Changes to employee benefits, which are scheduled to take effect on Jan. 1, will include higher copays, new health savings accounts and lower retirement contributions, according to chief human resources officer Traci Nordberg. The College finalized the changes following the conclusion of a comment period and open forums that negotiated and adjusted the recommendations submitted by the College Benefits Council on March 31, according to Nordberg.
The changes to benefits represent part of the College's efforts to reconcile the $100-million budget gap in two years, and once implemented, they will render $9 million in savings, according to Nordberg.
"Much of [the concerns] we heard were about affordability," Nordberg said. "We were trying to find ways to be fair to people and to find options for them to save and use their money in a more tax-efficient way."
The current plan provides employees with flexible savings accounts that make pre-tax dollars available for use towards benefits costs, according to Nordberg. As a result of an adjustment to the new plan, the College will broaden the group of employees eligible for a $250 deposit placed into each flexible savings account to all employees making up to $60,000, she said. The money can be used to defray the costs of prescriptions and increased copay, she said.
In addition, the plan will eliminate the $800 insurance credit offered to employees who opt out of the College health plan, Nordberg said. This change alone is expected to save the College $350,000, The Dartmouth previously reported.
The new plan will have both co-insurance and deductible components, according to Nordberg. Along with copay levels, insurance deductibles the amount an employee must spend before the insurance begins to make payments and out-of-pocket payments will increase, she said. An out-of-pocket maximum will be applied to hospitalization and expensive procedural costs, she said.
"I think [the employees] imagined they would be paying a greater amount for the sole cost of expenses," Nordberg said. "It's a protection to know that once they hit the out-of-pocket max, they won't have to pay more than that."
Under the new benefits plan, employees will pay between 2.85 and 45 percent of the total premium, based on their salary, The Dartmouth previously reported. Under the current plan, employees pay between 4 and 31 percent of the cost.
"The cost-share will continue to be case sensitive," Nordberg said. "We're pretty proud of that, and the Benefits Council was committed to continuing it."
Based on employee feedback, the plan proposal was adjusted to include health-savings accounts that allow individuals to "roll over" their pre-tax dollars, according to Nordberg.
Under the current system, "if you don't turn in expenses, the money goes back to the College," Nordberg said. "Health-savings accounts allow us to be more modern in plan design and give people more options to use pre-tax dollars."
Preventative care will remain free under the new benefit program, and the implementation of national health care reform is expected to augment the preventative care list, according to Nordberg.
The current plan, which covers only New Hampshire providers, will also be expanded to include all New England states, Nordberg said. As a result, employees currently choosing a more expensive plan in order to receive a broader network of coverage will be able to elect a less expensive plan once the changes come into effect, she said.
The new plan will include a fund for catastrophic health care, under which employees will become eligible for reimbursement once they have hit a particular threshold of spending on their health care, she said.
Retirement contributions will also see changes under the new plan, according to Nordberg. Under the current plan, the College contributes 10 percent of an employee's base salary to retirement accounts for every employee over the age of 35, she said. The new plan will reduce the contribution to 7 percent for employees between the ages of 35 and 29, and 9 percent for employees over the age of 40, Nordberg said.
"This is an area where higher-paid employees asked to make available a retirement program that doesn't cost the College but allows them to keep saving on their own," Nordberg said. "They will be able to contribute their own money to retirement funds" in addition to the College retirement plan, which must be standardized for all employees regardless of income.
The College has also decided to discontinue the "7-percent pay program," which provides salaried faculty and staff members over the age of 40 with a cash payment, according to Nordberg. Faculty members who are currently receiving the payment and those between the ages of 35 and 39 who will turn 40 before December 2015 will continue to benefit from the program, but staff hires will no longer be eligible as of July 1, 2010, according to Nordberg.
"[Phasing out the program] is another response to ways that we can save money without harming people now," Nordberg said.
In compliance with the federal health care reform bill, the College will also begin to provide health care for dependent children up to the age of 25, she said.
"We're letting everybody know that the fact that health care costs are high is a problem, and we need to keep working on that," Nordberg said. "We're forming a work group to get these costs down, and we want to make sure we're offering the best education and tools."
The education process about the plan is expected to begin during the summer, and employees will enroll in the new plan in the fall.
"We haven't made any changes in over 20 years," Nordberg said. "There are some features of the new plan that are common in other places, but that our employees may not have been familiar with."
Nearly 200 individuals attended information sessions that highlighted the plan's new features and presented hypothetical scenarios, she said.
In addition, almost 400 comments and questions were submitted by employees as of Apr. 21, according to the College Office of Human Resources website. Nordberg, Senior Vice President and Senior Advisor Steven Kadish, and CBC Chair Rich Howarth reviewed the comments and made changes to the final proposal before submitting it to College President Jim Yong Kim for approval.
