FY11 Meeting Minutes
Funded Retirement and Insurance Committee Minutes May 6, 2011, 11:30 am 302 USB Funded Retirement and Insurance Committee (FRIC) Meeting
Meeting was called to order at 11:30 am in 302 USB.
Members in attendance: Nancy Davin, Matthew Glasson, George Herbert, Daniel Katz, Sheldon Kurtz, Heather Schnoebelen, Victoria Sharp, Bernard Sorofman, Anand Vijh, Lynn Vining, Dagong Wang, Michael Wichman
Members absent: Jon Garfinkel, Katherine Tachau
Administrative Officers present: Sue Buckley, Richard Saunders
Guests present: Rick Borchard, Carol Fethke, Amber Goedken, Suzanne Hilleman, Julie Sexton, Joni Troester
- Committee members, administration representatives and guests introduced themselves.
- It was recognized that this was the last meeting for George Herbert as he has completed his term on the committee. Thanks and appreciation was expressed from all to George for his many years of service.
- Minutes from the April 7, 2011 meeting were approved with no corrections.
- The committee discussed wig coverage and whether wigs should be included as part of the insurance package available to employees. Richard Saunders provided the group with information from Wellmark regarding wig coverage. Wigs would fall under durable medical equipment and the UI cost would be 80% (not to exceed $800), the employee cost would be 20%. There were approximately 195 people that would qualify for wigs over each of the last two years. This number is an estimate based on the current definition of having hair loss due to chemotherapy treatment for cancer. There would be a limit of 1 wig per twelve months. Using this estimate this would equate to approximately $1.50 a month increase of premiums if wigs are added as covered.
The committee reached consensus that wigs should be covered as part of the UI health plans. However, much discussion existed surrounding the appropriate parameters of coverage. This included limiting the total dollar amount of a wig, the timeframe/longevity of wig replacement, what medical conditions need to exist before a wig will be covered. A motion was made and passed with one dissenting vote to cover wigs 80% cost to UI (not to exceed $800), 20% cost to employee and a limit of one wig twelve months.
- Richard Saunders spoke to the committee about double insurance coverage for UI employees. Under the new flexible benefits system those employees who have a spouse who is covered on a state health insurance plan do not receive the $200 credit if they do not take the University health insurance. What has happened is that those employees are on a state health insurance plan with their spouse and also choosing to take a free single health insurance plan through the flexible benefits system and thus are double health insurance covered. Currently there are 41 employees on campus in that situation and they will be informed at open enrollment this fall that they can only be insured once by the University of Iowa.
- The committee discussed expanded pharmacy coverage to include items such as prescribed vitamins. This was an issue that the committee discussed earlier in the year and the group determined that more data was needed regarding the medical conditions and drugs that might be prescribed to treat those conditions. Dan will collect data and bring more information to the group and Richard will talk with Wellmark for information. The committee will discuss this further at the September meeting.
- Health insurance plans for 2012 were discussed briefly; the same two plans will be offered in January 2012. The committee also needs to review and discuss further the information regarding alternative medicine that was presented in April; more discussion on this topic will take place at a fall meeting.
- There is no new information regarding the general and opt out credits for the flexible benefits system. Data regarding the effectiveness of the credits will be available for discussion at the February 2012 meeting.
- The committee discussed possible topics and additional agenda items for meetings starting in September. Those items included:
- Customer service at UIHC
- Chip II declining enrollment
- Out of state care and the coverage under the current health plans
- Co-payments and co-insurance under the current health plans
- Richard shared that he had heard nothing further regarding the proposed increase to long term care insurance rates.
- It was suggested that the mass email that will be sent in June regarding the TIAA/CREF restoration to 10% include a message regarding the renewal of the phased retirement program.
The meeting was adjourned at 1:00 pm
Recorder: Heather Schnoebelen
Funded Retirement and Insurance Committee Minutes April 7, 2011, 12:00 am 302 USB Funded Retirement and Insurance Committee (FRIC) Meeting
April 7, 2011
Meeting called to order at approximately 12:00 Noon in Room 302 USB. Note – this was a special meeting of FRIC with Nicole Nisly, MD, UIHC Internal Medicine to provide information to the committee about complementary and alternative medicine.
Members present: Nancy Davin, Matthew Glasson, George Herbert, Sheldon Kurtz, Heather Schnoebelen, Bernard Sorofman, Lynn Vining, Dagong Wang and Michael Wichman
Members absent: Jon Garfinkel, Daniel Katz, Victoria Sharp, Katherine Tachau and Anand Vijh
Administration: Sue Buckley, Richard Saunders
Guests present: Carol Fethke, Dan Fick, Amber Goedken, Suzanne Hilleman, Debra Hughes, Christine Miller, Nicole Nisly, Dick Stevenson, Joni Troester, and Dianne Wasson
1. Committee members, administration representatives and guests introduced themselves.
2. March 4th Minutes were approved with changes noted by Nancy Davin, date corrected and a clarification to the third paragraph under item 4 that UIHC sets the co-pay.
3. Alternative Medicine - Dr. Nicole Nisly from the Department of Internal Medicine gave a presentation to the group about alternative medicine explaining that alternative medicine includes a broad range of therapies encompassing older established therapies such as acupuncture to new emerging techniques such as energizing therapies. Alternative medicine is not typically part of the traditional western medical system. Alternative or complimentary medicine is typically used by higher educated individuals, women and those that whose incomes are greater than average. Iowa City is a typical place where alternative medicine would be used by residents. She explained that there are several basic types of complementary and alternative medicine, 1) biological based practices that include herbs, dietary supplements, foods and vitamins, 2) manipulative therapies which includes massage or chiropractic treatment, 3) mind-body medicine that includes meditation, yoga and acupuncture, 4) others such as homeopathic and energy therapies involving electromagnetic fields such as magnet or light therapy.
Dr. Nisly further explained that the UI started a small alternative care program in 1998 with her clinic providing guidance and consultative services to patients. Her patients include those dealing with radiation and chemotherapy treatments and seeking ways to deal with chronic pain. People are willing to spend money for alternative and complimentary medicine to support smoking cessation for example.
Insurance coverage for alternative and complementary medicine is limited. Most complimentary medicine services are provided as outpatient services. In some cases alternative medicine provided as in-patient services are covered by insurance. There is evidence indicating that patients that receive alternative medical services result in decreased time in the hospital. In some instances alternative medical treatments may be covered by insurance, for example music therapy, acupuncture, yoga, etc. for patients dealing with cancer.
Dr. Nisly answered several question posed by committee members associated with the safety, efficacy, evidence and education supporting alternative medicine. Committee discussed what types of alternative medicine is currently covered such as chiropractic care by law in Iowa, what could be covered, licensure requirements in Iowa and how to design and structure program for alternative medicine. Potential options include 1) cover alternative medical treatment for everyone, 2) limited coverage for alternative medical coverage, e.g., acupuncture, massage therapy, etc., 3) physician prescribed and 4) condition specific. There are obviously costs to including coverage, but there is also evidence that in some cases alternative medical treatments save costs. Committee discussed potential of piloting for a year and obtaining data related to costs, cost savings and decrease in length of stay. Dr Nisly stated that she will be available to meet with the committee again next year and supplied the following links to resources for the committee.
Link to UIHC Complementary and Alternative Medicine web site:
Subsequent to the committee meeting Dr. Nisly provided the following additional information to the committee:
What is CAM (complementary and alternative medicine): http://nccam.nih.gov/health/whatiscam/
lectures and review of evidence: http://nccam.nih.gov/training/videolectures/ Some select results of NIH
sponsored CAM research and literature analyses: http://nccam.nih.gov/health/providers/evidencebased.htm Academic
Consortium of Integrative Medicine: what other academic hospitals are doing: http://www.imconsortium.org/members/home.html
A non academic hospital example: Abott Nortwest Hospital in MN http://www.abbottnorthwestern.com/ahs/anw.nsf/page/ihh_home
Iowa Medical Board Position or regulation on Naturopathy: http://www.state.ia.us/ibme/policies/naturopathy.html
4. Wig Coverage – Committee discussed whether wigs should be included as part of insurance package available to employees. There are two basic types of wigs, synthetic and human hair with the human hair wigs being considerably more expensive. At the low end, synthetic wigs cost approximately $45 while human hair wigs cost approximately $1,100. According to Wellmark, several employers cover the cost of wigs for patients dealing with hair loss due to medical treatments. Generally the employer pays 80% and employee pays 20%. Estimate of cost to university was raised and less than 200 university employees currently meet Wellmark requirements for coverage. Committee requested copy of Wellmark guidelines for coverage, an estimate of cost to provide coverage effective 01/01/2012. Further discussion and possibly final decision whether to support will be made during the May meeting.
6. The meeting adjourned at approximately 1:00 p.m.
Next meeting – Friday, 05/06/11, 11:30 a.m. – 1:00 p.m., Room 302 USB
Michael D. Wichman
Funded Retirement and Insurance Committee Minutes March 4 , 2011, 11:30 am 302 USB
Members present: Nancy Davin, Jon Garfinkel, Matthew Glasson, George Herbert, Daniel Katz, Sheldon Kurtz, Heather Schnoebelen, Bernard Sorofman, Victoria Sharp, Katherine Tachau, Anand Vijh, Lynn Vining, Dagong Wang, Michael Wichman
Members absent: None
Administration: Sue Buckley, Richard Saunders
Guests present: Carla Clark, Carol Fethke, Dan Fick, Debra Hughes, Glenn Kell, Susan Klatt, Amber Goedken, Joni Troester, and Nancy Williams
1. First, the introductions were done. Next, the minutes of February 4, 2011, meeting was approved.
2. The discussion started with weight loss medications, a topic on which Amber Goedken, a Ph.D. student in pharmacy, had made a presentation during the last meeting in February 2011. She informed the committee that such medicines are ineffective, expensive, and sometimes unsafe. Daniel Katz and Richard Saunders subsequently held discussions with members of bariatric surgery department, who echoed this view. Given the overweight problem in U.S.A. and the increasing awareness of this issue, bariatric surgeons have been busy. Sometimes they receive inquiries from people who are only 20 lbs overweight. However, surgeries are typically performed on people who are at least 100 lbs overweight. The bariatric surgeons hold the opinion that while weight-loss medications are ineffective, simple antidepressants can also help. They believe that psychological counseling and behavioral modification may be the best solution.
Joni Troester, Sr. Asst. Director, Human Resources, was present at the meeting as a guest. She informed the committee that the UI wellness department makes available personal trainers and coaches to employees who have a BMI greater than 25 plus some risk factors. Coaches are more well rounded and advise on lifestyle changes, while trainers advise on fitness and exercise programs.
Daniel Katz has been providing useful information on the medical side of obesity treatment.
3. The next discussion topic was Long-Term Care insurance. Richard Saunders informed the committee of a looming rate increase. For the last seven years our provider has been John Hancock. This insurance company guarantees coverage to new employees if they enroll within 60 days of joining, but after that coverage involves a questionnaire and approval. They have not had a rate increase in seven years. To this Anand Vijh asked why a rate increase was necessary. They do not provide comprehensive care, rather a fixed dollar amount if someone requires care, so their cost may not have gone up. Richard Saunders clarified that earlier they had probably under-estimated probabilities of covered participants requiring long-term care. Besides, with people living longer also their costs had gone up. So they are asking for a 45% rate increase across the board. Their application is pending with the Iowa Insurance Commissioner. The Commissioner will probably ask for an outside opinion from an actuary and will approve some increase, usually the lower of what is asked by John Hancock and what is the actuary’s opinion. Richard Saunders also informed the committee that other Big Ten universities had seen their costs go up by around 40%. Thus, it appears some rate increase is likely and it will affect all insured. Enrollment may drop as a result of this increase.
4. The discussion next shifted to Health Insurance Plan for 2012. Richard Saunders informed the committee that Chip II will probably survive another year or more. It has around 300 participants at present. If the numbers of participants go down to around 100 the insurance plan becomes unsustainable.
At present there are only a few major issues under consideration concerning the Health Insurance Plan for 2012. One issue is the possible inclusion of alternative medicines. On this topic the committee awaits a presentation by Dr. Nicole Nisly from the Department of Internal Medicine.
There was a brief discussion of copayments for hospital visit under the UIChoice plan. The current copayment of $5 is clearly very low. Some members proposed that it could be eliminated as the collection cost is so high. Other members wondered why it was so low to begin with. Low copayment results in participants seeking excessive health care for small problems. It was felt that this was really a UI HC issue and if they felt this value was wrong than they could bring their concerns back to this committee. Therefore, no action was taken on this matter.
The discussion shifted to generic versus name brand medications. Name brand medications are much, much, more expensive. The FDA prescribes that generic medicines should be the same as name brand, but it does not seem to be so in all cases. Dan Katz clarified that in many cases doctors specifically prescribe name brand medicines since they believe that the generics are less effective. Bernard Sorofman from the Pharmacy Department provided the expert opinion that this is often so, hence the doctor’s insistence on name brand medications is not irrational.
Given the major cost issue of name brand drugs, questions were asked whether we can outsource medications (e.g. Canadian pharmacies). However, this is not possible under the law. In fact, the IRS would not allow the cost of foreign medications to be covered even under Health Care Spending Account Program which is primarily a set aside with the employee’s own money. So the university is essentially stuck with the higher drug costs when a provider prescribes a drug under the Dispense As Written (DAW) rules.
At this point the discussion shifted to what over-the-counter (OTC) drugs could be included in the health plan. Currently OTC’s are not covered. Several medical professionals in the room expressed the opinion that many OTC’s are necessary and are frequently prescribed by the physicians. In any case, under the present Health Care Spending Account system which is regulated by the IRS, a participant still needs a prescription to cover them. It will be challenging to come up with a list of covered over-the-counter drugs. Still, the medical professionals in the room thought that it was possible to come up with a list of ten or so widely prescribed and used over-the-counter products. This would have to be a manual process handled by the Benefits Office since the insurance companies would not be able to cover them. This idea was dropped, but Saunders was directed to look at what specialty items are covered through prescriptions only, such as prenatal vitamins or B-12 shots.
In response to other member questions, Richard Saunders informed the committee that hearing aids are covered under the present plan. In addition, 90% of the cost of breast pumps up to a maximum of $250 is covered. One excluded item is wigs for cancer patients. This could be covered up to a maximum dollar amount if the committee decides. A similar issue concerns the coverage of cosmetic aids to cover mastectomy damage to cancer patients.
Richard Saunders reminded the committee that discussion of changes to health plan for 2012 must be completed by the May 2011 meeting.
5. Richard Saunders explained to the committee that recently there has been a spurt in unsolicited emails from investment advisors to many employees. These advisors can access publicly available information on salaries and emails and there is nothing in the law to prevent them from offering their services. The advisors typically charge heavy fees, of the order of 1% of managed assets. Thus, if a targeted employee has assets of $1 million, an advisor would charge a fee of $10,000 a year for a wrap account to manage the funds. Their interest becomes obvious. The TIAA-CREF has a local office which provides some services for free, but does not actively trade the investment options like these vendors would. However, this is an area where the employees clearly have to watch their own interests.
6. The meeting adjourned around 1 p.m.
Anand M. Vijh
Funded Retirement and Insurance Committee Minutes February 3, 2011, 11:30 am 302 USB
Present: Nancy Davin, Matthew Glasson, George Herbert, Daniel Katz, Sheldon Kurtz, Heather Schnoebelen, Bernard Sorofman, Victoria Sharp, Katherine Tachau, Anand Vijh, Lynn Vining, Michael Wichman; Sue Buckley, Richard Saunders
Absent: Jon Garfinkel, Dagong Wang
Guests: Carol Fethke, Dan Fick, Debra Hughes, Christine Miller, Amber Goedken, Joni Troester, Dianne Wasson, Nancy Williams, Rick Borchard, John Swenning
Introductions. Introductions were completed. Members whose terms expire this year were reminded to submit an application to serve on FRIC again if interested. Approval of Minutes from December 3, 2010. The minutes were approved unanimously.
Open Enrollment Results. A handout of active employee and student open enrollment in various plans was distributed. Highlights included: UI Choice experienced a reduction in the number of health insurance contracts from 8800 to 8600. Chip 2 dropped from 351 to 315. Part of the reason for number changes is slightly less than 400 MSE staff were moved out of the P&S plans and into the State of Iowa health plans. The stay away credit: >50% stayed away, thus $200 was enough incentive to stay away. Chip 2 is stabilizing around 315 and maintains its existence. It becomes unviable when that number nears 100. If Chip 2 becomes unviable, subscribers would be given one year notice in the event of discontinuation. The smaller the group gets, the greater the risk for participants and the current policy is that health insurance premium rates not increase >30%. Didn’t see anything unusual in dental insurance except the number of Dental I single policies since Dental II single has better coverage and is also free.
Working on calculation sheets for domestic partners.
Weight Loss Drugs. Amber Goedken distributed an overview of her research regarding weight loss drugs. The research was done in response to requests from employees to cover weight loss medications, which are currently not covered. She reviewed the research and allowed the opportunity for questions. In summary, due to numerous side effects, risks, and reasonably minimal success, it is her recommendation that the University not cover the drugs. Dan Katz questioned the recommendation since the drugs are already approved by the FDA and offered that it may be a viable alternative to surgery. He remarked that all drugs have some level of risk and if we cover surgery for morbid obesity that we should be willing to provide medications and weight loss counseling. Amber’s conclusion was that the drugs are not effective enough to prevent a patient from needing the surgery.
In response to a question about the possibility of being proactive and covering a Weight Watchers membership instead, Joni Troester briefly discussed ongoing campus-wide wellness programs including a nutritional campaign in the dining services areas. The program is free of charge so there is no accessibility issue.
It was suggested that Benefits have a primary care (internal medicine or family medicine) or bariatric expert who routinely treats obese patients give their opinion about the use of drugs from their perspective.
UIHC Data. Chris Miller presented the most recent patient satisfaction data in an effort to keep the committee informed as requested last year. Highlights include: Access. Next third available appointment is the common measure for ability to schedule an appointment within a reasonable amount of time. There has been a 14% improvement overall since 2007. Third available appointment is used as a realistic measure to account for same-day cancellations. Kathryn Tachau expressed concern that Neurology and Psychiatry appear to be understaffed. There are almost one million visits a year across all clinics. Phone trees are being standardized – there are more than 20,000 lines coming in to UIHC. Efforts to improve access include Quick Care Clinics, River Crossing in Riverside, midwives have been added, a new clinic in Muscatine, Pediatrics in North Liberty, expanded hours in the Heart and Vascular Center, ability to schedule through MyChart, institution of a Service Excellence Program in February 2011 through in which 600 faculty and staff will participate with attention directed to the arrival experience.
