Employees urged to study health plans, some new

Open Enrollment begins in two weeks, and Benefits Services urges faculty and staff to study the health options carefully. Two plans will be eliminated and replaced with new ones, raising the possibility that employees who don't actively enroll could find themselves in a plan they aren't familiar with.

The two programs no longer being offered for 2005 are the Stanford PPO and the Triple Option Plan. The two new programs are Lumenos, a consumer-driven health plan, and the 3-Choice Health Plan, which allows access to the BlueShield PPO network and the Palo Alto Medical Foundation.

Another new plan makes Stanford Hospitals and Clinics the exclusive provider for employees who sign up. The Health Net, Kaiser Permanente and PacifiCare HMO plans still will be offered during Open Enrollment, which takes place from Nov. 1 to Nov. 19.

If employees who belong to the Stanford PPO and triple-option plans do not choose a plan, they will default into the Lumenos and the three-tier plans, respectively, on Jan. 1.

Of the approximately 11,000 employees who are signed up for the various health plans offered through Stanford, some 1,600 are now enrolled in the PPO. About 1,800 workers fall under the triple-option plan. The plans that will take their place have lower premiums and are similar in flexibility, said Charles DeSantis, associate director of Benefits Services.

Top administrators are speaking highly of the exclusive-provider arrangement with the university's hospitals and clinics, called "Only@Stanford." The arrangement, being offered to employees for the first time, also will allow members to go to the Menlo Medical Clinic.

"The Only@Stanford plan was created in response to faculty and staff members seeking better access to physicians at Stanford Hospital and Clinics, the Lucile Packard Children's Hospital and the Menlo Medical Clinic," Provost John Etchemendy says in a Vantage Point piece appearing on page 16.

He also explains that the changes in health care options this year are an attempt to lower costs. Over the past five years, the cost of employee benefits to the university has increased by more than 85 percent, with health care expenses gobbling up more funds that could otherwise go to academic programs and salaries.

"Those of us involved in the budgeting process have felt in the last several years like we're on the wrong side in a game of Pac-Man," Etchemendy said.

The new options also reflect trends in the health care industry. A growing number of employers nationwide are turning to consumer-driven plans such as Lumenos-both for their lower premiums and unique coverage structure. Under Lumenos, Stanford funds a "health reimbursement account" that covers eligible services up to a certain amount.

Any unspent money at the end of 12 months will roll over into next year's account. If medical expenses exceed what's in the account, members pay an out-of-pocket "bridge" amount that takes them into a more traditional model of partial coverage. Members can see any licensed physician, but they will pay full price unless they use one of the more than 400,000 doctors listed in the Lumenos directory.

Because consumer-driven health plans are fairly new-Lumenos opened its doors in Alexandria, Va., in 2000-employees and providers alike have signed up cautiously. Supporters of the consumer-driven movement say that health care costs decrease when employees have a bigger financial stake, while critics maintain that the plans are geared more toward younger, healthier individuals.

Stanford had planned to offer a consumer-driven program in 2003, but the university pulled the Definity Health plan at the last minute because negotiations between the company and Sutter Health-parent company of the Palo Alto Medical Foundation-fell through. The foundation's medical services will be available through Lumenos.

"The Palo Alto Medical Foundation is very important to Stanford," said Gerri Burruel, the university's benefits director. She added that Etchemendy and Vice President for Business Affairs Randy Livingston also endorsed bringing Lumenos to Stanford.

The plan is not available to employees retiring next year because they will lose any amount remaining in their reimbursement account when they leave. Plus, any money they pay toward meeting their deductible while still working won't be credited toward the deductible of the retiree health plan.

Meanwhile, the 3-Choice Health Plan includes more traditional aspects such as co-pays and annual deductibles. Members must go to a Blue Shield PPO doctor or the Palo Alto Medical Foundation to receive first-tier coverage, or see a doctor at Stanford Hospitals and Clinics for second-tier coverage. The third tier covers out-of-network care, usually at 50 percent.

For employee-only coverage, deductions for 3-Choice will be $18.42 less per paycheck than the current Triple Option Plan, which costs $61.61 to employees. The Only@Stanford plan, with deductions of $19.75 to cover just the employee and $100.98 with a spouse, has the lowest employee contribution of the three new options.

Regardless of which plan employees choose, Etchemendy highlighted the university's ability to offer a diverse menu of health plans while keeping them relatively affordable. Stanford will cover the full cost of Kaiser, the lowest-price individual health plan, as well as 82 percent of the lowest cost family plan.

This comes at a time when health insurance premiums rose 11.2 percent between 2003 and 2004, according to a survey released by the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust. In citing the survey, Etchemendy said the rise marks the fourth consecutive year of double-digit rate hikes.

"Such increases are not sustainable for any employer," Etchemendy said. "Stanford has never spent as much on employee health care as it will spend this year. I said that last year, and I suspect I will say it again next year."

Another change this year removes the two-year lock on vision coverage. So, employees who didn't sign up for a vision plan last year can enroll this year; those who signed up last year can drop it.

Benefits Services has mailed newsletters to all employees and will host presentations before and during Open Enrollment. Employees should refer to the enrollment guide, which will be sent out in the coming weeks, for specific instructions for signing up. The preferred method of enrolling will be online.

The first presentation is on Thursday, Oct. 28, from 1:30 to 2:30 p.m. in Fairchild Auditorium. Another presentation will be held the next day, starting at 1 p.m. in the Hacienda Commons at Rains House. More are scheduled through the end of Open Enrollment, while all-day benefits fairs to gather information and actually sign up will be held in various locations from Nov. 2 to Nov. 8.