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UNM regents vote to cut health insurance benefits

ALBUQUERQUE, N.M. — The UNM regents unanimously OK’d a package of health care-related proposals Monday that includes eliminating post-retirement benefits for employees hired after June 30 and integrating former employees who retired before they were 65 back into the pool of active employees for insurance premium purposes.

In a separate action, the board gave a thumbs-up to “selective strategic pricing” – scholarships to attract new students, particularly from Texas and some foreign countries.

In an effort to lower health care costs, the University of New Mexico removed the pre-65 retirees from the active employees category in 2013, putting them into a separate pool. That meant higher premiums for the retirees, who have argued all along that they were being deprived of a benefit that they were promised when hired.

The pre-65s gradually will be reincorporated into the regular employees’ insurance pool. For the coming budget year, they and the university will split the cost of premiums, 50 percent and 50 percent. In fiscal year 2017, the retirees will pay 55 percent of premiums, and in FY18, 60 percent.

Also included in the package were several cost-saving proposals, including:

• Increasing UNM’s engagement in disease management and wellness programs.

• Continuing collaborative efforts with the School of Pharmacy and exploring other options to reduce prescription costs.

• Evaluating the opening of a clinic only for UNM students, employees, retirees and their dependents.

• Joining UNM with three related affiliates – the UNM Medical Group, the Sandoval Regional Medical Center and UNM Hospitals – under a single umbrella for collective purchasing purposes.

• Looking into lowering the number of third-party administrators overseeing UNM’s medical plans.

The university also will defer a planned 0.25 percent contribution increase for employees who participate in the Voluntary Employee Beneficiary Association, a trust fund established two years ago for active employees.

The VEBA will provide health insurance coverage when the employees retire. It is funded by a 0.5 percent employee salary contribution and a matching 0.5 percent by the university.

The regents also directed the administration to evaluate imposing a monthly surcharge of perhaps $50 or $100 for the spouses or partners of employees and retirees if health care insurance is available through the spouse’s or partner’s employer.

Finally, the package approved by the regents included an evaluation of FY16 premiums “to ensure appropriate rates to cover claims and administrative costs” and, possibly, reducing premiums for employees and retirees.

The Selective Strategic Pricing plan to offer scholarships to increase enrollment – and revenue from tuition and fees – stems from a decline in the number of New Mexico high school graduates. It would focus on states such as Texas, where the number of graduates is rising. Other candidates are Colorado and Utah.

Terry Babbitt, associate vice president for enrollment and management, noted that in-state tuition for an undergraduate student taking 15 credit hours is $6,447 a year. That compares with $20,664 for nonresidents, a difference of $14,217. The scholarships would make up a percentage of that difference. Babbitt’s office is currently considering scholarships ranging from 25 percent to 70 percent.

The plan includes three “strategies.” The first would reduce tuition rates that promote international agreements, particularly with certain Latin American nations – Ecuador, Brazil and Mexico were mentioned.

The second strategy would adopt favorable tuition rates for states primarily to the east of New Mexico, where the number of high school graduates is growing. New Mexico does not have reduced rate agreements with any states to the east, like it does with the 12 other states that comprise the Western Interstate Commission for Higher Education.

The third strategy is a pilot program to offer six large-volume, online summer classes at 50 percent.

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