This time last year, FAMCO secured an important victory: a zero-percent increase in monthly healthcare premium costs for 2022. We also won the right to renegotiate healthcare costs and plan designs for 2023 and 2024. 

For a year, FAMCO has been listening to members’ concerns about the critical need for affordable and high-quality healthcare, and submitted a proposal to the administration that does the following:

• Lowers monthly premium costs for all faculty;
• Provides the choice of either a traditional plan or a high deductible plan to all faculty;
• Provides out of network benefit options for all faculty, regardless of plan;
• Establishes formal channels of transparency to assess the overall costs of healthcare to the university.

On September 20, after several weeks to prepare a reasonable counter in line with faculty needs and significant pressure from FAMCO to come to the table, the administration came to the bargaining table with a counter proposal that utterly fails to take any real steps to meet the needs of our members.

Administration proposes healthcare premium hikes as high as 57% in 2023

Specifically, the administration has proposed the following monthly premium changes for our members.  On all but one tier, the premiums are increased, and astronomically for faculty in the high deductible plans.

For faculty on the Direct Access Plan (PPO), the proposed monthly costs would be:

Individual: $356 per month (10% decrease)

Individual plus 1: $544 per month (.4% increase)

Family: $763 per month (8% increase)

For faculty enrolled in the high deductible plan proposed, the monthly costs would be:

Individual: $133 per month (23% increase)

Individual plus 1: $285 per month (57% increase)

Family: $399 per month (32% increase)

In reality, that would mean a faculty member earning $80,000 a year who enrolled in the proposed high deductible family plan, for example, could expect to spend an estimated 15% of their monthly paycheck on healthcare alone.

For a faculty member making $65,000 a year who would enroll in the proposed high deductible plan for an individual employee can expect to spend roughly 9% of their monthly paycheck on healthcare. If that same faculty member were to enroll in the proposed traditional PPO family plan, they can expect to spend a head-spinning 18% of their monthly earnings on healthcare!

For some further perspective on how unconscionable these proposed rate increases really are, the Affordable Care Acts sets the percentage an employee should reasonably pay for healthcare at 9.6% of an employee’s income, or else risking financial penalties for the employer.

For our good colleagues in administrative support positions who are paid considerably less than faculty at any rank, premium increases like these, if they were to be proposed by the university for support staff as well, would make it next to impossible for employees to enroll in university-sponsored healthcare plans.

Administration proposes new and higher deductibles for both plans that make access to care even more cost prohibitive

While the administration has stated they agree that plan choice and out of network benefit options are important for employees, their proposal does not accomplish those goals. Instead, the administration proposal includes plan design choices and out of network benefit options that are in name only.

In the administration’s proposal, all employees would have to meet a deductible for care ranging anywhere from $500 to $3000, depending on the plan.  For out of network benefits, faculty would need to pay anywhere from $1000-$6000 in deductibles and only after the in-network deductible has been met! 

For perspective, this means that a faculty member in the highest income brackets making $100,000 a year would have to spend the equivalent of nearly an entire month’s paycheck to meet an out of network deductible if they were on the proposed high deductible family health plan.  For faculty in the lowest income bracket, it could mean spending closer to a month and a half’s worth of a paycheck before they could meet their deductible.

With deductible levels this high, an out of network option is really no option at all.

If we were to combine the outrageous proposed increase in premiums, shockingly high deductibles, and the crisis of inflation together, faculty can effectively watch the 3% salary increases we won for 2023 and 2024 disappear.

The administration’s proposed healthcare cost increases effectively wipe out any across the board raises for 2023 for many faculty.

In fact, for many, that 3% salary increase combined with healthcare costs increases, would, in effect, become a salary cut. 

For example, for a faculty member earning $75,000 a year on the proposed traditional family plan, their 2023 raise of 3% could amount to roughly an 1.2% pay cut.  If that same faculty member were to enroll in the proposed high deductible family plan, they could expect that their 2023 raise of 3% could, in effect, amount to a roughly 1.7% pay cut.  For a faculty member earning $65,000 who enrolls in the high deductible family plan, their estimated salary cut would be closer to 2%!

When questioned on how the administration could possibly think any of these increases to the cost of employee healthcare reflects the values of a decent employer, particularly given the millions in savings they have incurred in moving to self-insurance, the university provided no explanation other than to say they believe it to be fair.

ADMINISTRATION CAME UNPREPARED TO BARGAIN

In shockingly bad form, the administration came to the bargaining table unprepared to justify this unconscionable proposal, almost to the point of risking a bad faith bargaining charge with the National Labor Relations Board when it became clear that all members of the administration team had not read the proposals on the table.  Although both parties had agreed to bring expert consultants to the session to assist in moving the discussions forward with greater clarity and speed to meet open enrollment schedules that would benefit our members, the administration failed to share their proposal with their own consultants in advance of the session.  As a result, the administration’s consulting firm had no basis to understand the important questions FAMCO was prepared to ask the administration about their proposal on behalf of our members. 

When FAMCO made clear that such behavior amounted to a statement of disrespect for the faculty and showed they lacked serious intention to negotiate, the administration conceded their error and agreed to revise their counter proposal to begin again in earnest next session. We expect the administration team to return with a revised counter proposal that moves toward the clear and reasonable needs of faculty and their families.

TAKE ACTION TO DEMAND A GOOD FAITH PROPOSAL!

There are two things you can do today in 5 minutes to help move the administration closer to faculty on healthcare:

1. Click on this link to take 2 minutes to email President Leahy and let him know his proposal is untenable.

2. Click on this link to download the “OUR HEALTH = MU Health” graphic and use it as your Zoom background at our first full faculty meeting this Wednesday, October 5!