Health Premium Holiday
The University of Nebraska is proud to provide a competitive, cost-effective health insurance plan to our employees and their families. With the leadership of our chief business and human resources officers, we have worked hard to manage our plan in a way that meets employees' needs while also protecting us against an uncertain future for the health insurance industry.
Our plan has had another successful year, with health claims in line with projections. I am pleased to inform you that we will take advantage of this positive outcome by offering all active employee members of our health plan a one-month “premium holiday” for December 2019. In short, employees will not pay medical or dental insurance premiums in December 2019.
The premium holiday applies to all employees enrolled in the university's medical and/or dental plans. Action is not required on your part; the medical and/or dental premiums that would normally be deducted from your paychecks will automatically be retained in December.
Your total savings will depend on which plan(s) you are enrolled in. For example, an employee enrolled in our basic employee-only medical plan and dental plans will realize gross savings of about $166 before taxes. An employee who receives basic family medical and dental coverage will realize gross savings of about $344 before taxes.
While we are pleased to be able to provide this one-time benefit, we are mindful that this is a challenging time for the healthcare industry. Our focus will be on prudent management of our plan so it remains competitive, financially sound, and well-positioned to react to these challenges. We'll work closely with the Board of Regents, chancellors and our independent actuaries to determine future premiums.
A Q&A with more detailed information on the premium holiday follows. Please contact your campus benefits office if you have further questions.
Finally, I encourage you to continue to be proactive about your health by getting regular check-ups and vaccinations, using generic drugs when possible, and eating healthfully and exercising. These are among the reasons we have been able to keep health claims in check, and we hope you will help keep the trend going—because few things are as important as the health and well-being of our employees and their families.
Thank you for all you do for the University of Nebraska.
Susan Fritz, Ph.D.
Interim President, University of Nebraska
Q&A Regarding December 2019 Premium Holiday
Who is eligible for the premium holiday?
All active employees who are enrolled in the university's medical and/or dental insurance plans.
When is the premium holiday?
Employees will not pay medical or dental insurance premiums in December of 2019.
Do I need to do anything to participate in the premium holiday?
No. You will not be charged for medical and/or dental premiums in your December paycheck(s).
What is the impact on my taxable income?
The health insurance premiums you pay are a reduction to your taxable gross income. Given that you will not pay premiums in the month of December, your taxable gross income will go up by an amount that is equal to the premium holiday savings. Per IRS regulations, this is taxable income. The university payroll system will automatically calculate and withhold tax withholdings, so no action will be required on your part.
Does the premium holiday apply to vision insurance premiums?
No. The holiday only applies to medical and dental premiums. Employees enrolled in vision care insurance will continue to pay that premium.
You indicated future health care premiums may increase. Rather than provide a premium holiday, why do you not use the health plan's savings to offset those increases?
We realize it may seem counter intuitive to provide a premium holiday now, while also indicating premiums will likely go up in the future. Let us explain.
The premiums you and the university pay toward your health insurance are the recurring, or ongoing, funding for the health plan, somewhat like the plan's monthly paycheck. The plan's reserves, which have accumulated over a number of years, are one-time resources, somewhat similar to a savings account. The plan's expenses, primarily medical claims, are a recurring expense that continue to increase year after year.
Using the plan's one-time savings to pay for these recurring expenses would be an ill-advised short-term solution, as it would create a future “fiscal cliff” once the savings are exhausted. If reserves were depleted, the plan would likely be required to implement significant premium increases to get it back to sustainability. It would not be prudent to knowingly expose you or the university's budget to this risk. Our intent is to keep your future premium increases as moderate and predictable as we can.
Whom should I contact for more information?
Please call your Campus Benefits Office:
UNL: (402) 472-2600
UNMC: (402) 559-4340
UNO: (402) 554-3660
UNK: (308) 865-8522
UNCA: (402) 472-5258
Director of Communications,
University of Nebraska