Health care changes ahead

Open enrollment, the annual period when Harvard employees can make changes to their benefit plans, begins Oct. 27. This year, faculty and staff will find a few important changes to their health care offerings, including a new vision care plan, free preventive health services, and increases in emergency room and office visit co-payments.

Employees have until Nov. 9 to make and review changes to their medical and dental coverage or open a flexible spending account, in which money can be set aside on a pretax basis to cover certain health or dependent-care costs. (Visit HARVie for more information or to make changes, which will be effective Jan. 1, 2012.)

But — as Harvard Human Resources (HHR) will be emphasizing over the next few weeks — it’s important that employees review their benefits even if they don’t plan on making a switch, because some changes to benefits will soon go into effect.

For starters, the University will offer a vision care plan for the first time. The Davis Vision plan — $5.43 a month for individuals and $12.49 a month for families — will cover vision exams, glasses, and contact lenses with co-payments.

Most Harvard employees* will also face a few increases in costs to their health care. Co-payments for visits to the doctor will now be $20, a $5 increase. Emergency room co-payments will rise from $40 to $75, although they’ll still be waived if the patient is admitted.

Those in Harvard’s Point of Service plans or Preferred Provider Organization plan  — an option for out-of-state employees only — will see an increase in their out-of-network deductibles and out-of-pocket maximums. Those changes, however, will only affect the relatively small number of employees who opt for coverage outside Harvard’s network of providers.

“Three-quarters of our employees are enrolled in our HMO plans, in part because the HMO plans are so comprehensive and include so many top providers,” said Rita Moore, HHR’s director of benefits and human resources systems. “A lot of people don’t feel the need to go out of network.”

By increasing co-pays and deductibles, Harvard has kept medical plan costs lower across the board. Overall, the increases are smaller than the national average. A recently released study by the Kaiser Family Foundation and the Health Research & Educational Trust shows that health care premiums have risen 8 percent for individuals and 9 percent for families in 2011. By contrast, Harvard plan rates for active employees are increasing by 3 to 5 percent, and dental plan rates are decreasing by more than 4 percent.

Still, the University acknowledges that the costs of health care can be difficult to manage for low-income families.

“If we’ve got a lower-wage earner who has substantial out-of-pocket co-pays, they may be able to be reimbursed,” Moore said, referring to Harvard’s Medical Co-payment Reimbursement Program.

In another move to offset employees’ out-of-pocket costs, preventive care will now be free to members of Harvard’s plans for active employees, a result of last year’s federal health care reform. The 2010 Patient Protection and Affordable Care Act mandates that fully insured plans offer annual exams, OB/GYN and maternity visits, routine pediatric visits, and select other services without co-pay.

As health care costs rise rapidly around the country, Harvard has taken several administrative steps in recent years to help slow the growth of ballooning health expenditures. The University has consolidated the number of plans it offers to leverage its buying power to keep costs low, and has moved to a pharmacy benefit manager to help manage costs.

The University spends more than $420 million a year on benefits, and health care is roughly 40 percent of those costs, according to Marilyn Hausammann, vice president for HHR.

Benefits are a highly valued asset to Harvard employees, Moore said, and the University is mindful of keeping its benefits competitive relative to both other higher education institutions and local employers.

“We’re very careful in trying to ensure our plans are a good value to employees and competitive in the marketplace,” Moore said. “At the same time, we’re trying to balance the financial pressures on the institution with the interests of our employees. We’re managing costs not just for this year but for future years.”

The distribution of health premium costs will remain the same. Harvard currently pays between 75 and 85 percent of employees’ premium costs for active medical plans and 50 to 100 percent of retiree coverage.

*Certain benefits changes for 2012 apply to faculty, non-union staff members, and members of SEIU, Local 26, ATC, and HUSPMGU. Because the University is still negotiating with HUCTW and HUPA over these changes, members of these unions should refer to HARVie for information about their benefits.