The University Record, January 31, 1994

Questions, concerns about flex addressed at public forums

Editor’s Note: The report of the Flexible Benefits Advisory Committee was carried in a special section of the Jan. 17 Record. A limited number of copies are available from the Record office, 747-1841.

Questions about the sick leave/attendance incentive program, the pricing of benefits and the relationship between core benefits and flexible benefits were among those addressed by members of the Flexible Benefits Advisory Committee at several public forums last week.

The forums were designed to get feedback on the flexible benefits plan that has been recommended to the executive officers.

Committee co-chairs David Anderson and Chandler Matthews noted that the information gathered in the meetings will be assessed by the committee and may be used to modify and/or refine a final proposal that will be submitted to the executive officers in mid-February.

Matthews said that the process followed by the committee began with talking with various groups of people about the concept of flexible benefits “to find out what is important to them. Following this, we built a prototype to which people can react. That is now available for review.

“The recommendation is not written in stone,” Matthews explained. “Some [benefits] we wouldn’t change, such as the retirement plan and choices among vendors for health insurance.” Other options, he noted, such as vision care, might not be included in the recommendation if people aren’t interested.

Anderson emphasized that “the report is open for scrutiny. We’re now gathering data that will help us verify our recommendations or modify them to more closely conform to what we’re hearing in this stage of the process.

“This is an ongoing process,” he noted. “If the executive officers say yes, we’ll most likely suggest a continuous feedback process, enabling refinement of the program over time.”

Among the comments made and issues addressed by staff members and committee members at the public forums:

Sick days: The proposed attendance incentive for sick days appears to penalize those who use all their sick time. This was not the intent of the recommendation. Extended sick leave, for those who are eligible, kicks in after sick days are used, as is the case now.

Tuition benefits for employees and dependents: The employee tuition reimbursement program has not changed. No action was taken on tuition coverage for dependents because data needed to make decisions is not yet available.

Relationship between core and flex benefits: Core benefits in the proposal are those we now have, with a change suggested only for sick time.

Flexible benefits options include some of those we now have, such as health care insurance and reimbursement accounts, and some new ones.

Determination of each employee’s flex dollars: This is not based on salary, but rather on family status (for health care coverage), the dental program and the attendance incentive. Salary is a consideration for life insurance, as is age of the employee and whether or not the individual smokes.

Individual choices of options would be based on the amount of flex dollars they have and, if they wish to select another benefit or a higher option, how much they are willing to contribute.

Health insurance: Single people seem to be disadvantaged with respect to health insurance because those who claim dependents get more money. Currently, singles can choose any plan and it’s “free” for them. In flex, they would get a specific amount of dollars, with the amount of flex dollars used based on the plan selected.

This is an advantage to everyone because people will look for value, thereby giving the University greater buying power. They won’t simply select the most expensive option because it’s fully covered.

Those with dependents currently receive a greater contribution by the Uni-versity and that will continue. This is based on the University’s “social conscience” and the importance it attributes to families.

Cost of administering the program: If cost were an issue, the University would not pursue this approach to benefits selection. The first-year costs of implementation are estimated to be $2 million. In the long-term, a flex program gives the University bargaining power. There’s a tradeoff with salary and benefits. As benefits costs rise, salary increases decrease. In recent years, this tradeoff has been driven primarily by the tremendous increases in the cost of health care.

With flexible benefits, individuals will be able to see what’s going on inside the program, will know exactly what the University is doing.

The timing for changing and/or upgrading elected options: Decisions on health care coverage would be made during the normal enrollment period, or in instances of significant life changes (i.e., births and deaths), as is the case now. If vision and dental plans are offered and selected, there is a two-year lock-in.

Life insurance: New options for life insurance coverage would include spouses and children. Under flex, at the time of initial enrollment or employment, no proof of insurablity would be required except for insurance amounts in excess of $500,000.

Retirees: The current proposal excludes retirees. If they were to be included in the future, some sort of transition period would have to be designed since retirees take into retirement the benefits they select in the final year prior to retirement, and some of those might not be the most appropriate for them.

Bargained-for employees: The flexible benefit proposal does not cover bargained-for employees at this time, but if the plan is adopted by the Univer-sity, it would be an item for discussion during contract negotiations between the University and the unions.