As the University of Minnesota adjusts its employee health care plan to comply with the Affordable Care Act, some faculty and staff members are concerned about how increased costs could affect them.

Because the recommended changes could increase out-of-pocket expenses for employees, some are arguing the changes are unfair to those on the lower end of the pay scale.

To avoid a $48 million federal tax over five years for noncompliance, the University proposed changes to its employee health benefits plan, UPlan, for 2014. The changes would raise the cost of copays for primary and specialty care and make employees pay deductibles, which they haven’t had to pay before.

Under the proposal, the insurance classification for employees with a spouse or domestic partner covered by the plan would be combined with the category for families. Employees with families would see a cost decrease, but those currently in the couples category would see a significant increase.

The University’s Benefits Advisory Committee met Thursday to discuss the proposed changes. The BAC is a group of faculty and staff members and retirees who advise University administrators on employee benefits.

Dann Chapman,  Office of Human Resources employee benefits director, said the University plans to soften the blow of the cost shift for employees by giving all enrolled in the UPlan a “premium holiday” for one pay period in March 2014. During this period, the University will pay for employees’ portion of the medical program, he said.

The University will also phase in the cost increase for couples over at least two years and start a “medical cost relief program” that employees can apply for to help cover the costs of the increases, Chapman said. The University could offer the program for up to three years.

Union response

At the BAC meeting, representatives from the American Federation of State, County and Municipal Employees unions raised concerns that employees won’t be able to cover health care costs under the new plan.

Some union members have already refused to seek medical care because the costs were too high under the current plan, said AFSCME Local 3800 President Cherrene Horazuk.

With increased costs under the new plan, this would only get worse, she said.

“It’s a real, serious issue for people at the bottom of the wage system at the University,” Horazuk said. “One premium holiday isn’t going to cut that.”

The University doesn’t have substantial evidence of employees postponing or refusing medical care, Chapman said.

“For most of our employee population, these changes are not that significant,” he said. “They are not going to cause most employees or their dependents to defer necessary care.”

In June, AFSCME representatives wrote a letter to University President Eric Kaler protesting the cost shift, saying the ACA is “being used to justify this move.”

“We believe that this proposal is not a result of the Affordable Care Act,” the letter said. “It is another example of the University administration’s decision-making that deliberately shifts costs to the most economically vulnerable workers.”

The union also started a petition requesting that employees ask the University to rethink the changes and look for other savings in its budget to lessen the cost for employees.

About 1,100 University employees have signed the petition so far, said AFSCME Local 3937 President Barb Bezat. The petitioners have come from all kinds of jobs, she said, not just those covered by the unions.

Far-reaching effects

Faculty representatives at the BAC meeting also commented on the possible repercussions of the changes for University faculty.

Some instructors at the University are paid very little, said University of Minnesota-Duluth economics professor Jennifer Schultz. The University should decrease out-of-pocket health care charges or raise employees’ salaries to cover the costs, she said.

Though a number of faculty members take issue with the changes now, the full impact won’t be widely known until fall, when faculty and staff members can update or change their health plans, said Twin Cities math professor Richard McGehee

Because her husband is a freelance designer, University accounts specialist Anh Pham said they rely on the University for health coverage. This puts Pham in the category where costs are pinned to increase the most.

Pham said she’s had chronic migraines for more than 20 years and sees a lot of specialists. Her husband is a cancer survivor, so he sees specialists, too. Since specialty care costs are set to go up under the new plan, Pham said she’s concerned.

“We need to go to see these specialists to function; to be able to perform our jobs,” she said.

Pham said under the new plan, she could see herself putting off a specialty appointment until her next paycheck but knows people who would have to make much tougher decisions because of the cost increases — like deciding whether to buy groceries or go to the doctor.

“We’ll make something work,” she said, “but there are people who aren’t in the same position that we’re in.”