OUS HW committee proposes changes to PEBB
Senate Bill 242 created an opportunity for OUS to look at alternatives to PEBB. David Hansen, SBA and Phil Lesch, PSU-AAUP Executive Director were voting members of the committee that worked for over one year with health benefits consultant Gallagher Benefit Services to evaluate PEBB and our benefit programs. The committee's final draft report recommends sweeping changes to the purchase and management of health care benefits for the 13,500 OUS employees in the 2012 $206,000,000 program.
Draft Version of the Report is here.
Information Session About Report
Monday October 20 in the Vanport Room in Smith
10am to 1130am and 1230 to 200pm.
Committee Recommendations:
Although committee members’ perspectives varied on some specific health insurance issues, they
agreed:
• That there is interest in changing OUS’ participation in PEBB, but not complete agreement to
separate from PEBB at this time;
• OUS’ representation in decision-making needs to be strengthened at PEBB both with the Board
and at operations levels, but if that is unachievable to meet member needs, OUS separation
from PEBB would be necessary;
• A benefits contribution structure based on actuarially determined price tiers or converted to
single defined contribution amount would not be endorsed by all members;
• OUS’ long-standing subsidization of the insurance pool should be reduced based on OUS’ costs
and contribution rates for better control of benefits costs that relate to student tuition for
Oregonians; and
• Special needs such as adequacy of out-of-area coverage need to be further addressed for OUS
employees.
Recommendations
Improving health insurance access, information, and services for OUS employees emerged as an early recommendation of the committee. As financial analyses were completed, consideration broadened to include cost control methods, the impact of benefits costs on student tuition and total compensation, and how to ensure that the greatest possible value is received for each dollar spent on health insurance.
Although the committee was not charged to evaluate OUS’ role in the overall healthcare transformation taking place in Oregon, its influence was recognized by the committee and factored into the recommendations. There is concern among committee members that leaving PEBB would not be supported by the governor. However, except for the governor’s strong support for keeping OUS and state employees together during the health care transformation, some committee members feel responsible to look for other alternatives. Others hold the view that OUS should not opt out because of impact on total health care strategies that are yet to be realized. The general agreement to stay in PEBB if sufficient progress is made to recognize and address OUS’ needs acknowledges the governor’s agenda and goals for healthcare reform.
Although the committee expressed different opinions about the advisability of establishing an alternate OUS health insurance program versus staying with PEBB, there was strong agreement that a benefits council or labor-management work group should be formed to carry forward the committee’s
recommendations.
Recommendation #1. Establishment of an OUS Benefits Council /PEBB Work group
The committee’s first recommendation is to seek formal representation and authority for an OUS
benefits council or labor-management work group responsible to implement the committee’s current
Value for Cost recommendations, and on an ongoing basis, directly and regularly advocate on behalf of university employees’ within PEBB. Member qualifications and terms, scope, authority, and governance would be incorporated into a formal charge and charter. This benefits council would have considerable autonomy in dispute resolution and campus benefit administration for OUS. It would report activities and updates as regular report item of PEBB board meetings; and would be in regular communication with PEBB staff. In order to improve communications and to begin to address the issues contained in Recommendation #2, the committee recommends the establishment of a labor-management benefits council that would have the ability to interact with PEBB with the requisite authority, through either the legislative or executive branch, to redress OUS’ issues.
Recommendation #2. Establishment of an OUS Benefits Council /PEBB Work group
The following changes are proposed to mutually benefit OUS and PEBB. Without these changes, the
likelihood of PEBB providing value commensurate with the cost of OUS’ participation is slim. The
substantive changes OUS is seeking include, but may not be limited to the following:
A Replacing PEBB’s Health Engagement Model (HEM) with an alternative employee engagement
model is a priority for OUS. The university system can address health improvement for its
employees provided that we have health status information specific to university system
employees rather than the entire PEBB population. The 2010 and 2011 claims data illustrates
significant differences, from which it can be reasonably assumed that emphasis is needed on
different patterns of health status than PEBB uses for the general population.
OUS proposes to establish its own member engagement and advocacy program. A contracted
health advocacy service would be hired to:
• Receive utilization data and provide direct claims analysis to identify OUS- specific health
improvement needs and progress;
• To replace HEM and PEBB communications for OUS employees with the understanding that
employee engagement is the responsibility and goal of OUS as an employer interested in the
health, welfare and overall employee relations with the people who are critical to the goals
and mission of the public university system. In 2011, both the implementation and
substance of PEBB’s HEM undershot any goal to create employee engagement, and OUS’
2012 Employee Benefits Survey showed PEBB and its administrators to be runners up in providing benefits and health information. Employees expressed a clear preference for
information from their health care providers and campus benefits offices.