Alternative Medicine. Richard Saunders reported that at the last meeting the committee requested he arrange for Nicole Nisely to come and present a talk about alternative medicine. He approached her and she is unavailable on Fridays. General interest was favorable and it was decided to schedule her for a day other than Friday and those who can attend will participate.
Old business. None. New business. None.
The meeting adjourned at 1:02 pm. The next scheduled meeting is March 4, 2011, 11:30 am in 302 USB.
Minutes submitted by Nancy Davin.
Funded Retirement and Insurance Committee Minutes from December 3, 2010 Meeting was called to order at 11:30am in 302 USB. Members in attendance: Nancy Davin, Matthew Glasson, George Herbert, Sheldon Kurtz, Heather Schnoebelen, Victoria Sharp, Bernard Sorofman, Katherine Tachau, Lynn Vining, Michael Wichman Members absent: Jon Garfinkel, Daniel, Katz, Anand Vijh, Dagong Wang Administrative Officers present: Sue Buckley, Richard Saunders Guests present: Carla Clark, Dan Fick, Debra Hughes, Jim Jacobson, Christine Miller, Dana Quartana, Julie Sexton, Nancy Williams 1. Introductions were done. 2. Minutes from the November 5th, 2010 meeting were approved as corrected. 3. The group discussed the status of open enrollment and the movement of members from the Chip II health insurance plan to the UI Choice plan. Employees can still make changes therefore final information on open enrollment data will not be available until the next FRIC meeting in February. 4. Richard Saunders shared that approximately 5,000 employee finalized the open enrollment on the final two days (Saturday/Sunday)). Discussion took place as to why this may occur and if there should or could be changes in the future. 5. The committee shared feedback that they received from employees about open enrollment: a. Questions about how to calculate contributions to the health care spending accounts. There are tools available on the Benefits Office website, Richard Saunders will look into this and provide an update on potential future changes to make this easier for employees. b. Questions about the paperwork for double spouse. c. Some concerns were raised from employees about overall changes in this year’s benefits structure but the general consensus was that employees found it relatively easy to navigate the online enrollment. 6. The committee discussed the health insurance plans for 2012 and whether there will be a need or desire to change the Chip II plan and/or create a new health plan. The discussion came back to the need to find out from our current employees what their satisfaction level is and what their needs/wants may be. 7. The committee discussed the timeframe for when decisions would need to complete on benefits plan changes in order to implement changes in January 2012. 8. A committee member asked a question about the status of paid up life insurance for retirees as a follow up to a previous meeting. Sue Buckley indicated that the President’s cabinet had approved and there was discussion with the Board of Regents. The Regents would like this proposal to be an interinstitutional proposal. 9. A committee member asked for an update on the TIAA/CREF retirement contribution reduction. The contribution will automatically be restored to 10% effective 7/1/11; this will be the 8/1/11 employee paycheck. The meeting was adjourned at 12:50 pm Recorder: Heather Schnoebelen
Funded Retirement and Insurance Committee Minutes November 5, 2010 Meeting was called to order at 11:35 am in 302 USB. Members in attendance: Herbert (Chair), Davin, Garfinkel, Schnoebelen, Sorofman, Vijh, Vining, Wang, Wichman. Administration: Buckley, Saunders. Members not in attendance: Glasson, Katz, Kurtz, Sharp, Tachau. Guests present: Debra Hughes, Christine Miller, Gerald Rose, Joni Troester, Doug Van Daele, Dianne Wasson, Nancy Williams. 1. Introductions. 2. Minutes from the October 10th, 2010 meeting were approved as corrected. Corrections included: changing the start time to 11:30am, indicating the finish time of 1:05pm, and striking “(~50)” from point #3 under item #4. 3. Presentation by Doug Van Daele, Chief Medical Information Officer, UIHC. The committee was given an overview of the patient viewable records section of the UIHC medical record system (EPIC) called MYCHART. Data is complete for ambulatory clinic visits from May 2009 and hospitalization summaries are available as well. The system is being phased in through January 2011 and thereafter. (Registration must occur at UIHC; not online or by phone). 4. UIHC Services Discussion. Christine Miller, Assistant Vice President for Integrated Strategic Planning and Business Development. Ms. Miller reported an update on services and new services at UIHC. She indicated that ‘wait time’ and ‘time to appointment’ have been trending in a positive direction. She will provide data to the committee. Ms. Miller also discussed the waiving of the co‐pay fee at UIHC. No committee discussion about this issue occurred. 5. CHIP 2. Data showed that CHIP 2 is down to 277 individuals. Since the data was prepared for the committee an additional 30 had been removed from plan. The pool is ‘shrinking rapidly’ and there is an expectation that it will be smaller after the annual enrollment process has completed. Mr. Saunders said it does not appear the small enrollment will sustain this health insurance option much longer. 6. Open Enrollment is ongoing. About 500 people have already completed the process. 7. A question about out of pocket maximums from last meeting was discussed. If we want to increase the out of pocket maximum, how much will that result in a reduction in claims. The answer was that for each $100 in increased out of pocket maximum, claims would be reduced 0.015%. 8. Next steps for considering new plans · The committee needs to discuss what will happen when CHIP 2 is no longer viable. · The committee will discuss UI Choice improvements next session. What can be done to improve the current plan? · The committee will then discuss whether an alternative plan should be developed. Should the University offer a single type of plan, such as UI Choice, or multiple plans? The meeting was adjourned at 1:02pm. Recorder: B. Sorofman
Funded Retirement and Insurance Committee Minutes from October 1, 2010 Meeting was called to order at 11:35 pm in 302 USB. Members in attendance: Kurtz, Herbert, Tachau, Sorofman, Katz, Sharp, Vijh, Vining, Wang, Wichman; Administration: Buckley, Saunders. Members Absent: Davin, Garfinkel, Glasson, Schnoebelen Guest present: Carla Clark, Debra Hughes, Amber Goedken, Julie Sexton, Nancy Williams, Glen Kell, Gerald Rose. 1. Introductions were done. 2. Minutes from the September 9 th , 2010 meeting were approved as corrected. 3. The Open Enrollment period will be from October 29 thNovember 21 st, 2010. 4. The discussion of Health Insurance Plans for 2012 was started. · The committee agreed that in addition to care at UIHC other options should be provided. · The question of whether we could consider a catastrophic plan was discussed. The new law places limits on this type of option including availability only to those less than 30 years of age who meet certain requirements. · There is a certain group of employees who don’t like our current plan because they live and work in Ankeny so they find it difficult to get their care in Iowa City. · The possibility of conducting a survey to see how satisfied employees are with the current plans was discussed. This was tabled for now because it was felt that with the flex credit changes the responses were likely to get off the topic and focus more on the overall flex credit changes. · Sue Buckley stated that based on relatively few complaints she feels that most people are happy with UI choice. Concerns were expressed from Ankeny employees about no availability to UI HC and higher copays. · There was a discussion regarding the merits of copays and the possible consequences if copays were eliminated for employees utilizing health care services at UI HC. · The option of getting rid of the family category and going to a system where we pay for the exact number of people covered was discussed. · If the out of pocket maximum is changed it will affect premiums. One member asked for additional information regarding this such as, for every $100 increase in out of pocket maximum, approximately how much will it affect the premium. · An area for future discuss is are there things we don’t cover that we should and are there things we cover that we shouldn’t (i.e. acupuncture, hearing aids and infertility)? 5. Christine Miller and Craig Syrop from UI Health Care will attend the FRIC in November. · My Chart demonstration · Health Care Reform’s impact on UI HC · FRIC will ask them questions about copays The meeting was adjourned at 12:55pm. Funded Retirement and Insurance Committee Minutes from October 1, 2010 Recorder: Victoria Sharp
Funded Retirement and Insurance Committee Minutes from September 9, 2010 Meeting was called to order at 11:30am in 202 USB. Members in attendance (bolded): Nancy Davin, Jon Garfinkel, Matthew Glasson, George Herbert, Daniel Katz, Sheldon Kurtz, Heather Schnoebelen, Victoria Sharp, Bernard Sorofman, Katherine Tachau, Anand Vijh, Lynn Vining, Ruth Wachtel, Michael Wichman, Dagong Wang; Administrative Officers: Sue Buckley, Richard G. Saunders Guests present: Carol Fethke, Debra Hughes, Susan Klatt, Amber Goedken, Dianne Wasson, Nancy Williams 1. Introductions were done. 2. Minutes from June meeting were not submitted; need to check with absent members for recorder of the minutes. 3. Ms Buckley shared that the FRIC’s recommendation to change copays from $5/$20 for UIHC/non UIHC healthcare use be changed to $15 for both groups was not accepted by the VP Group (President’s cabinet). The VP Group is requesting the FRIC Committee to develop new health plans to take into account both the existing CHIP II program and the copay issue. New members asked about the reason for copays and committee members shared the rationale for the copay was to encourage judicious use of healthcare along with supporting UIHC. 4. Ms. Buckley updated the committee on final numbers for the most recent retirement incentive program: a. 257 applied with 95 approved and 162 denied i. 14 of the applicants were faculty with 7 of those approved b. The 1 million desired savings for GEF was achieved, with 2.8 million total savings all funds noted for the first year of the program 5. Mr. Saunders distributed draft documents for projected premiums for calendar year 2010 that were based on 12 month averages, which crosses calendar years. Overall premium costs will show a small savings for employees due to only a slight increase in claims for this period. Claims for U of I were less than the average in the state. Discussion occurred on rationale for this, and Ms. Buckley shared that through the Wellness health assessment, which is a self reporting tool and may not actually be the reason, the results indicate healthier lifestyles over time. a. Estimates were based on previous guidelines set forth by the committee: b. If costs > 30%, premium increases are capped at 30% c. If costs < than previous year, rates remain the same as the previous year’s rates d. Motion was made by Mr. Garfinkel for approval of rates, and seconded by Mr. Sorofman, with unanimous approval by the committee. Benefit option selections will be available for employees on Oct 29 th through Nov. 21 st. 6. The FRIC’s previous recommendation was to decrease costs of life insurance by offering 2 times employee’s salaries (capped at maximum of $400,000 coverage) for a projected $2 million savings/year. The committee’s original recommendation was to still continue offering additional life insurance at 2.5 and 3.5 times salary as options. Mr. Saunders informed the committee that this cannot be done through PeopleSoft, the U of I’s benefit software. Mr. Saunders shared that currently staff have the option to choose up to a maximum life insurance of 6.5 times their salary. Two possible solutions that would still allow staff to obtain the 6.5 multiple maximum coverage were discussed: a. OPTION 1: Offer life insurance at 2 times the employee’s salary, and replace the 2.5 and 3% options within the supplemental life insurance with new multiples of 4 and 4.5. While supplemental life insurance costs are < for those under the age of 60, it negatively affects those > 59 of age if they were choosing life insurance under the group life insurance option versus Page 2 of 2 supplemental life insurance option. Cost of coverage in the supplemental is an additional 13 cents/$1000 coverage for those > 59 years of age. This proposed change would affect 1634 staff, with approximately 250 employees over the age of 59 who currently use the maximum life insurance coverage option. b. OPTION 2: Reinstate flex credit option as it currently is offered, with Life Insurance of 2.5 and 3. The $40 credit that is given for the $50,000 option would show up as earnings. This option affects approximately 11,000 employees. The potential downside is that it may cause confusion regarding the Flex Credit, along with it showing up on employees’ paychecks as earnings. After discussion of both options, a vote was taken and option 2 (5 votes) was approved, with 4 votes noted for option 1, and 1 abstention. 7. Mr. Saunders distributed criteria for the FRIC members’ consideration in determining other health care coverage plans, as requested by the VP Group. Committee members requested to have the handout updated with the current options offered in the existing health plans. Mr. Kurtz encouraged members to seek input from our constituents and to bring back ideas for the next meeting. 8. Meeting adjourned at 1:00 pm. Recorder: Lynn Vining
FY10 Meeting Minutes
Funded Retirement and Insurance Committee May 7, 2010 Meeting called to order at 11:30am in 302 USB. Members present: Nancy Davin, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Sheldon Kurtz, Bernard Sorofman, Katherine Tachau, Anand Vijh, Lynn Vining, Dagong Wang. Absent: Richard Borchard, Daniel Katz, Ruth Wachtel Administration: Sue Buckley, Richard G. Saunders Guests present: Carol Fethke, Dan Fick, Debra Hughes, Christine Miller, Michael Schueller, Craig Syrop, Dianne Wasson, Amber Goedken, Dick Stevenson, Glenn Kell 1. A few small amendments to the April 2 minutes were proposed. 2. Sue Buckley updated us on the progress of the Early Retirement Program II. Reminder notices have been sent that the deadline to apply is May 15 th . So far, about 200 applications have been received, 9 from faculty and the remainder from staff. There have been 4 approvals and 2 denials among the faculty applications. There have been 24 approvals and 12 denials among the staff applications. The original stated financial goals of the program were $1 million in GEF funds. We are now at $832,000. Administration is confident that the UI will reach its goal. 3. Sue Buckley noted that the Board of Regents (BOR) meeting (last week at the UI) contained an agenda item on efficiency studies. At the BOR meeting, it was noted that Regent Universities have made progress on implementing efficiencies, primarily in HR, IT, facilities and purchasing. The BOR continues to encourage the Regents institutions to seek out further efficiencies. 4. Richard Saunders discussed the implications of Health Care Reform for our longterm care coverage of employees. The new law provides for guaranteed coverage, age rated, with 5 years of vesting, effective January 1, 2011. This will be run by the Federal Government. If an employer adopts/offers the federal program, then all employees are autoenrolled. If an employee wishes to deenroll, they must take an action to do so. The federal government’s price is based on a nationwide pool of covered individuals. Also, we must pay attention to our current provider’s willingness to offer (and price of) longterm care insurance. Our current provider is John Hancock. 5. Richard Saunders discussed the new law’s effect on adult dependent children. The UI must decide whether to cover the “soon to be covered” group, earlier than Federal Law implementation of Jan 1, 2011. The motion to do so was put forth (Katherine Tachau), seconded (Mary Greer) and approved unanimously to offer coverage as soon as possible. 6. Craig Syrop and Christine Miller presented results from the UI Health Survey. Discussion of the survey results ensued. 7. UI Choice Copays were discussed by the Committee. A decision to continue the discussion at a yettobe determined meeting data (preferably in early June) was reached. 8. The meeting adjourned at 1:05pm. Respectively submitted by Jon A. Garfinkel
Funded Retirement and Insurance Committee (FRIC) April 2, 2010 Meeting called to order at 11:30am in 202 USB. Members present: Nancy Darvin, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Katherine Tachau, Anand Vijh, Ruth Wachtel Absent: Richard Borchard, Lynn Vining, Dagong Wang Administration: Sue Buckley, Richard Saunders Guests present: Carol Fethke, Debra Hughes, Christine Miller, Amber Goeken, Michael Schuller, Krista Smeins, Nancy Williams 1. Minutes of March 5, 2010, meeting were approved after minor corrections. 2. Sue Buckley started the discussion by talking about the Early Retirement Program II. There had been a Program I along the same lines to which eligible employees could apply during July 1, 2009, through September 30, 2009. The differences between the Early Retirement Program II and the regular retirement program are discussed in detail on the following website: http://www.uiowa.edu/hr/benefits/retire/erp2_compare.pdf. In particular, the minimum eligibility terms are 55 years of age and 10 years of service to the university. The eligible employees can apply to the Program II between April 1 and May 15. Next, the colleges and divisions have to act on the applications. The main criteria are the cost savings and the personnel requirements. The colleges and divisions have to send in their recommendations on applicants by June 11. The University administration makes its decisions by June 30, and the individuals must terminate by July 31. 2 Given the recent offering of Program I, Sue Buckley expects fewer than 400 applications, although there are 3,200 eligible employees. The early retirees receive no salary, but do receive several benefits such as medical and retirement benefits for up to five years (more details on the website). Sue Buckley thinks that optimistically speaking the cost savings may reach $1 million, but likely will be less. 3. Richard Saunders discussed the impact of the recently passed Health Care Bill on the University of Iowa Benefits programs. The details of this bill are still forthcoming. Different provisions of the bill become effective during different calendar years, with some of them becoming effective as late as 2018. So it is a wait and watch approach. However, some provisions are already clear as follows. First, the bill requires employers in 2011 to start covering dependent children on parents’ health policies until they are 26 years of age regardless of where they reside in the U.S. The current Iowa state requirement is to cover dependent children until they are 25 years of age and they reside in the state of Iowa. There will be no additional imputed income charge as currently occurs for covering nontax dependents. Second, the Health Care Bill caps flexible account spending at $2,500 per family in 2013. Also, in 2011 it restricts what all the flexible account dollars can be spent on. For example, most overthecounter supplements (e.g., bandages) will no longer be covered. Many people spend extravagant amounts on these items before yearend if they have money in their flexible accounts. However, items such as real drugs and prescription glasses will continue to be covered. The tighter rules on flexible accounts are intended to cut down on wasteful spending and to pay for the bill. (I read somewhere that it will generate an additional tax revenue of $15 billion a year.) Third, the bill imposes taxes on the socalled “Cadillac health plans”. (I read somewhere that these are defined as individual plans costing above $10,000 or family plans costing above $27,000.) If an employer pays above these limits for an employee’s plan, then that excess amount is taxable to the employee. Richard Saunders explained that none of our present health care plans are Cadillac plans (including the employee only plans). This part takes effect in 2018. 3 Fourth, the Health Care Bill requires employers to autoenroll employees in the health care plans. This provision kicks in during 2014, so there is time to wait and watch. 4. Chris Miller from UIHC informed the committee that there has been a good response to the surveys on the quality of health care mailed to all UI employees. As of last week there were 2,454 responses, out of 10,400 surveys mailed out in the first round. Studies suggest that most survey responses came in early, during the first week or so. However, a reminder will be sent on April 23, 2010. 5. There was a brief discussion of the proposed optout credit of $200 for not taking up the university health care plan. This optout credit is a part of the revised benefits plan that will be implemented for 2011. There was also some discussion of what index, if any, should be chosen for the various credits that are offerred. Sheldon Kurtz reminded that the purpose of the optout credit was to give employees an incentive to stay out of the university’s health care plan. Ideally, the credit would be chosen to maximize the cost savings, which depend on how many employees opt out, their health condition relative to others who stay in, and the amount of the credit itself. Unfortunately, the administrators have no information on what amount of optout credit will maximize the cost savings. Several suggestions were made by committee members on increasing this credit in steps to know what is the optimal amount for maximum cost savings. An additional suggestion was to ask the consultants if they had any experience in the matter. Both the amount of optout credit and the indexing of general credit have been matters of frequent discussion during last few meetings, and this time the discussion was limited. 6. The last discussion item concerned the UIChoice and CHIP plans. Under the UICHOICE health plan, to encourage employees to use the UI Hospital and Clinics, the copayment amount of Level 1 was decreased to $5 and Level 2 was increased to $20 starting in 2010. The results have been good: 97% of the employees are presently enrolled in the UIChoice plan. 4 The plan has had an unintended and unsatisfactory outcome for some employees who work outside the Johnson County/Iowa City location. For these employees UI Hospitals and Clinics are not easily accessible for routine care, so they have sent several emails to committee members complaining about their “unfair” treatment. The main hurdle in giving them lower copayments is that WellMark/Blue Cross who administers our selfinsured plan cannot create a separate category by zip code. At present they have only two copayment categories, depending on whether an employee uses Level 1 or Level 2 providers. Changes to this procedure will be expensive and increase the administration costs for all employees. Giving a lower copayment to certain employees (perhaps because they cannot reasonably access UI Hospitals and Clinics) and not to other employees may raise other inequity issues. Suggestions were made that copayments could be based on where an employee works and not where he or she lives. However, Richard Saunders pointed out that this is not equitable either. For example, eight employees who live in Dubuque work in a Dubuque facility whereas six employees who also live in Dubuque commute to the Iowa City campus. They would face inequity under such arrangement. While there was general sympathy for the Ankeny employees, there was also the need to achieve two goals. First, the university wants to encourage employees to use UI Hospitals and Clinics. Second, the university wants to decrease the cumulative health care costs, and additional administrative costs could negate this objective, to the detriment of all employees. Then, there is the general feeling that no system can possibly be equitable to all employees. Anand Vijh pointed out that there are inherent differences in cost of living in different locations, so full equity is not achievable. For example, the residents of Johnson County/Iowa City may have easier access to UI Hospitals and Clinics and the related low copayments, but they also pay $85 a month for campus parking (not counting the hefty parking fees charged by UI Hospitals and Clinics that could be thought of as another form of copayment for each visit). Offcampus employees may be paying less or nothing for their parking, so there are benefits as well as costs to such employees from their situation. The issue was discussed further, but not resolved. 5 7. The meeting adjourned around 1:00 p.m. Respectfully submitted, Anand M. Vijh
