Faculty Benefits Committee Meeting

Minutes, October 15, 2003

3:30 – 5:00

 

The following committee members were present: Dale Atkins, Michael Chang, Chuck Donbaugh, Michael Elliott, Blair Funderburk, Marc Goetschalckx, John Grovenstein, and Jean Hudgins.

Additional Issues to be Discussed This Year

Medical insurance cost increases. Committee members noted that the cost of health insurance had risen significantly. At the same time, the Board of Regents appears to be doing what is prudent and necessary to mitigate against the cost increases. The cost containment advantages of HMOs and PPOs has decreased as these groups have formed larger networks with less significant discounts. Balanced against this trend, the Georgia State Government negotiates for about 30% of all employees in the state (including state employees, University System of Georgia employees and local educators). University employees, who are generally healthier, are considered a separate risk group, so cost increases to the University system are about half of those faced by the state as a whole. Moreover, the Board of Regents have instituted the most obvious cost containment measures, including case managers, disease management programs and a drug formulary.

The committee discussed the Peach Program, which was an active program to encourage wellness amongst employees. This program no longer exists. In addition, faculty were given free access to the Student Athletic Center until recently. They are now charged a fee (considerably below market rate for fitness centers). While this fee does not generate much money, it was instituted to create parity between fees charged to students and those charged to faculty.

Could a program like the Peach Program help faculty and staff to stay healthier and thereby save on medical insurance? Since Georgia Tech does not negotiate rates on its own, changes in our own profile will have little effect on health insurance, but the program is worth exploring on its own merits.

The issue of the life-time caps on medical coverage was also raised, but this did not seem to be a significant issue. No one has ever reached this cap, and if they did, they could change insurers as long as they were employees of Tech.

The institution of flexible plans would probably decrease medical costs for the young and single, and increase costs for older individuals in families. Younger people generally go into HMOs, which are less expensive, thereby decreasing the costs of these programs relative to PPOs and the Indemnity Plan.

Educating committee members. Members expressed an interest in reading articles that help explain issues facing the Benefits Committee. John will bring these in when he comes across them. An article on Long Term Care was passed out at the meeting. Also, John and Blair will put together brief presentations on issues of importance to members. These include:

§         long term care

§         prescription drugs

§         wellness

§         403b and retirement accounts

§         medical costs

Domestic partners benefits. Last year, Tech provided access to all voluntary benefits (benefits in which no State moneys are used) to domestic partners. The reaction to Tech’s efforts have been supportive by faculty and staff within Georgia Tech, but has generated some negative reaction from some other individuals (taxpayers, alumni). Tech has now put into place policies on programs that it controls. Further expansion of benefits to domestic partners would require Board of Regent approval.

Outreach to faculty and staff. The committee spent much of last year assessing how Tech’s benefits compare to other universities. Is it time to conduct a systematic assessment of issues related to benefits, as perceived by faculty and staff? The committee felt that a broad-based survey would probably be counter-productive, since it would likely raise expectations without a specific plan to achieve those expectations. Rather, we will focus on actionable choices, developing more directed surveys (5 questions or less) to address specific issues when needed.

Workplan For the Year

We will seek to address the following issues during this year:

Long-term insurance

§         we will spend 4 meetings on this: to educate and provide an overview; review the advantages of individual and group policies; to consider plan design (e.g., inflation protection)

§         this is expensive and complicated

Vision Plan

§         we need one meeting since the program is simpler and low cost

§         a new program might be viable even in a year without raises

§         Blair and John will explore what might be useful to Tech employees

Sabbaticals

§         funding is a big issue here

§         Chuck will ask Randy Nordin (Chief Legal Advisor in Legal Affairs) concerning the legal ramifications about whether sabbaticals are potentially under the control of Tech faculty, or whether a change would require Board of Regents approval. Could Tech use Academic Leave with Pay to institute a sabbatical program?

Domestic partner benefits

§         We will explore what might be some useful next steps. These might include a web site showing what is available

§         we need to understand the state environment with respect to domestic partners issues

§         this was an action item last year and we made changes that Tech has legal authority to make

§         generally, it is not expensive for universities to expand domestic partner benefits because few employees participate in these program. This is particularly true when such benefits are restricted to couples who cannot get married (i.e., gay and lesbian couples). While there is no evidence, even anecdotal, of an effect on faculty/staff recruitment and retention, expansive domestic partner policies indicate a tolerant atmosphere. Generally, Tech is well served by such an atmosphere. The committee will continue to explore ways of making progress, but will not make this issue an action item for this year.

Flex Plans

§         We need to explore who gains and who loses from such programs, as well as what happens over time

§         Often flexplans are instituted by corporations as a cost containment by employers; while employees gain more flexibility, they also incur a greater share of the costs.

§         This is likely to be controversial, as some employees (young, single) gain and other employees (older, married with children) lose.

Wellness

Compensation

§         DHR is already working with Minorities in Management group on these issues; DHR will share what is learnt at the next meeting

§         Living Wage issue

Dependent Care and Medical Care Savings Plans

§         The Dependent Care Savings Plan is limited to $5,000 by law; Tech currently allows this deduction

§         For Medical Care Accounts, few people have asked to save more than the current $2,500 allowed by Tech; most employees are under $1,000; yet some employees have specifically requested a larger limit.

§         It may be possible to increase the limit, but all Section 125 plans are subject to discrimination tests (bias toward highly compensated employees). DHR would look carefully at an expansion of the program.

§         increasing the limit is a potential liability to Tech, since Tech must cover any differential if an employee spends the full amount and leaves before the end of the pay year.

§         employees are getting better at calculating their deductions. During the first year, participants left $50,000 of unexpended funds in these accounts. By the third year, only $5,000 was left over at the end of the year.

§         John will look into the feasibility of changing the limit.

Next Meeting

The next meeting will be on November 19, 2003.