Health insurance rates for state workers will rise from 28 to 46 percent for Fiscal Year 2003, and institutions such as Fort Hays State University and other state agencies and the employees personally will pay more.
"I told you earlier this year that Fort Hays State would probably take more budgetary hits this year," said Dr. Edward H. Hammond, FHSU president, at an informational meeting Tuesday, Sept. 24, to go over the new rates. All employees were invited to that meeting, and two more sessions with health plan representatives are scheduled next week.
Hammond said that the bad news on health insurance rates will amount to about a $500,000 extra cost that must be borne by the university budget, unless the state puts new money in.
"That does not seem likely at this point," said Hammond, who also repeated his prediction that further mandated budget cuts are much more likely than additional revenue.
FHSU employees and other state workers will also pay much more for health coverage. Each of the two plans available to state workers -- Kansas Choice and Preferred Health Systems -- has three tiers of employee contribution levels, divided by salary range: employees earning less than $25,000 per year, employees earning more than $25,000 but less than $44,500, and employees earning $44,500 or more.
The employee's share of the cost is deducted from 24 of the 26 paychecks in a year. The new rates go into effect Jan. 1, 2003.
The university pays $3,531.12 per year for each employee-only health plan and an average $1,633.68 for the three types of family plans: employee and spouse, employee and children, or employee, spouse and children.
In the highest tier, for employees making $44,500 or more a year who choose family coverage for spouse and children, the employee's share of the cost will increase from $161.40 per check to $232.16, or $1,697.76 more per year. That is under the more expensive health insurance plan, Preferred Health Systems.
The increase in employee's share at the same level in the Kansas Choice plan is $47.03 per check, or $1,128.72 per year.
Hammond, noting that FHSU employees received no salary or wage increases this year because of state budget constraints, said that FHSU was able to "eat" the increase in health insurance premiums last year so that the employee contribution did not rise. This year, that was not possible. The increase in premiums was in the contract signed by the state, and the increase in the amount that employees pay as their contribution toward the cost of the premium was mandated by the state, he said.
"Even if we could figure out a way to take up the slack, so that employees could be held harmless from the increases, we couldn't," said Hammond. "The state simply wouldn't allow it."