Faculty Benefits Committee Meeting

Minutes, September 10, 2002

11:00 – 12:00

The following committee members were present: Dale Atkins, Chuck Donbaugh, Michael Elliott, Blair Funderburk, John Grovenstein, Doug Martin for Jim Higgins, Jackie McGill, and Gayle Warren

The meeting was called by to order by Jackie McGill. She called for nominations to chair the Benefits Committee during the upcoming academic year. Michael Elliott was nominated and elected.

The minutes from the May 21, 2002 meeting were approved.

Plans for the 2002-2003 Year

The committee members identified the following issues for consideration during this academic year. The table lists the issues, general comments made about the issue, and the schedule for discussing the issues during the year.

Issue	Comments	Schedule for Discussion
The health plan	Costs are increasing at 12% per year. This is not sustainable. The Regents are considering options that might affect the plans available as well as a change in the 75/25 cost split between the Regents and employees.	after January
Retirement options	Executive 403b program will allow for supplemental savings to those who make more than $200,000. The 457 program should also be discussed.	after January
College Savings Plan	There are currently no problems with it. A question was raised about how well faculty and staff understand this program.	not scheduled
CUPA Benefits Survey	Findings have not been finalized, but should be available soon.	November meeting
Compensation survey	Georgia Tech has seen an erosion of its salaries relative to comparable institutions and companies.	to be discussed at this meeting and again in February
Domestic partners	Although the biggest benefits (such as health) are set by the Regents, Georgia Tech has some flexibility on other benefits.	October meeting
Life insurance	The current $25,000 benefit was set over 15 years ago.	October meeting
PeopleSoft Program	Tech is moving toward more self-service options for managing benefits. For example, benefits enrollment may be online in the future.	not scheduled

Classified Employee Salary Data

The Competitive Analysis Summary was distributed by Chuck and discussed. Compared to survey medians, Tech lost ground in all job groups except one. It now stands between 3.1% and 8.6% below national or local markets (depending on job classification) in all groups except Professional Academic, which is 24.5% above the national median. The biggest decrease was in Professional Administrative, which dropped from +6.0% last year to -3.7% this year, probably due to turnover associated with the recession.

The survey is used to identify groups whose pay markedly differs from the survey. For example, campus police and IT workers were recently identified as jobs needed special salary adjustments.

An updated compensation survey will be completed in another six months. The Benefits Committee will review this topic again in February, for next years raises.

Medical Benefits

John distributed materials and presented an overview of issues associated with employer health plan costs. The highlights are as follows:

§ The four year cumulative increase for health care paid by large corporations has been 68%

§ Savings associated with HMOs are no longer as significant as they were when they were first introduced in the 1980s and 90s. Employers now believe that PPOs are more effective at cost containment.

§ On average, corporations with over 700 employees pay 77% of the insurance costs for single employees but only 67 to 69% of costs for families. The Regents pay 75% for all employees.

§ The primary causes of cost increases are prescription drugs and increased utilization of health care, primarily because people suffering from cancer, AIDS, etc are living longer.

§ The primary tactics used by employers to manage cost include plan design changes and contracting with lower-cost vendors (both of which apply to Georgia Tech), as well as raising employee contributions and reducing plan choices.

§ Section 105 Medical Service Accounts are one innovation that is spreading. These are popular with young and healthy employees but not with people who are medically ill.

§ The biggest cost cutting feature used by the Regents was to create a closed formulary system to control pharmaceutical costs.

The next meeting will be held on October 17^th.