Changes to Benefit Plans
July 6, 2015
Dear Colleagues,
I am writing to update you on the proposed benefit changes that were recommended by the Employee Benefits Task Force (EBTF).
Over the last semester, roughly 1,000 faculty and staff attended meetings to learn about the proposed changes and to ask clarifying questions, and approximately 300 of you shared ideas and concerns by email. Thank you for your participation in this important process
Your feedback reflected careful listening and thoughtful reflection; this is exactly what we had hoped for during this period. As a result, you have had a direct impact on our plan design decisions, which are outlined below.
Plan Decisions – Overview
We have made the following decisions about the proposed changes:
- Health Plan: Changes will take effect on January 1, 2016. These changes adopt the structure proposed by the EBTF, but with some important differences that are described below.
- Long-Term Disability (LTD) Plan: Changes proposed by the EBTF will take effect on January 1, 2016.
- Tuition Exchange Plan: We will not be modifying this plan, and the proposed changes will not be implemented.
- Retirement Plan: The Boston University Retirement Plan will remain unchanged until at least January 1, 2017, while we continue to explore possible changes.
- 457(b) Deferred Compensation Plan: We will introduce a 457(b) Deferred Compensation Plan for eligible highly compensated employees effective November 1, 2015.
Health Plan
The following changes to the Boston University Health Plan will be implemented effective January 1, 2016:
- Offer two medical plan options – a new PPO Plan and the current Health Savings Plan. As proposed by the EBTF, we will combine the existing HMO and PPO features into an updated PPO, and we will continue to offer the Health Savings Plan. The HMO plan will be eliminated.
- Retain the current out-of-pocket maximum for both plans. Faculty and staff expressed concern about the affordability of the proposed out-of-pocket maximum. As a result, the in-network out-of-pocket maximum will remain as follows:
Expense Type New PPO Health Savings Plan Medical (non-Rx) $2,500 for individual coverage
$5,000 for family coverage$3,000 for individual coverage
$6,000 for family coveragePrescription drugs $2,000 for individual coverage
$4,000 for family coverage - Slightly increase the deductible in the new PPO from the amount proposed. To offset the cost of retaining the current out-of-pocket maximum, the new PPO deductible will increase slightly from what was proposed. The in-network annual deductible for the new PPO will increase from $200 to $250 per individual and from $400 to $500 per family.
- Increase the BU Health Care Flexible Spending Account (FSA) contribution to align with the increased deductible. As proposed, the University will contribute an amount to eligible employees’ Health Care FSAs if they enroll in the new PPO. The amount you receive will depend on your annual pay rate as of January 1.
If your 2016 pay rate is: BU’s FSA contribution as a percentage of the PPO in-network deductible: Less than $70,000 $70,000 to $99,999 50% ($125 per individual / $250 per family for 2016) $100,000 or more 0% - Add emergency room co-payment: A $100 co-payment will be implemented for all emergency room visits. Faculty and staff expressed concern that co-insurance for emergency room visits could lead to high out-of-pocket expenses, and that in an emergency situation many do not have control over the hospital from which they receive care. As a result, if a covered employee or family member visits the emergency room, he or she will pay only a $100 co-payment; there will be no co-insurance payment due from the employee or family member.
Long-Term Disability (LTD) Plan
LTD Plan changes, as proposed by the EBTF, will take effect on January 1, 2016. These changes include:
- New eligibility waiting period. The eligibility waiting period will be reduced from three years to two years.
- Cap benefits while on disability. Eligibility for health benefits while on disability is limited to five years.
- Health plan contributions during disability period. These will be the same as contributions for active employees.
Tuition Exchange Plan
Many community members called for the University to preserve the current Tuition Exchange Plan eligibility criteria, expressing the view that this benefit represents a way of recognizing long-serving employees and that the proposed changes would diminish the value of this program. As a result, the current plan will continue unchanged
Retirement Plan
The feedback revealed that we need more time to explore alternatives for updating the Boston University Retirement Plan. Our goal is to provide a more equitable distribution of the University’s retirement contributions across all ages and earning levels, while at the same time complying with IRS nondiscrimination testing requirements. We expect to develop a revised approach later this year and to share this proposal with you at that time. No changes to the Retirement Plan will take effect until at least January 1, 2017.
457(b) Deferred Compensation Plan
As of November 1, 2015, the University will offer a new 457(b) Deferred Compensation Plan to eligible faculty and staff earning more than $180,000 per year (rather than $200,000 as previously recommended). Eligible employees will learn more about this optional, employee-funded plan before November 1.
For More Information
You may review additional information on the updated Guide to 2016 Benefits Changes for 2016.
Once the Fall Semester begins, we will provide additional information about the plans and the upcoming enrollment period, which will be lengthened to provide ample time for our staff to learn about the options. You will also have an opportunity to attend meetings to learn more and ask questions.
Thank you again for participating in this important process. We are confident that our new plan will serve our employees well, use our financial resources prudently, and comply with applicable regulations.
Sincerely,
Robert A. Brown
President