FRIC Minutes March 3, 2010 302 UNIVERSITY SERVICES BUILDING Committee members present: R. Borchard, N. Davin, J. Garfinkel, M. Greer, G. Herbert, D. Katz, S. Kurtz, B. Sorofman, K. Tachau, A. Vijh, L. Vining, R. Wachtel, D. Wang; S. Buckley (ex officio), R. Saunders (ex officio). Guests present: D. Hughes, S. Klatt, C. Miller, M. Schueller, A. Goekin, D. Wasson, N. Williams. 1. The meeting came to order at 11:30 AM. After brief discussion, N. Davin moved, R. Wachtel seconded, that the minutes of the Feb. 5th meeting be approved as corrected. Motion carried. 2. EARLY RETIREMENT RESULTS: R. Saunders led the committee through the data that had been presented to the Board of Regents in February regarding the first early retirement program. He and S. Buckley reminded the committee of the criteria applied in deciding to approve or deny an individual’s request to take retirement under this program, as these criteria will be applied in the next months, if the regents authorize the second early retirement program at their telephonic meeting in late March. 3. GENERAL AND OPT OUT CREDITS: The group continued earlier discussion of whether the FRIC should recommend to the Administration that automatic increases to Flex Credits be built into our program, and, if so, what factors would be both feasible and would permit us to achieve any of the goals of this program (e.g., cutting the rate of increase of costs to UI, successfully motivating people currently covered by nonUI insurance to remain on their current plans). Possible factors to use in deciding what such an annual increase should be, include HEPI increases, Wellmark increases, UI’s historical experience, and the CPI. The committee agreed (1) that it should establish what principle would underlie any escalator, as this would enable us to decide among the possible factors and (2) that further consideration should be postponed until we are able to ascertain the effectiveness of the currently planned “opt out” credits. 4. UICHOICE: The committee took up the issue of whether the number of UI staff and faculty enrolling in CHIP II had dwindled so far as to make it impossible to maintain. As this seems to be a point this plan is quickly approaching, should the UI have only one plan (UIChoice) to offer P & S staff/faculty? Should we instead have a second plan that works better for employees outside of Johnson County (especially those at UI worksites elsewhere)? Are there advantages to employees in UI offering a choice of plans that FRIC believes we should maintain? Lively conversation ensued, to be continued at future meetings. 5. There being no further business, the meeting adjourned. NEXT SCHEDULED MEETING – 4/2/10 ROOM 202 UNIVERSITY SERVICES BUILDING 1130 AM Respectfully submitted, Katherine H. Tachau
Funded Retirement Insurance Committee (FRIC) Minutes for 2/5/2010 Location: 302 University Services Building Members: Richard Borchard, Nancy Davin, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Katherine Tachau, Anand Vijh, Lynn Vining, and Ruth Wachtel, Dagong Wang (names of members in attendance bolded) Administration: Richard Saunders, Sue Buckley Guests: Amber Goedken, Pat Kelly, Debra Hughes, Christine Miller, Nancy Williams, Dianne Wasson. The Feb 5, 2010 FRIC meeting was called to order at 11:30 a.m. in Room 302 USB. 1. Minutes were approved, as corrected. 2. Richard Saunders reviewed the enrollment data for 2010. UI Choice continues to grow from 8502 to 8813. CHIP 2 is shrinking, getting smaller from 572 to 351. Prior to current enrollment period, materials comparing plans were mailed to CHIP 2 enrollees. Some changed to UI Choice, most did not. 3. Shelly Kurtz addressed rumor that University is considering changing TIAACREF’s status as sole carrier of retirement plans. Not correct. TIAACREF continues to be sole carrier of all employersponsored plans. However, voluntary supplemental plans have multiple carriers currently and that will continue. No changes are under consideration. 4. Committee reviewed a draft of a health care survey to be sent to all faculty and staff. Kurtz suggested that it should be clear that survey is coming from FRIC and that results will be reviewed by FRIC. Sorofman asked whether the data would be public information. Saunders confirmed that it would be public. The committee reviewed each survey question and made many suggestions on improvements to the questions. UIHC and UI Health Plans will revise the questions and distribute the survey without further review by FRIC. 5. Sue Buckley gave a brief report on the success of the early retirement program and also Regents’ concerns about the proposal to extend the program. 6. Other agenda items were deferred until next meeting, March 5, 2010. Meeting adjourned at 1:05 p.m. Submitted by Matthew Glasson
Funded Retirement Insurance Committee (FRIC) Minutes for 12/4/2009 Location: 302 University Services Building Time: 11:30 AM 1:00 PM Members: Richard Borchard, Nancy Davin, Charles Drum, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Katherine Tachau, Anand Vijh, Lynn Vining, and Ruth Wachtel (names of members in attendance bolded) Administration: Richard Saunders, Sue Buckley Guests: Dan Fick, Debra Hughes, Susan Klatt, Nancy Williams, Joni Troester, Carol Fethke. Mike Schueller, Dianne Wasson. The meeting was called to order at 11:30am in Room 302 USB. 1. Approval of Nov. 13 th minutes was made by Sorofman/Garfinkel with recommended typo revision noted. 2. Shelly announced that Charles Drum is retiring at the end of December. Shelly thanked Charles for his service to both FRIC and the University over these many years. 3. 2011 FRIC Recommendations No changes were requested to be made to the 2011 FRIC recommendations. A question regarding the history of how out of pocket adjustments was made and Saunders and Buckley shared that it historically been done infrequently without being tied to inflation or other index, and is based on general benchmarks along with advisement by Wellmark. First proposal of increasing flexible credits from $90 to $115 starting in calendar year 2012 was discussed, with increased costs to the University projected at $3.2 million/year. Sorofman, Kurtz and others commented that we need to be aware of the credibility of the committee related to the timing of making any proposals that would increase costs at this time. Kurtz recommended adding the following language to the 2012 date to allow President Mason some flexibility: “2012 or as soon thereafter as the University’s budget would allow.” Since it was the committee’s charge to determine if there are any recommended changes to the 2011 FRIC recommendations, Kurtz/Drum moved to table the discussion of proposed changes for 2012, with majority approval and dissenting votes by Herbert, Sorofman, and Blanchard. Topic will be placed on the February meeting agenda, with information to be brought to the meeting by Saunders on different healthcare cost/premium/consumer price indices. Group also recommended discussing copay options based on location of care. Saunders reminded committee members that there is no mandate that restricts benefit plan reviews so reviews can be done at any time. Davin recommended that we send a letter to President Mason notifying her of our deliberations and Kurtz agreed to write a letter and send. Page 2 of 3 Saunders also asked for input regarding if the University should offer the Shared Saving Credit of $200.00 for staff who are already covered through their partner’s health benefits through another State of Iowa or University health plan. An example is the State of Iowa Blue Access merit plan which currently offers coverage for family at no cost. Vining made a motion to eliminate the Shared Saving Credit of $200.00 for personnel already covered under a University or State of Iowa plan, and Garfinkel seconded. Motion was passed unanimously. 4. Retiree Life Insurance Saunders shared that the University currently offers retirees a $2000 life insurance benefit for staff who have worked 50% or greater with 10 years of service, who retire at age 62 or older. The amount of the life insurance benefit increases $200/year for each additional year of service after 10 years, up to a total of $4000.00 maximum. This benefit however, eliminates retirees from being able to purchase existing life insurance at the amount up to their current coverage without preapproval. Saunders and Fethke shared that the death benefit was originally started in the 1950’s to cover funeral expenses for many who did not have monies for burial costs. Saunders asked the committee for input since he has discussed this at Gray Hawk and other campus meetings and consensus has been that having the option to purchase life insurance at their current amount or lower without preapproval is preferred versus having the life insurance benefit. Vijh shared that U of I costs to administer the current program is not trivial, estimating the cost to $2000/year/ employee. Kurtz motioned to rescind this coverage to enable staff the option to purchase life insurance up to their current limit and Drum seconded. Motion passed, with Borchard and Sorofman abstaining. 5. Health Rates – 2 or 3 or 4 Family Statuses Saunders asked for input whether the committee wanted to continue the current family status structure or to have a premium analyses done to evaluate moving to a 2 tiered structure of employee or employee and family option that is currently offered by the state. Vijh shared that it better to keep the existing groups if there is sufficient dispersion across groups. Garfinkil stated that cost would increase for 2 out of the 3 current status groups in order to subsidize the proposed employee and family option. Committee recommended keeping existing structure and no further analysis was requested. 6. IPERS Saunders shared that the University is required to designate a retirement plan for all new employees and there are 2 plans currently available. The IPERS option requires 5 years of vesting and offers a 60% retirement compensation for those retiring after 30 years of service, based on the 3 highest years of the staff’s salary. The other option is TIAACREF enrollment, which offers a variety of choices that the employee can select. Currently, new hires are enrolled into the TIAACREF retirement option, and employees have 45 days after employment to change to the IPERS option, with the inability to change plans after that time unless they terminate and are rehired at a later date. Retirement options and information is shared during employee orientation. General consensus was that default into the TIAA CREF retirement option should be continued. 7. Old Business Buckley shared that President Mason is not considering TIAACREF vesting at this time. Page 3 of 3 8. New Business none discussed. NEXT SCHEDULED MEETING – 2/5/10 ROOM 302 UNIVERSITY SERVICES BUILDING 1130 AM Recorder: Lynn Vining
Funded Retirement and Insurance Committee (FRIC) November 13, 2009 The meeting called to order at 11:30am in Room 302 USB. Members Present: Richard Borchard, Nancy Davin, Charles Drum, Matthew Glasson, Mary Greer, George Herbert, Bernard Sorofman, Daniel Katz, Lynn Vining, Sheldon Kurtz, Katherine Tachau, Anand Vijh, and Ruth Wachtel Administration: Richard Saunders, Sue Buckley Guests: Dan Fick, Debra Hughes, Nancy Williams, Carla Clark, Christine Miller, Krista Smeins, Joni Troester, Carol Fethke and other visitors. Minutes of the November 6, 2009 meeting were approved as submitted. Sheldon Kurtz presented a draft memorandum (circulated to the membership before the meeting) to President Mason, objecting to patient solicitation methods proposed as part of the UIHC’s Philanthropy Initiative. Following some specific suggestions on how to improve the memo, it was approved and will be sent to President Mason. Members of the committee suggested that the memo should appear on the FRIC web site, and it was agreed that it would. The committee then discussed three amendments to the FRIC proposal that had been suggested by FRIC members and distributed in advance of the meeting. 1. Members Nancy Davin and Mary Greer suggested tying the flex credit to a specific number rather than an arbitrary amount. Their proposal would increase the flex credit amount from $90 per month to $113.34 per month, an amount equal to 80 percent of the outofpocket maximum of UI Choice, currently $1,700. Each year, the flex credit amount would be adjusted according the new maximum. 2. A proposal from Richard Borchard would increase the general credit to $115 from $90, the increase intended to take into account inflation in health care expenses between now and 2012, when the proposed changes are to take effect. Borchard also proposed increasing the shared savings credit, the amount persons not taking UI health insurance will receive (referred to as the “stay away” credit) to $260 from $200, based on the same reasoning regarding inflation. 3. Dan Katz proposed a matching funds program that would match a portion of employee’s contribution to a spending account, allowing pretax dollars to be used for health and childcare services and materials. He included a sliding scale for the University portion in inverse relation to the employee’s salary, benefiting lowerpay employees. At the suggestion of Kurtz, Richard Saunders had prepared cost estimates for the three proposals. The general credit increase in the DavinGreer and Borchard proposals would cost an estimated additional $3.2 million. Borchard’s suggested increase in the shared savings credit might add about $1.3 million to the University expense, although there were too many variables for that estimate to be very solid. The Katz proposal also included too many variables to put together a meaningful estimate, but the potential is there for large increases, Saunders said. There followed a lengthy discussion of the elements of the proposals and their various benefits and weaknesses. Some highlights: Kurtz said that in these difficult economic times, the committee needed to make a proposal that would not mean a smaller savings than the original proposal. He reminded the committee that the FRIC recommendations were in place and that while the committee might let President Mason know its aspirations for reducing the burden on employees, any changes without savings would be difficult to sell to administration. He expressed his concern for maintaining FRIC’s credibility with administration. Sorofman agreed, saying that if administration does not take FRIC’s recommendations seriously, then the committee cannot successfully represent staff and faculty. Tachau reminded the committee that in spite of the flurry of emails urging changes, many more employees are benefiting from the proposed changes than are losing. Greer said that the proposed amendments are an opportunity to reduce the pain to employees. Sorofman said that $25 wasn’t going to do much to reduce the pain he had seen at the forums. Glasson said that the worst thing the committee could do would be reduce savings and thereby cause layoffs. Tachau said that the committee needed some element to address morale. She said that if they could not accept anything that would mean increased costs, the committee should be coming up with a list of what must be restored in better times and in what order. Susan Buckley told the committee that there was one added outstanding issue the committee needed to take into account. Couples in which faculty or P&S staff are married to merit employees, the couples may choose to use the merit insurance family program, which is offered at no cost. Because the merit program is more expensive for the University than UI Choice, the issue is whether University should pay the stayway credit to P&S & Faculty in this situation. The committee will continue the discussion and come to a decision at its regular Friday, Dec. 4 meeting. Charles Drum
Funded Retirement and Insurance Committee (FRIC) October 2, 2009 The meeting called to order at 11:30am in Room 302 USB. Members Present: Richard Borchard, Nancy Davin, Charles Drum, Jon Garfinkel, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Anand Vijh, and Ruth Wachtel Administration: Richard Saunders, Sue Buckley Guests: Debra Hughes, Susan Klatt, Christine Miller, Dianne Wasson, Nancy Williams, Jane Holland, Nicole Jaeger, George Paterson, John Spencer, Ann Baker, Lynn Westpahl. 1. The minutes of September 18, 2009, were approved as submitted. 2. Cochair Kurtz asked if anyone had any suggestions for changes to 2011 FRIC recommendations. 3. Mary Greer noted that she was pleased when President Mason delayed implementation. 4. Rick Borchard expressed concern with the erosion of purchasing power of the $90 and $200 payments to University employees. He is in favor of some level of indexation of these amounts over time. 5. Dan Katz presented ideas in a powerpoint discussion. The key suggestion was that the University preserve (most if not all) of the 2011 FRIC recommendations, but layer on an additional benefit for Dependent Care Spending. The crux of the suggestion is that employees can choose to put money into a DCSA, with the University matching up to a certain (yet to be determined) level. 6. Vigorous discussion ensued. 7. Cochair Kurtz highlighted the implicit deadline of the December FRIC meeting for making final recommendation to President Mason. 8. The retiree life insurance topic was briefly raised. Short discussion led to recognition that more discussion is needed before a decision on whether to continue the program is made. The meeting was adjourned at 1:05 pm. The next scheduled meeting is November 6, 2009. Respectfully submitted, Jon A. Garfinkel
Funded Retirement and Insurance Committee (FRIC) September 18, 2009 The meeting called to order at 11:30am in Room 302 USB. Members Present: Richard Borchard, Nancy Davin, Charles Drum, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Anand Vijh, Lynn Vining, and Ruth Wachtel Administration: Richard Saunders Guests: Carol Fethke, Debra Hughes, Julie Sexton, John Spencer, Kathy Terrell, Dianne Wasson, Nancy Williams 1. The minutes of September 11, 2009, were approved as submitted. 2. Richard Saunders distributed a health care survey form. The survey is similar to one performed in 2007. It was requested by FRIC but will be sponsored by UIHC. The purpose is to understand why people do not choose UIHC for their healthcare needs but go elsewhere instead. Five problems were already brought up concerning the survey in that it fails to address: i) difficulty scheduling appointments, ii) waiting times in clinics, iii) automatic scheduling of follow-up appointments, iv) coordination of multiple appointments on the same day, and v) limited access to the staff provider. The Committee did not discuss the survey, but was told to send additional comments directly to Richard Saunders. 3. A handout from John Spencer was distributed via email this morning. John emphasized that benefits plans could be evaluated either financially or based on principles and equity, and that it was important to integrate these two concepts. FRIC needs to explain and justify its plan to the University. A graph in the handout showed the University contribution in each employee category for 2008 and 2009. The purpose of the graph was to show that the relationships among categories was not stable over time. Discussion centered on the value of looking at only 2 years of data. Further examination revealed that the 2009 numbers were based on the number of employees enrolled in health plans, while the 2008 numbers were based on the number of individuals receiving flex credits in each family category. Therefore, the comparisons shown are not truly valid. The result of any plan is that employees will be expected to assume a greater fraction of the costs of their own health care. Nevertheless, in 2009, 7200 employees would have received a $90 monthly credit under the FRIC proposal. John Spencer discussed similarities and differences between his proposal and the FRIC plan. Differences include the amount of money an employee receives for not accepting health care coverage because they obtain it through a spouse. Another difference is apparent for dual spouse employees. The FRIC plan covers the cost of a single health care plan for each individual. The Spencer plan covers 128% of the cost for each spouse. Choosing a specific plan involves a philosophical decision of whether to focus on providing products to employees or providing dollars for flex credits. The meeting was adjourned at 1:00 pm. The next scheduled meeting is October 2, 2009. Respectfully submitted, Ruth E. Wachtel
