Modeling Costs, Pushing Prevention

Editor's Note: Related Business Officer articles about the Independent Colleges and Universities Benefits Association appear in the July-August 2006 issue, "Battling Health Care Costs: Round Two," and in the September 2003 issue, "Coming Together to Cut Health Care Costs."

Dawn Peterson

Five years ago Rollins College joined the Independent Colleges and Universities Benefits Association, a consortium of 11 Florida institutions that currently covers more than 6,500 employees. One immediate benefit of joining ICUBA was better purchasing power that translated into lower premium rates for the college and our employees. While we experienced higher than normal claims this past year, requiring us to adjust premiums accordingly, for the previous four years, the college's premiums have been below national averages.

Three years ago, the consortium redesigned the health benefit to offer a consumer-directed health-care plan that gives participants discretion over how to spend an annual employer-provided allotment designated for health care. The plan includes individual health reimbursement accounts (HRAs) for each employee. Each institution in the consortium is free to offer different options for its employees with regard to premium strategy and employer funding levels of employee HRAs.

Spending Scenarios

A big part of our success in getting employees enrolled in this new consumer-directed model at Rollins has been an aggressive education campaign to help employees understand what the plan offers and how it works. In addition to group presentations, HR staff will meet with employees one-on-one to walk through a modeling program that staff designed to show employees what their out-of-pocket costs would be if, for instance, they had three doctor's visits, a dozen prescription co-pays, and one X-ray during the course of the year. We can show the spending scenario for each of the various deductible options offered, calculating an employee's premium, HRA allotment, and maximum out-of-pocket costs.

In total, 580 of the college's 660 employees are currently enrolled in one of our four plans. This year during our open enrollment period we moved about 50 percent of employees in our high-premium plan into a lower-premium, higher-deductible risk/reward plan for which we also fund the employee HRA at a higher rate. One thing we've found through this education process is that many employees tend to equate higher-premium plans with better coverage. When we actually sit down with employees and explain how the consumer-directed model and health reimbursement accounts work, they begin to understand that all our plans offer the same covered benefits and that this model allows them to better control their costs based on choices they make. We also emphasize another important point about the HRA—namely, that once employees meet a three-year vesting period, the account is portable if they leave Rollins.

All of our materials are available from our Web site, which also includes cost comparisons for all plans as well as health plan calculator tools.

Free for All

A key benefit of the consortium's plan includes 100 percent coverage for all preventive services for all covered employees and family members. These services include mammograms, bone mineral density screenings, colorectal cancer screenings, colonoscopies, glucose testing, lipid panels, EKG/ECG, pap test, prostate cancer screenings, and adult immunizations and well-child exams, among other services.

As a consortium, we've begun to amass data for each institution that includes employee demographics, claims costs, and use of services so that we have a better understanding of how individual institution populations compare to the whole. This allows participating institutions to see where they may need to spend more time in education efforts. One thing we learned about our employee population at Rollins is that, despite our aggressive education campaign promoting wellness, many younger workers, particularly male employees, are not taking full advantage of the preventive services offered. The implication is that we need to continue to push the message to employees that these services are free and could help prevent future illness.

For instance, for the 2006-2007 plan year, the percentage of Rollins employees below the recommended number of free preventive services was dramatically higher for all male categories:

• Males 20-39 are missing out on 69 percent of services. 
• Males 40-49 are missing out on 57 percent of services.
• Males 50-64 are missing out on 56 percent of services.
• Females 20-39 are missing out on 21 percent of services.
• Females 40-49 are missing out on 46 percent of services.
• Females 50-64 are missing out on 35 percent of services.

Comparing Co-Pays

Another education challenge we've faced involves our prescription drug benefit. In addition to full coverage of preventive services, all plans offered through Rollins include the same prescription drug co-pay rates. We've made a big push to try to help employees understand that name-brand drugs are not necessarily better for them. We explain that many advertised drugs have a generic component or formulary in the same family and provide Web sites for employees to cross-check the chemical composition of name-brand prescriptions with generics. We emphasize that not only does choosing available generic options help save the plan money, but that doing so can also save the employee significant out-of-pocket expense, since generic co-pays require a $10 co-pay versus a $55 co-pay for name-brand drugs.

Collective Costs

At Rollins, we believe that helping employees understand the true cost of health care includes showing them how their individual costs are impacted by the health and decisions of the group as a whole. Our presentations include sharing with employees information about what the college pays versus employee costs, total claims costs for the year and how these factor into premium adjustments, total prescription drug costs, and so forth. This bigger-picture breakdown gives employees a better sense of how their own choices impact overall costs for the college and their own annual premiums, and it underscores the important role they can play in helping to keep health-care costs under control.

Maria J. Martinez is assistant vice president of human resources and risk management, and Dawn Peterson is assistant director of benefits, at Rollins College. E-mail: mmartinez@rollins.edu; dpeterson@rollins.edu.