By Ame Phitwong
Beginning June 1, the University will pay $261,500 per month for health insurance for faculty and staff, totaling $3.14 million for one year. This number rose by $28,500 from $233,000, the price the University is currently paying.
James Kuffner, assistant vice president of human resources, explained that the increased percentage has grown in the last 10 years.
Every year Kaiser Permanente, the company UP uses for health insurance, evaluates the existing coverage plan and presents the University with a proposed increase, he said.
This year, that number was a 22 percent increase, but it was negotiated down to a figure between 9 and 10 percent. Last year, Kaiser proposed over a 20 percent increase and UP was able to bring it down to 12 percent.
"Part of the problem is caused by ourselves," Roy Heynderickx, vice president of financial affairs, said. "We have an aging workforce, which is driving the costs for UP."
Heynderickx explained that the large increase has been difficult for the University to handle.
"The cost of healthcare across all lines have definitely been increasing," he said.
According to Heynderickx, the rise in employee healthcare costs constitutes 0.5 percent of the 5.8 percent total rise in student tuition.
In the last 10 years, Kaiser's proposed increase has been above 20 percent three times and between 10 to 20 percent three times. Despite the rising values, the University has been able to maintain an increase around 10 to 12 percent after each negotiation.
"Some years, the 10 percent increase in one year is more difficult to manage than a 12 percent in another," Kuffner said.
The University's Kaiser healthcare plan currently covers 1,200 people. That figure includes spouses and other family members. Only 425 are actual employees of the University.
The University also offers a "share the savings" plan, in which the employee is encouraged to sign up with insurance through their spouse's benefits and not UP's. If the employee chooses that plan, a certain amount of money is directed to a savings plan, like a retirement fund each month. Currently, there are approximately 100 to 110 employees enrolled in this option.
The faculty and staff who are enrolled with Kaiser have had the chance to attend meetings the University has set up with Kaiser representatives to answer questions and comments.
"So far, feedback from the first week of meetings has been positive," Kuffner said. "Employees understand that healthcare is like a 800 pound gorilla - it's hard to control."
Kuffner and Heynderickx both said there are no plans to change health insurance providers at this time.
"We are celebrating 50 years with Kaiser," Kuffner said. "It has benefited [us] over time and we have a deep enrollment in Kaiser. It would be difficult to dislodge."