Funded Retirement and Insurance Committee (FRIC) September 11, 2009 Meeting called to order at 11:30am in 302 USB. Members Present: Richard Borchard, Charles Drum, George Herbert, Lynn Vining, Jon Garfinkel, Bernard Sorofman, Ruth Wachtel, Daniel Katz, Katherine Tachau, Anand Vijh, Sheldon Kurtz, Mary Greer, Nancy Davin, Matthew Glasson Absent: Administration: Sue Buckley, Richard Saunders Sixteen Guests 1. Minutes of May 1, 2009 meeting were approved after a spelling correction. 2. Sue Buckley reported on the developments of the Board of Regents subcommittee formed to study benefit practices among Iowa’s educational institutions. She reported on the composition of the subcommittee that now includes Regent Gartner, Downer, and Regent Campbell who replaced the student regent. The University of Iowa complied with this committee’s request to provide data regarding the University’s benefits plans, enrollments, and policies. An interim report of the Subcommittee was expected this month. However, the Governor has announced a task force on state government operations and efficiency. Therefore, the Board of regents subcommittee interim report has been postponed. A discussion of the BOR subcommittee and the newly formed Governor’s task force ensued. Among the questions that arose during this discussion were how the Subcommittee’s work or report could affect the FRIC and the University of Iowa. Sue Buckley responded that it is unclear at this point in time. Also, it was asked whether there was a public record of the subcommittee’s deliberations. The answer was that the subcommittee’s work does not have to be reported for the public record. 3. Richard Saunders reported to the committee on the projected changes in premiums to UI Choice and CHIP II health benefit packages. Past years’ claims, the number of employees enrolled in each plan, and projected cost increases factored into the projections. Single coverage under CHIP II would see the most dramatic increase at 30%. UI Choice premium increases averaged about 9%. Mr. Saunders indicated that these increases were competitive and comparable to the increases seen at other institutions and industries. A discussion on the projected changes in the premiums ensued. It was noted that even groups whose total claims were “in the black” were seeing a rate increase. This, Mr. Saunders said, was due to projected changes in the cost of care and the projected change to the composition of the groups. The group then deliberated why CHIP II still needed to be offered since it seems unattractive as a policy and uncompetitive with UI Choice. The reason that CHIP II must still be offered is that some people believe it to be an attractive option, especially for the employee/children group. The number of enrollees in CHIP II is expected to atrophy over time. At some point in time FRIC will need to consider whether or not CHIP II should continue. Richard Saunders made the additional point that the University provides enough in its benefits package to cover 100% of an individual’s coverage under the UI Choice plan. Total benefits across the university run approximately 30% of payroll (payroll is 1.2 billion dollars). Vote to approve proposed rate changes: unanimous approval 4. Mr. Saunders then updated the group on changes to UI Choice that were first proposed to the FRIC by Christine Miller and Craig Syrop of the University of Iowa Hospitals and Clinics administration during the spring term. The purpose of the changes was to incentivize employees to select UI Choice in order to encourage more patients to select the UI healthcare system. Among the incentives were a 5 versus 20 dollar copay for care received within the University as compared to elsewhere, a change to outpatient coinsurance, and inpatient deductibles along with preferential appointment status for employees. The hospital is still working on a survey that will address the reasons why employees seek healthcare outside of the University. The Hospital will present a draft of the survey at the next meeting and eventually report its findings to the FRIC. Other 2010 changes include: 1) a reduction in the baseline amount of life insurance coverage from 2.5 x salary to 2.0 x salary; 2) a reduction in the maximum University contribution to spending accounts from $7,500.00 to $6,000.00. The proposed dental fluoride treatment coverage pilot program was not approved for 2010 due to budget concerns. FRIC member questions were answered and a brief discussion ensued. 5. A general deliberation of the proposed changes to the FLEX program took place. Mr. Kurtz provided a brief history of the evolution of benefits at the University of Iowa. Basically, the current system emerged when a onesizefitsall approach was abandoned in the 1980s. The Flex system was designed to allow employees choice among products. This resulted in the unintended consequence of giving some employees (notably dual spouse employees) substantial discretionary credits beyond what was needed to cover only the health benefits. It seems that many of the dual spouse employees applied the extra credits toward child care. The Flex credits, over time, became viewed as a piece of the total remuneration package of an employee. It was noted that the Flex credits can and are also applied to nonchild care expenses. Examples of elder care and dental restorative care were given. Mr. Saunders distributed a tabular and graphical summary of effects on future costs comparing the current, ‘FRIC’, and Spencer plans. All models assumed current levels of enrollment and were projected over a 12 year period. The FRIC plan was noted to result in the greatest savings. At twelve years the Spencer plan cost approximately 80 million dollars more than the FRIC plan, it however still resulted in a savings of 186 million dollars (as compared with a 266 million dollar savings under the FRIC plan). The main point of discussion revolved around a comparison of the pros and cons of the Spencer versus the FRIC plans. John Spencer, present at the meeting, was asked to comment on the benefits of his plan. The main stated benefits were maintaining the ability to maintain a greater sum of discretionary (flexible) benefits and maintain the choice of how to apply those benefits. The impact of the reduction in benefits was noted to be less for ‘dual spouse’ employees under the Spencer plan. Shelly Kurtz asked committee member Jon Garfinkel to prepare with John Spencer a summary of the effects of the Spencer versus the FRIC plans across the various groups (i.e. single, E/spouse, Family, E/child.). This summary is to be presented at next week’s meeting. The meeting was adjourned at 1:00 p.m. Respectfully submitted, Daniel Katz
FY09 Meeting Minutes
Funded Retirement and Insurance Committee (FRIC) May 1, 2009 Meeting called to order at 11:30am in 302 USB. Members Present: Richard Borchard, Nancy Davin, Charles Drum, Lois Dusdieker, Jon Garfinkel, Matthew Glasson, George Herbert, Daniel Katz, Bernard Sorofman, Barbara Spence, Ruth Wachtel Absent: Mary Greer, Sheldon Kurtz, Katherine Tachau Administration: Sue Buckley, Richard Saunders Guests: Debra Hughes, Susan Klatt, Christine Miller, John Spencer, Crag Syrop, Joni Troester, Dianne Wasson, Nancy Williams and others. Barb Spence thanked Lois Dusdieker for her work and dedication to the committee as this was Lois’ last meeting as a member of FRIC. 1. Minutes of April meeting were approved. 2. Dr. Craig Syrop and Ms. Christine Miller of the UIHC continued the discussion started last meeting regarding suggestions to increase UI Faculty/Staff usage of the UIHC. Dr. Syrop and Ms. Miller presented a recommendation to modify specific copayment plans based on Level 1 providers (UIHC, CCOM, & UI Community Medicine Services Clinics) and Level 2 providers (Blue Cross providers other than Level 1) and Level 3 providers which are out of the Wellmark network. Their proposal within the Outpatient/Ambulatory Services category suggested: decreasing Level 1 copays for Office Visits to $5 from the current $10, while increasing Level 2 copays to $20 from $15; Routine Physical copays from the current $0 for both Level 1 & 2, to $5 for Level 1 and $20 for level 2; WellChild Care from the current $0 copayment for both levels to $0 Under age 7, over age 7 Level 1 $5 copay, Level 2 $20; decreasing Routine Eye Exam copays for Level 1 from $10 to $5, and increasing Level 2 from $15 to $20; the same recommendation was made for Routine Hearing Exam; to increase copays for both Chiropractor and Podiatry services Level 2 to $20 from the current $15; and to increase the copay for level 2 Infertility Treatment from 10% to 30%. In addition, for Inpatient/Hospital Services they suggested: increasing Level 2 Inpatient Hospital Room and Board deductible from $400 per admission to $600, and increasing Level 3 (any provider outside of Level 1 or 2) from $600 to $800, while maintaining the 10% coinsurance for all three levels; and increasing Level 2 10% coinsurance for Outpatient Surgery to 20%. Extensive discussion followed the presentation of the recommendations. The committee members made a number of observations on current UIHC practices; asked numerous questions of Dr. Syrop and Ms. Miller to clarify their recommendations and address issues such as faculty/staff access, standards of care, clinic hours, and other potential UIHC benefits to faculty and staff; discussed coordinated vs separated care and introduction of the new EPIC software initiative; expressed concern on the intent of the recommendations with regard to routine physicals and wellchild care; educating of new UI employees of the UIHC benefit versus changes in copays and coinsurance; and concerns associated with faculty and staff not living in the Johnson County area. After further discussion, and a decision to separate the Outpatient/Ambulatory Services recommendations from the Inpatient/Hospital Services recommendations was made, and two separate motions were introduced (1) to accept the recommendations of the UIHC 2010 UI Choice Benefit Proposal Outpatient/Ambulatory services as submitted with the following modifications, the Routine Physicals and WellChild Care copay provisions remain as currently defined (Routine Physicals $0 copay for Level 1 and 2, 40% coinsurance for Level 3 and Well Child Care $0 copay for Levels 1 & 2 and 0 coinsurance at level 3). Motion was seconded. There was a brief discussion on any conflicts of interest with regard to committee members and this proposal. Vote was called the motion passed 8 YES, 2 NO, 1 ABSTENTION ….(2) to accept the recommendation as presented of the UIHC 2010 UI Choice Benefit Proposal for Inpatient/Hospital Services component. Motion was seconded. Vote was 8 YES, 2 NO, 1 ABSTENTION. The committee indicated to Dr. Syrop and Ms. Miller they would forward this recommendation as amended to the central administration, and that it was their hope that the UIHC would develop a mechanism to benchmark their practices with regard to improving services to UI faculty and staff and report these results back to the FRIC committee annually. 3. Richard Saunders reported back that he had received results of a survey the committee requested previously of individuals’ who receive specialty drugs (self injectables). These drugs, though dispensed at a pharmacy, are considered within the medical coverage of our benefit program. Wellmark was now offering the institution the option of coverage within the prescription plan or continue in the medical plan. 54 individuals were sent surveys, 15 replied with 10 indicating leaving the coverage in the medical plan, while 5 indicated moving it to the prescription plan. A motion was made and seconded, not to change the current program. Vote 9 YES, 1NO, 1 ABSTENTION. 4. Received an update on discussions with the Gray Hawks regarding the life insurance benefit for retirees. There needs to be additional information communicated to this group before any further discussion can happen. The matter was deferred until a future meeting. 5. Sue Buckley provided a brief update on the Regents’ meeting and their approval of our focused early retirement and phased retirement programs. The meeting was adjourned at 1:05pm. The next scheduled meeting is September 4, 2009. Respectfully submitted, George Herbert
Funded Retirement and Insurance Committee (FRIC) April 3, 2009 The Funded Retirement and Insurance Committee (FRIC) meeting commenced at 11:30 a.m. in 302 USB. Members present: Richard Borchard, Nancy Davin, Lois Dusdieker, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, and Barbara Spence. Administration present: Sue Buckley and Richard G. Saunders. Guests Present: Dan Fick, Debra Hughes, Christine Miller, Krista Smeins, Craig Syrop, Joni Troester, Dianne Wasson, Nancy Williams, Ashish Tiwari, Anand Vijh, and others. 1. FRIC March 6, 2009 meeting minutes were reviewed and approved without change. 2. Retirement. Retirement carriers were presented by Finance faculty members Ashish Tiwari and Anand Vijh. The foci of their presentations were whether available investment options should be expanded beyond TIAACREF and why. By report, fund expenses are the best predictor of how the investor will fare. TIAACREF has expense ratios higher than Vanguard and Fidelity investment options. A small difference in fees can have a large impact on portfolio values over time – examples over 20 years were shown. Cost calculator and fund analyzer tools are available to run numbers for various investments. It was recommended that other carriers than TIAACREF be involved also, or send investment money to TIAACREF with instructions to invest elsewhere. Why does TIAACREF have higher expenses? Active vs. passive investment styles were discussed. TIAACREF is a passive investor and has 0.50% extra cost. CREF Growth fund equals Vanguard Growth, but CREF has 63 basis point cost and Vanguard only 10 basis point cost. Why does CREF charge more? Captive audience. Retirement funds have little turnover where retail has a lot. By end of 2008 TIAACREF had about $20 billion to manage which is a small amount. Iowa chose Vanguard to manage 529 plan. TIAACREF lost California 529 plan in 2006. Vanguard is a nonprofit, shareholderowned enterprise. Most Big 10 schools offer alternative choices for investments (Iowa, Penn State, and Purdue are outliers). Finance academics, per Professor Vijh, prefer Vanguard. Proposals offered include: · Do not eliminate TIAACREF but propose adding others, i.e. Vanguard, Fidelity, etc. Would have to open for bids. · Add Vanguard and Fidelity. · If can only add one, then Vanguard preferred. · If can only get Fidelity, than have them offer some Vanguard products. Code issues need to be checked. Vanguard would need an instate representative, Fidelity already has one. Downside questions. Brokerage accounts. TIAACREF could do record keeping but could move investment monies around. The investment alternatives suggested, code issues, and logistics needed will be researched further by Mr. Saunders and presented at the next meeting. 3. UI Choice Changes Dr. Syrop and Ms. Miller lead discussion. Since January 2007 the UI Choice health plan has had 3tier levels – care at UIHC, care outside UIHC in state, and then out of network. There are different copays for the 3tier levels. New changes at UIHC include a new electronic medical record – Epic, which will go live in early May. There are many proposed benefits but system is complex. In the future, patients will have easy access to their medical records wherever they may be. To improve patient access, changes in scheduling procedures have been made and QuickCare clinics and extended clinic hours have been established. New clinics such as expanded sports medicine have been established. Health plan offices have also been more available for questions. The goal discussed was how to increase the number of patients receiving their care at UIHC. Concerns were raised regarding increasing patient numbers, especially in FCC primary care clinics such as Pediatrics, when staff physicians and nursing support staff are being drastically cut due to budget constraints. A questionnaire to address why employees do/do not use UIHC for their care was proposed as available data is rather old. Would adjusting the copay for the 3 tiers make UIHC a preferred provider? What would the change in copay fees need to be to get more employees at UIHC $5, $10, or $20 more in Tier 2? Suggestions about copay fee changes and new questionnaire administration were made. More discussion at a later meeting is planned. 4. Agenda items 49 were not addressed as the meeting time was over. The Spence plan and FRIC plan with 5year cost projections maybe addressed at the May or September meeting. The meeting adjourned at 1:05pm. The next scheduled FRIC meeting is May 1, 2009 at 11:30 a.m. in 302 USB. Respectfully Submitted, Lois B. Dusdieker, MD
FRIC Minutes March 6, 2009 The University of Iowa Funded Retirement and Insurance Committee met at 11:30 on March 6, 2009 in Room 302 USB. Present: Richard Borchard, Nancy Davin, Charles Drum, Lois Dusdieker, Jon Garfinkel, Matthew Glasson, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Barbara Spence, Katherine Tachau, Ruth Wachtel. Absent: Mary Greer Administration: Sue Buckley, Richard G. Saunders Guests: Debra Hughes, Susan Klatt, Christine Miller, Joni Troester, Dianne Wasson, Nancy Williams, Christine Douglas, Ashish Tiwarzi, Anand Vijh 1. Minutes of the meeting of February 6, 2009 were approved without corrections. 2. Buckley reported on the meeting of the President’s Cost Savings Task Force – HR & Benefits Subgroup. Kurtz and Spence solicited FRIC’s feedback on ideas under discussion. A. Early Retirement Program. The goal is to save money by encouraging early retirement and not replacing those individuals who retire. Would be completely voluntary and would require departmental approval. The application period would be short, probably July 1 to September 30, 2009 and any early retirement would have to occur by June 30, 2010. Age 57 and older no service requirement. As an incentive, the University would continue to pay its contribution toward health and dental insurance for 5 years and would continue contributing toward TIAA/CREF for 3 years at 15% and 2 years at 10%. There were questions about how the program would be implemented, whether it would be Regents‐wide and whether it would actually result in cost savings. m/s/c (unanimously) to recommend this proposal. B. Phased Retirement Program. Supplements but does not replace current phased retirement program. Program would be available to faculty and staff who are at least 57 years of age, regardless of years of service. Retirement would be phased in over a period of no more than two years. During that time, the person would be expected to provide 50% effort and be paid for 75% of regular salary. The University’s contribution toward TIAA/CREF would be based on the regular salary. Individual’s contribution would be based on 75% pay. This program would also be entirely voluntary and would require department approval. m/s/c to recommend this proposal (with one no vote). C. Buy Out. Program would apply to all non‐organized faculty and staff paid by State funds (potentially 250 people). Incentive to retire now would be 2 weeks of pay for each year of service, minimum of 8 weeks and a maximum of 52 weeks. University would 2 continue its share of health insurance for one year after the buy‐out. The application period would be short, probably July 1 to September 30, 2009 and any buy‐out would have to occur by June 30, 2010. This program would also be entirely voluntary and would require department approval. m/s/c to recommend this proposal (with one no vote). D. Reduce Employer Contribution to TIAA/CREF. The proposal would save money by reducing the University’s contribution by 1% at the same time that the individual’s contribution would increase by 1%. The change would not affect the total contribution to TIAA/CREF, but would effectively be a 1% pay cut to affected individuals. Benefit to the individual would be that the 1% would go toward retirement and would be tax deductible. Committee members were concerned about making fundamental changes in retirement funding formula in response to short‐term economic problems. m/s/c (unanimous) to reject this proposal. E. Cliff Vesting. Proposal to adopt three year vesting requirement on University’s contribution toward TIAA/CREF. Would apply prospectively, only to new faculty and staff. Estimated cost savings of $146,000 annually. Motion to recommend this proposal failed on vote of 4 to 9. F. Prorate Benefits. Proposal to prorate health and dental benefits, based on percentage of appointment. Would affect all non‐bargaining faculty and staff. Proposal of 75% to 100% appointment receive 100% contribution and 50% to 75% receive 50% contribution. Estimated savings of about $800,000. Committee members expressed concern about the effect this would have on recruitment, especially in health care, also anticipated disparate effect on female faculty and staff. m/s/c to reject this proposal (passed unanimously). G. Expedite Flex Credit Change. Proposal to move the effective date of the changes in the Flex Credit system up from January 1, 2011 to January 1, 2010. Consensus of Committee members that this was not a good idea for a variety of reasons. m/s/c to reject this proposal (passed unanimously) 3. Retirement Carrier Options. Ashish Tiwarzi and Anand Vijh were invited to discuss the advantages of providing additional retirement carrier options. Not enough time was left for them to present their information. Committee members agreed to postpone discussion until April meeting and to put them on the early part of the agenda, if possible. 4. Adjourned at 1:30 p.m.
