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Penn State Reverses Course on New Health Care Fee

Responding to widespread backlash from faculty and staff, Penn State is backing off plans to impose a $100 per month surcharge on employees who don’t fill out a health care survey.

However, administrators say something has to be done soon to contain spiraling health care costs.

The survey is part a new wellness program called “Take Care of Your Health.” The university started the program in a bid to reign in what it calls out-of-control spending on health care.

The school estimates that health care spending will hit $217 million in the next year. That’s about 13 percent higher than last year — and the reason administrators say changes have to be made.

The rollout of the program triggered privacy concerns with some employees worried about who might have access to their medical records. Others expressed anger, saying that some of the questions being asked were invasive. Not only that, critics considered the $100 surcharge “coercive.”

President Rodney Erickson says he’s clearly heard the concerns from faculty and staff. In a news release, Erickson says, “We have decided to suspend the $100 per month surcharge so that people who are uncomfortable with any aspect of the survey will not feel as if they are being penalized.”

Erickson says he’s willing to work with employees to find a solution. “It’s clear that the interactions we have had up to this point have not been sufficient and this is a genuine attempt on our part to ensure appropriate input and consultation has been sought from members of our faculty and staff, he says.”

A joint task force will be formed to seek input on how to implement the proposed changes. Says Erickson, “There is still a tremendous financial challenge that we must address in the coming year and beyond, but we also need to acknowledge the concerns of employees and seek their advice on how to overcome these fiscal roadblocks and still provide quality health care.”

The University Faculty Senate is considering a one-year moratorium on implementing the health care changes. A vote on that moratorium is set for Tuesday, Sept. 24.

But the university says there is no time to wait. “The financial imperative is so great at this point, that we cannot institute a one-year moratorium,” says David Gray, senior vice president for Finance and Business. “We cannot delay the inevitable. If we don’t get on top of this challenge now, each and every year we will compound our problem.”

According to Gray, the surcharges for smoking and for spouses who qualify for their own health insurance will remain in place.

University employees will choose employee benefits for 2014 during the annual open-enrollment period set for Nov. 1 through Nov. 22.

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