New Plan Alters Employee Health Care Coverage

By Hye-Jin Kim, Senior Writer

Editor’s Note: This article is the third in a series that will examine the current financial state of the College. In recent years, the College has run budget deficits and has been forced to rein in spending in order to ensure long term financial stability. These articles will aim to inform the Middlebury community about the College’s financial situation, dispel rumors, raise new questions and, hopefully, spark new debates about how the College operates and spends its money.

The administration is devising a new health care plan, slated for January 2019, to help the College cut back on spending after running a five-year deficit.

Still administered through Cigna, the new health benefits will include a menu of plans: platinum, silver, gold and possibly bronze. Albeit more expensive, the new platinum plan will be comparable to the current one offered to all employees, while the bronze plan would provide the least coverage (and highest deductibles) for lower premiums. What you pay for is what you get.

Currently, the College foots 80 percent of the bill minus the copay or deductible for most health services. Visits that fall under preventative care like immunizations, mammograms and routine dental check-ups are completely paid for. “Any which way you look at it, this is a rich [health benefits] plan,” said Cheryl Mullins, director of human resources.

But that plan is likely to change. Faced with an operating loss that’s ballooned to nearly $17 million this year, college administrators are looking for ways to spend less. Spending outpaced revenue for five consecutive years, according to treasury reports; the last time the College “broke even” was in 2012. To get a grip on its operating deficit, Middlebury is sacrificing other amenities to prioritize academic spending. For students, this translates to changes like shortened dining hall hours and rises in tuition. For college employees, it means another change to their health plan.

This fall, the College switched administrators from CBA Blue – a subsidiary of Blue Cross Blue Shield of Vermont that insures nearly 90 percent of Vermonters — to Cigna, a company that offers coverage in all 50 states and overseas. The National Association of Insurance Commissioners ranked Cigna as the seventh largest health provider in the U.S. by market share, and Forbes Magazine listed it as the fourth most-valued company among national competitors.

The switch, something that Bill Burger, vice president of communications and chief marketing officer, said is common and “usually no big deal” at other institutions, has generated more than a handful of complaints, about things like filing more paperwork or lobbying for claim approval from faculty and staff alike.

“I would not argue that CBA Blue took a little more liberal view of what is ‘medically necessary,’” Mullins said, citing teeth bleaching as a cosmetic procedure that might have once been approved. In 2016, the College spent about $20.5 million on healthcare. The switch to Cigna and its more stringent process for approving claims slimmed Middlebury’s annual health bill by $800,000, according to school records.

Middlebury was not the only college to switch to Cigna this fall, nearby Champlain College and St. Michael’s College did as well. The three schools make up the Green Mountain Higher Education Consortium, a partnership formed in 2013 for better bargaining power. The tagline on its website: “Efficiency and reducing costs is what Green Mountain Higher Education Consortium is all about.”

The proposed three or four-tier plan would be negotiated through the consortium. Norwich University, the nation’s oldest military college roughly 50 miles east of Middlebury, will likely hop on-board as well. The new health plan is a big draw, according to Burger. 

Today, the College offers the same coverage for everyone who works full-time, regardless of age, health and job title – an engineer who runs the biomass plant and his family of four have the same plan as a tenured professor who lives alone. According to administrators, this one-size-fits-all policy isn’t just generous, it’s overkill. “Right now, we’re over-insuring,” said Vice President of Human Resources Karen Miller at an open meeting on March 21 in Wilson Hall. “Could we be lowering the cost to the College while providing health insurance?”

In 2016, college employees chipped in roughly 20 percent of the total $20 million healthcare cost through premium payments. In the private sector, those insured often pay a bigger slice – in the high 20’s or low 30’s. “We’re insulated from the market reality,” Burger said. “We need to have our employees pay more in premiums.”

At the College, biweekly premiums are determined on an income-sensitive scale; the more you make, the more you pay. A staff member making $20,000 per year pays $21 for the same coverage as a high-level administrator paying $141 from their $200,000 income.

Instead of signing everyone up for the one-size-fits-all health coverage, Miller said offering four different plans give employees the “choice” to save money, especially if they are young, healthy and single. And under the bronze plan, a health savings account would be included to help pad the risk of a major medical emergency.

Some professors oppose the change because it’ll likely mean higher premiums for the same health coverage. The new plans will likely cost the most for employees on the mid to higher-end of the payscale due to the effect of income sensitivity in calculating premiums. “And I am certain we will keep income sensitivity,” Mullins said.

There are also concerns that those who can’t afford the most expensive plan will lose out on health care – that the proposed changes will likely hurt staff members already paid the least. Will employees with big families and smaller paychecks, unable to afford higher premiums, be left out in the cold?

At the open meetings in March, professors spoke out against the new plans. “It’s insurance,” said mathematics professor Priscilla Bremser. “I can’t tell you what my medical tests next week are going to tell me. I think a healthy twenty-year-old could end up with leukemia tomorrow, and heaven forbid that twenty-year-old be on the wrong color plan.”

Bremser remained skeptical of how practical or beneficial a flex fund might be for those on cheaper plans with less coverage. “You can save ahead of time for health care, but not for something that ends up costing tens of thousands of dollars, especially if you’re on the lower end of the pay-scale at this college,” she said.

Of the roughly twenty people who showed up to Wilson Hall for a recent faculty and staff meeting about health benefits, most were professors. An employee in dining operations said many staff members either didn’t know or didn’t care enough to speak out against the changes. Wary of engaging in public debate against his employer, he refused to be identified by name. “There’s no leadership, no one on staff is willing to step up and lead it. And any talk of unionizing must be reported to higher bosses,” he said.

On the other hand, a recent college hire said the new changes were nothing to panic about. She was shocked at not being asked to choose a health plan at all in her contract. “I’ve lived this for over 20 years. I’ve seen it work for people,” she said. “You can never predict what your health is going to be, but the bottom will not fall out. We will all be insured. I think giving it a chance will be worthwhile.”

And if the platinum plan ends up costing a lot more than the current premium? “Well, I’m screwed,” the dining employee said. “I have a big family.”