Six Guiding Principles for Medical Benefits Plan Design
A six-point plan of guiding principles for the design of Penn State’s health care plans was submitted by the Senate Committee on Faculty Benefits and approved in March 2016 by the University Faculty Senate.
These recommendations were developed by a subcommittee of members from three University committees, with response from the full-membership of these committees: the University Senate Committee on Faculty Benefits, the University Joint Committee on Insurance and Benefits and the President’s Health Care Advisory Committee.
The six guiding principles set forth by the advisory and consultative report include:
A principle of choice for employees in health care plans should guide the annual design of plans with consideration of the levels of premium contributions and out-of-pocket contributions shared with employees.
2) Cost Sharing
A principle for overall cost sharing of 75 percent University and 25 percent employee should guide the determination of contributions to meet the annual full-cost of healthcare. (University cost, plus employee premiums, plus employee out-of-pocket costs).
3) Affordability and Equity
This principle suggests that various plan design features might provide financial support for employees below the median salary. Such features might include a more modest premium, decreasing deductibles as income decreases, lower coinsurance and out-of-pocket maximums, or incrementally higher seed money in the Health Savings Account or Flexible Spending Account as income decreases from the median.
4) Informed Use
A principle of informed use should guide the implementation of a data warehouse and cost transparency tools that provide the following: a. Analytic capabilities for conducting secure and anonymous studies of University employee healthcare use and provider costs. This will allow better design of future healthcare plans, contract terms and vendor management; and, b. Cost transparency and analysis tools to aid members in better understanding the costs and quality of care received, and so plan their utilization of healthcare services.
5) Quality, Accessibility, Transparency and Cost Effectiveness
The principles of quality, accessibility, transparency and cost effectiveness should guide the negotiation and management of contracts for healthcare services.
A principle of fostering and promoting a culture of health, which is included as a thematic priority in the University’s 2016-2020 strategic plan, should guide the design of plan features and programs that promote healthy choices and activities, shared efforts to establish tobacco-free campuses and support the consistent and effective management of health risks.