Insurance provision savings projected

Nearly 200 spouses of YSU employees have dropped their YSU insurance.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- Coordination of health-insurance benefits for the first time in employee contracts is netting Youngstown State University larger dividends than it had anticipated.
A provision in new faculty, classified employee and Association of Professional and Administrative Staff contracts provides for a $100 per month surcharge for a YSU employee to keep a working spouse on the university's insurance plan, if that spouse works at least 32 hours a week and has access to, but doesn't take, his or her employer's insurance as primary coverage.
Should the spouse take that other insurance, YSU's insurance will serve as secondary coverage without any surcharge. The monthly fee doesn't apply to a YSU employee whose spouse doesn't work or has no health-care insurance available where he or she works.
Employee spouses switching to insurance provided by other employers was expected to generate an annual savings of $330,000 for the university, but Jeff Taylor, director of budget planning and resource analysis, told the YSU Board of Directors on Thursday that savings are now expected to surpass $550,000 a year.
Numbers
There are 701 people in the three employee groups who have a spouse on their YSU health insurance. Taylor said 277 of those spouses work 32 or more hours per week with access to their employer's health-insurance plan.
Of that number, 187 have already switched from YSU insurance to their employer's health insurance, resulting in an anticipated annual insurance cost reduction of $445,000 to YSU, Taylor said.
The remaining 90 working spouses will keep YSU as their primary coverage and pay the $100 a month premium. That will reduce YSU's insurance cost by an additional $108,000 a year, he said.
Early retirement incentive
Taylor also offered the board a revised version of the costs of an Early Retirement Incentive Plan being offered to 185 eligible YSU employees over a two-year period.
Early cost estimates predicted that the plan would cost the university nearly $10 million over a three-year period but that the university would save $7.84 million over that same period by leaving vacated positions empty for one month and then filling them with new employees at a lower salary level.
Taylor said revised numbers now show that the cost over three years if all 185 employees took the package would be $7.17 million, while the savings would be $7.83 million.
After the three-year buyout period ends, the university should see base salary savings of $3.6 million a year, Taylor said.
He said 77 employees had signed up to take the incentive package as of mid-February and, if no one else signed up, the three-year buyout cost would be nearly $2.4 million while the savings would be over $2.8 million at the end of three years, with a permanent annual base savings of $1.6 million thereafter.
More employees are expected to take advantage of the offer, however.
Dr. David C. Sweet, YSU president, said the savings will likely be even larger because the university doesn't intend to fill every position that is being vacated through the incentive plan.
gwin@vindy.com