Benefits Committee
Meeting Minutes: March 18, 2008
Faculty and Staff Benefits Office
Bldg. 7, Woodrail Center
Al Hahn called the meeting to order at 10:35 a.m.
Those present included: June DeWeese, Jack Batterson, Al Hahn, Mike Paden, Roger Heath, John Bauman, Patsy Higgins, Jatha Sadowski and Marj Leavene.
On a motion from John Bauman, minutes of the February 19, 2008, meeting were approved with corrections. Minutes of these meetings will be posted on the MURA web site.
The 2007 Retirement, Disability and Death Benefit Plan annual report was e-mailed to Committee members in PDF format and hard copies were available for committee members. In response to questions from Jack Batterson, Mike Paden reported that the actuarial method was used in compiling this report. The program is a pre-funded basis listing $3 billion in assets. There would be no asset accumulation if the plan was a pay-as-you-go fund. Paden referred members to page 11 of the report with charts showing actuarial and market values of the plan. The 2007 report shows that the plan is fully funded under both formats.
This is the first year that public institutions are required to follow GASB 45 accounting regulations with regard to medical insurance programs. UM has tentative plans in place to fund the post employment health care benefit at the 50% level. There is no requirement to fund at 100%. The UM pension plan is a legal obligation and first priority for the institution. The medical side of the plan is at the Curators’ discretion—both for currently employed and retired staff members. This is a controversial topic. In a recent survey, only 3 or 4 out of 12 public institutions subsidize their medical plans. UM does subsidize their plan. Ramification of non-compliance with GASB 45 could adversely affect an institutions bond rating.
President Forsee will not recommend an increase in pension benefits for UM retirees at this time.
The shingles vaccine is available through the University pharmacy and is administered by University physicians. Retirees whose primary physician is not a University physician can make an appointment with a nurse at Kilgore Pharmacy, and several others in town. Insurance coverage under the preventive care option is available to persons 60 years of age and older.
Mike Paden reported that the University is working with Express Scripts on Medicare changes. This will have very little effect on retirees. They are still working on the Medicare Advantage Fee for Service Option. This is a co-payment model with no deductible. Coventry and Aetna are the finalist in the competition to administer this program. HR is formulating a communication plan to inform retirees of this option. Retirees will have an option to buy into or cancel out of the program during the normal annual enrollment period. Boone Hospital will not participate in this insurance option at this time. Hahn urged those on the committee who know folks on the Boone Hospital Board to contact them and request they urge BJC to reconsider its rejection.
Participants are seeing a less dramatic chance in medical premium. In fact, medical premiums went down slightly last year. Currently UM insurees are at a 67-68% generic drug fill rate. (The ideal is a 75-78% rate) The rate for retirees is lower. In addition the university uses an expected return methodology to calculate premiums This smoothing approach includes ups and downs in the market over a 5 year period. The most cost effective way for the University to buy drugs is through Express Scripts or the University Pharmacies. The University would like to encourage purchase of maintenance drugs through these sources. Limiting other pharmaceutical sources to a 30-day refill is one way to encourage this savings. The University Pharmacies have five locations: Green Meadow, Fairview, University Hospital, Ellis Fischel and a new location on Smiley Lane.
The committee has been asked to submit a report to the Chancellor at year end. Al Hahn asked committee members to review the committee’s charge and think about recommendations that might be included in this report. Please e-mail suggestions to Al at: HahnA@missouri.edu.
Hahn thanked Mike Paden for his participation in committee meetings. He also thanked Jack Batterson for sharing web site information that might be helpful in the committee’s deliberations.
The next meeting will be held at 10:30 a.m. on Tuesday, April 22, 2008, at the Woodrail Center.
On a motion from DeWeese, the meeting adjourned at 11:30 a.m.
Respectfuly submitted,
Marj Leavene
