Regular session – October 8, 2007 – 3:30 p.m. – Jacobson Faculty Hall 102
office: Jacobson Faculty Hall 206 phone: 325-6789
e-mail: firstname.lastname@example.org web site: http://www.ou.edu/admin/facsen/
The Faculty Senate was called to order by Professor Steve Bradford, Chair.
PRESENT: Albert, Apanasov, Bass, D. Bemben, M. Bemben, Benson, Bradford, Brown, Callard, Clark, Conlon, Croft, Edy, Eodice, Forman, Franklin, Ge, Grasse, Greene, Kent, Kershen, Knapp, Livesey, Magnusson, Marcus-Mendoza, Miranda, Morrissey, Moses, Nelson, Reeder, Roche, Rogers, Sadler, Schmidt, Skeeters, Tan, Trafalis, Trytten, Vitt, Warnken, Weaver
Provost's office representative: Mergler
ISA representatives: Cook
ABSENT: Basic, Brule, Halterman, Horn, James, McDonald, Radhakrishnan, Rambo, Riggs, Russell, Striz, Verma
TABLE OF CONTENTS
2007-08 Campus Departmental Review Panel
Faculty development awards
Search committee, Architecture dean
UOSA resolution on climate change
The Faculty Senate Journal for the regular session of September 8, 2007 was approved.
The following faculty will
serve on the 2007-08 Campus Departmental Review Panel: Paula Conlon (Music), Pamela Genova (Modern
Languages, Literatures & Linguistics),
The Faculty Senate sent out the call for proposals for the faculty development awards on September 28. Proposals are due to the Faculty Senate office on October 31. Up to $2500 is awarded. Further information is available at http://www.ou.edu/admin/facsen/facdev.htm.
The Senate Executive
Committee nominated three faculty members for the at-large position on the
The Faculty Senate approved the following Committee on Committees’ nominations to fill vacancies on university and campus councils, committees and boards:
Academic Programs Council -- 2007-10 term of Marjorie Callahan: Craig Hofford (Health & Exercise Science)
Athletics Council -- 2006-09 term of Ben Alpers: Sridhar Radhakrishnan (Computer Science)
Faculty Compensation Committee -- 2005-08 term of Karl Sievers: Lyn Cramer (Musical Theatre)
Faculty Compensation Committee -- 2005-08 term of Heidi Mau: Allison Palmer (Art)
Research Council [other] -- 2006-09 term of Traci Carte, as of 1/08: Suliman Hawamdeh (Library & Info. Studies)
ROTC Advisory Committee -- 2005-08 term of David Carnevale: Craig Russell (Management)
Shared Leave Committee -- 2006-09 term of Nancy Barry: Lance Drege (Music)
Prof. Bradford explained that Human Resources Director Julius Hilburn and Assistant Director Nick Kelly would give a presentation on the health care committee report (see Contribution Strategy and Health Insurance Options Committee Final Report). Prof. Bradford will report on the Senate’s discussion to President Boren.
Mr. Hilburn noted that he was a member of the health care committee appointed by President Boren. The committee was created in response to a recommendation by the Employment Benefits Committee and started meeting in February 2007. The members wanted to make sure that what we offered was competitive and geared toward improving the health insurance options that were available to all OU employees. With what is happening nationally with health care, trying to solve the problems that impact us is not easy to do. The committee issued its final report September 6 and shared the report with the campus community. President Boren is considering the report, weighing the feedback from the campus community, and will make a recommendation at the October regents’ meeting. It is not a done deal yet. The president wants to get as much feedback as possible. It is critical that we have a plan in place for 2008; our annual enrollment process will begin the first part of November. The committee looked at current plan designs, how we fund our health insurance benefits, our competitive position, and the possible effects that wellness incentives might have. The committee was charged with analyzing the data and coming up with recommendations that would best meet the needs of a very diverse university community. Some guiding principles were established, for example, that health care should be affordable (we should not create a hardship for lower-paid employees) and that benefits should be comprehensive and competitive.
