The Decisions on Benefits Redesign

To the University Faculty and Staff

We are pleased to acknowledge a set of recommendations that represent the first thorough review of our benefits package in more than 15 years. The University's benefits package is vitally important to our ability to retain and recruit outstanding faculty and staff. We believe that the recommended changes will substantially modernize our benefits package and increase its value for faculty and staff. The package will offer greater choice and be more responsive to the preferences of the community, and will also be more cost-effective and consistent with current best-practices of benefits design.

The recommendations are the product of a long and deliberative period of study and consultation stretching over the last year. They were first developed and approved by a specially constituted Benefits Advisory Committee and then endorsed by the University's standing Academic Planning and Budget Committee. The recommendations were then provided to the Ad Hoc Committee of the Faculty Senate on February 5, to the Personnel Benefits Committee of University Council on February 7, and to the University community in Almanac on February 11, 1997. Members of the Benefits Advisory Committee have met with each school's faculty and staff from throughout the University--altogether more than 3,000 people--to explain the recommendations and gather feedback. The Benefits Advisory Committee and the Academic Planning and Budget Committees were reconvened for final sessions last week to consider this feedback before sending their recommendations to us for action.

On Medical Insurance we accept in full the recommendations. The University will:

retain Plan 100, PENNCare, and the Keystone and US Health Care HMO's
offer the new UPHS/Keystone Point-of-Service Plan
institute the recommended employee payroll contributions for all plans
introduce a prescription drug plan for those electing the HMO plans
discontinue the BC/BS Comprehensive plan and the QualMed HMO.

We recognize that these changes are complex and will require an intensive educational program during open enrollment at the end of April. Given the range of choices being offered, we will also enhance our current monitoring of the quality of care in each plan and provide alternative plan designs if needed.

On Tuition Reimbursement, we accept, with one exception, the recommendations. The University will:

retain the undergraduate tuition program without change
establish special qualifying courses for employees whose admission to CGS or Wharton is deferred
eliminate the graduate and professional tuition reimbursement for spouses and dependents of faculty or staff hired on or after July 1, 1997
retain the graduate and professional tuition reimbursement for spouses and dependents of faculty or staff hired before July 1, 1997.

This last bullet represents the single point on which we depart from the original recommendations. We do this on the advice and counsel of the Faculty Senate Executive Committee, the Benefits Advisory Committee and the Academic Planning and Budget Committee after receiving the feedback of the University community.

On Life Insurance, we accept in full the recommendations. The University will:

provide all employees, at no charge, with life insurance coverage at one-times annual benefits base salary, up to $300,000.
allow employees to purchase additional life insurance at group rates up to an additional four times pay
raise the current insurance maximum from $300,000 to $750,000
eliminate flex credits and replace them with an equivalent increase in benefits base salary for each employee.

In instituting this change, we will communicate to employees the salary increase due to the elimination of flex-dollars separately from the annual salary increase.

On Paid Time Off, we accept in full the recommendations of the Committees. The University will:

maintain the current winter vacation
end the practice of reduced summer hours and the compensatory days off associated with them
reduce the number of categories for paid time off
adopt a single accrual schedule for new staff (A1s and A3s) hired on or after July 1, 1997.

On Part-Time Benefits, we accept in full the recommendations of the Committees. The University will:

maintain the current benefits package for regular part-time employees
permit part-time employees with at least two years of continuous service to participate in the health care pre-tax account with a maximum of $1000.

We recognize that the review of benefits must continue and that several issues still need to be addressed including, for example, retirement, disability, and mental health coverage.

In the future, benefits redesign will occur in a more continuous, but also more comprehensive fashion, in the context of the principles enunciated by the Benefits Advisory Committee and in the context of total compensation. The goal will continue to be to maintain a highly competitive total compensation package in order to recruit and retain excellent faculty and staff.

-- Judith Rodin
President

-- Stanley Chodorow
Provost

-- John Fry
Executive Vice President

Open Enrollment: April 28-30, May 1-7
With decisions now final on benefits redesign (above), the University has also changed the 1997 Open Enrollment dates to the two weeks starting April 28, according to Human Resources Vice President H. Clint Davidson.
Members of the faculty and staff may expect to receive their individual packets during the second week in April.
A stepped-up benefits counseling program for faculty and staff will be announced in a forthcoming issue.

Almanac Between Issues. Tuesday, March 25, 1997.

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