Penn State views providing its employees with a high-quality benefits package that is both competitive in the marketplace and provides some control over their spending as an integral component of attracting and retaining talented faculty and staff.
However, health care costs continue to escalate faster than consumer inflation, and it becomes more challenging to find ways to balance the amount the University can continue to spend, with keeping medical benefits competitive and affordable for employees.
The anticipated rise in medical costs — which grew by 6.2 percent for Penn State in 2015 and increased for employers by another 8 percent 2016, according to industry experts — has the University examining how best to manage the growing expense of providing high-quality medical benefits for its employees.
“Doing nothing to our benefit plan designs and cost sharing for 2017 could potentially cost the University $14 million,” said David Gray, senior vice president for Finance and Business, and chair of the Health Care Advisory Committee. “But we’re not going to simply push the cost on to employees. If we reasonably share the cost burden between the University and the employees, exhibit prudence and seek efficiencies without compromising quality of care, continue to educate and create understanding, and provide the tools and resources we all need to create awareness and better manage our health, together we can reasonably manage the increase below the anticipated market trend.”
In April 2016, the Health Care Advisory Committee (HCAC) considered options for Penn State’s 2017 medical benefits plan design and cost sharing. Recommendations were shared for consideration and feedback with the Joint Committee on Insurance and Benefits, the Senate Committee for Faculty Benefits, and the President’s Council for consideration, and will be shared with the University Staff Advisory Council later this month.
“The recommendations put forth by the HCAC included recognition and consideration of the ‘Principles for the Design of Penn State Health Care Plans,’ which was approved by the Faculty Senate in March, as well as the principle of fostering and promoting a culture of health, which is a priority in the University’s 2016-2020 strategic plan,” Gray said. “This principle calls for plan features and programs that encourage a healthy community, promote healthy choices and activities, and support the consistent and effective management of health risks.”
The University believes it is well-positioned to play an integral role in achieving a healthy community by infusing health into everyday operations and business practices.
For more on how Penn State plans to encourage a healthy community, click this link to Culture of Health.