Several questions were identified at the start of the process. One was how competitive our benefits are. Key findings from a comprehensive benchmarking study showed that our plan designs and options were pretty common and competitive. We spend as much on benefits as the other institutions, but how we spend is markedly different. We spend significantly more on employee benefits and significantly less on dependent coverage. We also are unique in paying 100 percent of the premium for employee medical and dental and retiree medical. Among the comparison group, OU and OSU are the only ones who pay nothing toward dependent coverage. The average employee contribution for PPO coverage for the peer group is $68/month. This year, our rate for family coverage is $778/month; the peer rate is $380/month. A follow-up question was whether OU’s current program was creating disadvantages in attracting and retaining faculty and staff, particularly those who have dependents requiring health insurance coverage. Only 25 percent of our participants have dependents enrolled in the university’s health insurance plans; the benchmark is about 50 percent. Since 2001, our family coverage cost has gone up 177 percent. Since 2003, the number of employees who cover dependents has dropped from about 1500 to 605. People have chosen to enroll dependents in other plans or have chosen to go without insurance. The high cost of dependent insurance is a factor in attracting new faculty and staff. Another question concerned the third-party administrator and how frequently OU should issue a request for proposal. It is in our best interest to go to the market frequently enough, every 3-4 years, to get the best value but not create too much disruption. The committee recommended that we should issue an RFP for the plan that will start in 2009. For 2008, the committee recommended that the HMO high option be eliminated. It is to most employees’ advantage to pay a lower premium and take the HMO low option. There is not enough additional value to make it worthwhile to continue the high option. Only about a hundred employees are enrolled in the high option. The committee considered whether to introduce a high deductible plan but thought the Aetna Health Fund provided a better value. As to the question of whether OU could realize savings by joining a coalition, Mr. Hilburn explained that one of the negatives of being in a coalition is we would have to agree with what is best for everyone. OU is big enough, with about 10,000 insurable lives, to generate economies of scale and define its own plan. Therefore, the committee recommended that we continue to be independent and have that flexibility. OSU has been in OSEEGIB, the state health plan, but will change in January 2008 to Blue Cross Blue Shield. Concerning the question of whether healthy behavior should be encouraged through incentives, the difficult issue is how to do it and what to do. We have some expertise on our campuses in designing wellness programs and understanding the investments that will make a return. Some things that we need to do immediately are to add some wellness features, in particular smoking cessation benefits, and to fund some health and wellness initiatives, such as weight loss and walking programs. The intent is to provide incentives, as opposed to penalties. Two of the committee members will head up the review of wellness initiatives: Professors Bob Dauffenbach and Gary Raskob (HSC).
Prof. M. Bemben said he hoped the committee would look at the expertise available on the Norman campus in the areas of health and wellness. Mr. Hilburn said the committee would reach out to the community on all three campuses. We already have initiatives. What is missing is that the initiatives are not tied to our health plan, and they are not coordinated across the campuses. Prof. Dauffenbach said the committee would welcome ideas.
Mr. Hilburn said the question that the committee spent the most time on was the contribution model(s) that should be used to determine premium contributions. The committee concluded that we needed to make a significant change in our structure to make us more attractive for covering dependents, which will improve our ability to attract and retain employees. Many of the dependents who remain in our plan tend to have higher experience. For OU rates to approach the benchmark, it will take additional university and employee contributions. A key consideration is affordability for lower paid employees. The recommendation for 2008 was for the university to increase funding by about $2 million and introduce moderate employee contributions. Our consultants modeled a lot of different contribution strategies. The difficult decision is who contributes and how much and where to draw the lines between the amount of contribution. At some universities, everyone pays the same thing. The committee settled on a 4-tier compensation-based structure, with some distinction in ability to pay. Mr. Hilburn distributed the report appendixes, including the contribution structure. One tier would be based on family size and income and would not require an employee contribution. Family coverage in that tier would cost $274, which is $500 less than the current rate. The other tiers would be based on OU compensation. At OU $42,000 is the median salary, $42,000-$59,999 represents the 50th-74th percentile, and $60,000 and above represents the top 25 percent of OU compensation. The rate for employee only for the PPO option would be $75/month for those with salaries at $60,000 and above. That figure was derived from the $68/month average in the benchmark organizations for 2007, adjusted for normal medical inflation. Mr. Hilburn introduced Prof. Darryl McCullough, chair of the Employment Benefits Committee and a member of the committee. Prof. Dauffenbach pointed out that employee premiums could be paid with pre-tax dollars, which would yield a lower net premium.
