HEALTH CARE COST SHARING DECISIONS

The Committee on Sustainable Health Benefits, which included members of our faculty, staff, and retirement communities, was specifically charged to make recommendations on how to achieve a new aggregate cost-sharing ratio for health care of 70 percent contribution from the University and 30 percent contribution from employees and retirees. This ratio is closer to that of peer universities and health systems. The University will adopt the following with a phased implementation, beginning in 2010.

1. The University will continue basing the contribution formula for health care on the two lowest-cost comprehensive plans and will continue our current tiers of coverage -- employee, employee plus adult, employee plus adult and child(ren), and employee plus child(ren).
2. Employees and retirees will contribute more to their health care costs than they do today to achieve the new aggregate ratio for cost sharing. Half of the increase will occur in January 2010; the remainder in 2011. Although it is too soon to know the actual premium rates for 2010, we have created premium
   contribution estimates to show what the employee and University contributions to U-M Premier Care would be if these changes were in place today.
3. The University’s contribution to premiums will be greatest for employees and retirees, and greater for child dependents than for adult dependents.
4. The University will use three salary bands to help make costs more affordable to lower-wage employees.
5. Part-time benefits-eligible employees will continue to have access to the full choice of U-M health plans, but will receive a University contribution toward premiums that will be 80 percent of the University contribution made for full-time staff in the lowest of the three salary bands (Band 1).
   (This applied to benefits-eligible employees with appointments of 50% to 79.9%. Those with appointments of 80% or more will receive the same University contribution as full-time employees.)
6. University contributions to premiums for retirees and their dependents will be the same as its contributions for active full-time employees in the lowest wage band (Band 1).
7. The co-pay amount for an office visit will change from $15 to $20 and emergency room visit co-pays will change from $50 to $75 (co-pay is waived when admitted to the hospital for care). Co-pay increases will become effective on Jan. 1, 2010.
8. The University will continue its commitment to creating a culture of health through MHealthy programs for prevention, early intervention and wellness.

Health care cost-sharing changes will be implemented in two phases

Jan. 1 2010: Changes to co-pays for office visits and emergency room visits will be made, along with one-half of the increases in employee premium contributions.
Jan. 1, 2011: The remaining one-half of the premium contribution increase will become effective.

Exact contribution amounts for U-M health plans will be available once annual rates are set, well in advance of Open Enrollment.  Rates for 2010 will be posted on the Benefits Office Web site by August 15, 2009. Health plan descriptions and rates also will be published in Open Enrollment material in October when faculty and staff choose their benefits for the following calendar year. 

View the final report of the Committee on Sustainable Health Benefits (PDF)
View the report appendices (PDF)