• To improve OUS member assistance in provider selection; understanding fees and cost of
provider services, and to access information sufficient for informed health care
consumerism; and
• To assist OUS employees in navigating the PEBB health insurance program, OUS proposes that this contract and services would be funded by PEBB as a value proposition to OUS, compensating the provider(s) selected through a formal RFP process that may include PEBB representation. PEBB would authorize and facilitate direct claims reporting to the advocacy program provider(s), following HIPAA guidelines and limitations, for the entire OUS population to the employee advocacy service to support OUS- specific wellness and health improvement plans and communications applicable to the public universities’ population and health improvement needs.
B. Contribution Rates. OUS needs the ability to establish a unique composite rate based on its
own employee costs to support competitiveness in higher education employment and
recruitment. OUS additionally proposes that PEBB adopt a consumer-directed health plan
(CDHP) option for use by university system employees for whom OUS would provide health
savings and/or health reimbursement accounts.
C. Worldwide Coverage. Blanket approval is requested for OUS to contract for other health
coverage under ORS 243.215xiii for rural, national and international coverage, with PEBB funding
offsets sufficient to provide benefits equal to the cost of the current third party administrator’s
out-of-area-network providers. The intent is to eliminate the current post hoc reimbursement of
employee-paid charges incurred when they travel to or are assigned outside the local PEBB
provider network. History supports this model: In 2000 PEBB engaged Regence Blue Cross/Blue
Shield to provide a travel plan that employees could transfer into when traveling to give them
“Blue Card” recognition and coverage. The mid-year plan change was effective until the next
open enrollment period.
D. Enrollment and Payment Management Systems. Improve and update PEBB enrollment/payment
processes to more closely operate as OUS would otherwise contract with a third party
administrator for full enrollment management and payment services. The PEBBdotBENEFITS
(PDB) system was designed for DAS’ HRIS (PPDB) and the Oregon State Payroll System (OSPS)
and is not adequately inter-operable with OUS’ Banner FIS/HRIS. PDB requires extensive manual
processing, and does not transmit or reconcile vendor payments. The design of PDB creates
operational and accuracy problems that would not be accepted from a third party administrator.
For OUS, the PDB system is a workload-intense bottleneck that should be redesigned or
replaced. The university system has conducted a preliminary study of an alternative to PDB, and
has determined that OUS systems and redeployed staffing resources are sufficient to manage
online enrollment, reporting, and payments without the complications created by PEBB’s system.
E. Dedicated PEBB staff for OUS. Increase PEBB staffing and dedicate that staffing to OUS in a
segregated service group to improve responsiveness to employer requests; to absorb their new
workload associated with overall health care transformation; and to improve quality control to
reduce data and report errors. PEBB should assign at least one internal staff member dedicated
to the Oregon University System and available to university benefits and payroll officers, events
such as campus meetings and benefit fairs, ombudsman services for members, and coordination
with OUS’ benefits council for health and welfare plans.
F. Practice and Policy Changes. Other desired improvements in services to the university system
were identified in the course of the committee’s work, including:
• Pharmacy. Direct third party administrators, insurers, and providers to override pharmacy
maximum fill quantities for OUS employees who are travelling or relocating out of the
country to perform university system work. OUS employees encounter difficulty in refilling
maintenance medications in locations where mail delivery and pharmacies are unreliably
available.
• Flexible Spending Accounts. Reimburse all forfeited Flexible Spending Accounts monies
(dependent and health care qualifying expenses) to OUS retroactive to January 1, 2012, as a
credit against the vendor’s administration fees. Administrative fees were passed from PEBB
to OUS in 2012 without any offsetting forfeiture account balances that PEBB retains.
• Tele- health Expansion. Develop telephonic or online tele- health services for employees
working in or travelling to rural counties and national/international localities for OUS
employees. The Providence Health eXpress online service, or similar type program of PEBB’s
third party administrator, should be provided in La Grande and Klamath Falls, where rural
access to providers requires time loss and cost for travel, and where the Rural Subsidy cost
support was revoked in 2011.
• Fitness Incentive. Subsidize employees’ use of university recreation centers, based on
university-reported utilization of three or more sessions per week, up to the cost incentive
provided for participation in Weight Watchers. Use of university fitness centers and other
wellness programs were noted by nearly 10% of participants who provided comments to the
2012 Employee Benefits Survey, indicating an area where PEBB and OUS could be successful
in health status improvements and maintenance that are based on employee interest and input.
Recommendation #3: Normalize OUS Costs and Contribution Rates
OUS’ longstanding subsidization of the PEBB insurance pool should be reduced based on OUS’ costs and contribution rates for better control of benefit costs. With reduced state funding the majority of these costs are now being borne by tuition, thus impacting affordability and the achievement of the statewide educational goals contained in ORS 351.009.
Questions? Come to the Vanport Room on Monday October 22 10-1130 or 1230-200.