Prof. Bass said her sense was that more faculty would be in the top 25 percent of salary, and more staff would in the lower. She asked if the faculty would be subsidizing the staff with this system. Mr. Hilburn replied that that could be a conclusion. Another conclusion could be that employees with single coverage would be subsidizing families. However, the impact on a particular group, faculty or staff, was not a major consideration in the recommendations. Prof. Forman remarked that the proposed premium would be a $900/year increase for anyone making more than $60,000 a year. He said he had always valued the benefit of free employee health care. He noted that the university has been paying the retiree health care premium. The report indicated that employees who were already retired or were eligible to retire would not have to pay a premium. He asked whether those who were not yet eligible would lose a significant portion of their retire health benefit. Mr. Hilburn answered that the committee talked a lot about retiree medical. People who are retired or eligible to retiree will have no change in their benefits. For others, the committee recommended further study on where to draw the line. People who are approaching retirement eligibility, who have a significant investment in time, will have no change. The committee will continue to meet on this issue, but the thinking seems to be that eligibility for retiree medical in the future should be a function of length of service at OU.
Prof. Tan commented on the difference between employee/spouse and employee/children premiums. Mr. Hilburn replied that in terms of competitive data, our rate for children was similar, but our rate for spouses was very different. In the past, the rates have been based on experience, that is, how much people use the health care system. Typically, children are cheaper to cover than spouses, so their rates in most insurance plans are cheaper. The committee thought the cost to cover a spouse in our plan was so much higher that it was a barrier for employees who needed to cover a spouse. Your view of the cost depends on where you sit. The committee wanted to balance what we charge individuals and what we charge for dependents and wanted to be competitive with other universities. We should not look so different that it creates barriers to hiring or keeping people.
Prof. Edy said the tiers break apart assistant and associate professors and would generate compression issues. Median salary for assistant professors is $55,000; for associate professors it is $65,000. Prof. Hilburn said that one of the inescapable things about line drawing is that people fall on each side. The committee tried to balance the tiers in a way that there were no drastic differences from tier to tier or additional hardships as individuals moved from one to another. Percent of pay was even discussed as an option. The proposed model was viewed as a reasonable way to address some of the differences. The committee did not focus on particular groups but on where people fit in overall compensation. Prof. Edy asked whether the contributions would continue to rise. Mr. Hilburn said that for the future, the expectation is to maintain a ratio of what OU spends and what the employee spends, with the idea that we would all benefit if we have good experience and rates are slow. On the other hand, any increasing costs would be shared as well. The recommended overall ratio is about 90 percent paid by the University and 10 percent paid by the employee. We would try to maintain those same ratios going forward. It could happen that health care costs could go up and no money would be available for raises; however, a salary program is one of the president’s highest priorities.
Prof. Kershen asked whether the changes would take place in January 2008 or 2009. Mr. Hilburn said the recommended implementation would be January 2008 so we could make significant movement toward the benchmarks in the shortest time possible. The president has to decide whether to accept the recommendations in part or in whole and implement them immediately or in phases. Prof. Kershen asked whether having employees pay some of the premium might affect our rate structure in terms of usage experience. In other words, was the idea that people would think more about their health if they had to pay a little? Mr. Hilburn said there was some discussion that there should be more about consumerism, but it was not a major factor in the recommendations. Prof. Dauffenbach added that we should find ways to make ourselves more insurable through consumerism, accountability, and wellness. The flight of families from our program has set in motion a vicious cycle of worse experience ratings and higher costs. When we bring families back in, some of the costs may go down. We need to consider this program for what it means to OU in the coming years.
Prof. Bass asked whether the proposed rates for dependents were competitive enough that people would leave outside plans and come back to OU. Mr. Hilburn said the weighted average family premium was at the benchmark, with the employee paying about 32 percent. Prof. Bass noted that to attract healthier children and spouses back, the rates needed to be competitive at the high end. Mr. Hilburn said there was a reduction in each tier and a significant movement in the right direction to get families back into our plan. Prof. Greene said he had pulled his family out because it saved $200 a month. With the new plan, he will put his family back in because it will be cheaper.
