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Employee costs for health care plans to decrease in 1995
STANFORD -- Nearly all Stanford employees will contribute less for the costs of their health care plans in 1995 than they did this year, according to James Franklin, director of total compensation.
The university was able to negotiate lower rates for all health plans, Franklin said, because of good claims experience, moderating medical inflation and competitive pressures among Stanford's health plans.
“Stanford employees are knowledgeable medical consumers, both individually and collectively, and that gives us good negotiating leverage,” Franklin said.
The reductions at Stanford, which has more than 12,000 employees and retirees eligible for benefits, are part of a statewide trend this year, with a number of major companies able to negotiate lower rates. Franklin said, however, that Stanford's price decreases are exceptional.
He cautioned that the drop in rates this year is a result of unusual circumstances and it is unlikely that Stanford employee costs will be lower again in 1996.
Stanford negotiated the largest rate reduction for 1995 with Kaiser, making it once again the lowest cost plan for employees. Though the other plans - Take Care, Health Net and Blue Shield - did not reduce their costs as substantially as Kaiser, the university has adjusted its contribution formula so that employees will pay less no matter which plan they choose, Franklin said. The share of medical costs that Stanford pays each year for employees is based on the rates for the lowest cost plan.
In 1993 and 1994, Stanford had contributed 90 percent of the cost of the lowest-cost plan for employee-only coverage and 75 percent of the lowest-cost plan for all other levels of coverage for non-USW employees. For 1995 only, the university will pay 94 percent of the Kaiser rate for employee-only coverage and 79 percent of Kaiser's rate for all other levels of coverage for non-USW employees.
Non-USW employees also receive other university contributions, Choice Dollars, that they may apply to medical costs, so individual costs vary. (Choice Dollars are university money that employees can use to pay for benefits or take as cash.) Choice Dollars also will be increased for 1995. The new effect of lower rates, an increased contribution formula and more Choice Dollars will be a zero-cost employee-only Kaiser rate for 1995.
“We are pleased to offer a no-cost option for individuals in 1995,” Franklin said, but he added that it is likely to be only a one-year phenomenon.
Workbooks with complete information about the health plan rates and enrollment materials for flexible benefits are scheduled to be mailed to employees' home addresses by Nov. 1.
The Open Enrollment period for university benefits begins Nov. 1 and runs through midnight Nov. 23, the day before Thanksgiving.
A Benefits Help Line will be available beginning Oct. 28 to assist employees with specific questions: 3-FLEX (723-3539).
In addition, six open enrollment information meetings have
Benefits Fairs, at which vendors will respond to specific questions on health and welfare and retirement, also have been scheduled:
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