Purdue trustees approve medical plans for 2018

WEST LAFAYETTE, Ind. — Due to significantly increasing health care costs projected for 2018, Purdue faculty and staff will see an increase of 7 percent in medical plan premiums in 2018. However, a new incentive wellness plan focused on encouraging health awareness and engaging with a primary care provider also will be introduced in 2018, offering eligible employees the opportunity to earn additional health savings account and health reimbursement account contributions. The Purdue Board of Trustees on Friday (Aug. 4) approved the 2018 premiums, medical plans and wellness incentive plan. University costs under the plans also will increase by 7 percent.

The same three medical plan options with Anthem Blue Cross Blue Shield available in 2017 will be offered in 2018.

Background

For calendar year 2014, Purdue redesigned the medical plan offering and reduced total employer and employee medical costs by approximately $25 million. Given the substantial reduction in overall costs, the University added certain coverages (preventive dental, bariatric surgery and full autism coverage) in calendar years 2015 and 2016 to address the needs of Purdue employees and their families.

Total health care costs in calendar year 2014 were $155.2 million. For calendar year 2017, total health care costs are currently projected to be approximately $183 million, an 18 percent increase over the three-year period, and an 8 percent increase over calendar year 2016. A number of factors have contributed to the increase in total costs:

* The number of covered employees has increased 5.7 percent.

* Overall medical inflation has been approximately 6.5 percent annually.

* The additional coverages added, discussed above.

* The number of high-cost claims and chronic conditions within our covered population continues to increase; high-cost claims rose 21 percent in recent years and the cost of chronic conditions increased from 49.8 percent of total costs to 60 percent over that same time frame.

Historically, the University has borne approximately 70 percent of the overall costs, and employees have borne approximately 30 percent of the costs. Over the past three years, the University has consciously limited the increase in employee premiums, and the ratio of employer to employee costs has moved to approximately 74 percent employer / 26 percent employee.

2018 plan

For calendar year 2018, the University is projecting its total health care costs to increase to approximately $199 million, inclusive of over $3 million targeted to be spent by the University on various wellness initiatives.

Excluding this $3 million wellness investment, the health care cost projection represents an approximate 7 percent increase over projected 2017. As such, the 7 percent increase in both employer and employee premiums for 2018 will bring the employer annual contribution total in 2018 to $10,850 per employee, versus $10,140 for 2017.

Due to the trends and costs mentioned above, the University will introduce a wellness program with incentives to encourage employees and their dependents to be aware of their health risks and become more active in maintaining/improving their overall health. This campaign will encourage employees to engage with a primary care provider and work toward healthier choices. With 60 percent of Purdue’s total health care costs driven by behavior-based and chronic conditions, this initiative directly aligns employees to focus on prevention, awareness and healthier choices, hopefully resulting in lower costs (or at least lower increases) in the future.

Purdue will work closely with the new Center for Healthy Living vendor on the West Lafayette campus to coordinate all wellness programming. Human Resources also will continue to review the scope of services at both the Center for Healthy Living and the Purdue University Student Health Center to determine if there is potential to integrate or share services to bring greater cost efficiency across the entire campus population.

The Center for Healthy Living provides numerous health management and wellness offerings throughout the year at no cost to benefits-eligible faculty, staff and their spouses covered on a Purdue health plan.

Wellness programs are also available at the Indiana University-Purdue University Fort Wayne and Purdue University Northwest campuses.

More information will be shared in the weeks leading up to the open enrollment period of Oct. 23 through Nov. 10.

Source: Candace Shaffer, 765-496-0312, shaffe14@purdue.edu