FixFlex.Org

(FUNQ = Frequently Unanswered Questions)

Below is a list of questions compiled by FixFlex from members of the UI Community. We submitted this list to the University Benefits Office/Human Resources via uibenefits-09@uiowa.edu on 5/27/08. We will update this list of Frequently UNanswered Questions (FUNQ) as new information becomes available.

Questions to FRIC/HR

From Members of the UI Community

Submitted by FixFlex.Org

Who is covered? Let’s FRAME the discussion with concrete numbers

Who is covered under the new plan? “All regular faculty, professional and scientific, and supervisory exempt merit staff.  Professional employees represented by SEIU participate in the Flexible Benefits program under the same terms and conditions as other faculty and staff.” (HR Website) According to estimates from HR and FRIC, this includes about 11,000 employees.

• How many individual UI employees receiving flex benefits fall into this category:  “dual employees, that is married couples with both spouses working at the University”? UI estimate from 5/14 Staff Council Meeting: 1100
• How many individual UI employees receiving flex benefits—but not part of the “dual employees” group—do not purchase UI health insurance with their flex money? This group likely purchases health insurance through a non-UI spouse. UI estimate from 5/27 FRIC Q&A Meeting: 1500
• How many individual UI employees are signed up for Dental III?
• How many individual UI employees are currently signed up for life insurance that exceeds the 400K maximum offered under the new plan? The HR website says: “Individuals could choose to buy additional life insurance.” From a UI group plan? From outside UI? What does this mean?
• How many individual UI employees are currently receiving long-term disability payments at the 70% level?
• How many individual UI employees fall into the “Employee/Children” category?
• How many members of SEIU participate in the Flexible Benefits program and how will these employees be impacted? From 5/27 FRIC Q&A Meeting: SEIU representatives estimate that of the 2700 SEIU members who participate in the Flexible Benefits program, 45% will lose up to $3700 under the new plan.

What is the impact of the proposed changes on UI employees?

• Based on the details of the FRIC proposal released this past week, the following groups will be negatively impacted under the new proposal: (1) dual-spouse employees; (2) employees who are insured through a non-UI spouse and use their UI flex credits for other purposes (e.g., dependent care spending); (3) employees currently enrolled in Dental III, many of whom are in the middle of expensive dental treatment; (4) employees counting on group life insurance in excess of the new 400K maximum (e.g., terminally ill employees); (5) employees currently receiving long-term disability. Is this an accurate assessment of the new plan? From the 5/27 FRIC Q&A Meeting: employees currently receiving 70% LTD will remain at that level. Employees wishing to purchase over 400K in life insurance will have this option (no details released). Note that employees cannot use flex credits to purchase outside life insurance.
• In a guest opinion on 5/23 in the IC Press-Citizen, Sheldon Kurtz wrote: “some of the university’s 11,000 covered employees would receive a reduction of flex credits attributable to health insurance estimated to range from about $1,800 to $4,000.” What is this number based on? [Note that many UI families have calculated their loss to be closer to $5000-6000.]

Does the new plan offer less choice?

• Are there any employees covered under the current plan who do not receive healthcare, life and LTD insurance? If we are adequately covered in these areas now, how does the proposed plan extend these benefits? Reduce these benefits? To Whom?
• Under the new plan, what types of choice are being eliminated from the system?

Do dual-spouse employees really receive “double benefits”?

• In an article in the Des Moines Register on 5/21, Sheldon Kurtz said, “Dual employees - married couples with both spouses working at the university - are getting double the flex benefits of a single employee, and they don’t need to buy two family policies for the one family.” Is this statement accurate? Are dual-spouse employees really receiving “double benefits” (see IC Press-Citizen opinion on 5/19)? [Hint: the answer is ‘no’. Employees with a spouse do not receive “double” benefits to cover the spouse; they receive 1.6*single benefits.]
• Under the proposed plan, the university will pay for 80% of an employee’s family health care costs, an increase from the current coverage of 75%. If, however, the employee is married to another UI employee, the university will now only pay 50% (since, between the two employees, the family is 100% covered). This makes fiscal sense from the university’s perspective. And it sounds equitable when health care is considered as a “product”. But from the perspective of individual employees, why shouldn’t the university pass some of its savings onto dual-employee couples? How is it fair to cover 80% of costs for some families and 50% for other families?

Are dual plans for married employees possible?

• Some dual-employee spouses at UI purchase insurance separately.  Under the new plan, will they be forced onto one insurance plan?  If so, their out of pocket maximum for prescription drugs (which only one spouse might use) will go from $1100 (what it is on an individual plan) to $2200. For spouses who opt for this approach, the proposed plan creates a huge financial burden, especially since $90 a month in flex credits will not even cover the $1100 OPM. Why shouldn’t these individuals get a “whole” insurance package just because they married?
• Similarly, would dual-employee spouses be able to retain two delta dental coverages (one under each spouse)? Some spouses opt for this approach when one spouse must undergo an intensive dental treatment plan..

How does the new plan work relative to other existing plans at UI?

