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Do IT this week: Layering
Salaries grow to cover employees' share of premiums; price tag is about $240,000 in Kent, $325,000 in Akron
By Carol Biliczky
Beacon Journal staff writer
Published on Sunday, Nov 02, 2008
The University of Akron and Kent State are making sure most employees don't pay higher medical premiums.
Kent State announced this week it will absorb about $240,000 in medical costs that normally would have been passed along to employees next year.
In January, UA officials quietly began adding as much as $1,159 a year to the salary of administrators and staff to offset higher medical costs.
The $325,000 yearly cost of the UA benefit increases will be ongoing because they were built into employees' salaries.
While this is the first time Kent State has picked up the employee medical increase, UA has been doing so for more than three years.
In January 2006, all faculty, staff and administrators received $2.8 million a year in their pay to help cover the 15 percent share of their medical premiums for two years. The pay raise followed a negotiated settlement with the American Association of University Professors, in which faculty union members agreed to begin paying 15 percent of their medical premiums, provided they receive an initial pay raise to cover the cost.
Until then, the university had absorbed all medical costs.
The university extended the benefits payments this year to nonunion employees, notifying administrators and staff in January that they would get raises retroactive to the start of the year.
Ted Mallo, secretary to the board of trustees and UA's chief legal counsel, notified eligible employees by letter.
''The board of trustees, for this year, authorized the administration to increase salaries of full-time employees to maintain the 85/15 percent contribution rate. . . . Your service to the university is greatly appreciated,'' he wrote, for example, to George Newkome, vice president of research and dean of the Graduate School, on Jan. 24.
Nothing on the record
Mallo told employees that trustees approved the raises as part of the university's $29 million health and wellness package on Oct. 17, 2007, although there was no mention of the raises in the trustees' resolution.
''I do not have a copy of a specific board action to prove it — all we have is what you already have, that the board of trustees approved the health and wellness package,'' chief university spokeswoman Barbara O'Malley wrote in an e-mail.
The raises were handled so quietly that even Jennifer Holz, president of the UA chapter of the American Association of University Professors, was unaware of it.
''I feel I was left in the dark,'' said Holz, who is an associate professor of sociology at UA's Wayne College. Members of the professors' union are not receiving the benefits raises in 2008 and 2009 to cover their share of the increased costs.
Eligible employees received yearly raises equal to 0.20 or 0.30 percent of salary, depending on the medical plan they chose, plus as much as $200 a year, to pay the 15 percent hike in health care this year and next. UA's benefits include health care through Medical Mutual, Anthem, Kaiser, Summa and Hometown Health Network.
Because the raise was in addition to merit or promotional increases, many nonunion employees got at least two upticks in the 2007-08 school year, just as they did in 2005-06.
For example, Newkome's salary rose from $220,414 on July 1, 2007, to $220,955 with a $541 benefits increase on Jan. 1 and to $229,455 with a merit raise on July 1, a 4.1 percent increase, according to information provided by UA.
Head basketball coach Keith Dambrot received a $575 benefits increase on Jan. 1 that brought his salary to $200,575 and a raise on July 1 that brought his salary to $225,000, a 12.5 percent increase over the year.
The cost of UA's benefits include employees at the Northeastern Ohio Universities Colleges of Medicine and Pharmacy in nearby Rootstown Township. About 10 percent of the UA total is for the medical college.
In 2006, NEOUCOM gave health-care raises of up to $500 to employees making up to $55,000 a year, spokesman Mark Bosko said. In 2007, the medical college moved to a benefits cost-sharing plan, in which higher paid employees absorb a higher portion of their medical costs. No raises were given out starting in 2007.
At Kent State, Fred Martone, director of benefits and compensation, said the university's new contracts with faculty guaranteed that their premiums would not rise next year. He said administrators wanted to treat other employees the same way.
He said the board of trustees discussed how to treat nonunion employees when it approved the union contracts, but didn't take any formal action to authorize it.
''It's hard to say to some groups, 'You're not getting any increase,' but to others, 'You're getting an increase,' '' he said. ''We didn't want to get anyone mad at us.''
Martone said Kent State will pay $2.4 million more in health care in 2009 than it did this year. The total includes the 10 percent that 4,200 faculty, administrators and staff members normally pay for medical, prescription and vision coverage.
Cost of the Medical Mutual plan increased 8 percent; the Anthem plan, 15 percent, Martone said.
More changes coming
Administrators also decided to hold down employee costs because of what they plan for the future, he said — to nudge employees' share to 15 percent to 20 percent of the total by 2011.
''That is the goal,'' he said. ''We want to ease the transition.''
KSU spokesman Tom Neumann said the university considered many issues when it decided to absorb medical costs.
''You've got to talk about employee morale and the effect of higher costs on employees,'' he said.
Kent State will not absorb the benefits increase for the 370 or so employees who are in the American Federation of State, Local and Municipal Employees, which is negotiating for a new contract, Martone said.
The health-care announcement follows an e-mail request by KSU President Lester Lefton that employees hold down costs by sending e-mails instead of letters, arranging teleconferences instead of trips and simplifying or going without special events.
''I can assure you that the university's leadership team is doing the same as we put every aspect of university finances under the microscope,'' he wrote.
