment is currently given to salaried staff over 40 years of age.) However, the senior leaders determined that it will remain in place for faculty and staff who currently receive it.
For those who do NOT currently receive it:
We are actively working on new requirements under the healthcare reform bill. Effective January 1, 2011, children through the age of 25 will be eligible to be on our medical plan regardless of student status. (Currently medical coverage eligibility for dependents is defined as an unmarried dependent child between the ages of 19 and 25 who is enrolled full time in an accredited secondary school, college, or university.) We’ll continue to provide updates on other reform changes.
Thank you again for your comments and suggestions as Dartmouth faces its challenges while maintaining a vision of excellence for faculty, staff, and students.
