Ohio State Adopts Tiered Health Care Benefit Premiums

October 20, 2015

Ohio State University is moving to a tiered contribution health care plan next year, The Columbus Dispatch reported. The university spends $300 million per year on faculty and staff health care benefits and is seeking to lower the burden of rising insurance costs on lower-paid workers. Those at the top of the compensation tier, who make $400,000 or more annually, will pay $4,450 in premiums for family coverage under the new plan. At the other end of the income ladder, those who make $35,000 or less annually will pay $3,685 -- about 17 percent less than their highest-earning fellow employees. Some 65 percent of the university faculty and staff fall into the bottom two tiers, at $75,000 or less in annual income, and will pay less next year than they’re currently paying -- unless they elect a family plan -- through the Prime Care Advantage plan, according to the Dispatch.

A number of colleges and universities, from Pennsylvania State University to Harvard University, have explored ways to reduce the institutional burden of rising health care costs in recent years. Just this month, Wittenburg College said it will end retiree health care benefits and cut employee benefits packages. Andy Brantley, president and CEO of the College and University Professional Association for Human Resources, said a number of other institutions already have moved to the tiered approach. “The bottom line is that colleges and universities are looking for ways to make health care as affordable as possible as costs continue to increase,” he said. Tiered pricing, incorporation of wellness incentives and implementation of high-deductible health plans are examples of strategies being adopted across higher education, Brantley said.

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