Like all Ohio tax-supported colleges and universities, KSU and UA agreed to freeze tuition for the 2007-08 and 2008-09 school years in exchange for more money from the state.
Carol Biliczky can be reached at 330-996-3729 or cbiliczky@thebeaconjournal.com.
The University of Akron and Kent State are making sure most employees don't pay higher medical premiums.
Get the full article here.
Comments
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Tallmadge, OH
Posted 07:59 AM, 11/02/2008
It's time to change how the Ohio universities are run and funded. This is just plain wrong for UA and KSU to fund more helthcare for their emplyees. We in the private sector don't get that help. It's taxpayer money they are using and we as taxpayers need to not allow it.
Front Line, KC
Posted 09:07 AM, 11/02/2008
So the cost of tuition for my daughter and me goes up, so that the professors don't have to pay for medical coverage? I pay my own and I pay tuition. What a scam. There needs to be changes made in this system. The schools should be not for profit.
akron, oh
Posted 09:12 AM, 11/02/2008
Certainly, to require that professors - that are paid handsomely - pay a larger portion of their health care is not asking too much. Their contribution should be more in line with what those of us in the private sector pay. But, of course, the unions will fight this tooth and nail. And then unions wonder why businesses are leaving for more profitable locations and union members are looking for new jobs.
Medina, OH
Posted 09:18 AM, 11/02/2008
It is about time these people come to the table of the rest of us and start sharing the good and the not so good times we all find ourselves. I think it is high time we quit putting the professors well being on the backs of the students. What comes next? Increase in student fees. or a sir charge for health care coverage. We should have to have the students pass an examination for each class taken and base the teacher pay on the percentage of passing grades.
Akron, OH
Posted 09:19 AM, 11/02/2008
This is one of the many main problems with Obama.
He has never worked for a private sector business that cannot just allocate other people's money--tax money--to cover the stifling operating costs like health insurance premiums.
He's a Univ. of Chicago Law School professor in the Ivory Tower with idealogues like Ayers, and his wife made $275,000 for sitting on Univ. of Chicago Hospital Board (only a portion of their total income of around $1 million). You can be sure that in the Executive office of the Presidency that this same mentality will prevail.
Akron, OH
Posted 09:29 AM, 11/02/2008
Sam, not only do you pay the taxes and your own kids' tuition, but you're paying the tuition for Faculty and Staff children--that's a huge perk nobody talks about off-campus.
Posted 11:30 AM, 11/02/2008
First of all theres a PROFESSORS union?! Give me a break.
Second, how BIG of the union to agree to a hike in health insurance copays when the school raised the salaries to make up for it! So basically, it was a wash. It was a big scam so the univesity could say "hey we are charging professors for health insurance now like everyone else" but meanwhile behind the scenes the next effect was ZILCH! No savings.
And yes they do all get a free education for their kids.
Posted 11:58 AM, 11/02/2008
College is a scam for the most part and these clueless professors live on fantasy island. Very few classes actually teach skills that a person needs in a real life job that they already have not learned in high school. Technical and trade schools are a different story, they actually teach skills needed for real life and cut out all the bs classes.
Akron, Oh
Posted 01:00 PM, 11/02/2008
Right g, College is a scam. That's why statistics prove that those with a college education make far more money than those with only training from a trade or technical school or with only a high school diploma. Check back with us when you have real data, you chump!
Akron, Oh
Posted 01:00 PM, 11/02/2008
You people are just plain jealous!
Medina, OH
Posted 01:12 PM, 11/02/2008
Yes - jealous and broke.
Akron, Oh
Posted 01:28 PM, 11/02/2008
It's your own fault if you're broke.
Medina, OH
Posted 06:22 AM, 11/03/2008
Thanks for signing you "name?"
Posted 06:42 AM, 11/03/2008
Let me make sure I understand this. If you work for the city of Akron and they sell the sewer system, your job is guaranteed, at the same wage. If you work for U of A or KSU, your insurance premium increases are taken care of at no expense to you. I am currently unemployed and struggling to keep my Cobra, while my taxes support this?
Akron, Oh
Posted 01:12 PM, 11/03/2008
We don't sign our name. This site does that ans sometimes it leaves out our names for some unknown reason.
Posted 03:59 PM, 11/03/2008
I work at UA as staff, not faculty and this article is news to me. As I recall a few years ago they gave us a lump sum to help pay for healthcare for the first year since it was now something we were paying out of our salaries. Supposedly this was so all our salaries would be larger when evaluated for retirement. However, it is really just an easy way to make us pay for all the future increases. The article mentions eligible employees so I don't know who they are excluding. I do know over the years our cost for health care and prescription copays has increased dramatically along with our cost to park. Our current healthcare payment is based on a percentage of our salary. For those of you thinking we are all on Easy St. since we work at a University, we are not. The cost of everything has gone up for us too. There's no need to be jealous. As for the tuition perk, for years we were paid lower wages which helps compensate for that benefit...and keep in mind many don't take advantage of it. It would cost universities more to offer a higher wage to everyone and take away that "perk". Private companies have their perks too such as bonuses, company parties, picnics, and gifts--none of which we get at the universities unless it's privately funded. It is tough for everyone now. Keep that in mind.
