Iowa State University

Inside Iowa State
Sept. 20, 1996

An Inside look at the new benefits program

A new benefits program, which would take effect for faculty, professional and scientific staff and supervisory staff in February, has been proposed to the State Board of Regents.

In the Q&A below, Johnny Pickett, assistant vice president for business and finance, and Mark Power, chair of the Annuities and Insurance Committee, discuss the new program, called the ISU Plan.

More information on the ISU Plan will be coming soon as details are firmed up. Watch your mail and the ISU Plan Web pages

Why is Iowa State changing the benefits plan?
Health care costs are going up and both the university and ISU employees are facing increases in insurance costs. We wanted to find ways to better control health care costs and, at the same time, give faculty and staff more individual control over the kind of benefits they receive and buy. Not every Iowa State employee wants or needs the same kinds of health, dental, life or disability insurance. The new program gives individuals more choices about what they buy with their benefits dollars.

Did the Iowa Board of Regents ask Iowa State to change its benefits plan?
Iowa State has higher health care costs and fewer managed care options than other regents institutions. The regents asked us to look at what we could do to better control costs and increase managed care options.

How will the new program work?
The new program offers many more options than the current one. Faculty and staff can develop their own individualized benefits programs by selecting from a variety of health, dental, life and disability insurances and flexible spending options. They will pay for these options with "benefit credits" provided by the university and their own contributions, through payroll deduction.

Is my benefits program going to cost me more?
Iowa State will contribute the same total dollars to employee benefits under the new program as it did under the current one. Under the proposed plan, most employees will not pay more for benefits options than they currently pay. However, your costs depend on what benefits you select and how many family members will be covered. Those who select more comprehensive insurance plans may pay more than they do now.

Is the university's contribution to my benefits based only on my salary?
Iowa State's contribution to your medical and dental plans has nothing to do with how much money you make. The university contribution is based on which of four coverage options you choose -- single, employee plus spouse, employee plus children, or family coverage. Disability and life insurance benefits are based on your salary.

How much will the university contribute to my benefits options?
Iowa State's contribution to your medical or dental plan depends on which of four coverage options you select. The chart at the end of this article illustrates the proposed medical plan options. The most important part of the table is the net employee cost. As you can see, a single employee who selected an HMO would pay nothing for medical coverage and have a credit of $7.50 per month left over for something else.

A single employee who selected an indemnity plan would contribute $15.89 monthly to his/her medical coverage.

The dental plan works the same way as the medical -- Iowa State pays a specified amount and you pay any additional costs. Disability and life insurance coverage benefits are based on your salary. You'll receive more details on these plans in brochures mailed to you in October. Or for more information right now, you can go to the ISU Plan page on the World Wide Web.

Can I opt for no benefits at all?
The only thing you're required to take is the disability benefit at 50 percent of your base salary. You do not have to take health, dental or life insurance.

If I opt not to take some of my benefits, can I have the university contribution in cash?
You can't take benefit credits in cash. You can do one of two things with "leftover" benefit credits:

What health care options will be available?
Under the proposed ISU Plan, health insurance options will expand from the current two options (PAT 1000 and Preferred Blue HMO) to four options. It's important to understand how each option works and to assess which option works best for you. One of the bulletins that will be sent to employees in October will describe in more detail how each option works. Detailed plan documents will be available prior to the enrollment period.

Briefly the four proposed options are:

What are the new features in the benefits plan?
All the proposed health insurance plans are new and two of the plans -- the point-of-service and catastrophic plan -- are quite different from plans we previously have offered at Iowa State. A second dental plan, covering expanded restorative services and orthodontia, is new.

The ISU Plan also allows you to buy additional life insurance coverage and to buy some coverage for dependents. The disability plan will have a 50 percent coverage level for employees who feel that they need less coverage and would like to allocate their benefit credits to other benefits or to spending accounts.

How easy is it to change my benefits package?
Generally, you will be able to change your enrollments once a year, with some restrictions.

How does the new benefits package affect TIAA- CREF?
It doesn't. Policies involving TIAA-CREF and your retirement benefits remain unchanged.

Are Merit staff getting a new benefits program?
Merit staff are covered by collective bargaining and the benefits package is determined through contract negotiation.

When do I sign up for my new benefits package?
You'll be asked to return your enrollment form between Nov. 18 and Dec. 6. In the meantime, you'll be provided with much information about the new benefits program. A series of three brochures will be mailed to you.

Right before the enrollment period, you will receive an enrollment package containing detailed information about your options and a workbook to help you complete your enrollment form. You'll also have the opportunity to attend an on-campus workshop or seek advice from a Benefits Information Center (in operation during the sign-up period).

And as always, you're welcome to contact the Benefits Office by e-mail ( or phone, 4-7680.

What happens if I don't sign up for a new benefits package?
If you don't sign up for a package, you'll be enrolled in a default package that will be similar to the coverage you have now. However, it's certainly in your own best interest to create your own package. You'll get the most for your money if you only pay for those benefits that you need and want.

In the following chart:
The proposed new ISU Plan options are listed in the first four columns.
The old indemnity plan costs are listed in the last two columns.

HMOPOSCatastrophicIndemnityPAT 1000
(as of 7/1/96)
PAT 1000
(proj. 1/1/97)
Total Price
Employee$147.50$156.50$134.91$170.89$179.88$19 2.47
plus spouse
plus children
Family$432.98$459.39$396.02$501.63$441.47$472. 37
plus spouse
$266.00$266.00 $266.00$266.00
plus children
Family$356.00$356.00$356.00$356.00$307.54$307. 54
Net Employee Cost
Employee$ (7.50)$ 1.50$(20.09)$ 15.89$ 8.20$ 20.79
plus spouse
$ 73.25$ 93.94$ 44.29$127.03
plus children
$ 44.50$ 60.69$ 21.83$ 86.59
Family$ 76.98$ 103.39$ 40.02$145.63$133.93$164.83

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