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Five months after Harvard unveiled a controversial new health benefits policy for non-union employees, the University Benefits Committee that recommended the changes said it expects less than 1 percent of families enrolled in the program to reach the family out-of-pocket maximum of $4,500.
Approximately half of these families will have access to a reimbursement program established by University President Drew G. Faust designed for affected faculty and staff whose health care costs, excluding premiums, exceed 3 percent of their salaries, according to a detailed medical program fact sheet released on Friday.
The fact sheet further outlined many of the changes of the new policy and the potential impact they may have on non-union employees and on the University’s expenses.
Since the announcement of the change, faculty members have criticized the new plan for introducing a deductible at the point of care for non-routine health appointments and increasing copayments. At the November meeting of the Faculty of Arts and Sciences, faculty unanimously voted for Faust and the Harvard Corporation, the University’s highest governing body, to reverse the policy. Faust ultimately kept the contested new policy but established the reimbursement program.
Under the controversial plan, 10,855 enrolled faculty and staff members will be affected. Employees may pay up to $1,500 a person and up to $4,500 for families of three or more out of pocket to cover copays, coinsurance, deductibles, and drug costs.
According to the fact sheet, Harvard estimates that it will save $6.4 million in Fiscal Year 2015 as a result of the policy changes, and affected non-union employees will take on $2.5 million collectively, adding up to total savings of $3.9 million. The document, which does not list an author, estimated that costs will rise an average of $230.31 per employee as a result of the new policy.
The percentage of employees enrolled in Harvard’s benefits program has reached an all-time high, increasing from 84.5 percent to 88.2 percent since 2007; similarly, the number of enrolled employees electing family coverage increased to a high of 51.7 percent, according to the fact sheet. This higher enrollment has resulted in an increase of “approximately $48 million in cost to Harvard” from FY 2007 to 2014, according to the document.
Since FY 2001, the share of medical benefit costs paid by employees has risen from 19.6 percent to 22.7 percent, while Harvard’s share has fallen from 80.4 percent to 77.3 percent, according to the fact sheet.
Since 2005, Harvard has re-bid its medical and pharmacy contracts multiple times in an effort to secure more competitive prices.
—Staff writer Theodore R. Delwiche can be reached at firstname.lastname@example.org. Follow him on Twitter @trdelwic.
—Staff writer Mariel A. Klein can be reached at email@example.com. Follow her on Twitter @mariel_klein.
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