Committee suggests changes for benefits

Unlike last year, the proposed changes have not stirred much controversy. Although the first round of the redesign of employee benefits provoked considerable controversy last spring, the lines of communication have remained surprisingly quiet with the latest round of recommendations. "Nobody's really griping," said Donna Arthur, chairperson of the A-3 Assembly, Penn's support-staff group. The second phase of employee benefits proposals, announced last week by the University's Benefits Advisory Committee, seeks to minimize benefit inequality between A-1 employees, who are generally administrators, and A-3 employees. The system also redesigns caps on lifetime maximum health insurance and monthly maximum disability benefits. The committee, comprised of administrators, faculty members and staff, recently released its recommendations in the ongoing process of restructuring employee benefits, proposing changes to health insurance, pension plans, long-term disability, mental-health benefits and long-term care insurance options. University President Judith Rodin, Executive Vice President John Fry and Interim Provost Michael Wachter will review the proposals next month. Committee Chairperson and Radiology Professor David Hackney said he expects the plan to be implemented in July. The committee was appointed last year to review the University's largely "unmanaged" benefits package and identify methods to contain the costs of the program, which had an annual 8.1 percent growth rate and comprised 12 percent of the University's budget, Associate Provost Barbara Lowery said. The Committee's first set of recommendations -- implemented last July -- called for a revamped benefits package that eliminated reduced summer work hours for current employees and graduate tuition benefits for spouses and dependents of employees by 2002, while changing some health care plan offerings. Additionally, the plan altered life insurance benefits, abandoning Penn's age-based system for a benefits package based on an employee's salary. At the time, employees protested the plan's tuition-benefits cut -- which was ultimately scratched from the proposal -- and more expensive health care options. This year, the committee tried to equalize access to benefits for A-1 and A-3 employees by eliminating the three-year waiting period that previously blocked all A-3 and certain A-1 employees from receiving coverage on the first day of employment. So far, according to Lowery, the complaints are few and far between this time around. As of last week, she had only received one complaint via the Internet from an employee concerned about mental-health benefits. In outlining the differences between A-1 and A-3 employees, Hackney noted that the "typically" white-collar A-1 employees get a monthly salary while blue-collar A-3 employees are paid weekly. The committee also recommended replacing the $2 million lifetime cap on health insurance benefits -- which combines both care received within the Penn network and out-of-network care -- with an unlimited in-network care benefit and a $1 million cap on out-of-network care. Although the cap may deter some employees from venturing outside of the in-network University health services, Hackney said the lowered out-of-network cap "can't make anybody come to" the Penn Health System. After examining the practices of peer institutions and accounting for inflation, the committee raised the employee income cap on maximum long-term disability payments from $100,000 to $150,000 -- increasing the maximum disability benefit from $5,000 to $7,500 paid out to employees each month. The committee also removed annual and lifetime dollar limits for psychiatric benefits in order to conform with regulations in the Mental Health Parity Act, passed by Congress last year. Hackney cited "cosmetic changes" to the current system, which will include replacing dollar limits with a restriction on the maximum number of day visits to mental health offices. In an age marked by the spiraling cost of long-term care, the committee recommended a long-term care option for employees. Although all costs of the plan would be paid by the individual employee, the University may secure a better rate by buying in bulk, Hackney said. "Many people spend all of their money on nursing home care and become impoverished," he noted. Seeking to lighten the administrative load of filing employee paperwork and records, the committee proposed a mandatory "cash-out" plan that would allow employees to receive a sum of money when they leave the University instead of waiting for decades for the "trivial amount of money," offered through their retirement plans, Hackney said. Hackney added that plans to review retirement plans and vision care benefits have been temporarily placed on the back burner. Division of Human Resources spokesperson Bruce Fisher declined to give a timetable for additional benefits redesign, adding that other phases "will be announced in a timely manner." Yet Arthur said employees have concrete questions about retirement benefits, which she hopes will be addressed at an open forum scheduled next week with Fry and other officials.