Federal health care reform was signed into law in March, but the changes affecting University of Minnesota faculty who receive coverage as a benefit will be implemented in a series of changes over the next few years.
EmployeesâÄô children will see positive changes, while more liberal spending will be reined in.
Over the summer, the University extended health coverage for employeesâÄô children to their 26th birthday. Previously, children were only covered until the age of 25, said Fred Morrison, a University Law School professor.
Come 2011, children with pre-existing conditions will no longer be denied coverage.
Also already implemented into UPlan, the UniversityâÄôs health care plan, is health care for early retirees, something that the University had previously offered and now will be paid for by the federal government as encouragement to retire.
In 2011, flexible-spending accounts will no longer be permitted to cover most over-the-counter drugs unless they are prescribed by a physician, Morrison said. The lifetime maximum on benefits will also be eliminated.
In 2013, flexible spending accounts will be limited to $2,500; the current limit is $5,000, Morrison said.
In 2014, “we will have to comply with a lot of rules regarding coverage and cost and so on,” Morrison said. “This will not be difficult as they are little technical rules.”
The biggest change to come will be in 2018 with the “Cadillac Tax.” This is simply a federal tax on high-value plans that offer too many benefits. University consultants have estimated that the Cadillac Tax could end up costing the University as much as $8.9 million for the first year and possibly rising in subsequent years.
Morrison said there are steps that the University could take in order to avoid the tax. A better choice in health care providers is one.
“We may be trying to create a network of high-quality, low-cost clinics in order to reduce our costs,” Morrison said.
The benefits of high-quality, low-cost clinics are that people would be healthier and thus go to the doctor less and that each trip to the doctor they do make costs less, he said.
The cost of health care is rising at the rate of 8 percent annually, Morrison said.
Carlson School of Management assistant professor Colleen Manchester isnâÄôt too troubled about higher co-pays for quality health care.
“I think that an increase would be doable,” she said. “However, I think that it may have disproportionate effects on faculty and staff because of the income differences.”
Morrison mentioned that the University is preparing for these effects, but because Republicans are working to repeal the bill, the changes may never happen.
University Board of Regents member Maureen Ramirez agreed.
While the University is “modeling all the different options” now, she said, “it may not look anything like it does now because there is a presidential election and a couple other ones between then and now, which means that Congress could change anything about it.”
University employees are not the only ones affected by health care reform. Students who purchase their health care through the University may see changes as well, according to Susann Jackson, director of student health benefits at the University.
While the UniversityâÄôs objective is for students to receive full coverage benefits, the health care bill may result in high deductible plans, which may mean students who canâÄôt afford the coverage may not receive the specialized care they need, Jackson said.
