October 24, 2012

University Cuts ‘Antiquated’ Health Plans for Cornell Employees

Print More

The decision to drop two of the five healthcare providers offered to University employees in Cornell’s endowed colleges should save both the University and its staff members money, according to Cornell officials.

The University will not offer one healthcare provider, HealthNow PPO, this year and has stopped accepting new entrants for another called Aetna 80/20, according to Paul Bursic, senior director for Benefits Services at Cornell. Three other health plans — Cornell Program for Healthy Living, Health Savings Account and Aetna PPO — will continue to be available to employees, Bursic said.

The Aetna 80/20 plan had “outlived its usefulness,” Bursic said.

“It is no longer an effective use of our employees’ money [or] our own money,” he said. “It doesn’t use more modern models of healthcare delivery, which [are] dependent on the networks that insurance companies set up.”

Employees will pay lower premiums under the three remaining health plans that Cornell will continue to offer than they would have under the two being eliminated, according to Tanya Grove, general manager for Schwartz Center for Performing Arts.

“What [led] me to switch from HealthNow to the CPHL was that it was a little less expensive, which is very important to a lot of employees at this point of time,” she said.

Furthermore, offering only the three remaining plans will allow the University to pay lower administrative fees, according to Bursic.

“[By] getting rid of HealthNow, we are actually being charged less … because their administrative fees were scheduled to go up,” he said.

Both administrative costs to the University and employees’ premiums will be further reduced now that a single contract with Aetna will cover employees at both the Ithaca campus and Weill Cornell Medical College, according to Bursic.

“We worked out an even better deal because we combined our contracts with the medical college in Manhattan,” whose employees have all also switched to Aetna, effective Jan. 1, he said. “So, we have combined now and we have over 12,000 employees that are on this plan giving us even lower administrative fees.”

Bursic said reductions in premiums will not alter the proportion of total costs split between employer and employee, who will both see reductions.

“[The reduction] is going to be expressed, and is expressed, in the upcoming premium. We save money; the employee saves money,” he said.

Still, Bursic noted that some employees are reluctant to change their health plans.

“Nobody likes change. The average person doesn’t have the opportunity to compare the way I can compare as I see all the data,” he said. “The University has no axe to grind here. We provide healthcare because it is an important part of the total compensation of people … We want to provide the best possible service.”

Although Grove said she personally “didn’t face any problems with HealthNow,” according to her, the provider’s systems “were antiquated and not up to power.”

“As far as for HealthNow going away, my understanding … is that a lot of doctors in the community didn’t care for HealthNow,” she said. “For example, now with the new programs one will be able to [pay with] a debit card. So if you have [a Health Savings Account] plan then you don’t have to pay out of your pocket, as it comes out of your savings.”

Grove also noted that a healthy lifestyle could help employees reduce their healthcare expenditures.

“I think the big goal is to have employees thinking more practically about their health so that [they] are not sick as much … which helps to keep health costs down,” she said.

Original Author: Manu Rathore