• How will P&S staff members currently covered by UIGradCare be treated with the proposed changes? From 5/27 FRIC Q&A Meeting: This has not yet been determined
• For a P&S employee with a spouse who is a merit employee covered under ASFCME contract: will these employees get the $200/mo “shared savings credit” by taking medical coverage as part of the spouse’s plan? From 5/27 FRIC Q&A Meeting: This has not yet been determined

Analyzing health care spending under the current plan

• Did HR and FRIC conduct a thorough analysis of how many flex dollars are spent on health care expenses through the health care spending account? Has FRIC generated a list of what these monies have been spent on?
• How much flex money did the University contribute to health care spending accounts in the 07-08 fiscal year and the two years preceding? How much of this money was spent on health care expenses?
• What is the average income of families using these flex dollars? Did FRIC analyze spending patterns in relation to income? If so, did the analysis reveal ways to implement benefit changes that reduce the negative impact on those with lower incomes? From 5/27 FRIC Q&A Meeting: No detailed analysis of spending relative to income was conducted, although the general issue of linking flex credits to income was raised and rejected
• How close are employees to claiming 100% of their available health care benefits? Is it really possible that the 114% increase in benefits expenses cited by HR/FRIC will continue or is it about to level off even if no changes to the system are made?

Analyzing dependent care spending under the current plan

• Did HR and FRIC conduct a thorough analysis of how many flex dollars are spent on dependent care expenses?
• How much flex money did the University contribute to dependent care spending accounts in the 07-08 fiscal year and the two years preceding? How much of this money was spent on dependent care expenses?
• What is the average income of families use these flex dollars? Did FRIC analyze spending patterns in relation to income? If so, did the analysis reveal ways to implement benefit changes that reduce the negative impact on those with lower incomes? From 5/27 FRIC Q&A Meeting: No detailed analysis of spending relative to income was conducted, although the general issue of linking flex credits to income was raised and rejected
• How close are employees to claiming 100% of their available dependent care benefits? If the number is close 100%, how does this factor in to the 114% increase in benefits expenses cited by HR/FRIC?

Comparisons to other plans?

HR and FRIC believe that changes to the UI benefits plan are necessary to “enable the recruitment and retention of talent to support the University’s missions of teaching, research and service” (Susan Buckley). Given that UI salaries rank in the middle among the Big 10 schools, that would mean the UI benefits package would have to be better than many of our peer institutions for us to compete for faculty and staff. In light of that…

• What other benefits packages did FRIC examine? What are the central similarities/differences between the UI system and these other systems?
• How do other Big 10 schools handle benefits for dual-spouse employees?
• How do other Big 10 schools handle benefits for employees who get health insurance through a non-university spouse?
• What do other Big 10 schools do to help employees with child-care costs for families with young children?

How did this process get started? Was this the appropriate path?

• Since HR and FRIC based their proposal on recommendations of an outside consulting firm, Hewitt Associates, we would like to know: when will the recommendations from Hewitt Associates be released in their entirety? In addition, how was Hewitt Associates compensated and will they receive a portion of the proposed savings to the University as is often the case with contracts to outside consultants? From 5/27 FRIC Q&A Meeting: The University has received permission from Hewitt Associates to release this report in its entirety. This report will be released very soon. Susan Buckley briefly described four other ideas FRIC considered: (1) just adjusting flex credits for dual-employed couples and couples who obtain insurance from non-UI sources; (2) driving down the cap on health care spending accounts; (3) eliminating choice entirely from the system and just providing a set of fixed “products”; (4) implementing a focused child care credit and lowering the general flex credit to compensate.
• Did the UI consider whether it was appropriate for FRIC to take on this task? With an issue so large, with such far-reaching consequences for many, did the UI consider establishing a task force to study this problem? And if UI decided that FRIC was representative, on what basis was this decision made? Consider…
  • How many members of FRIC are from the College of Liberal Arts and Sciences? 0
  • How many members of FRIC are part of a married couple with both spouses working at the University?
  • How many members of FRIC get their health insurance through a non-UI-employed spouse?
  • How many members of FRIC have dependent care expenses for children under 12? Under 5? From 5/27 FRIC Q&A Meeting: At least one member of FRIC has some children under the age of 12
  • What is the average income of FRIC members? $108,173
  • What is the average income of families impacted by this change? [$58,507 in FixFlex sample]

The Impact to the Iowa City Community

• • The university does not exist in isolation; it does bear some responsibility for town-gown relations. Did FRIC consider the impact of the lost flex dollars on our larger Iowa City area community? If so, what are the strategies FRIC developed for communicating to the larger community about these lost dollars?

Why not FREEZE the current system to allow for discussion?

• • The FRIC proposal will hit MANY families quite hard—thousands of dollars per year. Why not FREEZE the current system to allow for discussion or implement the plan more gradually? For contrast, prior to the State law change this year, the University was willing to give smokers 18 months to adjust to a non-smoking campus (July 2009). Why do they think it is appropriate to cut benefits and inflect hardship on families with a mere 8 months notice? From 5/27 FRIC Q&A Meeting: FRIC discussed this issue and voted to press forward with their recommendation that the plan be approved by July 1, 2008 and be implemented on January 1, 2009. The July date factors in the time needed to re-program the benefits system to prep for a January implementation. The January implementation was deemed appropriate because some employees feel the current system is inequitable; these employees do not received flex credits under the current system which has been largely in place for the past 20 years. FRIC felt these employees deserve some flex benefits now and, consequently, that cuts should be made on the proposed time-table.
  • Can’t you make some allowance for people who made serious life decisions based on the current benefits plan?
  • Some people have a second child on the way; some people recently purchased a new house; some people are currently undergoing expensive treatments—and all of these decisions were based on the current benefits system and expected compensation as of January 1, 2009. Furthermore, some people with a terminal illness have purchased life and disability insurance through the UI, and their families will be devastated under the new plan.
  • Isn’t there some way to make the implementation of this plan more humane? From 5/27 FRIC Q&A Meeting: FRIC noted that they are an advisory committee and that their recommendation is now in the hands of President Mason and the University Vice Presidents for consideration. They noted that the University is open to input, and encouraged members of the UI community to send comments to uibenefits-09@uiowa.edu.