UNM, employees split insurance hike

news@dailylobo.com

Even though UNM employees’ health insurance premium costs have increased, employees earning less than $50,000 per year won’t pay for the full amount of the increase out of pocket.

Employees saw an 8.5 percent hike in insurance premium costs for fiscal year 2013, which began on July 1. But UNM changed its salary-tier contribution schedule, which lists the ratio of premium costs covered by the University to costs covered by employees. The University covers employees’ costs on a sliding scale based on employee salaries.

According to the contribution schedule for FY 2012, UNM contributed 80 percent of premium costs for full-time employees who earned less than $25,000 per year, 70 percent of premium costs for those who earned between $25,000 and $35,000, and 60 percent for full-time employees who made more than $35,000.

In FY 2013, UNM contributes 80 percent of premium costs for full-time employees who earn less than $35,000 per year, which is the maximum percentage allowed by the State of New Mexico. UNM covers 70 percent of premium costs for employees who earn between $35,000 and $50,000 and 60 percent of premium costs for employees who earn more than $50,000 per year.

UNM is self-insured, which means that the University is the policy vendor. The University contracts with Lovelace and Presbyterian hospitals to provide networks and process insurance claims.

Employees earning more than $50,000 per year are unaffected by the change in salary tier contribution and will pay for the full 8.5 percent increase out of pocket.

But employees in lower income brackets will in some instances pay less in out of pocket costs for this fiscal year despite the 8.5 percent increase. For example, a single, full-time employee earning between $25,000 and $35,000 on the Presbyterian plan paid $114 in monthly costs last year. This year, employees who fall into that category pay $82.40 because all employees who earn less than $35,000 are grouped into the lowest income bracket and have 80 percent of their premium costs paid for.

Vice President of Human Resources Helen Gonzales said the University increased premium costs due to an increase in claim and premium costs that left the UNM Medical Plan with a substantial gap in funding.

“Premium increases and changes to plan design are the only available tools for meeting this challenge,” Gonzales said. “The salary tier contribution schedule, or ‘split,’ was adjusted. For employees impacted, UNM’s increased contributions minimized the premium increase.”

On June 28, the Supreme Court upheld the Affordable Care Act, a policy that aims to provide more affordable health care to U.S. citizens and mandates that health insurance companies can no longer discriminate against people with pre-existing conditions or implement coverage caps on insurance costs.

The increase in coverage led to an increase in premium costs across the nation to ensure that insurance companies have adequate funding to cover the increased health care costs.