Employee Benefits: Private Exchange Update

Early last spring, during a series of open meetings on financial sustainability, the community was introduced to the concept of a “private health exchange”, which Middlebury had planned to implement in 2019. As a reminder, under a private exchange our current one-size-fits-all medical plan will be augmented by at least two new medical plan options, giving employees the ability to select a plan that best meets their needs. In addition, a private exchange will likely include an optional employer-funded health reimbursement account or a health savings account* (both quite popular with employees), as well as additional dental and vision options and new voluntary benefit choices. Implementing a private exchange will allow Middlebury to continue to improve our excellent health benefits while at the same time managing ever-rising healthcare costs.

Our update today is that this benefit change will be postponed until January 1, 2020. The reason for the change in timing is that the institution needs to prioritize the implementation of the Oracle ERP (Enterprise Resource Platform) project—Project Ensemble. That work is underway and is going well, but will extend through the spring of 2019.

While the delay is unfortunate, it has the upside of allowing Human Resources more time to work with our Green Mountain Higher Education Consortium partners to design a program that will best meet the diverse needs and preferences of our community and ensure that we have the support needed to minimize uncertainty and anxiety that often accompany changes of this kind.

For example, as we learn more about best practices we are strongly leaning toward a set of tiered plans that will cover the identical services, procedures, and prescription medicines, with the difference being in the share of the cost covered within the chosen tier. This model reduces the complexity of decision-making and concerns about equity between tiers of coverage.

Even with a simplified tier approach we remain acutely aware that adding multiple benefit plan options will require comprehensive support for employee decision making. The GMHEC partners have continued to explore sophisticated software options that are available to help employees navigate the benefit selection process. In addition, we have learned that the newly emerging best practice is to employ not only software, but to contract with a benefits consulting company to provide a team of highly trained professionals to temporarily supplement the employer’s benefits department during the critical decision-making period. In this way the institution can ensure that anyone who wants one-on-one support will be able to get a timely appointment. Our thinking, at this point, is that such a model could be highly useful, especially during the first year of the private exchange.

As we look forward toward the private exchange, we want to emphasize one important institutional commitment: regardless of the composition of the benefits program, Middlebury will continue to maintain its income-sensitive approach to employee contributions in which lower-compensated employees pay a significantly lower percentage of the premium cost.

Because the private exchange implementation is now over a year and a half away, we do not anticipate having large open meetings over the next few months. However, HR remains committed to keeping the community apprised of the project status and to that end has recently visited Senior Leadership Group, Staff Council, and met with representatives from Faculty Council to provide in-person updates.  As we get closer to January 2020 you can expect communication and engagement efforts to intensify. In the meantime, we are happy to meet with other stakeholder groups who may be interested in learning more about our current thinking on private exchange design and support of the new program.  Please email questions or invitations to cmullins@middlebury.edu.

 

–Karen Miller

–Cheryl Mullins