Update on proposals for UC’s 2014 medical plans
As part of its annual review of employee benefits, this year the University of California is requesting bids for its medical plans.
Michael Baptista, executive director of systemwide Benefits Programs and Strategy, said UC is soliciting proposals from new and current medical plan vendors as part of a comprehensive review of UC’s health care offerings intended to both lower health care costs and provide for more distinctive choices.
Baptista said it will be mid-summer before UC will finalize the 2014 plans offered, and premiums will be announced prior to Open Enrollment this fall, but UC employees and retirees can count on a few things:
- UC will continue to offer a wide choice of plan types to meet the needs of faculty and staff.
- All UC medical plans will continue to offer comprehensive coverage and high quality medical care.
- Kaiser, Western Health Advantage and Optum, the mental health provider, will remain among the plans that are offered, since they were not part of the bid process.
UC decided against re-bidding the Kaiser and Western Health plans because they are unique products, and their costs are not likely to improve through a bid process, Baptista said.
Nor is UC re-bidding its mental health plan. Baptista said the university is generally pleased with Optum’s plan.
“More important, given the special patient-provider relationships that develop around mental health benefits, we want to avoid disruption for our employees and retirees,” Baptista said.
Employees will see a mix of options in next fall’s Open Enrollment, according to Baptista. For example, offerings could include Kaiser, Western Health, a tailored HMO, a PPO with a Health Reimbursement Account or a Health Savings Account, and UC Care, a new self-insured plan offering care that is provided by UC’s five nationally renowned medical centers.
HMO and PPO options
UC intends to offer an HMO plan similar to the Health Net Blue & Gold plan. Blue & Gold offers a tailored network of the most cost-efficient providers and plan members may receive health care at all five UC medical centers. Members pay small copayments for office visits, hospital stays and other services.
The HMO also could be a tiered plan, in which members pay lower copays when they use doctors and hospitals in the select network and higher copays for providers in the plan’s larger network. In effect, said Baptista, it would be like having Blue & Gold’s narrow network and the full Health Net HMO network in one product.
UC sought bids for Lumenos-like plans that offer either a UC-funded HRA or an employee-funded Health Savings Account (HSA). These plans are designed to allow members to become better consumers in managing their health care needs.
There are advantages to each. In both cases, the plans would likely have low premiums and high deductibles, with the premium savings and HRA or HSA accounts used to cover some out-of-pocket costs.
The advantage of the health reimbursement account is that the university funds a reimbursement account to help cover a portion of the deductible. If you don’t use all of the HRA, the funds roll over to the next year, but if you leave the plan, any remaining money in the HRA returns to the university.
With the employee-funded health savings account, contributions are pre-tax, which lowers your taxable income and monies withdrawn for medical expenses are tax-free. All contributions and earnings from the account belong to you. So, if you leave UC employment or retire, the money goes with you and can be used to pay for future out-of-pocket medical expenses.
The university is also considering offering a new plan named UC Care, a university-funded medical plan that would include UC medical centers and doctors among its providers. It is most similar to Anthem Blue Cross PLUS in that it has tiered out-of-pocket costs: for Tier 1 (preferred providers, including UC providers) you would pay a small copayment; for Tier 2 (network doctors not in the preferred tier) and Tier 3 (out-of-network providers), you would pay higher co-insurance amounts.
An integral component of UC Care is a wellness program with incentives and rewards to promote healthy actions such as preventive care visits, online programs and campus wellness activities.
UC is also considering bids from specialty vendors who focus on a certain aspect of care, such as pharmacy benefits, wellness or disease management. If any of these vendors are selected, the benefits would be offered alongside the medical plan, not integrated within it. This is similar to the way UC’s current Optum mental health and StayWell wellness benefits are structured.
All bids are now in, and UC is in a confidential review and evaluation period. There is not likely to be any additional public information until mid-July, when the selection of plans is complete. Premium costs for employees will not be available until October, prior to Open Enrollment.