Faculty Benefits Committee Meeting
12:30 – 2:00
The following committee members were present:
A RFP for provision of long term care was sent out by the
Board of Regents. The RFP proved to be too broad in scope and was withdrawn.
The BOR may reissue a revised RFP in the future. Even if the BOR moves forward
with this RFP,
What is the advantage of obtaining group long term care insurance compared to policies available to individuals? Group insurance incorporates guaranteed issue and usually provide a 5% reduction in price if associated with a payroll deduction system. Once we receive proposals from insurance companies, we can compare their proposals with those of TIAA-CREF.
Information available on the need for long term care comes mostly from insurance companies. According to these companies, individuals have nearly a 50% chance that they will require nursing care in a facility, and that for most diseases other than Alzheimer’s, the average length of care ranges from 16 months for cardiac problems to 48 months for diabetes. For Alzheimer’s, the average length of care is 96 months.
Another source estimates that 12 million Americans currently need assistance to carry out everyday activities, of which 53% are over 65 and 44% are working age. The rest are children. Of the older population with long-term needs, about 30% have substantial long-term care needs. Of these 25% are 85 or older and 40% have incomes below 150% of the federal poverty level. The percentage of older people needing long term care is declining, but the level of disability for those who need long-term care is increasing. In general, the prevalence of cognitive impairments is increasing while physical impairments remain stable. 23% of households provide informal caregiving (home-based from unpaid individuals) to a person 50 or older. Nearly 79% of people who need long term care live in homes, not institutions. There is a trend toward providing community-based services as opposed to nursing home placement, but these services are not yet well developed (only 18% of expenditures for long term care support community services). For all service expenditures, government accounts for $78 billion and individuals and families cover $35 billion. (see www.caregiver.org)
We could not find any financial calculators for cost/benefit of long term insurance. Moreover, any such calculator would be based on many assumptions. Given the volatility of this type of insurance product, the calculators are unlikely to give a robust sense of the uncertainties and potential payoffs.
Committee members identified the following as desirable
characteristics that we would hope to find a long term care policy.
§ 4 years coverage
§ 30 day exclusion (waiting period)
§ inflation protection, compound interest (ideally based on inflation in health care but mostly likely based either on a CPI or, most commonly, on a fixed rate, e.g., 5%)
§ home care option allowed to cover professional assistance
§ as a current base rate, coverage of $140/day
§ should the policy be an indemnity or reimbursement plan?
§ guaranteed issue?
§ open to retirees?
§ costs to various ages (40/50/60)
We would like a good, solid plan without too many unusual benefits. For example, we will not investigate coverage of lost wages for relatives who provide long term care.
No new information. Is there any way to see what other states have done or are doing? We will look into this after we receive a legal opinion concerning sabbaticals.
None of the current health plans has a true vision plan, but most have wellness benefits that cover some aspects of vision care.
Top tier private schools generally support extensive
§ Such a policy, if established by the BOR, would help recruitment and would likely be widely supported by Tech faculty and staff
§ Check with Said Abdel-Khalik concerning the process of proposing resolutions and whether the Benefits Committee is the appropriate vehicle. Are we the appropriate instrument for making a recommendation or does this require a broader discussion? Is the Senate the right place for this broader discussion?
§ Who provides employer sponsored health benefits to domestic partners? Look at other state institutions and how they handle partner benefits.
We were on hold concerning allowing 9-month employees to get coverage for 12 month salaries if they covered their summers. To do this requires changes in the PeopleSoft software. The last revisions did not include any provision to tag disability insurance for this treatment. The next revisions may.
The next meeting will be on Wednesday, February 18 from 12:30 to 2:00.
Future agenda items include self-service benefits (e.g., web-based benefits options enrollment and other paperless benefits such as electronic pay stubs).