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Premium Rate Increase and Benefits Plan Design Changes for UT SELECT PPO Medical Plan

The UT SELECT Medical plan administered by Blue Cross and Blue Shield of Texas is self-funded by the UT System. As a self-funded plan, all claims are paid by UT System through premium sharing monies allocated by the State Legislature, UT System Institutions, and your monthly out-of-pocket cost (for dependent coverage and for part-time employees, the portion of employee-only coverage). The claims experience during the current benefit year (2009-2010) indicates an upward trend of 9% in the cost of providing health care services to UT members. Currently, the UT SELECT self-funded plan is spending more on claims than it receives in contributions. With the higher than anticipated claims experience, and the need to match the expected trend during the upcoming 2010-2011 plan year (to make up for a funding gap), it is necessary to increase premium rates and implement benefits plan design changes for the upcoming 2010-2011 plan year.

Premium rate increases for dependent levels of coverage for Retirees will result in an increase in out-of-pocket cost of:

If you are a Retiree, UT System and the State of Texas will continue to provide 100% of your premiums for the Basic Coverage Package*, and up to 50% of the premiums for your dependents’ medical coverage.

*Basic Coverage Package includes: Retiree only medical coverage (including prescription benefit) plus the Basic Life Insurance of $6,000 (an increase of $3,000).

The following chart reflects the UT SELECT Monthly Premium Cost for a Retiree. Monthly Premium Cost = Premium Sharing from the State of Texas and UT System, plus Your Monthly Out-of-Pocket Cost. The final column indicates the total out-of-pocket increase in your monthly premium effective September 1, 2010.

UT SELECT Medical: Retirees

Level of Coverage
Total Monthly Premium Cost
Monthly Premium Sharing Paid by the State and U.T.
Your Monthly Out-of-Pocket Cost
Increase in Monthly Out-of- Pocket Cost
Retiree Only

$440.25

$440.25

$0.00

$0.00

Retiree & Spouse

$860.57

$671.03

$189.54

$20.31

Retiree & Child(ren)

$786.14

$587.90

$198.24

$21.24

Retiree & Family

$1,193.33

$820.06

$373.27

$39.99

*This rate chart includes the cost of Basic Life Insurance of $6,000.

UT SELECT Medical Plan Changes

With the funding gap partially addressed by increasing premiums for dependent levels of coverage, the remaining funding deficit will be made up by sharing costs among everyone. The benefit changes below are effective September 1, 2010:

Contact Us

If you would like a specific topic discussed or have a question you would like answered in a future issue of this newsletter, please send your suggestions to benefits@utsystem.edu.

UT System Employee Benefits Web site: www.utsystem.edu/benefits/
UT System Retirement Programs Web site: www.utretirement.utsystem.edu
Your Local Benefits Office: www.utsystem.edu/benefits/contacts/#1