To combat the rising costs of employee health insurance, UC executives unveiled a new proposal earlier this week to offset increased healthcare costs for 2009.
According to a statement issued by the UC Office of the President, the University expects health insurance costs to increase by 8.9 percent in 2009, but will continue to pay approximately $967 million in employee health benefits. In addition, the UC will spend $5.9 million on a one-time subsidy to offset healthcare costs for the lowest-earning UC employees.
UC executives estimate the subsidy will cause a drop in monthly health care costs for 36,000 covered employees, including 21,000 lower-paid workers. Co-pays and deductibles will remain at present rates, and dental and vision benefits for employees will continue to be fully compensated.
“We recognize how important good health benefits are for our employees and their families, especially our lower-paid employees who are hit hardest by escalating health care costs,” UC President Mark G. Yudof said.
While the rising costs of healthcare nationwide are forcing other employers to slash healthcare benefits or shift the costs to the employees themselves, UC spokesman Paul Schwartz said the administration is committed to keeping costs at a minimum.
“While some employees will see a modest increase in their monthly costs in 2009, others will actually see their costs go down,” Schwartz said. “The change depends on choice of coverage and salary level.”
Larisa Traga, graduate program assistant for the Anthropology Dept., said health insurance costs have not increased dramatically in her three years as a UC employee. Although she appreciates the new measures, Traga said increased wages or decreased parking rates would also better her financial situation.
“When I had a son, my premiums on health insurance went up,” Traga said. “I definitely feel the cost more with a family. The aid these measures bring would be welcome.”
William Schlitz, political communications director for American Federation of State, County and Municipal Employees, said the temporary solutions provided by the proposal still fail to address larger issues.
“If workers got livable wages and didn’t have to work two jobs and put all that wear and tear on their bodies, then they wouldn’t get sick,” Schlitz said. “We look forward to the day when … the UC puts workers out of poverty wages. Until then, it’s all smoke and mirrors.”
Schwartz said while the subsidy will not aid the entirety of UC employees, it will provide relief for the workers most in need.
“If the [5.9$ million subsidy] were spread over our 170,000 employees, it wouldn’t amount to much,” Schwartz said. “There’s nearly $150,000 of wage increases proposed to AFSCME that they have yet to agree upon. The subsidy is a way of being equitable to all employees.”