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Western Kentucky University

WKU Health Plan Forum

 

     On July 16, 2014, the Department of Human Resources held an open forum for faculty and staff to discuss proposed changes to the WKU Health Plan for plan year 2015.

2014 WKU Health Plan Forum

 

Employees who were unable to attend the forum held on July 16, 2014 can view a full recording of the session here: Health Plan Forum Video

 

The following link: Glossary of Terms provides a list of commonly used terms and acronyms related to health plans and employee benefits.

 

Recent Q & A

If you have questions about the 2015 WKU Health Plan, please email benefits@wku.edu

Click on a question below for the answer.

How does WKU measure the effectiveness of the Employee Wellness Program?

LiveHealthier, our vendor-partner, provides a wide variety of monthly, quarterly and annual reports that track different program elements in order to provide a rich and complete view into all aspects of the Employee Wellness Program. The elements tracked and analyzed go well beyond program participation and include de-identified aggregate reports from health risks assessment and biometric screening data, risk profile analysis, behavior change and other program performance data.

Program evaluation also includes an estimate of the return on investment (ROI) by comparing longitudinal heath care claims data of participants to non-participants. The ROI estimate is narrowly focused and does not include potential savings/benefits from productivity-related costs (absenteeism, presenteeism), disability-related costs (short-term, long-term and workers' compensation), improved employee recruitment, engagement or job satisfaction.

The Employee Wellness Program is considered an integral part of the WKU Health Plan and is intended to promote, reward and assist employees in achieving optimal health, well-being and quality of life.

Has the Benefits Committee considered having all buildings on campus tested for radon which is a known carcinogen and prevalent in this region?

Radon testing is handled by WKU's Environment Health and Safety Department. According to EH&S, radon testing on campus is done by request.  Other indoor air quality parameters are collected on a proactive, scheduled basis. 

Has the committee considered providing incentives for all employees to get the recommended health screenings available through our insurance plan (such colon cancer, breast cancer, prostate cancer, etc.)?

Yes, this is currently being evaluated under the proposed wellness incentive structure.  Additionally there may be the option to receive a wellness credit for these types of preventive screenings within the voluntary cancer insurance policies being considered for 2015. 

What made up the "healthcare" in the comparison to the other 17 institutions?  Was it only employee premiums/institutional contributions or did it include amounts/types/health demographic of the area?

The purpose of the medical plan benchmarking analysis was to compare the overall competitiveness of WKU's medical plan against our comparison market - WKU's 17 benchmark institutions.  The study compared prevalence and number of medical plan types offered, plan eligibility rules, medical and pharmacy plan design provisions (members' share) by plan type, and contributions (employee and employer) by plan type and tier. 

As a self-funded plan that we contribute to, do we have access to see breakdowns of where reserve funds are going (for example, x dollars to prescription claims, x dollars to medical claims, x dollars to other expenses?)

Anthem and our benefits broker provide mid-year and annual reports which include a breakdown of expense categories.  These reports are reviewed by the Benefits Committee to help better understand cost drivers and trends.  Additionally, on a monthly basis the committee reviews a financial statement detailing revenue, expenses and fund balance monthly and year-to-date.  A Benefits Committee webpage will be developed in the coming months to provide plan performance and financial summary documents as well as a committee membership directory.

In plan year 2013, plan expenses totaled $17.7 million. The plan paid a total of $16 million in claims, with 77% in medical claims and 23% in pharmacy claims.  Approximately $2 million (10%) od total expenditures represent administrative fees and miscellaneous expenses including the following:

  • Administrative fee to Anthem, our Third Party Administrator
  • Stop Loss Re-Insurance fee
  • Flexible Spending Account/COBRA administration fees
  • Wellness Program fees
  • Fiduciary Liability Policy
  • Broker Services and Consulting fees
  • Banking and Trustee fees

In asking us to become healthier consumers (and other than only focusing on a tobacco free campus) what are the measures being taken to make this a more ACTIVE campus - specifically for employees? 

The wellness program will continue to promote physical activity and include such as an incentive eligible activity in the next program year. Additionally, we are evaluating incentives for employees who frequent gyms and workout facilities (both Preston and other facilities). We are investigating creative ways to encourage physical activity while at work, including treadmill work stations and walking breaks. The Healthy Campus Initiative will reach beyond the WKU Health Plan and we will be partnering with other stakeholders on campus to create an atmosphere that promotes and supports the total well-being of our faculty and staff.

