DENVER – Colorado higher education institutions might be caught in a Catch 22, attempting to throttle skyrocketing tuition costs versus grappling with soaring health care premium costs caused by the Affordable Care Act dubbed ObamaCare.
The institutions have been hit with higher premium costs – but unlike small businesses and individuals, the state employees may be buffered from the burden of ObamaCare.
It seems that Gov. John Hickenlooper and the state employees’ union, Colorado Wins, are working on a plan to grant pay raises and put a lid on health care premium costs for state workers.
To assess the damage, the state legislature’s Joint Budget Committee asked, “How will the Affordable Care Act decrease health care costs for employees? Does your institution of higher education anticipate long-term savings?”
The higher education entities responded that there is no foreseeable long-term savings. Instead, they are bracing for increased premium hikes.
Insurance premium costs will spike in January 2015 when adjunct instructors, who work 30 hours or more per week, must be afforded health care coverage. Failure to do so could result in massive fines levied against the education institutions.
The University of Colorado System, which includes CU Boulder, CU Denver and University of Colorado at Colorado Springs, estimated that the Affordable Care Act (ACA) will have a $1.2 million impact on the CU Health Trust. Of that “90 percent will be absorbed by the employer and 10 percent by the employees.”
In addition, some education institutions like the University of Colorado System plan to hire one fulltime employee, paid an estimated $50,000 a year, to track and provide coverage to those who work 30 or more hours a week.
Colorado State University System, which includes CSU Pueblo, CSU Fort Collins and other campuses, said, “CSU does not anticipate any savings from ACA. Conversely, we anticipate an increase to overall premium costs… in the order of $750,000 – $1 million annually.”
“The Act has actually resulted in increased costs in the form of fees and taxes that raise premiums for employees,” declared CSU. “For example, our premium increase for 2014 will be approximately 5.5 percent of which 1.9 percent can be attributable to projected claims, and the balance of approximately 3.5 percent is due to ACA fees and taxes.”
Colorado Mesa University is also bearing the burden of paying ACA fees and taxes. “As an example, in this calendar year, 2013, CMU has been charged $75 per prescriber for ACA costs and fees by our provider who passed them onto us.”
CMU predicted “it is unlikely to decrease health care costs for employees” and the institution has already had to bear increased premium rates.
The university in Grand Junction also plans to spend taxpayer money to upgrade its system of tracking part-time employees and adjunct professors whose hours may increase to 30 or more per week.
“If we should fail to offer health coverage to 95 percent of our eligible employees (we do not expect to fail) and one of those employees receives a premium tax credit in the exchange, CMU would penalized $2,000 x the number of employees (an amount totaling) $1.3 million.”
Under ACA and the Colorado’s health coverage exchange, CMU officials noted, individuals living in Mesa County, mountain communities and outlying eastern and western areas are unfairly assessed higher premium rates.
The current and future adverse financial impacts of ACCA were shared in responses from Western State University in Gunnison, Fort Lewis College in Durango, Colorado School of Mines in Golden, the Community College System, University of Northern Colorado in Greeley, Metropolitan State University in Denver and Adams State in Alamosa.
Perhaps the financial blow will be cushioned.
In July, state employees were granted raises between 2 percent and 4.4 percent. Now, the state employees’ union, Colorado WINS, is campaigning for a 3 percent pay increase – twice the amount proposed Hickenlooper for the fiscal year 2014-15 budget.
Colorado Wins criticized Hickenlooper’s meager pay raise request, but praised the governor for budget “proposals that will have a positive impact on our lives, such as putting 1.5 percent more (taxpayer funds) towards merit pay and making sure that Health/Life/Dental premiums don’t increase.”