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Approval of Recommendations: Benefits Redesign II
To the University Faculty and Staff:
We are pleased to acknowledge the second set of recommendations on benefits redesign put forward by the Benefits Advisory Committee and endorsed by the Academic Planning and Budget Committee and the Personnel Benefits Committee of the University Council. They were published for comment in Almanac on February 10, 1998.
The recommendations have now been forwarded to us for action.
On Health Care Insurance we accept in full the recommendations.
The University will:
  • Make no change in Plan 100's Major Medical $1,000,000 lifetime maximum.
  • Replace the $2,000,000 combined in-network and out-of-network lifetime maximum benefit in the PennCare option with an unlimited lifetime maximum for in-network care and a $1,000,000 lifetime maximum benefit for out-of-network care.
  • Express annual and lifetime mental health benefit limits in days rather than dollars and eliminate separate lifetime limits on outpatient mental health benefits in Plan 100, PennCare and the UPHS/Keystone POS plan.
On The Retirement Plan we accept in full the recommendations.
The University will:
  • Make the TDA plan available to employees who are at least age 21 and have completed at least one year of service. Current participants with less than one year of service will be grandfathered.
  • Permit TDA plan participants who terminate prior to age 55 to withdraw the full balance in their Tax-Deferred Annuity accounts (including University matching contributions).
  • Increase the mandatory cash-out amount from the Retirement Allowance Plan from $3,500 to $5,000.
  • Continue discussions on the retirement plans from perspectives other than compliance. This will include examining long-term objectives for the plans, concerns of faculty and staff, and benchmarking studies.
On Long-Term Disability we accept in full the recommendations.
The University will:
  • Retain the current income replacement level of 60% of base salary.
  • Increase the maximum monthly benefit to $7,500 and eliminate the three-year waiting period for A-3 and certain A-1 employees so that all benefits eligible faculty and staff will participate on their first day of employment. (As is currently the case, benefits will begin after six months of continuous disability.)
  • Set the amount the University pays for medical coverage at the HMO premium for individual or family coverage depending upon the employee's coverage at the time of disability. (Disabled employees who want to remain in a plan other than an HMO may do so by contributing the premium differential.) Employees who are currently disabled will be grandfathered under the old policy.
  • Continue University contributions for disabled employees in the Tax-Deferred Annuity Plan whether or not the employee continues to contribute.
On Long-Term Care Insurance we accept in full the recommendations.
The University will:
  • Offer to employees, retirees, spouses/domestic partners, parents, parents-in-law, grandparents and grandparents-in-law the option to purchase individual long-term care coverage.
We believe that the proposed changes to current benefits and the addition of a new optional benefit will continue to provide Penn employees with a strong, competitive benefits package while at the same time help to contain the cost of benefits to the University. We believe also that the changes satisfy the articulated principles of the benefits redesign process and that they will ultimately advance the University's mission as well as the quality of life and well-being of its employees.


Judith Rodin, President Michael Wachter, Interim Provost


John A. Fry, Executive Vice President

Return to:Almanac, University of Pennsylvania, March 17, 1998, Volume 44, Number 25