There has been a lot of focus around the Preston Center, but has consideration been given to partnering with other local gyms for discounts and incentives for faculty/staff?

Yes, we continue to evaluate options for providing incentives for employees who frequent gyms and workout facilities, both on campus and off campus.

 

Q & A from the WKU Health Plan Forum

The information below includes questions asked during the forum along with responses from the Department of Human Resources. It also includes questions that were submitted to HR following the forum. This section will be updated regularly in response to new questions submitted during the coming months.

 Click on a question below for the answer.

In the development of the Health Campus Initiative, has there been consideration given to a smoke-free campus?

Yes, the Employee Benefits Advisory committee supports a tobacco free campus and is prepared to make a recommendation to leadership in favor of such. We believe it is an important component of a Healthy Campus. We encourage our faculty, staff, and student governance entities to support us in this recommendation.

Why is our plan not in line with Obamacare and potentially subject to the 40% Excise Tax?

The Excise Tax, commonly referred to as the "Cadillac Tax", begins in 2018 for plans with costs exceeding specified thresholds. Plans exceeding the cost thresholds are subject to a 40% excise tax on employer-sponsored medical premiums (including both the employer and employee-paid portion) in excess of thresholds. The current 2018 annual thresholds are $10,200 for single coverage, and $27,500 for family coverage. These thresholds will be indexed for inflation in subsequent years. Based on our assumptions and forecasting under our existing health plan structure, WKU may be subject to the excise tax as early as 2019, which could be as much as $4.6 million annually by 2020. 

WKU must develop a long term strategy to avoid the excise taxes. If we do not take action and our healthcare expenses continue to grow at trend rates at or above 10% annually, we will face significant penalties under the Excise Tax. We cannot effectively solve the problem by continuously increasing premiums (employee and employer paid portions); which will only exacerbate the impact of the excise tax for WKU. We must find better ways to lower trend and manage our healthcare expenditures over time.

Is there concern with a tobacco-free campus and how it will impact students? Would this not affect enrollment?

Student enrollment is of strategic importance to WKU. Any decision in any regard that might adversely impact student recruitment and retention will only be made following careful assessment and evaluation with appropriate WKU leadership and stakeholders.

Has the Benefits Committee looked at decreased rates to use Preston and to provide easier access to Preston (parking, faculty & staff hours, etc.)?

Yes, the committee has talked about offering some sort of incentive involving Preston and continues to evaluate such. According to our Chief Financial Officer, funds from the WKU Health Plan cannot be used to pay for this incentive; therefore, the WKU Health Plan could not reimburse Preston for employee memberships:

"Generally, employer-provided health benefits are excludable from gross income under Internal Revenue Code (IRC) sections 104 through 106 if the benefits are for medical care, as defined in IRC section 213. However, a gym or health club membership would not fall under any of the
general exclusions outlined in those code sections. Therefore, any amount that WKU might provide or reimburse for membership in the Preston Health & Activities Center would be treated as a taxable benefit. As a result, such amount may not be paid from or provided by the WKU Health Plan"

The committee continues to evaluate other alternatives and options for incentives for physical fitness. Unfortunately, the committee has no control over parking on campus; however, Steve Rey provided the following information about access to the Preston Health & Activities Center:

"There is ample parking available to our members during the hours of 6 a.m. to 7:30 a.m. and 4:30 p.m. to 11 p.m. Monday through Friday. Parking has never been an issue at the Preston Center during the weekends. During the hours of 7:30 a.m. to 4:30 p.m. Monday through Friday all students, faculty, and staff must park in the appropriate areas on campus per their parking permit. Many of the current faculty and staff, who are members (722) of the Preston Center, walk to the Preston Center on a daily basis. The Preston Center is also supported by 12 meter parking spaces."

"The primary funding source for the Preston Center comes from our students and through a significant donation to the students from Raymond B. and Hattie L. Preston Family Foundation. All programs, services, and facilities are available equally to our students, faculty, staff, retirees, and alumni throughout the year. Prime time usage by our students is during the hours of 3:30 p.m. to 8:30 p.m. Monday through Thursday.

