Faculty health care costs rising

SARAH STOESZ | ASST. NEWS EDITOR

Health insurance costs for Butler University’s faculty and staff are projected to rise more than 10 percent before 2015.

An increase in insurance premiums occurs every year.  Increases have been kept below 10 percent at Butler for several years.  

However, Bruce Arick, assistant treasurer and vice president of finance, said  the premium will likely rise above 12 percent for 2015.  

The scope of the benefits provided with the insurance will not change.  The various coverage options will also stay the same, he said.  

Zach Finn, a clinical professor and the director of Butler’s division of the Davey Risk Management and Insurance Program, said Butler is self-insured for health care benefits.  Every year, the university pays based on the claims that the faculty and staff have as a whole. 

Arick said the increase in the premium is partly due to a recent trend in the higher volume and severity of claims. Butler is not seeking to lower the premium increase for 2015 in an attempt to have benefits stay the same for faculty and staff.

“We are not looking to reduce the premium by shifting more costs onto the plan users,” Arick said.  

However, the benefits provided with the university’s health care plan are not as good as other universities, Finn said. 

“I mean, if you look at the benchmarking of our benefits versus other university benefits, we are actually in the red, meaning ours are less generous compared to other universities,” he said. “Meaning our faculty members are sacrificing more as far as our quality of health care in order to keep tuition costs down.”

Finn, however, said comparing benefits with public versus private universities changed the scope of the problem.

“Basically, our benefits are not as good as other universities, in the general university category,” Finn said. “Now, if you compare that to private industry, our benefits are very good.”

The premium increase will raise costs for faculty and staff.  This may cause concern for some Butler employees.

“For faculty members, it can be really challenging when your health care costs go up 10—15 percent when your salary raise only goes up 1—2 percent,” Finn said.

He also said the university is doing anything it can to control costs.

“As our population gets older, and as medical costs get more expensive, the changes in our benefits are not good,” he said. “It is just how do we manage the cost; it is something that the faculty has done a great job on.”

The university is trying to decide how much it will pay for health care and how much of the cost the faculty and staff will bear.  Finn said the university generally bears most of the cost.

“For every dollar of tuition that comes in, Butler University pays roughly 77 percent of that. Employees pay the remaining 23 percent, so Butler pays the majority of the cost,” Finn said. “And so they are doing what they can do. It is just an issue where it kind of it is what it is.”

Arick said the entire health care industry is experiencing rising costs just like Butler.

“As a general rule, health care in particular has some pretty significant escalating costs from year to year on its own,” he said.

 Industry-wide health care costs are projected to increase 9.5 percent, Arick said. 

A decision has not yet been made about the definitive amount of the premium increase.

Arick made a presentation to the faculty senate last Tuesday about the projected health care changes.  

Elizabeth Mix, head of faculty senate, said faculty senate members are concerned with the rising costs.

“Everybody is always concerned with anything that is going to impact how much they pay for anything,” Mix said.  “I mean, I really think we all want to work together to come up with creative solutions. This is a challenge for every university, for every business, for every part of the country. 

“We’ve got an awful lot of incredibly talented people here, and if anybody can come up with a creative solution, I bet it is the people at this university working together who can do that,” Mix said. “And maybe other people can start copying us, and that would be awesome.” 

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