FRIC Minutes Draft February 6, 2009 The University of Iowa FRIC met at 11:30am on February 6, 2008, in room 302 USB. Present: Committee – Richard Borchard, Nancy Davin, Lois Dusdieker, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Barbara Spence, Katherine Tachau. Absent: Charles Drum, Ruth Wachtel. Administration – Sue Buckley, Richard Saunders; Guests – Mary Griener, Debra Hughes, Susan Klatt, Kim Miller, Julie Sexton, John Spencer, Kathy Terrell, Joni Troester, Anand Vijh, Nancy Williams. 1. The minutes were approved. 2. Fluoride treatment for adults. Richard Saunders presented a summary of the information that the committee wished to have from the College of Dentistry, and explained that Delta Dental does not expect to be able to have “risk codes” to distinguish among patients before 2013, which gives us until then the option of offering covered fluoride treatments to all or none of our insured over the age of 18. There being roughly 20,000+ dental checkup cases per year now covered by us, of which roughly 15,000+ might be affected (being checkups of people age 19 or more), the total cost of including such coverage could be $560,000/year. Discussion ensued, focusing especially on the benefits to patients and UI of preventing more expensive care by offering this treatment. · It was moved and seconded that we cover prophylactic fluoride treatments in adults as a pilot project for two years. The FRIC committee would then study usage patterns before deciding whether to continue such coverage. The motion carried, with one no vote and one abstention. 3. Life Insurance for retirees. At the December FRIC meeting, Saunders had indicated that the amount of such insurance had not changed since the benefit was established in 1953, so has become insufficient to meet its original purpose. After discussion, we deferred further consideration of whether and how much to increase the paidup policy until we have some feedback from the Council of Emeriti and the Gray Hawks as to the degree of concern among retirees. 4. Issues regarding future benefits. · The Board of Regents has inquired whether university contributions to TIAACREF are competitive or too generous, with the intent of discovering whether there could be budgetary savings. The FRIC committee was informed by a member that Provost Loh plans to set up a task force to look at this issue. · Other factors affecting the UI’s funds for the next fiscal year include the annual bargaining process with the unions represented on campus, which will continue until midMarch, and the current legislative session. · As requested at the November meeting, the Committee received from Saunders a chart itemizing and comparing the costs of the proposed FRIC and SpencerFixFlex benefits based on the most recent (January 2009) enrollment choices made by faculty and P & S staff. After discussion and clarification from Spencer of the flexibility of his proposal, the committee requested information as to the longerterm trajectory of each plan’s cost savings relative to each other and to the current program if no changes were made. 5. Old Business. · Spence reported back regarding the conversation between the FRIC committee cochairs and the chair of the Charter Committee on Family Issues, Leanne Seedorff. That committee views childcare issues as within their purview, and so we should defer to them; they are considering proposals to support childcare needs and funding. · The FRIC committee postponed discussion of retirement carriers until the March meeting. 6. New Business. There being no new business, the committee adjourned
FRIC Minutes December 5, 2008 The University of Iowa FRIC met at 11:30am on December 5, 2008, in room 302 USB. 1. In the Nov. 7 minutes, change “approach” to “approved.” Delete last sentence in 5b. Minutes were approved with changes. 2. Fluoride treatments. The question is whether to expand fluoride treatment to those over 18. Saunders brought two documents on topical fluoride. In one, it was recommended that the procedure was valuable only for medium to high risk patients. The second, from the UI College of Dentistry, makes the same recommendation. Saunders said that the issue to be resolved in whether such a procedure can be dealt with administratively, that is whether risk factor coding can be associated with it to limit the claims to those at moderate or high risk. The insurers can also tell us how much such an expansion would cost in the long run. He promised more information before the next meeting. There was some discussion of fee structure. 3. FRIC Recommendations. Barbara Spence had distributed a number of suggestions for changes to the FRIC proposal. There was some discussion of the insurance multiple restrictions that will take effect in 2009 & 2010. Spence also mentioned a suggestion that dealt with sick leave. Saunders said to modify the system to do such a thing would require involvement of the legislature. The separate issue arose of vacation lost because of departmental policy. Another suggestion had to do with the issue of the amount of life insurance for retirees. Saunders pointed out that every retiree dies, so increasing the amount would increase the University’s burden. He said that the original purpose of the benefit was to insure that University retirees would not die indigent, but the amount has not changed since the benefit was established. Saunders said he would provide more information about cost to the University to the next meeting. Saunders also promised to bring estimated costs of the suggested changes brought by John Spencer. Another suggestion was to proportion the value of benefits according to percentage of time. 4. Old Business. Spence spoke about trying to determine whether the change of the flex benefits system would create a problem with recruitment and retention. She said she had not been able to find any relevant information, but is still looking. It was suggested that Spence try to find out how it may have affected nursing in particular. Buckley said nursing and information technology are the most competitive and that if there is a problem, it is there. A member suggested that another possible area to look at for an effect is the inability to fill positions. Buckley said she would bring exit interview information to the next meeting. The meeting adjourned at 12:35. The next meeting is Feb. 6.
FRIC Minutes November 7, 2008 The University of Iowa FRIC met at 11:30am on November 7, 2008, in room 302 USB. Present: Committee – Richard Borchard, Nancy Davin, Charles Drum, Jon Garfinkel, Mary Greer, George Herbert, Daniel Katz, Bernard Sorofman, Barbara Spence, Katherine Tachau, Ruth Wachtel. Absent: Lois Dusdieker, Matthew Glasson, Sheldon Kurtz. Administration – Sue Buckley, Richard Saunders; Guests – Carla Clark, Dan Fick, Debra Hughes, Susan Klatt, Joni Troester, Nancy Williams, Margaret Ketterer, Anne Gembel Archer, Kim Miller, Susan Foreman, Hazel Kerr, Robert Helle, Sasha WatersFreyer, Angie Smith, Cathleen Moore, Melanie A. Allsup, Nancy Williams, Kathy Terrell, John Spencer. 1. The minutes were approved with two changes. A) Charles Drum (not Drug) attended the previous meeting. B) In point #3, second sentence, “…of the pharmacy side” was changed to “…or the pharmacy side” 2. Fluoride treatment for adults. The College of Dentistry thinks it’s a good idea. People don’t drink as much (fluoridated) tap water as they used to. Bottled water doesn’t always contain fluoride (and it’s not obvious which bottles do). Filter systems sometimes remove fluoride from water. Adults are evidencing more cavities. More RX drugs dry out mouths, encouraging cavities. There are more people with weakened immune systems, which can encourage cavities. Conditional on FRIC going forward with the notion of coverage, FRIC would need to decide how The University of Iowa would cover it. Richard Saunders will get back to us more data/information to be provided by the College of Dentistry. 3. FRIC website is working. Need to ask Staff Council, President’s Office, Faculty Senate to all put links to the website on their sites. It’s already on the AZ Search for The University of Iowa and the Benefits Office website. 4. John Spencer presented an alternative FLEX proposal. FRIC will have an opportunity to see the calculations behind the differences between Spencer’s proposal and FRIC’s proposal after the first of year using the new enrollment numbers. 5. Other alternative ideas for changes to benefits have been submitted (via email) to UIBENEFITS09. The following comments emerged from a discussion of some of these alternative ideas. a. It’s not obvious that one proposal which claims to eliminate administrative fees, actually does so. b. There was some discussion of redistributive benefits being tied to employee income. This is recognized as a contentious issue. c. Some employees view their salary/benefits as one package. If you take away some benefits, for this group it is perceived as a pay cut. d. Separate child care benefits were mentioned as a possibility. It was noted that there is another charter committee (Family Issues) that can discuss such ideas. 6. FRIC anticipates future conversations on the following items. a. What is the difference between the Spencer Plan and FRIC’s proposal? Conceptually, one is a credits plan and the other is a policy plan. b. Do we tie benefits to salary? See 5b above. c. Dan Holub forwarded a plan. Richard will look it up. d. Have we received any signals about recruiting/retention difficulties in the six months since FRIC first floated its proposal? e. FRIC may contact individuals who submitted idea (to UIBENEFITS09) that we wish to learn more about. The meeting adjourned at 1pm.
FRIC Minutes October 3, 2008 The University of Iowa Funded Retirement and Insurance Committee met at 11:30 a.m. on October 3, 2008, in Room 302 USB. Present: Committee – Nancy Davin, Charles Drug, Lois Dusdieker, Matthew Glasson, Mary Greer, Daniel Katz, Sheldon Kurtz, Bernard Sorofman, Barbara Spence, George Herbert, Ruth Wachtel. Absent: Richard Borchard, Jon Garfinkel, Katherine Tachau. Administration – Sue Buckley, Richard Saunders; Guests – Debra Hughes, Krista Smeins, Joni Troester, Nancy Williams, Kim Miller, Amber Seaton 1. The minutes of September 5, 2008, were approved with one minor typographical change (#2, 1 st sentence, the word Raging was corrected to Rating). 2. GSRA Loans and Hardship Withdrawals. The UI must administer and make all companies aware of loans and hardship withdrawals of its staff. We currently allow investments with 14 companies. Two options were discussed a) restrict GSRA loans and hardship withdrawals to TIAACREF only, or b) pick three companies for hardship withdrawals and hire at the UI’s cost a 3 rd party vendor to administer. It was moved and seconded to restrict GSRA loans and hardship withdrawals to TIAACREF only since everyone has a mechanism to take out a loan or withdrawal by transferring funds from another company to TIAACREF. The motion passed unanimously. 3. Specialty Drugs. Specialty drugs are currently paid out of the medical side of insurance products. Wellmark is giving the UI a choice to have them paid from either the medical side of the pharmacy side. Though the committee felt they would be best left on the medical side, it was decided that Richard Saunders will contact Wellmark and ask them to contact the 146 staff members who are prescribed specialty drugs to ask them if there is a preference to determine if there would be an overwhelmingly negative impact either way. 4. Fluoride Treatments for Adults. Currently dental insurance covers fluoride treatments for dependents under 19 years of age. There have been recent requests to cover fluoride treatments for adults. Richard will contact the College of Dentistry for some evidencebased information regarding the efficacy of fluoride treatments in adults and, in addition, ask if the trend in bottled water consumption has a negative effect due to lack of fluoride in the water. 5. Sharepoint Website. Barb Spence distributed information on how to access the FRIC sharepoint site this morning. Minutes from the past three years have been posted on the site. If committee members have suggestions for additional materials to be posted, contact Barb. HR is providing a staff member to load and maintain a website that housing the FRIC agendas and minutes. Agendas will be posted approximately one week in advance of meetings; minutes will be posted once they are approved. The FRIC meetings have also been placed on the University calendar. 6. Health Savings Accounts (HSA’s). Bernie Sorofman was approached by two people who asked that FRIC consider Health Savings Accounts. A handout was distributed. After FRIC Minutes – October 3, 2008 Page 2 discussion, it was determined that we are unable to offer a Health Savings Account to employees because they cannot be offered to domestic partners. This would be a violation of the UI Human Rights Policy. 7. 2011 FRIC Recommendations. A synopsis of feedback from the 2011 FRIC recommendations was distributed. 8. John Spencer will be presenting the FixFlex proposal at the November meeting. 9. Charlie Drum proposed that the childcare benefit be discussed regarding the appropriateness of separating the benefit from the healthcare benefit. This is also being discussed by the Family Issues Charter Committee. 10. Richard Saunders presented the possibility of adding 48 additional partner funds to the TIAACREF selections. We can cherry pick them or include all funds. A motion was made to add all 48 funds. The motion passed with one opposed. When the opposing member, Dan Katz was asked why he was against adding them, his concern related to employees making uninformed choices thereby possibly enhancing their risk. A revote was called for and was passed 5 to 4. 11. The meeting ended at 1:00 p.m. 12. The next scheduled meeting is November 7, 2008. Respectfully submitted by Nancy Davin
FRIC Minutes September 5, 2008 The University of Iowa Funded Retirement and Insurance Committee met at 11:30a.m. on September 5, 2008, in Room 302 USB. Present: Committee – Richard Borchard, Nancy Davin, Charles Drum Lois Dusdieker, Jon Garfinkel, Matthew Glasson, Mary Greer, George Herbert, Daniel Katz, Sheldon Kurtz, Barbara Spence, Katherine Tachau, Ruth Wachtel. Absent: Bernard Sorofman Administration -- Sue Buckley, Richard Saunders; Guests –Dan Fick, Debra Hughes, Susan Klatt, Julie Sexton, John Spencer, Joni Troester, Nancy Williams, Dianne Wasson 1. The minutes of June 6, 2008 were approved as submitted. 2. Health Rates: Saunders distributed “The University of Iowa 2008 Experience Rating Period June 1, 2007 through May 31, 2008.” Saunders explained that claims from two years are blended together and that this is claims per contract. UI Choice broke even. CHIP II continues to lose a lot from the claims and lower enrollment. Tachau asked if education is targeted to CHIP II enrollees; Buckley responded that lots of education and targeted mailings, but people still select in. As enrollment shrinks, CHIP II runs the risk of not being financially viable. Plans get risky if enrollment is less than 100. Online calculators are on the benefits website. Kurtz asked Saunders to bring numbers of CHIP II enrollees who use it for out of state second opinions. 3. GSRA’s Loans and Hardship Withdrawals: Saunders distributed “SRA’s as of September 1, 2008.” Saunders described federal legislation mandating that 403Bs come more in line with 401Ks. We get to decide if we want to allow hardship withdrawals and borrowing for loans. Loans are limited to 50% of investment and no more than $50,000 total combined from companies. You are really “borrowing” from yourself, so the interest is low and loans have to be paid back or you pay a penalty and have to declare it as taxable income that year. The UI must administer and make all companies aware of borrowing. We currently allow investments with 14 companies. Iowa State is reducing to only allowing SRAs with two companies. Should we do the same? TIAA-CREF and TIAA-ROTH have the most contracts—2,635 of the total 3,256. Kurtz asked Saunders to bring more data on next three largest companies. Decision deferred. 4. 90 day drug supply: Kurtz received a request from a retired enrollee asking if many months (more than 90 days) worth of medications could be prescribed for people traveling out of the country. There is currently a limit on amount of medication prescribed—no more than 90 days worth. Discussion ended with administration agreeing to allow exceptions to 90 day rule for up to, but no more than 12 months, for travel out of the country. Enrollees wishing to have more than 90 days worth will have to contact the Health Plan Office at UIHC who will coordinate the request with BC. This change will be noted in the enrollment materials this fall. 5. FRIC Agenda, Minutes Web Site, SharePoint: Staff Council has discussed with President Mason the possibility of assigning someone to the charter committees to assist with minute taking and putting minutes and agendas on the web. Until then, FRIC will continue to ask members to take minutes and may ask the President’s office if their web administrator can post them on the charter committee site. Drum suggested he would like to see dynamic web sites built for charter committees. Spence suggested we may want to use SharePoint to store material relevant to FRIC meetings. Online discussion boards were discouraged because many felt discussions should happen face to face. Greer suggested Spence/Kurtz ask HR to make her an administrator of the SharePoint site so she can create libraries and other storage areas for FRIC materials. Views on using SharePoint were mixed. 6. Voluntary Benefits: Saunders reported that we either can select voluntary benefit companies such as those offering pet insurance, auto and home insurance, etc or we must take what is offered through the State of Iowa. The committee agreed that at the present we do not want to entertain any additional voluntary products and we should let our faculty and staff participate in the State’s offerings. We don’t have to offer voluntary benefits from the state’s list if we have our own, such as long term care insurance. 7. 2011 FRIC Recommendations: Kurtz reports that the recommendations from last year were endorsed but with the understanding that we would consider others. Only serious proposals in writing will be considered. John Spencer has a proposal ready to go. Borchard thought Dan Holub had one to be resurrected and reviewed and Tachau would like to see one that considers a child care fund. 8. Meeting ended at 1 pm. 9. Next scheduled meeting is October 3, 2008, 11:30 am, 302 USB Respectfully Submitted by Mary Greer.
