U task force reviews health insurance plan

by Erin Ghere

Even though the Board of Regents has declared domestic partners of University employees eligible for benefits, most are not insured through the University.
Under the state’s health insurance group, domestic partners cannot receive health benefits despite their eligibility under University policy. However, University employees cannot opt out of the state’s health care plan.
Professors on sabbatical and staff members who retire early are also not covered by the State of Minnesota Employee Group Insurance Program, which the University has been enrolled in since 1967.
University officials are aware that their employees’ domestic partners are not covered by the state health insurance, said Robert Fanhorst, acting director of employee benefits.
A University task force, first established in Sept. 1997, has begun to look into the advantages and disadvantages of this health insurance plan, Fanhorst said.
A historical problem
The Board of Regents established domestic partnership benefits for University employees in 1993. But because they participate in the state health plan, the University does not negotiate its own health care, Fanhorst said.
The regents changed University policy in 1993 because of compensation issues, said Beth Zemsky, director of the Gay, Lesbian, Bisexual, Transgender program office and University vice president of multicultural and academic affairs.
In 1988, the regents approved an equal-opportunity statement banning discrimination based on sexual orientation.
Married employees received as much as $5,000 per year more than employees with domestic partners through family health benefits, leading to a situation of unequal pay for equal work, Zemsky said.
“(The policy) wasn’t in the spirit of the equal-opportunity statement of the University,” Zemsky said.
But because the state does not grant domestic partnership benefits to state employees, the University and its homosexual employees are left in a catch-22 under the state’s insurance plan, Zemsky said.
Although the University reimburses employees’ domestic partners for their insurance, the process is “very substandard,” Zemsky said.
In this process, homosexual employees must first register their relationships with the University. By filling out a lengthy form, they must prove they and their partners are financially and emotionally connected.
“In some cases this means outing oneself if (their sexual orientation) is not part of their personnel file,” Zemsky said.
Married employees do not have to show any proof of their relationships, she added.
The domestic partner then must go to the open market to find a different health- care plan, but this is more expensive and difficult to obtain than the University’s plan, Zemsky said.
Although those registered for the University’s health insurance do not have to reveal medical history, domestic partners applying for other health-care plans often must. If the partner has a pre-existing medical condition, it is likely they will not be insured.
“People don’t like having to go out and get their own insurance,” said Jessica Morgan, coordinator of the Minnesota Women’s Center.
Once obtained, partners must pay for their health insurance out of their own pocket each month, submitting a bill to the University for reimbursement every three months.
About one month after submitting the bill, the partner will receive reimbursement funds, but only up to the amount the University pays for a family policy under the state’s plan.
That never covers the entire cost of private insurance plans, Zemsky said.
For example, a private plan costs about $200 each month. The University pays about $150 for a family policy each month under the state’s plan.
Because the reimbursements are taxed, partners are likely to receive only $125 or $100 for each month of private insurance they pay for, Zemsky said.
“The benefits are something, but they’re not fabulous,” she said.
In a Sept. 9 presentation to regents, University officials admitted the situation for domestic partners is “far from equitable,” as it leaves partners paying an individual rate higher than if they were insured under a group rate.
Potential solutions
There are two solutions to the problem of domestic partnership benefits, Zemsky said.
The state could negotiate to include domestic partnership benefits in contracts with health-insurance providers, or the University could opt to negotiate for their own health insurance.
But there are pros and cons to each option, Zemsky added.
If University officials negotiate employees’ contracts, they would have a smaller group to work with, possibly meaning higher rates. However, the University could negotiate for options, such as domestic partnerships, tailored to their own policies.
Despite lobbying efforts by University administrators, the state plan still does not allow domestic-partner coverage under any of the health plans offered, officials said.
The University established a task force two years ago to study the University’s short- and long-term goals to improve the insurance situation. This plan is expected by January 2002, according to University officials at the Sept. 9 regents presentation.
Employee complaints
A two-year progress report on employees’ problems with the health plan showed that only two of eight issues have improved since 1998.
In addition, Zemsky said her office has received complaints about the domestic partnership policy since before the 1993 change in regents policy.
Some of the most common complaints include finding insurance for domestic partners with pre-existing medical conditions, paying expensive insurance premiums each month and being forced to register relationships.
Zemsky said she also received a complaint last month that an employee’s partner had been bumped into a higher income-tax bracket because of reimbursement checks, leaving the partner owing more taxes even though total salary had not increased.
To help ease these problems, Zemsky said her center informs employees and their partners of other University benefits — such as family sick leave, funeral leave, child care and family-student housing — that are not as difficult to obtain.
The state health-insurance plan covers 15,000 University employees, more than half of whom opt for family coverage. After premium rates raise in January 2000, the University will be paying $67 million each year to subsidize health insurance for its employees.
Additional problems
Other issues the University task force will consider in upcoming months include coverage for faculty on sabbatical and early retirees, as well as improved coverage for mental health programs.
Officials said “some improvement” has been made for faculty living out of state during sabbaticals and other forms of leave, but more improvements are needed.
In addition, University employees who retire before the age of 65 are covered under the state health-care plan but have to pay premiums without University subsidies. Those who move out of state are only covered by a high-cost option. Those who retire after 65 are insured through Medicare.
Lastly, all plans in the state program include a small amount of coverage for mental health and chemical dependency, but it is seen as “inadequate” and “too restrictive,” officials said.
Erin Ghere covers faculty and welcomes comments at eghere@daily.umn.edu. She can also be reached at (612) 627-4070 x3217.