The Preston Center Advisory Council, whose make-up consists of students, faculty, staff, retirees, and alumni members, unanimously voted not to provide user group only times at the Preston Center with the exception of the 1 p.m. to 5 p.m. intercollegiate swim practice times Monday thru Friday and academic classes in the dance studio/multi-purpose room during the week."

I understand that WKU's health plan contribution rate was in the top 1/3 position of KY Public Institutions for many years and is no longer in this position. If WKU were to increase its contribution, how much will it increase? These health plan problems are not new so why has WKU funded other items instead of healthcare?

Back in 2001, when WKU increased its contribution from $170 to $315 per month, it was among the highest contributions in the state. The University increased its contribution an additional 7 times over the subsequent 13 year period to its current level of $525 per month. While the committee understands this is an important competitive value on the surface, it is difficult to maintain this as a reliable figure given the variance in the funding strategies among the Kentucky public institutions. WKU is now the only institution with a flat employer contribution across all coverage tiers.

For example, compared to the other KY Public Institutions with a PPO plan similar to WKU's standard PPO plan, WKU has the highest employer contribution toward employee only coverage than all other KY Public Universities. The other institutions use a variable funding strategy to allocate employer funding to coverage tiers including dependents (EE + Children, Couple, Family). WKU does not use this methodology currently so we cannot accurately conduct an apples-to-apples comparison using a flat employer contribution against variable employer contributions.

While we have experienced problems with Heath Plan funding in the past, the committee requested increased funding to help stabilize the reserve during those times. In plan year 2009, we experienced a decrease in our reserve, with expenses exceeding revenue by nearly 2 million. We responded with plan design modifications to our existing PPO plans and employee premium increases. Additionally, the University contribution increased from $405/month to $418 in 2010 and to $471 in 2011. As a result of these changes, an appropriate reserve level was replenished and hovered near the 5 - 5.5 million mark in plan years 2010, 2011, and 2012. Therefore, it was not necessary to increase the revenue into the plan in those years. As the reserve began to dip again in plan year 2013, the committee began discussions about how to increase revenue and stabilize the reserve level in a more strategic way. The traditional plan modifications and employee and employer premium increases only provide temporary solutions and do not provide a long-term remedy to our health plan financial situation. Additionally, the looming excise tax limits our ability to continuously increase our premiums and remain below the thresholds imposed under the Affordable Care Act.

As we began the approach to developing a long-term strategy for maintaining our self-insured health plan, WKU's position in the marketplace was one of our guiding principles. A comprehensive benchmark comparison was done to assess WKU's competitive position with regard to plan options and coverage provisions, benefit plan cost sharing, and contribution levels. The committee has attempted to maintain a position that requires a balanced approach to increasing plan revenue, one that is shared equally between employees and the University. This assists with maintaining an appropriate overall cost share that is in line with our benchmarks.

Who can tap into the WKU Health Plan Reserve?

By written agreement, the Reserve, whether maintained in a regular University (Education and General) Account or Foundation Custodial Account, is for the exclusive use and purpose of maintaining viable health care coverage for WKU employees and covered dependents and for expenses directly related to Plan operations including claims cost, Third-Party-Administrative fees, re-insurance cost, plan liability coverage, broker/consultant fees, certain health/wellness initiatives and other similar direct costs.

What costs make up the Administrative portion of expenses paid from the Health Plan?

The following administrative fees make up approximately 9% of our total plan expenditures:

  • Administrative fees to Anthem, our Third Party Administrator
  • Stop Loss Re-insurance fees
  • Flexible Spending Account/COBRA administration fees
  • Fiduciary Liability Policy
  • Broker Services and Consulting fees
  • Banking and Trustee fees
  • Wellness Program expenses

If you have an EPO (Exclusive Provider Organization), what happens if you have an emergency and can't get to a network provider?

Currently, if employees experience a true emergency situation and need to seek treatment in an ER or receive ambulatory transportation with no opportunity to select an in-network provider, services would be covered as "in-network". This would also be true under an EPO type arrangement. To experience "out-of-network" charges under an EPO, an employee would essentially have to elect to receive the services outside of the network.

How do you plan to handle employees who waive the health plan? Will they still receive incentives?

Employees who waive the health plan will continue to receive opt out credit in some form and also the opportunity to enhance that benefit through participation in the wellness program. We do not have specifics on the amount or method of credit employees who waive the Health Plan will receive. More information will follow as we continue to develop and model our plans for 2015.

