Council of Chancellors endorses withdrawal of campuses from UC SHIP

The original version of this article contained information that was unclear and has been changed. See the bottom of the article for additional information.

Several University of California campuses plan to withdraw from the UC Student Health Insurance Plan, after a council of UC chancellors endorsed the move, among others, today.

The Council of Chancellors, comprised of the chancellors from the UC campuses, met today to receive the recommendations of the UC SHIP executive steering committee, a part of the UC Office of the President.

Several University of California campuses plan to withdraw from the UC Student Health Insurance Plan, after a council of UC chancellors endorsed the move, among others, today.

The UC SHIP Advisory Board, made up of representatives from the different UC campuses,  convened last month to finalize its recommendations – both system-wide and campus-specific – to the executive steering committee, which in turn passed along the campuses’ recommendations to the Council of Chancellors today.

The issues with the insurance plan stem from a $57 million deficit UC SHIP has accumulated since 2010.

The plan’s deficit comes from originally setting the premium costs too low for past plan years, rates the UC said were set based on advice from the consulting firm Aon Hewitt. The UC is currently taking “legal action” against Aon Hewitt, and has not disclosed information about the lawsuit, according to Daily Bruin archives.

One of the recommendations from the UC SHIP Advisory Board, which received an endorsement from the Council of Chancellors, is to allow campuses who wish to withdraw from the plan the right to do so.

Student representatives from UC Berkeley, Riverside and Davis –  in addition to undergraduate student governments at UC Santa Barbara and Irvine – have expressed an intent to pull out of UC SHIP, said Scott Arno, a UCLA graduate student in neuroscience and a member of the UC SHIP Advisory Board.

However, representatives from the UCLA undergraduate student government have said they intend to stay on the UC SHIP.

Another recommendation the Council of Chancellors endorsed today is to remove lifetime and annual benefit caps at the UC, which vary by campus andhave recently stirred up controversy from students and employees across the University.

Aimee Dorr, UC provost and executive vice president for academic affairs, said the next step is for the Council of Chancellors to verify that the recommendations they received are accurate.

Once verified, implementation would take place immediately, which means campuses that intend to pull out from the plan can do so, and benefit caps can be removed, Dorr said.

She did not specify how the recommendations would be verified. The new stipulations would only apply to the 2013-14 school year, however.

[Updated: On Thursday, the UC Office of the President released a statement about the council’s decision.

“These added benefits will provide students with enhanced access to care and less financial risk,” said Lori Taylor, the UC’s new director of self-funded health plans, in the statement. “The University of California remains committed to providing quality health care insurance to its students, offering strong benefits at an affordable price in a plan that is sustainable now and in the future.”]

The UC SHIP Advisory Board previously decided to recommend that campuses pay into the plan according to their individual levels of debt, rejecting a “smoothing” approach that would have spread the deficit burden more evenly.

Because UCLA has a lower debt burden than other campuses, it would see lower premium increases than other campuses, though the rates could hover between 10 and 20 percent.

Premium increases, which were expected before the council’s meeting today, are still being seriously considered, Arno said.

The UC still has to to finalize premium rates, Arno said.

Arno said the current understanding is that campuses that pull out immediately from the plan would not be billed for the debt for which they would otherwise be charged. The money, however, would likely come from a campus tax that would fall on all students, regardless of if they have student health insurance.

“One way or another, all students will have to pay (for this),” Arno said.

The UC, however, said there will be no such campus tax and students who do not have UC SHIP will not have to pay for it.

Dorr said the Council of Chancellors is currently confirming the validity of the recommendations from the executive steering committee, and plans to finish their confirmations by Sunday.

[Updated: There will be one last UC SHIP Advisory Board meeting on May 13 to discuss transitioning to the new recommendations, according to the UC Office of the President.]

Compiled by Katherine Hafner, Bruin senior staff.

Clarification: The UC said there will be no campus tax and students who do not have UC SHIP will not have to pay for it.