UA’s insurance costs rise, but employees rates unchanged
Posted on Thursday, September 25, 2008
According to the University of Arkansas, the costs for faculty and staff health insurance coverage is going up by more than $ 600, 000, but those covered by the institution’s plan won’t immediately pay more in premiums.
The UA will absorb the increase of about $ 607, 067 without an increase in individual premiums “ at this time, ” the UA said in a statement released Wednesday.
The University of Arkansas System is a self-insurer, and the system office sets the premiums for all campuses, based on past claims and projected future costs. Each campus has the option of absorbing the entire increase as part of the employer share or passing part of the increase on to employees.
University employees saw a 3-percent increase in their premiums for 2008-2009 back in July, as did the UA budget. The most recent change was the result of an increase in catastrophic claims over the past year, according to Richard Ray, director of benefits for the UA.
Approximately 3, 290 employees at the Fayetteville campus are on the campus’s insurance plan. The rates they pay are determined by their full- or part-time status, the number of family members covered and by the coverage plan they select. The university pays at least 69 percent of the premiums required for each employee’s coverage.
Ray said that the University of Arkansas System has done well at preventing increases in health coverage premiums when compared against national rates. The university saw increases at the beginning of the fiscal year in 2003, 2004 and this year but nothing as large as the double-digit increases that many health coverage plans have sustained.
Having a second premium increase in a single year is rare, Ray said, but appears to have happened this year because of an increase in catastrophic claims over the past year. The higher number of catastrophic claims forced each of the campuses in the system to raise premiums about 2. 8 percent. “ In these difficult economic times, with the cost of everything going up, we don’t want to do anything that will cut into the paychecks of the people who work so hard for this university, ” said Chancellor G. David Gearhart. “ At the same time, this is another operating expense the university will have to absorb, and it is yet another example of why full funding of the adopted state-funding formula for higher education is of increasingly critical importance. ”
A spokesman for University Relations said any changes in premiums when the new plan year starts in July 2009 will be determined at that time.
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