What are the plans to address part-time employees?

Part-time employees are not currently eligible to participate in WKU's core benefits package (Health, Dental, and Life & Disability). However, beginning in January 2015, employees who have averaged 30 hours or more per week over the prior 12 month period are required to be offered health insurance under the Employer Mandate provisions of the Affordable Care Act. Employees who meet this threshold will be offered the full core benefits package currently available to employees working full-time. We anticipate this will include only a limited number of individuals (under 50) and we will be continuously monitoring this population going forward.

Is there any incentive for us to look for billing errors in our medical bills? A previous employer provided small incentives if we found errors in our claims payments.

There is currently no direct incentive for identifying billing errors on medical bills. However, the employee can certainly save money through identifying and questioning billing errors. We recommend employees always review the EOB (Explanation of Benefits) from Anthem before paying any bills to providers upon utilization of medical services. This is important to ensure insurance has paid the provider before the provider bills the patient. The Department of Human Resources is always willing to assist employees with any discrepancies or questions they have about their medical bills.

In the future, will we have a different vendor than Anthem BCBS?

Anthem will remain our TPA (Third Party Administrator) for plan year 2015. We are preparing to enter into our 5th year under our existing contract with Anthem. We last bid out the TPA service in 2009 and selected Anthem to continue as our TPA for 2010 through 2012 with optional renewals annually through 2017. Anthem has served us well over the length of our contract. We enjoy access to one of the largest networks in the nation, which extends to worldwide coverage when traveling abroad. They have maintained consistent, accurate and timely payment of claims and offer significant cost savings to employees and the Plan through their provider contracted rates. We evaluate this arrangement annually and will re-bid again in 2017 for plan year 2018, or possibly even sooner if desired.

The majority of the presentation has had to do with costs and I'm curious about care. You spoke earlier about voluntary benefits like cancer and accident policies. What happens if I have the HDHP (High Deductible Health Plan) and I get cancer?

Employees will continue to receive the same level of care under the new plans that exist under the current plans. The same types of services will continue to be covered; the costs for those services may differ based on the type of plan selected. Cancer diagnosis and treatment is covered under our plans now and will continue to be under the new choices. What may differ is the amount an employee pays out of pocket for medical care when required. For example, if you elect a HDHP and it has a $1,500 annual deductible, you likely will meet that deductible if you are hospitalized or have surgery related to the treatment of cancer.


Voluntary benefit plans, like a cancer policy, are designed to supplement core health plan benefits through lump sum payments to the employee, which can be used to offset out-of-pocket expenses related to the claim. You would pay a monthly premium for the cancer policy and if you were to file a cancer claim, the voluntary insurance provider would mail you a check for $5,000 (example for illustrative purposes only). You would then be able to use those funds to reimburse yourself for any out-of-pocket costs you or your family members incur. This could include your deductible, co-insurance, prescription costs, hotels expenses if traveling for treatment, airfare, gas, food, etc. These voluntary benefits are portable and can be continued after employment and provide an additional safety net to protect your finances in the event of costly or unexpected medical care.

Will there be changes to the Out-of-Pocket Maximums?

There will likely be changes to the out-of-pocket maximums but we are not able to provide those details at this time.

I understood wellness was on some sort of trial period. What was the outcome? How much does it cost and would we be bidding that out like our health plan vendor?

Elements of the Employee Wellness Program and the selected vendor for health promotion and disease management services were approved by the President and Administrative Council in July 2012, as recommended by the Employee Benefits Advisory Committee. Employee Wellness is considered an integral part of the Employee Health Plan and is continually evaluated just as other elements of the Plan. Wellness program fees are estimated at $150,000 annually, which is less than 1.0% of total Plan cost.

Does a spouse have to go through a Health Assessment?

It is our intent to provide the same opportunities for covered spouses/partners to earn incentives through participation in the wellness program that will be available to employees.

Who is another low cost provider for imaging instead of Western Kentucky Diagnostic Imaging?

That will always depend on the type of imaging done and the place of service where it is performed. Employees can currently access Anthem's member only website and use the "Estimate Your Costs" tool to identify facilities or providers who may be lower cost. There may be times when a low cost facility is located in another town, such as Nashville or Owensboro, but it may be worth the drive to save a few hundred dollars toward your deductible. We plan to provide additional tools and resources for
employees to use to conduct cost comparisons. Anytime we use a lower cost facility or provider, not only does the plan save money, but employees will pay less out of pocket through deductibles and co-insurance. Making informed, conscientious decisions about our healthcare has the potential to have a big impact on our overall costs and our own pocketbooks as well.