Prof. Marcus-Mendoza said she thought the recommendation was the right thing to do to make sure everyone had access to coverage. As a department chair, her job would be easier. We do not have enough leverage without the people who left. Even though she and her husband would be paying more, what she pays out of pocket may go down. Mr. Hilburn explained that the actuary estimated that our plan experience is probably four percent higher than if we had a normal participation of families. When applied to a $50 million annual health care budget, that represents a $2 million difference. Prof. Rogers asked if the committee had accounted for the fact that married employees may switch who covers the children. Mr. Hilburn said he would expect that the employee in the lower tier would enroll the children. When we send out the RFP for 2009, we will ask for a special rate for dual-career families.
Prof. Livesey commented that there is value to rejoining the group policy because there is a certain security that individual policies do not have. Most insurance companies drop people who have a catastrophic illness. He asked whether OU could combine the pools of employee and spouse to bring the experience down. Mr. Hilburn said one way to bring it down was for OU to pay part of the premium for the spouse, which is what is in the proposal. The cost of the spouse is reduced for all tiers, although it still is about $100 more a month than the cost for covering children.
Prof. Forman remarked that subsidizing family rates makes OU more attractive to employees who have families, but he is concerned about the higher cost for people who have single coverage. Because of the cost to them and the university’s $2 million contribution, we will not be in a position to offer competitive salaries to people that we might want to hire. Prof. Moses agreed, saying we are encouraging one group at the expense of another. Mr. Hilburn said the committee talked a lot about that. It is easy to conclude that we are asking one group to subsidize another group. The other way to look at it is what is competitive. What do people, even single people, experience when they are looking at other employers? There is almost always the requirement that they have to make a contribution toward their own coverage. We are not asking them to pay more than what is common. If we spend too much in one area, then it reduces our ability to be competitive in all areas. Prof. Moses replied that people look at the total package and will see that salaries did not change but benefit costs went up. People who are single and make wise health choices are subsidizing people who made poor choices as well as subsidizing health incentive programs. In the long run, what we are really after is improving the health of employees because that will determine the costs. He asked whether we could establish an endowment for health care that people could contribute to. Mr. Hilburn said the committee had no significant discussion about that issue, except to suggest that one way to solve the problem would be to send the president out on a capital campaign.
Prof. Schmidt pointed out that insurance is a shared risk. Young, healthy people subsidize older people, but someday the former may be using the benefits. The proposed reduction in premiums for families is a big difference. Prof. Conlon said a lot of new hires in her school fall in the younger bracket. The proposed plan should help retain them. We need children in the plan to offset the usage by older people. Mr. Hilburn said the president had gotten feedback from the Staff Senates, Budget Council, and various other committees. The Employment Benefits Committee supported the recommendations. President Boren has some tough choices to make. He has commented that he really needed to focus on the timing and the pace of change and find a balance that dealt with ability to pay. He will make a recommendation to the OU Regents at the October meeting.
Mr. Nick Kelly announced that the annual benefits enrollment would be done online November 5-18. The benefits fair will be held on October 30 and will include some wellness components. A new long-term care plan will be open to employees without having to medically qualify. Under the current plan, those who do not enroll at the initial time of employment have to medically qualify. Rates for the new plan are age-related. Spouses are eligible but would have to medically qualify.
Prof. Bradford told the senators that they could send him an email if they had any other thoughts on the report that he should include in what he sends to the president.
The Chair of the ECC, Prof.
Deborah Dalton (Interdisciplinary Perspectives on the Environment), said she
would be back with the students at the next meeting to talk about what is going
on at OU related to environment and climate change. She handed out the bill passed by both the
Undergraduate Student Congress and Graduate Student Senate, the text of the
American College & University Presidents Climate Commitment that President
Boren signed, and an explanation of the Presidents Climate Commitment
(available from the Faculty Senate office).
The students have asked that the Faculty Senate simply endorse the bill
that has passed both student houses. The
bill operates within the framework of the Presidents Climate Commitment. Prof. Vitt asked whether OU could purchase 15
percent of its electricity from renewable energy.
A discussion of issues for 2007-08 was postponed.
The meeting adjourned at 4:55 p.m. The next regular session of the Faculty Senate will be held at on Monday, November 12, 2007, in Jacobson Faculty Hall 102.
Sonya Fallgatter, Administrative Coordinator
Roberta Magnusson, Secretary