Copyright 2001Â© Allan Baumgarten
The University of Minnesota changed health benefit plan options for its 15,600 employees and the results are intriguing. Last week, the University announced the open enrollment results and what employees had selected from the four plans that were offered. One new plan did very well and another did not.
The University had previously contracted with the State of Minnesota Group Insurance Program for its health benefit plans. It decided to change because of problems with the state plans and because anticipated increases in benefit costs would literally eat up all the new dollars that Governor Jesse Ventura had proposed to provide to the University over the next two years.
The University offered four plans. Two were HMOs, HealthPartners and PreferredOne. It also offered two "non-traditional" plans: Choice Plus, the care system plan developed by the Buyers HealthCare Action Group, and Definity Health, a plan which included a medical spending account and a high-deductible major medical policy.
Here are the results of the open enrollment:
Plan Employees Percentage Bi-Weekly Employee Contribution for Family Coverage*
HealthPartners 8,507 54.5% $20.67
Choice Plus 4,779 30.6% Tier I - $20.67
Tier 2 - $39.23
Tier 3 - $65.73
PreferredOne 1,653 10.6% $143.91
Definity Health 683 4.4% Option 1 - $51.63
Option 2 - $51.55
TOTAL 15,622 100.0%
* In Twin Cities area
HealthPartners attracted the most enrollees. That HMO (and the original Group Health Plan) had been offered to University employees since the late 1950s and already had significant market share in the University group. It was a low-priced plan, and employees could choose it with no additional premium for employee coverage and a bi-weekly cost of $21 for family coverage.
Employees could also select Tier I care systems for Choice Plus for the lowest cost, and Choice Plus drew nearly 4,800 employees. Choice Plus groups its participating provider systems into three levels based on the prices set by the care system, and that is reflected in the price to employers and consumers. For example, employees could select the Park Nicollet/Methodist and Children?s care systems and pay Tier I prices. The Allina Medical Clinic is in the highest cost tier, and University employees choosing that system will pay $65.73 for family coverage. In Duluth, the CareNorth system was in the lowest tier while the St. Mary?s Duluth Clinic care system was in the highest cost tier.
Only about 700 University employees selected Definity, which offered two options: a Personal Care Account funded by the employer of $500 for an employee or $1,000 for a family and deductibles of $1,250 per person and $2,500 per family. For Option 2, the University will fund an account of $1,000 for an employee or $2,000 for a family, with deductibles of $2,000 per person and $4,000 per family. Either option cost the same to employees - $52 per pay period for family coverage.
Definity, which has been closely watched, marketed aggressively and posted billboards at two high-traffic locations near the University. One touted Definity as a plan without co-payments. Definity was recently in the news when the Pacific Business Group on Health said that it would include a Definity option in the new health benefit plan structure that it is developing for members of its purchasing alliance.
Preferred One had been an option to state employees for the past two years and has a provider network covering most of the state. It was selected by 11% of the employees. It was more expensive than the other options, costing $144 per pay period for family coverage.
Links for more information: University of Minnesota Employee Benefits Department http://www1.umn.edu/ohr/eb/uplan/medhome2.htm
Choice Plus http://www.choiceplus.com/
Definity Health http://www.definityhealth.com/marketing/index.html