FY08 Meeting Minutes
FRIC Special Meeting Minutes June 5, 2008 8 a.m. A quorum of The University of Iowa Funded Retirement and Insurance Committee met at 8 a.m., June 5, 2008, in room 202 USB. Present: Richard Borchard, Jane Chalmers, Mary Greer, George Herbert, Sheldon Kurtz, Lynette Lancial, Dorothy Persson, Bernard Sorofman, Barbara Spence. Administration -- Sue Buckley, Richard Saunders; The minutes of May 2 meeting were approved with the following changes: 1. In item two, reword the sentence this way: “The specific numbers were not discussed at the open forums held prior to the May 2 FRIC meeting.” 2. In the second paragraph of item two, this sentence better describes the population: “Approximately one-third of the employees enrolled in the Flex Credit System have children under the age of 13.” 3. In item four, add this wording to clarify what the committee asked the benefits office to do: “…that the proposed plan is not family-friendly” 4. The meeting adjourned at 8:30 a.m. Minutes submitted by Mary Greer
Funded Retirement and Insurance Committee May 2, 2008 Minutes Attendees: Committee: Richard Borchard, Lois Dusdieker, Jon Garfinkel, Mary Greer, George Herbert, Sheldon Kurtz, Lynette Lancial, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Barbara Spence, Ruth Wachtel Administration: Sue Buckley, Richard Saunders Guests: Rebekah Ahrens, Joyce Baker, Ransom Briggs, Carla Clark, Charlie Drum, Debra Hughes, Chris Lake, Susan Klatt, Kathy Klein, Pat Kosier, Jennifer Masada, Heather Schnoebelen, Michael Schueller, Krista Smeins, Eileen Sullivan, Katherine Tachau, Joni Troester, Rhonda Weaver 1. Approval of April 14th Minutes: There were no additions or correction to the minutes. The minutes were approved as written. 2. Flex Program: Sue Buckley and Richard Saunders reported they met with the deans and vice presidents. Various members of the committee met with Faculty Senate and Staff Council. The specific numbers were not discussed at the open forums held prior to the May 2 FRIC meeting. The deans and vice presidents responded favorably to the proposal but questioned the amount of money necessary to incent a faculty or staff member to take health insurance elsewhere. The faculty and staff expressed similar ideas and concerns that were expressed in FRIC meetings. A major concern expressed by some faculty in the late‐April faculty symposium was the lack of choice in the proposed new benefits structure. Dual career spouses, employed by the UI, would not receive double credit. Employees with children under thirteen would not have as many flex credits to put into their dependent care accounts. Some expressed concern about employee notification and the ability of employees to adjust their budgets to a new benefits package by January, 2009. Requirements related to having to purchase life insurance and dental insurance were viewed as paternalistic. Shelly distributed a health insurance chart which listed the major, but not all, of the choices employees may make related to health insurance. This chart showed how costs were redistributed and who lost and who benefited from the changes that were being proposed. Approximately one‐third of the employees enrolled in the Flex Credit System have children under the age of 13. Less than 1,000 dual career individuals (approximately 400‐500 couples) work for the UI. The plan impacts many with dependent children and dual career couples working for the UI by reducing amounts they would receive under the proposal At the same time, many other employees modestly benefit from the proposal. There was a discussion of phasing in a new benefits plan over several years or deferring implementation for one year, to January, 2010. Phasing in flex benefit changes was deemed logistically too complex for the Benefits Office to implement. A one year implementation deferment (from 2009 to 2010) was voted on twice. The first vote to defer passed by a vote of six opposing deferment and five favoring deferment. After further discussion, the chairs requested a second vote. The second vote to defer the implementation of a new plan failed by a vote of seven against deferment and four favoring deferment. The point for deferment centered on the abrupt loss of significant benefits compensation, ranging from $1,836 to $4,368 annually, for the small group of dual flex credited marital status employees; therefore, extra time was suggested to prepare financially for the loss in compensation. Points for not deferring centered on a much larger group of employees who would gain in benefits compensation ($1,080 annually), violation of the cost neutral principle, and other potential problems that would then result in further implementation delays beyond January, 2010. 3. Voluntary Benefits: The new plan which would include a general credit for each employee would be cost neutral and address the increase in health care costs. To address the issue of choice, the employee could decide how to spend the general credit. Benefits was still crunching the numbers, and there was no final report on the dollar amount for the general credit, but it should be around the previously discussed $90 per person per month. Approximately 1900 employees do not purchase dental insurance and wanted this insurance to remain optional. Voluntary dental coverage would not violate a cost neutral principle. It would be possible to give each employee a credit for not taking dental insurance. The credit would be around $20 and would be determined along with the general credit going to everyone. The committee voted eleven for and one maybe to support this option. The proposed plan would require everyone to take 2Xsalary for life insurance. However, a number of employees would prefer to avoid the tax liability. The committee voted nine for and two against choice where everyone would be required to take $50,000 with a credit for those who did not take the 2Xsalary. Again, the UI would determine the credit based on the principle of cost neutrality. FRIC recommended a $100 credit to incent employees who do not participate in the UI health insurance plans to remain in outside plans. The UI Administration does not believe that $100 is enough and would like to propose a $200 credit. After further re‐ consideration of the University’s position, the committee voted ten for and one against increasing the credit from $100 to $200. Thus, the committee agreed to increase the benefit to $200. In summary, there will be four credits: a general credit of about $90 for everyone, a $200 credit for those obtaining their health insurance outside of the UI, a credit for those who are not taking dental insurance, and a credit for those taking only $50,000 in life insurance. 4. Employee Communication and Education: FRIC urged the UI Benefits Office to consider how it would address any negative perceptions that the proposed plan is not family‐ friendly and to begin the educational process about the new plan as soon as the general, dental, life, and stay‐away health insurance credits were finalized. The meeting adjourned at 1 p.m. The next meeting of FRIC will be Friday, September 5, 2008. Recorded by Dottie Persson
FRIC MINUTES 4-4-08 Attendees: Committee: Dusdieker, Lois; Garfinkel, Jon; Greer, Mary; Herbert, George; Kenney, Melanie; Kurtz, Sheldon; Sorofman, Bernard; Spence, Barbara; Wachtel, Ruth; Lancial, Lynette; Nelson, Forrest Administration: Buckley, Sue; Saunders, Richard. Guests: Hughes, Debra; Klatt, Susan; Troester, Joni; Williams, Nancy; Ward, Kevin; Miller, Christine; Sexton, Julie; Wasson, Diana Minutes: Started at 11:30am 1. Minutes of the past 2 meetings approved. 2. Discussion of general credits (called ‘z’); dependent care spending account. The discussion centered on whether there should be differential benefits based on child care needs of some employees. 3. MOTION: Every employee at The University of Iowa should receive a monthly general credit of (some specified amount)*. No additional credits will be made available specifically for dependent child care. * This was estimated to be $90/ month. VOTE: 10 for; 1 against; no abstentions. 4. Discussion of incentive credit to purchase insurance outside the university system. 5. MOTION: General credits of $100 / month will be provided for individuals who demonstrate health insurance coverage other than at The University of Iowa and do NOT participate in The University of Iowa Health insurance plan. VOTE: 9 yes; 2 no; no abstentions. 6. Discussion of model benefit plans. 7. A promise was made by representatives of the administration that FRIC will have an opportunity to weigh in on any changes in proposal modifications prior to a final decisions. It is recognized that the timing of that opportunity may not be optimal regarding scheduling. 8. Summary of decisions: a. Every faculty and P&S employee gets health insurance (either Chip II or UI Choice (employee’s choice) at no cost to the employee b. Married employees whose spouse works at the University of Iowa will receive health insurance free for both spouses and their dependent children. c. Married employees whose spouse is NOT working at The University of Iowa will be provided with a family policy covering spouse and/or dependents with the employee paying 20% of the cost of the policy for the spouse and dependents. (Note: this is unlike the case where both spouses work at UI in which case both spouses and dependents get free insurance). d. Dental insurance. Dental 1 and 2 mimic health insurance. Dental 3 will be dropped. e. Life insurance will be supported at 2x salary up to $200k in salary / $400k in maximum benefits. f. Disability plan will be 60% and the 5 year ramp up has been eliminated. g. General credits. All faculty and P&S employees get the same general credit, estimated to be about $90 per month. For people who do not participate in our health insurance and otherwise demonstrate they have health insurance elsewhere, $100 / month in additional general credits will be provided. General credits can be used to purchase additional coverage where available for group life, supplemental life and accidental death insurance, and to fund dependent care and health spending accounts. VOTE to AFFIRM: 9 Yes; 1 no. h. Question: Can the University develop additional disability insurance? This will be examined. i. Question: Can the University develop additional group life? This will be examined. Adjourn: 1:12 pm.
FRIC Minutes 03/07/2008 The University of Iowa Funded Retirement and insurance Committee met at 11:30 am, March 7, 2008 in room 302 USB. Present: Committee – Richard Borchard, Jane Chalmers, Lois Dusdieker, Jon Garfinkel, Mary Greer, George Herbert, Sheldon Kurtz, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Barbara Spence, Ruth Wachtel; Administration – Susan Buckley, Richard Saunders; Guests – Barbara Bennett, Charles Drum, Janet Duncan, George Hospodarsky, Debra Hughes, Susan Klatt, Christine Miller, Eileen Sullivan, Craig Syrop, Joan Troester, Kevin Ward, Dianne Wasson, Nancy Williams 1. The minutes of February 8, 2008 were approved as submitted. 2. Three handouts were distributed. The first summarized Guiding Principles. The second outlined the current Flex program and four proposed programs. The third outlined advantages and disadvantages of each. Committee members reviewed the documents and discussed each proposal. 3. After much discussion, the Philosophy of the Committee was determined. Employees should receive a single health policy. Employees with spouses and/or children should receive some additional contribution but only to one parent if both are employees. All employees should receive some type of Flex credits. 4. The Committee agreed to meet twice this month and next for two hours. The date for the second meeting in March is March 28th. 5. The meeting ended at 1:30 pm. Respectfully submitted by Barbara Spence.
FRIC Minutes 2/8/2008 The University of Iowa Funded Retirement and Insurance Committee met at 11:30 a.m., February 8, 2008, in room 302 USB. Present: Committee – Richard Borchard, Jane Chalmers, Lois Dusdieker, Mary Greer, George Herbert, Melanie Kenney, Jon Garfinkel, Sheldon Kurtz, Lynette Lancial, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Barbara Spence, Ruth Wachtel; Administration -- Sue Buckley, Richard Saunders; Guests – Charles Drum, Debra Hughes, Susan Klatt, Joni Troester, Nancy Williams, Julie Sexton, Nancy Davin, Doug True, George Hospodarsky, Krista Smeins. 1. The minutes of December 7, 2007 were approved as submitted. 2. Doug True discussed the value in taking a look at where we are going, because our current benefits are not sustainable. He encouraged the committee to step back and look five years out, etc. He considers FRIC a model charter committee because the decisions we make touch everyone. Doug said healthcare is super inflationary; and our spending accounts have gone from $9M to $20M in five years. The cochairs invited Doug to return at FRIC’s March 7th meeting. 3. GRSA Retirement Options Discussion: Richard Saunders informed the group that recent federal legislation impacted retirement plans. Federal guidelines used to make exceptions for public employers; but now they are trying to get more in line with the private sector. Effective January 1, 2009, all employers will be responsible for communicating all activity in retirement plans to all of the plans carried by the employer. Currently we carry 14 plans. In lieu of the upcoming 1/1/2009 mandate, do we want to limit the number of plans retirees can use. Data indicates some 3,209 retirees put $1.2 into 14 plans. TIAA has the most, with 2600. Lois recommended Richard ask the current 14 if they are still willing to be a carrier with us and we will discuss at the September meeting. 4. Mutual Fund Vendors: Richard Saunders informed the committee that state legislation now allows mutual fund companies, who have an office in Iowa, to participate in GRSA. It used to be that only insurance companies were allowed to do this. Richard asked the committee if we wanted to be open to mutual fund vendors who meet the state requirements. A motion was made by Sheldon Kurtz, seconded by Jon Garfinkel, to consider mutual fund companies as vendors. Motion passed. 5. Auto enrollment in SRA: Richard Saunders suggested that other universities were mandating that a certain percentage of salary (1%) be enrolled in a SRA for the employee. Lois Dusdieker moved and Dorothy Persson seconded that the University not accept this type of mandate. Motion passed. 6. GASB 45: Richard Saunders explained the impact of GASB 45, a federal measure that encourages public employers to set aside money for future premium liability. We are currently “pay as you go.” To do this, the UI would have to set aside approximately $7M each year. This is not required, but if we don’t it will impact our ability to borrow money. 7. Meeting ended at 1 pm. 8. Next scheduled meeting is March 7, 2008, 11:30 a.m. – 1:30 p.m., 302 USB Minutes submitted by Mary Greer
FRIC Minutes 12/7/2007 The University of Iowa Funded Retirement and Insurance Committee met at 11:30a.m. on December 7,2007, in room 302 USB. Present: Committee -- Jane Chalmers, Lois Dusdieker, Jon Garfinkel, Dan Holub, Melanie Kenney, Lynette Lancial, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Ruth Wachtel; Administration -- Sue Buckley, Richard Saunders; Guests – Debra Hughes, Susan Klatt, Joni Troester, Nancy Williams, Kathy Klein. 1. The minutes of November 16 were approved as submitted. 2. Dental Insurance: The committee resumed discussion of the Dental Insurance plans. The history of the dental plans was reviewed. A discussion ensued about reducing from three separate plan offers to two plans, due in large part to lower enrollment in one plan. Motion: The University of Iowa Funded Retirement and Insurance Committee recommends that Dental Insurance Plan 3 be dropped and only two plans be offered. Passed unanimously. A second issue concerning the use of two University contribution levels, one for people less than 3 years and one for people over 3 years, was held. The committee also passed a recommendation dropping the year based contribution program and to go to a contribution structure based on the health insurance model of using a weighted average for each family status of 100% for singles and 75% for the other family statuses. 3. Double Spouse Credit Discussion: The committee returned to a discussion of whether The University of Iowa should continue to provide family level flexible benefits credits to spouses / partners who are both employed by The University. Dual Spouse credits add another $3-$5 million dollars annually in benefit costs. The FRIC committee discussed several alternatives; the most favored seeming to be providing one spouse / partner employee with family level credits and the other with ‘single’ employee credits. Next meeting we will consider the options and vote on this issue. The tentative options would be to either keep the system the same (dual family credits) or move to the one family/one single program. Additionally, we will consider the notion of “phasing in” this change. 4. Flexible Credit allocation options: A brief introductory discussion looked at alternatives to assigning flexible credits to employees. Our current system is to allocate credits based on costs of insurances, length of service, and the employee’s current salary. One alternative presented would be to assign contributions to the standard benefits of life, LTD, dental and health based upon participation in the programs. Individuals would receive health and dental insurances for free. Any of the family coverage’s would be required to contribute towards the cost of their insurance plans at some set rate. A set amount of extra flex credits would be proportionally assigned to all employees based on salary. There could also be different levels of extra credits based on family status with children under the age of 13 for child care. The underlying philosophy of this concept is that individuals with higher salaries have more financial means of acquiring additional benefits appropriate to their needs while reassigning extra credits to persons with lower salaries who have less of a financial ability to acquire their needed benefits coverage. These extra credits could than be applied towards purchasing additional benefits such life, AD&D, or spending accounts. No decisions were made. 5. Guiding Principles: The FRIC committee members discussed the notion of having a set of guiding principles for decision making. Although no principles were created or decided upon by the committee as a whole, members suggested several (minute taker’s best guess): Affordable employee benefits for all; affordable health care benefits for all; optimization of health insurance for best outcomes; good stewards of the benefits funds and programs; decisions should help to minimize future benefits costs; incentives should be created to direct employees to options that benefit themselves and the employee pool. 6. Flexible Credit Discussion: the committee discussed the options of keeping or removing the flexible credit (cafeteria plan) system. No decisions were made. Three options were articulated: no change; phase in changes in the flexibility of the credits with partial revision of the double spouse credit; and, complete revision of the flexible credit system. 7. No meeting December 14th 8. Meeting ended at 12:50 pm. 9. Next scheduled meeting is Feb 1, 2008, 11:30am, 302 USB Submitted by Bernard Sorofman December 7, 2007.
FRIC Minutes 11/16/07 A special meeting of the University of Iowa Funded Retirement and Insurance Committee was convened at 11:40 am on November 16, 2007, in Room 302 USB. Present: Jane Chalmers, Jon Garfinkel, Mary Greer, George Herbert, Dan Holub, Melanie Kenney, Sheldon Kurtz (via telephone), Lynette Lancial, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Ruth Wachtel, Sue Buckley, Richard Saunders, Charles Drum, Debra Hughes, Susan Klatt, Christine Miller, Joni Troester, Diane Wasson, and Nancy Williams. 1. The minutes of November 2 were approved as submitted. 2. Long Term Disability Insurance: The Committee again discussed the Hewitt proposal to drop coverage from 70% of salary to 60% of salary, while providing immediate coverage to new employees instead of an optional wrap around policy for the first 5 years of employment. The two changes combined would be cost neutral. The value of 60% of salary is standard for most employers. If coverage were dropped to 60%, individuals would be able to purchase additional coverage from Principal to bring them up to 70%, but no higher. Premiums would be age adjusted. An individual could also purchase a private policy, although payments may be offset by amounts received from any other policy. Most policies will not pay 100% of salary because they want to encourage return to work. Some members of the Committee expressed concern over the impact of loss of an additional 10% of salary on those collecting disability. Others did not favor reducing a benefit for approximately 75% of employees in return for conferring an added benefit on only 25% of employees. 3. Life Insurance: Flex credits currently fund purchase of life insurance at 2½ times salary, which costs the University $10M annually. Employees must elect a minimum of either 1 times salary or $50,000, whichever is less. Richard Saunders distributed a handout on the number of employees with salaries above $100k - $400k. These people have the option of buying large amounts of life insurance and represent considerable risks should their beneficiaries collect on the insurance. The handout also showed the cost of funding fixed amounts of life insurance for each employee instead of a multiple of salary. Costs ranged from $3.9M annually for $50k per person to $16M for $200k per person. If life insurance were funded at a pre-determined level for each employee, the cost could be removed from the flex credits pool if desired. 4. Benefit Savings: Richard Saunders distributed a handout listing programs that could potentially benefit from savings derived from reducing flex credits. Joni Troester briefly discussed some of the options, which included contributing to employee participation in the Recreation Center and expanding programs to include spouses/partners. 5. Dental Insurance: Richard’s handout listed the number of contracts in each of the dental plans for each family category. The University currently provides a contribution to flex credits to fund Dental 1 insurance at the family status for the first 3 years of employment. The contribution is increased after 3 years to fund Dental 2. The Committee briefly considered whether the 3 separate plans could be consolidated. Page 2 of 2 6. Double Spouse Credit: As of November 15, 1,778 individuals were members of dual spouse couples employed by the University. The Committee briefly discussed the double spouse credit. Employees benefiting from the current policy may consider the credit to be part of their total compensation package, without regard to the rationale behind it. Any change would be perceived as a cut in benefits. The issue of whether both partners “deserved” the credit would be irrelevant. A Committee member questioned whether existing employees could be “grandfathered in,” while new employees would not receive the dual spouse credit. A problem could then arise if a new employee realized he was receiving a less favorable compensation package compared to a co-worker. No decisions were made on any topic and discussions will resume at the next meeting. The meeting was adjourned at 1:00 PM. The next scheduled meeting is December 7, 2007, in Room 302 USB. Submitted by Ruth E. Wachtel, November 30, 2007
Funded Retirement and Insurance Committee Minutes:
November 2, 2007 11:30 AM -1:00 PM Members Present Richard Borchard, Jane Chalmers, Jon Garfinkel, Mary Greer, George Herbert, Dan Holub, Melanie Kenney, Sheldon Kurtz, Lynette Lancial, Forrest Nelson, Dorothy Persson, Ruth Wachtel Administration Present Sue Buckley, Richard Saunders Guests Present Charles Drum, Debra Hughes, Christine Miller, Craig Syrop, Joni Troester, David Taylor 1. Approval of October 5, 2007 Minutes: The minutes were approved as presented. 2. Long Term Disability Insurance: Information regarding the history of LTD claims by age, years of service and position (faculty, P&S, merit) was distributed and discussed. The terms of disability benefits were described and discussed. A draft proposal, intended to provide a focus for discussion, was circulated. A question was raised regarding the availability and cost of additional, optional insurance to bring the total benefits to, or nearer to, 100 % of salary. Action on the proposal was tabled, pending answers to that question. 3. Group Life Insurance: Information on the distribution of choices made by current employees over levels of group and supplemental life insurance coverage was distributed and discussed. A consensus seemed to arise that mandatory group life insurance should be continued; the question remaining on the table was the level of required coverage. 4. Dental Insurance: Currently available coverage was briefly described and discussion ensued. There seemed to be general satisfaction with the current plans. The primary issue needing to be addressed is double coverage when both spouses are employed but the University. Data on enrollment levels by plan will be made available at the next meeting, and discussion will continue. The meeting adjourned at 1:05. Respectfully Submitted Forrest Nelson
Funded Retirement and Insurance Committee Minutes:
October 5, 2007 11:30 AM -1:00 PM
Members Present - Richard Borchard, Jon Garfinkel, Mary Greer, Melanie Kenney, Lynette Lancial, Forrest Nelson, Dorothy Persson, Bernard Sorofman, Ruth Wachtel
Administration Present - Sue Buckley, Richard Saunders
Guests Present - Charles Drum, Debra Hughes, Susan Klatt, Christine Miller, Eileen Sullivan, Craig Syrop, Dianne Wesson, Nancy Williams
1. Approval of September 7, 2007 Minutes: The minutes were approved with the suggestion that UI Community Medical Services be abbreviated as UICMS rather than CMSC.
