Like the O’Colly editors, I was impressed by President Hargis’ willingness to address questions from the O’Colly, and the candor of his responses. I was also pleased that one of my questions was used.
Unfortunately, I’m afraid the point of my question was not addressed in his answer. While President Hargis’ answer focused upon the skyrocketing costs of health insurance and health care in general, my question was more specific, and certainly is “just a crisis here,” at least as compared to our peer institutions.
My question focused on the out-of-pocket expense for family health care benefits to faculty and staff. In addition to a new high-deductible HSA program, OSU offers faculty and staff two traditional health care plans (one PPO and one HMO).
The HMO plan offers no local pediatricians or family practice providers, so the PPO plan is the only viable traditional health insurance choice.
The out-of-pocket premiums for an employee to purchase this coverage for their spouse and children is $722 per month. This out-of-pocket expense is approximately double the typical rates available to faculty and staff at our peer Big 12 institutions for comparable coverage, and triple or more for some of our peers.
For many faculty and staff, this amount exceeds their monthly mortgage payment and represents their single greatest monthly expense, if they can afford it at all.
Why the lack of a competitive benefit? Apparently because our peer institutions share the cost of family coverage premiums with their employee, usually assuming the lion’s share. In my own research, I have learned that our peer institutions typically contribute anywhere from an additional $240 to over $400 per month to cover family premiums, over and above the money used to cover employee-only premiums.
This year, OSU negotiated less expensive premiums for health plans. Rather than pocketing the savings, OSU did the right thing and maintained the amount they had contributed to health insurance per employee in 2007.
This resulted in an additional $7 to $34 dollars per month that an employee could put toward the cost of family premiums or other benefits. While this was a noble gesture, it still fell far short of the benefit offered by all of our peer institutions.
OSU has, by far, the worst benefit for family health insurance in the Big 12. Next worst is the University of Oklahoma. However, OSU’s plan falls woefully short even in comparison to their plan. Employees at OU making between $42,000 and $59,999 pay $427 to $561 per month for family coverage.
Even OU’s most expensive plan is $160/month less expensive than OSU’s least expensive plan. Why? In part, because OU contributes about an additional $175 per month for employees electing to buy family coverage (and they are, except for us, the worst in the Big 12!).
Although I was disappointed in the answer to my question, I found President Hargis’ answer to a subsequent question about faculty and staff salaries more encouraging. He said “ You simply have to have competitive compensation for people or they are going to be looking for another opportunity.”
As a successful business leader, I’m sure it is obvious to President Hargis that compensation includes a competitive benefits package. The difference in out-of-pocket expense for family health premiums between us and our peer institutions amounts to a competitive shortfall in compensation of $3000-6000 per year for employees with families.
Everyone benefits by recruiting and retaining quality faculty and staff. The safe, family-friendly environment of Stillwater is an attractive recruitment tool.
However, without a competitive benefits package for employees with families, we fail to attract the best faculty and will continue to lose those who can’t afford to stay.
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