Since wellness and health plans will be combined, does that mean that funds from the reserve will go towards wellness? Where is the budget for wellness?

Funding for the wellness program is already part of the health plan budget so that will continue to operate as it currently does.

What are the wellness activities and health pledge you referenced?

We have not finalized the wellness program for 2015, but we believe the activities will be similar to what we currently offer. However, the incentives will be different. For example, you may be asked during open enrollment if you wish to make a "health pledge" which would involve completing certain activities, such as the biometric screening, the health assessment questionnaire, and other activities throughout the year. If you elect to make the pledge during enrollment you could be eligible for an immediate incentive, such as upfront funding into an HSA (Health Savings Account) or HRA (Health Reimbursement Arrangement), premium discount, etc. You would then be asked to complete those activities by a specified time in order to keep those incentives. We do not have further details or specific information to provide at this time.

How will health and wellness affect deductibles?

One example would be earning upfront funding into a HSA or HRA as an incentive for participating in the wellness program. Let's say you earn $500 in an HSA for the 2015 plan year. You then have a medical claim that costs $375. You would have the HSA fund available to use first toward meeting the deductible before you would pay anything out-of-pocket. Earning funding to an HSA/HRA would lower your deductible and your overall out-of-pocket costs.

Will Graves Gilbert Clinic cover the biometric screenings like Health Services did in the past?

We hope to be able to continue to offer on-site biometric screenings through a partnership with Graves-Gilbert. We realize this is a very convenient option for employees on campus. We do not have any additional details at this time.

Has there been any discussion about a dedicated faculty and staff workout area?

There has not been any formal discussion or evaluation of a dedicated faculty and staff workout area. The idea has been mentioned over the years but no formal study has been done. We are certainly open to partnering with other interested parties on campus about the broader Healthy Campus Initiative and looking at creative and innovative ways to promote health and well-being across campus.

Your presentation mentioned vision under the voluntary benefits? Does this mean vision would be voluntary?

We are evaluating moving the vision plan to a voluntary benefit option. It is currently attached to the medical plan which prohibits participation by employees who opt out of the health plan and for
spouses/partners and dependents of employees who are not enrolled in the medical plan. Carving out the vision from the medical benefit makes the benefit open to all employees and their dependents, regardless of medical plan participation.

Are there any other issues being discussed for a surcharge, like tobacco use, such as alcohol, obesity, etc.? Do you anticipate other things like this being used in the future?

No other surcharges are being considered at this point. WKU's Wellness program is "participation based" and not "outcomes based". Federal regulations provide parameters around which wellness programs must comply.

How will these changes affect retirees?

WKU does not provide health insurance to retirees. KTRS & KERS retirees are covered by the state's health plan. Therefore, these changes generally will not affect retirees, other than the possible introduction of the HSA (Health Savings Account). Unused funds in an HSA are portable and can be used in retirement for out-of-pocket medical costs and other expenses. This may be an attractive savings vehicle for our participants in the ORP (Optional Retirement Plan) who do not have access to retiree healthcare under the state pension plan.

I have a few questions about the HSA/HRA options:


1. Will HSA/HRA funds be available for anyone covered under the employee's health insurance plan (spouse/dependents)?


2. Will HSA/HRA funds roll over from year to year if unused?


3. Will HSA/HRA funds be available on January 1 (like our FSA accounts) or do you earn a portion of the funds each pay period?


4. Will HSA funds be held at a financial institution?


    a. If so, will all WKU HSA accounts   be held at the same financial institution or does the employee have a choice?


    b. If so, do you anticipate any account maintenance fees?

We do not have information or specific details to respond to these questions at this time.

What is the total amount spent from the healthcare budget for salaries, compensation, etc.?

No positions are funded from the WKU Health Plan budget.

Has the university considered offering a pharmacy benefit that will allow employees to get a 3-month supply of medication at a retail pharmacy at a discounted rate instead of only using the mail order program?

The pharmacy benefits are being fully evaluated as part of this process. We will review this option. No additional information is available at this time.

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 Last Modified 9/24/14