2. Long Term Disability (LTD) Insurance under FLEX - Group FRIC’s in depth discussions on the UI’s FLEX program will evolve around the data and analysis provided by Hewitt Consulting.
Hewitt summarized this data for the UI in a report that was sent by attachment for FRIC members to review in preparation for today’s meeting. In response to a request at a prior FRIC meeting, R. Saunders provided a handout from Hewitt that listed the universities and colleges from which Hewitt draws its life and disability insurance benchmarking data. A discussion regarding the current LTD plans provided by the UI ensued. At present, the purchase of LTD insurance is mandatory for UI employees. The UI offers its employees three LTD insurance options that provide identical coverage except for the percentage of salary replacement; a 50% salary replacement plan; a 70% salary replacement plan; and a wraparound option that brings the coverage up to 70% during each of the first five years of service. The exact amount of LTD benefit is based on salary, length of service and the plan chosen with the employee becoming eligible for the optimal amount of coverage selected after 5 years of employment with the UI. UI employees may purchase their LTD coverage by using monies allocated in the FLEX program. A handout regarding the LTD benefits provided by other schools in the Big Ten and Iowa State (ISU) and UNI was reviewed. The median salary replacement provided by LTD plans offered by schools benchmarked by Hewitt and by Big Ten schools is 60%. Only two schools in the Hewitt report offered 70%. UNI and ISU offer 70% and 75% respectively. Only 25% of the universities in the Hewitt report offer a choice of LTD plans. What members consider an “appropriate” amount of LTD was debated. Members asked how the 70% coverage figure is determined. R. Saunders stated that the 70% LTD coverage would probably approximate an employee’s take home salary prior to disability but that this would vary considerably by level of income. Lengthy discussion of the various features of LTD insurance in general, the diverse circumstances of persons who become disabled, and the sources of benefits following disability ensued. The valuable role that benefits, and specifically the UI’s LTD offerings, play in recruitment of faculty and staff was stressed by several members. FRIC Minutes: October 5, 2007 2 To summarize this meeting’s discussion of LTD benefits, the question of whether LTD insurance should be mandatory for UI employees was posed. In response, members agreed that employees should be required to have LTD coverage. However, no consensus was reached regarding the percentage of coverage. When considering percentage of coverage, members briefly discussed their thoughts regarding eliminating the current sliding scale in which employees become more fully insured over the first five years of employment . Offering an optional plan to allow persons to obtain more complete coverage than what might be offered was also mentioned. As time ran short, further discussion on these items was tabled until the next meeting.
3. Life insurance under FLEX - Tabled until next meeting
4. Dental insurance under FLEX –Tabled until next meeting
5. Health insurance under FLEX – Tabled until next meeting
7. GSRA retirement options – Tabled until next meeting
8. Retiree health insurance contribution –Tabled until next meeting
9. Voluntary benefits -- Tabled until next meeting
The next scheduled meeting is November 2, at 11:30 A.M. in Room 302 USB.
Respectfully submitted by Lynette A. Lancial
Funded Retirement and Insurance Committee (FRIC)
September 7, 2007
The first Funded Retirement and Insurance Committee (FRIC) meeting for the 2007-2008 academic year was held 9/7/07 at 11:30am in 302 USB.
Members present: Richard Borchard, Jane Chalmers, Lois Dusdieker, Jon Garfinkel, Dan Holub, Melanie Kenney, Sheldon Kurtz, Lynette Lancial, Dorothy Persson, Bernard Sorofman, and Ruth Wachtel.
Administration present: Sue Buckley and Richard G. Saunders.
Guests Present: Debra Hughes, Susan Klatt, Joni Troester, Charles Drum, Julie Sexton, Eileen Sullivan, Terry Johnson, Charles Drum, and Nancy Williams.
1. Introduction of members and guests. An orientation to the benefit plans was recommended to all new committee members.
2. A website for FRIC is being developed. Meeting minutes and progress/accomplishments of the committee will be posted there in the near future.
3. Minutes of the 5/4/07 meeting were approved.
4. Reorganization of benefit plans and adjustment of rates. UI Care, UI Select and CHIPS 3 plans are being discontinued. CHIPS 2 remains. A “revised version of UI Select” entitled UI Choice will be a 3-tiered plan with level 1 care provided at the Carver College of Medicine (CCOM) and UI Community Medical Services (CMSC). Level 2 services are by Blue Choice providers other than CCOM and CMSC. Level 3 services are for all other providers (may be out of state). Coinsurance is less for level 1 and 2 at 10% and level 3 is 40%. Out of pocket maximums are the same for level 1 and 2 but more for level 3. There is no deductible. CHIPS 2 is not being revamped. You may choose any provider but have a $1200 single/$3600 other family status deductible. 10% coinsurance. The out of pocket maximum increases for family coverage. With UI Choice every visit can be a different level and the costs to the employee varies by the level used for that visit. Routine care obtained in state (level 1 or 2) is much less expensive than routine care obtained out of state (level 3). Emergent care (if true emergency) is covered differently. Rates for the 2008 enrollment period will be based on CHIPS 2 and UI Select rates for 6/06 – 5/07 and usage within those plans. Rates for 2008 will not exceed a 30% increase for each plan subgroup, i.e. CHIPS 2-family or UI Choice-employee/spouse, for example. It is important to remember that co-payments do not contribute to out of pocket maximums. There is a growing concern about very large spending accounts for certain employees who do not purchase health insurance and hence have large residual Flex Benefit funds. This year there is a proposed cap of $9000 for those with excessive flex benefits. There is a max of $5000 on the dependent side (no matter how many dependents).
5. Hewitt Recommendations for Flex Benefit Options The Flex Benefit design was established in 1987. It is time to re-examine the 20-year old program, see what is going on in current cafeteria plans, and possible options. Options extend from no change to tossing out everything. Health, dental, life insurance, and disability coverage are under review. It is important to consider that total compensation includes salary and benefits. Salary here is not ranked highly by Big 10 standards. Committee members are to examine alternative program scenarios for medical (4 options), dental (4 options), life insurance (3 options), and disability insurance (3 options). These alternative program options will be discussed at the October, 2008 meeting.
6. GSRA retirement options were not discussed in depth secondary to lack of time.
Meeting adjourned at 1:00pm.
The next scheduled FRIC meeting is at 11:30am, 10/5/07, in 302 USB.
Respectfully Submitted, Lois B. Dusdieker, MD, MS
FY07 Meeting Minutes
A regular meeting of the University of Iowa Funded Retirement and Insurance Committee was convened at 11:30 am on May 4th, 2007, in Room 302 USB.
Present: Committee Members; Richard Borchard, Jane Chalmers, Charles Drum, Lois Dusdieker, George Herbert, Dan Holub, Lynette Lancial, Forrest Nelson, Dorothy Persson, Richard Randell, Ruth Wachtel.
Administration; Sue Buckley and Richard Saunders.
Guests: Debra Hughes, Richard Stevenson, Joni Troester and Mary Greer.
1. Approval of Minutes:
Minutes of April 4th were approved as submitted.
2. New Principal Insurance Products;
Principal Group website now offers, at no charge for Iowa Life Insurance customers, self planning assistance and forms for wills, identity theft, power of attorney. Website registration is required. Service is available for employee and spouse. All documents must be signed and notarized to be legally binding. Optionally documents can be recorded at Court House.
3. Flex Credit Options:
Flex spending choices have changed and Administration requests FRIC perform an evaluation needs versus cost. The topic was introduced as starting point, at this time, to generate a dialogue for consideration and to be resumed this fall. Richard Saunders pointed out the cost of flex credits are significant and growing, the current program was designed in 1989 by an outside consultant and not been reviewed since. It was suggested by Sue Buckley discussions consider the program strengthens and weaknesses.
Comments from discussion follow.
- REMAIN AS IS: Common perception is ‘the university pay is not so good, but benefits are great’. Some may consider benefits as compensation; reducing benefits would effectively reduce take-home pay.
- DROP FLEX BENEFITS PROGRAM: If you do not participate no benefits.
- MAXIMUM OF $5000 OF EXCESS FLEX CREDITS CAN BE DEPOSITED TO A SPENDING ACCOUNT: Forfeit of portion exceeding $5000. Spouse with insurance outside of University. 1792 employees would be affected (mostly families). $6.4 million dollars would be lost. May influence more money going to insurance.
- EMPLOYEE OUT OF POCKET COST METHOD WITH CREDITS GIVEN PER OPT OUT OPITION: Iowa State uses this method. Employee shares cost as a deduction on pay check, may reduce number of insured. Page 2 of 2
- DUAL EMPLOYED COUPLES: Was reviewed recently—savings and numbers affected are low. Some need and use it all, some buy five pairs of glasses, massages, etc.
- DAN’S PROPOSAL: Flex Credit Options: Dan Holub proposed a formula for determining allocation of flex credits which would re-distribute funds toward individuals in the lower salary ranges. target is 100% of the single premium flex credits are capped at 100% of the family premium Assuming a median salary of $60,000, and single and family premiums of $350 and $800, flex credits would be distributed as follows:
- OUTSIDE CONULTANT RECOMMENDATIONS: It was suggested that we may need outside help on this complex and emotional issue.
- GENERAL COMMENTS: This is highly emotionally issue. Choice versus cost. Review recent satisfaction survey. Survey again with focus on flex credits.
4. Richard Stevenson is leaving the group to assume the duties of UI Retiree’s President.
The meeting was adjourned at 1:00 PM.
The next scheduled meeting is September 7, 2007, in Room 302 USB.
Submitted by Rick Borchard, July 18, 2007
A regular meeting of the University of Iowa Funded Retirement and Insurance Committee was convened at 11:30 am on April 6, 2007, in Room 302 USB.
Present: Richard Borchard, Jane Chalmers, Charles Drum, Lois Dusdieker, George Herbert, Dan Holub, Melanie Kenney, Sheldon Kurtz, Lynette Lancial, Dorothy Persson, Richard Randell, Ruth Wachtel, Sue Buckley, Richard Saunders, Debra Hughes, Susan Klatt, Richard Stevenson, and Joni Troester.
1. The minutes of March 2 were approved as submitted.
2. Curaquick Clinics:
Curaquick Clinics have opened in local HyVee stores and are staffed by PAs or ARNPs. They are urgent care clinics that provide an alternative to emergency rooms during evenings and weekends. Patients pay $40 a visit. Curaquick does not submit claims to Wellmark on behalf of patients and its providers do not have provider numbers. Patients covered under Chips II or III can submit claims to Wellmark themselves for reimbursement, while UICare and UISelect enrollees are not covered.
Out-of-pocket costs can always be paid from a Healthcare Spending Account. Community Medical Services is planning to staff their North Liberty and First Avenue clinics on evenings and weekends to serve as urgent care clinics. The Committee considered whether visits to Curaquick Clinics should be covered under all health plans. The Clinics could submit a bill electronically once a month directly to the University, bypassing Wellmark. Coverage might save money because the $40 charge is less than an emergency room visit and is even less than a visit to most physicians, such as those at CMS. Concerns were raised over the quality of care, the lack of continuity of care, the possibility that coverage might be seen as an endorsement of the Clinics over CMS, and the likelihood of misuse if no copayment were required. A motion was passed providing for a one-year trial of full coverage of visits to Curaquick under all health plans, with direct billing to the University, and the ability to monitor usage closely. There were 2 dissenting votes.
3. Health Plans Proposal:
UICare will be terminated next year. The Committee unanimously passed a proposal to eliminate Chip III and to transform UISelect into UIChoice, as discussed previously at several meetings. UIChoice would have 3 tiers of coverage. Level I would allow visits to UIHC providers at no cost. Level II would provide coverage for care in Iowa through the current Blue Access network of providers, similar to the current UISelect Plan. Level III would cover care outside of Iowa, but would have a separate deductible, coinsurance and a separate out-of-pocket maximum. Emergent care outside Iowa and care not available within the network would be covered under Level II.
4. Spending Accounts:
Healthcare spending account claims must be submitted by April 30 for expenses incurred the previous calendar year. The federal government, but not the University, now permits expense incurred prior to March 15 to be paid from the previous year’s account. For example, any expenses incurred between Jan 1, 2008, and March 15, 2009, could be charged to the 2008 account. One problem with this system is that any Page 2 of 2 claims submitted for the period Jan 1 to March 15 will be charged to the previous year before the current year is paid. If someone submits bills from Jan 2009 prior to their bills from Dec 2008, they could exhaust their 2008 funds with Jan expenses, leaving no money in the account for 2008 to pay their Dec bills. They might then have an excess of funds in their 2009 account. Richard Saunders distributed a graph showing the increase in health care spending accounts over the past 6 years, to about $15 million in 2005. Due to the high administrative costs associated with extending the claims window, and the potential for mis-allocation of claims submitted near the beginning of a year, the Committee decided that action to alter the current claims policy was not warranted.
5. Health Insurance Rate Options:
Richard Saunders distributed a handout describing 4 algorithms for setting the relative rates of insurance premiums for different family statuses, and a handout showing what would have happened to 2007 premiums if rates had been set based on multiplication factors applied to the single rate. The multiplication factors are based on industry standards derived from actual claims over millions of covered lives. For comparison, Richard also noted that Northwestern bases premiums on salary ranges. The issue was brought up because our rates sometimes appear inconsistent across differing family statuses, since they are based on actual claims, not formulae. When the University migrates to only 2 health plans next year, apparent inconsistencies will be much less noticeable. The Committee decided that no action was necessary.
6. Flex Credit Options:
Dan Holub proposed a formula for determining allocation of flex credits which would re-distribute funds toward individuals in the lower salary ranges. target is 100% of the single premium flex credits are capped at 100% of the family premium Assuming a median salary of $60,000, and single and family premiums of $350 and $800, flex credits would be distributed as follows: The plan was not discussed in detail due to time constraints.
The meeting was adjourned at 1:00 PM.
The next scheduled meeting is May 4, 2007, in Room 302 USB.
Submitted by Ruth E. Wachtel, April 16, 2007
Funded Retirement and Insurance Committee Minutes:
March 2, 2007 11:30 AM -1:00 PM
Members Present – Richard Borchard, Charles Drum, George Herbert, Melanie Kenney, Sheldon Kurtz, Lynette Lancial, Forrest Nelson, Dorothy Persson, Richard Randell, Ruth Wachtel
Administration Present – Sue Buckley, Richard Saunders
Guests Present – Debra Hughes, Mary Greer, Susan Klatt, Cathy Klien, Richard Stevensen, Joni Troester
1. Approval of February 2, 2007 Minutes:
The minutes were approved with one correction. The Members Present section was corrected to indicate that Lynette Lancial was in attendance.
2. Benefits Update-
Buckley A handout entitled Long Term Benefit Cost Management was discussed. The UI administration requested that FRIC strongly consider the following series of five measures and actions steps to help contain escalating benefit costs:
- Reduce the number health plans offered to save administrative and claims costs.
- Review the flexible benefits program to determine options to achieve cost savings.
- Analyze how UI employees use health care services to determine if incentives and programs might reduce claims.
- Review and enhance UI wellness initiatives
- Reevaluate pharmaceutical costs/incentives to seek incentives for lower cost drugs.
A brief discussion ensued with Chairman Kurtz asking how FRIC should approach the task. Saunders said Benefits will produce/request data to help with analysis of costs and utilization. Buckley responded that it is critical that FRIC address item #1 this year. She encouraged the committee to move ahead with the rest of the meeting agenda which contained items pertaining to the necessary measures and actions steps.
3. Big 10 Health Comparison - Saunders
R. Saunders distributed two pages containing tables displaying the 2007 Health Insurance Costs for Big Ten Schools and for the 4 universities in Iowa. The tables showed whole premiums and the breakdown of employer and employee costs for Chip 3 - Single and Family, and UI Select - Single and Family. In general, in the standard Chip 3 plan, the UI is not very competitive, paying 68% of the single premium and 56% of the family premium. However, in the UI Select plan, the UI is competitive; the UI is the only Big Ten School paying 100% of the single plan and it pays 84% of the family plan. The UI contributions are below the other Iowa state schools.
4. Curaquick Clinics- Saunders
R. Saunders distributed a listing of the services provided by Curaquick clinics walk-in health care clinics that are currently being test marketed in Iowa City Hy-Vee Food Stores. These clinics are based out of Sioux City. Sioux City and Iowa City are the only Iowa sites for Curaquick. Curaquick is negotiating with the UI to make Curaquick services a funded benefit for UI employees. FRIC Minutes: March 2, 2007 2 4. Curaquick Clinics (Continued) Curaquick and The University of Iowa [Community Medical Services (CMS)] are also negotiating to have CMS receive medical referrals from Curaquick. An upbeat discussion ensued with some committee members relating their positive experiences with Curaquick. A vote, with the majority assenting, was taken to determine if the committee wanted more information on this issue. That information will be forthcoming.
