<< Front page News November 21, 2003

Faculty revamps health care plan

Oberlin College has reduced employee health care claims by nearly $2 million this year after switching to a larger health care provider, though employees are still feeling the pinch of higher medical costs and increased prescription drug expenses.

Traditionally, the College has paid for 85 percent of employee health care costs, though that number mushroomed to nearly 90 percent in 2001-2002. Once again the College is aiming to make employees responsible for 15 percent of their health care costs within the year.

Overall, health care expenditures have more than doubled since 1994, from roughly $4 million to $9 million today.

At the November general faculty meeting, several employees raised concerns over the new policy’s increased “single-source” prescription drug costs. The co-pay for employees buying prescription drugs with no generic equivalent doubled under the new provider from $10 to $20 per drug.

“We realize that there are some people who use prescription drugs on a regular basis,” President Nancy Dye said. She added that she was unaware of the change until she tried to buy a prescription drug herself.

“I think it’s a matter of equity,” physics professor John Scofield said. He said that employees under the new system were being penalized for having certain kinds of illnesses, since drugs were priced differently based on their over-the-counter availability.

Dye acknowledged the complaint, but asserted that the best solution might be to set a cap on employee prescription drug costs.

“There are many different ways to look at equity,” Dye said.

Associate Vice President of Finance Ron Watts said a cost cap for employees buying prescription drugs had not been discussed, but added that many of the specifics of the new health care plan had not been set in stone.

“There will be significant discussions next spring,” he said.

“If we need to make changes, then we will make changes,” Dye added.

Concerns were also raised over the College’s appropriation of a $300,000 health care budget surplus in the past year. Dye said that the money went back into the College’s general fund to help balance the budget.

Several faculty asserted that the money should have been siphoned off into a special reserve fund to help offset years that the College underbudgets health care expenses.

“The projected cost benefits of the new plan are still not verified,” Watts said. “We won’t have the numbers until next March.”

The new health care provider, Signa, has more bargaining power due to its national network, and was able to lower medical costs while maintaining the same coverage.

“A major part of the savings was due to changing networks,” Watts said. He said that the previous health care contractor, Farley, was a local provider who did not have the same leverage as Signa.

The College provides health care benefits for 976 current employees and 264 retirees. Retirees who worked for the College for 10 years and retire after age 62 are covered under the plan.

In the case of former employees, the College pays two-thirds of their health care costs. Former employees can chose to buy into the College’s health care plan at age 52 if they have worked at Oberlin for 10 years, but do not receive financial benefits until age 62.

United Auto Workers and Oberlin College Office and Professional Employees union officials have hinted that health care will be the primary concern when contract talks begin next may.

The administration insists that the recent changes to health care, which occurred during the last contract period did not violate any terms of the union contract.

   

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