Health Benefits for Faculty: OUS vs PEBB
Background: Since the State Employees Benefits Board (SEBB) and the Bargaining Units Benefits Board (BUBB) were merged into the Public Employees Benefits Board (PEEB), health benefits for former SEBB members, including faculty, have eroded. Pre-existing benefits like the cash back option and the opt/out alternative have disappeared. Plan choices have shrunk to a bare minimum. Benefits under these plans grow less comprehensive and attractive each year. It is indisputable that funding that supported SEBB benefits has moved across the ledger to former BUBB members as the PEBB Board has focused on extending family health coverage to all former BUBB members.
Issue: The Oregon University System (OUS) wishes to leave the PEBB system and strike out on its own in the health insurance arena. A recent study showed that OUS staff are healthier as a group than are state employees generally. OUS estimates that it could save up to $12 million in the 2007-2009 biennium if it negotiated OUS-specific coverage. Governor Kulongoski is unlikely to allow OUS to pursue this course of action. If Ron Saxton is elected Governor, it is possible that he could be persuaded to do so.
PRO: Given the horrendous under funding in OUS, any viable option that would free up existing funds for other uses in addressing faculty issues merits careful consideration. If agreements could be reached and legislation passed to assure that a stand alone OUS health benefit system would provide benefits to faculty that are at least comparable to current PEBB benefits and any savings are completely dedicated to faculty compensation, Then assisting OUS in making this change ought to be an AOF priority. The implementing legislation would have to be very carefully drawn to assure that the Legislature appropriated sufficient funds to support an OUS stand-alone system and that savings (every penny of savings) went in to the salary pot.
CON: If OUS were to exit PEBB, it would quickly find that projected “savings” were illusory because its purchasing power would be greatly diminished. Also, leaving PEBB would remove the security of benefiting from the PEBB reserve fund which has been used in the past to cover cost increases that exceeded expectations or union agreements. Lastly, it is a question of whom should faculty trust: OUS management or the PEBB Board which includes labor advocates.