5. Health Plan Proposals - Saunders
A handout listing the following potential health benefit changes for 2008 was distributed.
Terminate CHIP 3:
- Terminate UICARE. FRIC was told that UIHC and the UI CCOM met and decided that they would be in favor of closing UICARE if the proposed changes in UI Select are possible.
- Changes in Chip 2 Increase out-of-pocket maximum (OPM) from $4200/$6300 to $4200/$8400. The need to make OPMs and deductibles consistent across the Plans was reviewed.
- UI Select would become a 3-Tier Model:
- Tier 1: $0 copay for care from UI providers as is done currently with in UICare;
- Tier 2: $10 copay for care from Blue Choice providers other than UI;
- Tier 1 & 2 would have a new combined OPM of $1700/$3400;
- Tier 3 is for insureds using out of state providers, with 60%/40% coinsurance and a separate OPM of $2000/$4000; and,
- The pharmacy OPM would increase from $1100/$1700 to $1100/$2200. A lengthy discussion of how these changes will impact insureds and providers ensued. The recent concession on UICare makes the 3-Tier UI Select model possible.
In the first year (2008), the UI Select premium change for employees would be similar to what has happened in recent years. In the following years, the impact of these changes (more enrollees across the tiers with varying amounts of claims) on premiums is hard to predict. The down side of this proposal is that, while the move from the other plans to UI Select will help reduce and hold down the cost of claims, it will not necessarily slow usage. Usage needs to be addressed by other interventions such as education and wellness initiatives.
The final actions on these potential changes will take place at the next meeting, April 6, 2007.
6. Health Insurance Rate Options
Tabled until next meeting.
7. Flex Credit Options
Tabled until next meeting
8. Spending Accounts
Tabled until next meeting
The next scheduled meeting is April 6, 2007, at 11:30 A.M. in Room 302 USB.
Respectfully submitted by Lynette A. Lancial
Funded Retirement & Insurance Committee Minutes:
February 2, 2007
Meeting Members Present: Richard Borchard, Charles Drum, George Herbert, Dan Holub, Sheldon Kurtz, Forrest Nelson, Dorothy Persson, Ruth Wachtel
Administrators Present: Richard G. Saunders
Guests Present: Mary Greer, Debra Hughes, Joni Troester, Dick Stevenson, Cathy Klien, Susan Klapp
1. Approval of December Minutes
The minutes were approved with one correction. Under Health Plan Designs, the statement: “There is no consistency in out of pocket maximums between single versus all other contracts” was changed to read “There is no consistency across plans in out-of-pocket maximums.”
2. Wellness Update
Joni Troester spoke about the Health Risk Assessment and Health Coach Service, reporting good participation. Almost half the eligible population participated and four out of five gave permission for UI Wellness to contact them about health improvement programs. The top five chronic health conditions among UI employees are migraines, arthritis, back problems, asthma, and diabetes. Asked about whether Wellness would offer support for employees facing a non-smoking campus, Troester pointed to smoking cessation programs already in use. Asked about including retirees in the Wellness programs, Troester said there are plans to include them in the future, but not at this time.
3. 2007 Health Enrollment Data
Saunders distributed the latest data showing enrollments in the health insurance plans. The question arose what to do with the CHIP III plan as enrollment continues to decline and rising premium costs make the plan a bad buy for employees.
Action resulting from the discussion was deferred.
4. Mandatory Life and Disability Insurance
The discussion of mandatory life insurance, begun last meeting, continued. Many employees question why they must carry mandatory life insurance. Saunders recounted the history, in which the University, wanting to be sure that employees could cover the expense of their own deaths, provided that insurance at no cost. Currently, the University provides $21/month to cover the cost. Most employees choose the minimum, opting to use part of the benefit in other ways. The UI does not self-insure the life insurance. If participation is not mandatory, rates may go up for the group if enough employees opt out.
There was no motion for change.
5. Mandatory Disability Insurance
The discussion of mandatory disability was also continued from the last meeting. Saunders noted there are two demographics who question the mandatory insurance, the young and the old—the young because they tend to feel invincible and the old because they figure they don’t have long until retirement. There was no motion for change.
6. State of Iowa Sick Leave Program for Retirees
Richard Saunders reported on the state’s new sick leave program for retirees, which uses whatever sick leave is left upon retirement to pay for health insurance premiums. The current UI program pays a contribution for life. In addition, figuring the faculty contributions would be difficult.
7. Health Plans Designs
The discussion about how best to construct the health care plans continued from the December meeting. The goal, it was suggested, is to give the best benefit to the largest number for the lowest cost. The issue of what to do about CHIP III resumed with the observation that employees are “voting with their feet” to collapse the number of plans, reducing choice because choice is too expensive. When some discussion centered on what plan choices were most economical for the University, Kurtz opined that the committee represents the employees, and that it is not FRIC’s role to save the University money. The discussion will continue.
The other agenda items were postponed until the next meeting.
The next FRIC meeting is March 2, 2007 at 11:30 a.m. in Room 302 University Services Building.
Respectfully submitted, Charlie Drum
Funded Retirement & Insurance Committee Minutes:
December 1, 2006 Meeting
Members Present: Richard Borchard, Jane Chalmers, Charles Drum, Lois Dusdieker, Dan Holub, Forrest Nelson, Dorothy Persson, Ruth Wachtel
Administrators Present: Sue Buckley, Richard G. Saunders
Guests Present: Hyman Joseph, Debra Hughes, Joni Troester
1. Approval of November Minutes
The minutes were approved with one correction. A “the” was added to the following sentence under Health Plan Designs: “Recommendations from subcommittee (Charlie Drum and Ruth Wachtel) included increase in out of pocket maximums, which in essence increases cost to the 15% who are heavy users.”
2. Mandatory Life and Disability Insurance
Some employees who have purchased life insurance from a company not affiliated with the UI and some young employees do not understand why they are required to spend at least $21/month (cost of minimum amount of insurance, $50,000) from their flex credits for life insurance. These employees would rather spend the $21/month on other benefits. The UI does not self-insure the life insurance. If participation is not mandatory, rates may go up for the group if enough employees opt out. Saunders agreed to gather some data for review before a decision was made about optional versus mandatory participation.
Employees who are 65 years and older do not understand why they are required to purchase disability insurance. At age 60 and up to age 70, an employee may receive disability payments for 5 years or until age 70 whichever comes first. After age 70, an employee may receive disability benefits for 1 year. These employees are asking that the UI make participation in the disability insurance program optional after a certain age. Saunders will bring data on the number of employees who are 65 years of age and older to the next meeting. A final decision was postponed.
3. Infertility Claims
UI health insurance pays up to $25,000/contract (lifetime maximum). Infertility claims do not count toward the out of pocket maximum for the health insurance plan. One hundred seventy-three (173) employees sought fertility treatment, for a cost of $280,000, last year. The committee decided that the expenditure was reasonable and decided to keep it in the plan.
It would cost $68,000/year to cover immunizations free. The flu shots would still be provided through on-campus clinics in the fall, but employees would obtain other immunizations from their physicians. A motion to offer all vaccinations (including travel vaccinations) free was made, seconded and passed.
5. Health Plans Designs
In 2008, Wellmark anticipates that it will be feasible for the company to handle an out of state option for UI Select. There is no consistency in out of pocket maximums between single versus all other contracts. In February, the committee must look at these out of pocket maximums and decide what to change.
The other agenda items were postponed until the next meeting.
The next FRIC meeting is February 2, 2007 at 11:30 a.m. in Room 302 University Services Building.
Respectfully submitted, Dottie Persson
Funded Retirement & Insurance Committee Minutes:
November 3, 2006
Meeting Members Present - Richard Borchard, Charles Drum, Lois Dusdieker, George Herbert, Dan Holub, Melanie Kenney, Sheldon Kurtz, Lynette Lancial, Ruth Wachtel.
Administration present - Sue Buckley and Richard Saunders.
Guests present –Joni Troester, Dick Stevenson, Debra Hughes, and Hyman Joseph.
1. Approval of the October 2006 Minutes
Approval of the October 2006 minutes was done without any changes voiced.
2. Health Fair:
Health Fair, November 1st at the Field House was very well received and many positive comments noted. 3,100 participants attended; 700 influenza vaccines were administered; 400 cholesterol levels were checked; 200 blood pressure measurements were done; and 250 body composition measurements were made.
3. Pandemic Response
Team Pandemic Response Team is in place and plans for activation are in progress.
4. Health Plan Designs
Health Plan Designs were discussed in depth and handouts given. Recommendations from subcommittee (Charlie Drum and Ruth Wachtel) included increase in out of pocket maximums, which in essence increases cost to 15% who are heavy users. Increasing deductibles would increase costs for everyone. Addition of deductibles to apply to UI Select, previously without deductibles, was made. A third recommendation was to increase co-insurance for x-ray/lab from 10% to 20%, which again affects the users. These suggestions would be considered for 2008. The number of plan options was discussed. One plan only was not felt to be adequate because choice is important to many participants. A comparison of UI Care; UI Select; Iowa employers – HMO – employers of 1000+; for employers – HMO – all employers; and CUPA-HMO was graphically presented. 67% of contracts had greater than $1,000 deductibles. What should be covered infertility, etc? If deductibles are not increased, then premiums may be increased but increasing deductibles may be burdensome to lower income employees.
5. Hearing Aids
Hearing aids were discussed at length. By report hearing aids last about 5 years when hearing is stable. Hearing aids were not felt to be a cosmetic issue. Fifty-three claims were submitted for this benefit. A motion to provide 80% of the cost of a hearing aid(s) up to $2,000 every 5 years was made, seconded and passed.
$65,000 was employee share of all immunizations. Coverage of adult, child and foreign travel vaccines was addressed. Information on foreign travel vaccine requirements and costs was requested.
Consumer Driven Health Care plans were discussed. Only 4% of employers are enrolled in this program. There are 2 types. HRA – health reimbursement accounts – are plans which allow employer contributions only, which build in amounts while worker is employed, but employee loses all when he leaves the company (employer preferred). The second is the health savings account (HSA) which allows employer and/or employee contributions. The worker can take the account money when he leaves and also spend the money on anything he chooses (employee preferred). University of Iowa has had a high deductible plan since 1987. It was determine not to pursue these options at this time.
8. Health Insurance Rates and Flex Options
Health insurance rates and flex options were re-addressed again in response to a concern raised by a recently divorced worker with a marked change in the flex benefits. Flex benefit rates are set on weighted averages for all employee groups. Many issues are involved, including 2-employee families. More discussion is planned for the future.
The remaining agenda items were not discussed because of time constraints.
The next scheduled FRIC meeting is December 1, 2006 at 11:30am in Room 302 USB.
Respectfully submitted, Lois B. Dusdieker, MD
Funded Retirement and Insurance Committee Minutes
October 6, 2006
Members Present: Richard Borchard, Jane Chalmers, Charley Drum, Lois Dusdieker, George Herbert, Melanie Kenney, Lynette Lancial, Forrest Nelson, Dottie Persson, Ruth Wachtel
Administration Present: Sue Buckley, Richard Saunders
Guests: Debra Hughes, Joni Troester, Dick Stevenson
The meeting was called to order at 11:35am.
1. Approval of Minutes-
September minutes were approved with two corrections: Point # 2…. Major contributors to the increase were cancer, heart stents, and… (#2 bullet point 4) Encourage more members to move from Chip III to UI Select, when economically sound,….
2. 2007 Contributions-
Sue Buckley reported the UI administration accepted the committee’s recommendation to continue the current plan contribution levels of the weighted average of 100% (Single) and 75% (Family) for 2007. She also reported the administration would like the committee to actively review current plan co-pays, deductibles, and out-of-pocket maximums, and continue to examine plan options, in particular CHIP III.
3. Health Plans Designs-
Debra Hughes distributed and discussed data comparing the UI Health Plans deductibles, co-payments, co-insurance, out-of pocket maximums, out-of-pocket maximums-Rx, and prescription drugs to survey information gathered from the College and University Personnel Association, Linn Associates Survey of Iowa Employers, and information from Wellmark. S.
Buckley and Richard Saunders provided additional information on the data and how the various plans may be compared. The committee discussed the information, asked if plan premium (rates) data and/or range data might be available from the surveys. The committee identified the review of the health plan designs as an important, but complex issue. S. Buckley suggested interested members of the committee could form a sub-committee to meet with R. Saunders and D. Hughes to examine the data in more detail and report back to the full committee. Ruth and Charley volunteered and if anyone else was interested they are to contact R. Saunders.
4. HPV Vaccinations-
As requested at last months meeting, R. Saunders got additional information regarding the human papillomavirus (HPV) vaccine and updated the committee. He reported that Wellmark, though continuing to gather information on the vaccine, had indicated they would, most likely, approve the vaccine coverage by January 1st, though would be referring the decision to whether to cover the vaccine within the current plan programs back to the employer. The committee reviewed cost projections and discussed the inclusion of the vaccine within our health plan programs. On a motion and second, the committee voted unanimously to offer the HPV vaccination as a coverable vaccination within the coverage guidelines of each of the UI health plans for 2007.
5. Hearing Aids-
R. Saunders provided background information on the current utilization of the hearing aid coverage within the health plans. The plans provide $1,000 in coverage every 3 years. In 2005, 53 individuals submitted claims for hearing aids in the amount of $152,000 with the plans paying out $42,000. Purchase of batteries are not included in the plan coverage, though are a qualified purchases under the Health Spending Account. The committee asked a number of questions and made some observations. R. Saunders indicated that he would get some additional information. No further action was taken by the committee.
6. CREF Investment Options-
R. Saunders reminded the members of the recent CREF changes approved last year by the committee, which included expanding the plan participants CREF fund investment options from 19 to 38, which included the addition of “partner-funds”. He also explained that CREF offers a “brokerage-window” service, which allows participants to select any of the 5,000 mutual funds currently available in the market, and asked if this was a service we should include in our plan. After discussing various aspects of the brokerage window concept, the committee decided not to recommend extending our CREF investment options to include this service.
The remaining agenda items were not discussed due to time.
The meeting adjourned at 1:00pm.
The next scheduled meeting is November 3, 2006 at 11:30am in Room 302 USB.
Respectfully submitted by George Herbert
Funded Retirement and Insurance Committee Minutes:
September 8, 2006 11:30 AM -1:00 PM
Members Present – Jane Chalmers, Charles Drum, Lois Dusdieker, George Herbert, Dan Holub, Melanie Kenney, Lynette Lancial, Forrest Nelson, Dorothy Persson, Richard Randell, Ruth Wachtel
Administration Present – Sue Buckley, Richard Saunders
Guests Present – Hyman Joseph, Debra Hughes, Joni Troester
1. Approval of Minutes for Meetings of March, April, May and June, 2005:
The minutes were approved as written.
2. 2006 Health Insurance Experience, and 2007 Rates - Saunders
A data sheet with information about 2006 Health Insurance cost experience was distributed and led to extended discussion. The most noteworthy observation was the 16% increase in costs, as compared to the expected 12%. That will dictate substantial increases in premiums in virtually all plans and classes. Major contributors to the increase were cancer, heart and joint replacement. The discussion included the following issues regarding the containment of future costs:
- The generic drug program -- it saved $1.4m in first 6 mos.
- Wellness programs underway and may soon begin to have an impact
- A pharmaceutical management program is in pilot stage
- Encouraging more members to move from Chip III to UISelect, where negotiated payments result in lower expenses
- Indexing or raising out-of-pocket maximums
- Education of members regarding relative costs of various programs
A tangential question was raised regarding our commitment to the policy that flex credits should cover 100% of weighted average health premium cost for singles, 75% for families. No formal resolution was proposed or voted on, but the discussion indicated overwhelming support.
Motion – Raise cap on % premium increase to 30% – passed unanimously
Motion – Mount an educational plan targeted at Chip III enrollees – passed unanimously
3. HPV Vaccination-Saunders
R. Saunders noted that the new human papillomavirus (HPV) vaccine is not now covered by Wellmark. The vaccine is given to 11-26 year old women and is regarded as 70% effective against cervical cancer and other diseases. It is delivered in 3 doses at a cost of $120 per dose. If coverage were to be added, it could result in a first year cost to our health plans of as much as $900k, presuming every eligible member took advantage of the offering.
Actual FRIC Minutes: September 8, 2006 2 cost would in all likelihood be considerably less, and costs would decline dramatically after that first year. The vaccine is recognized and promoted by a number of national health organizations, but Wellmark is waiting for the vaccine to be placed on a particular recommendation list before they add it to their list of covered medication.
The question raised was whether the UI should request coverage of the vaccine. Discussion ensued, and included the observation that, while the vaccine is undoubtedly cost effective, the benefits accrue to vaccinated women and their health insurance plans much later in their lives, typically after they are no longer enrolled in the UI health insurance programs.
The issue was tabled pending more information.
4. Licensed Marriage and Family Therapist (LMFT) -- Saunders
R. Saunders updated the group on the LMFT issue. As was discussed in a meeting last year, Wellmark has not allowed coverage for pre approved family counseling when the provider is an LMFT, even though it is allowed for other providers. The primary obstacles were the registration of LMFTs, the negotiation of payment rates, and specification of which LMFT services are covered and which are not. The new information is that Wellmark is currently in the process of extending coverage to this group. LMFTs are currently being enrolled and coverage will be added soon.
5. UISelect Option – Saunders
Out of area coverage of medical claims was to be added to the UISelect program, according to a FRIC decision of last spring. R. Saunders informed the group that administrative obstacles will prevent Wellmark from making that change this year.
6. Consumer Driven Health Plans – Saunders
7. Roth 403B – Saunders
The Roth 403B retirement savings plan is a new investment option similar to SRAs but involving after-tax rather than pre-tax deposits. In the face of continually rising tax rates, the plan offers taxpayers the potentially attractive option of paying the income tax now at current tax rates rather than at rates which may be in place when the funds are eventually withdrawn. The option will be most attractive for young employees – any advantage it offers requires a minimum of 5-10 years before withdrawal. The program becomes available after January 1. It is a very complex issue and will require extensive education. The plan education will not be offered directly by the UI Benefits offices but rather by private brokerage firms, such as through TIAA/CREF.
The Meeting was adjourned with remaining agenda items delayed for future meetings.
The next scheduled meeting is October 6, 2006, at 11:30 in Room 302 USB.
Respectfully submitted Forrest Nelson