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University of Oklahoma looks at changes to retiree medical benefits

In an effort to rein in rising fixed costs, University of Oklahoma officials are considering making cuts to retiree medical benefits.
BY SILAS ALLEN sallen@opubco.com Published: February 18, 2012
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— Changes may be coming for retirement medical benefits for University of Oklahoma employees.

In an effort to rein in rising fixed costs, university officials are considering making cuts to retiree medical benefits.

Julius Hilburn, OU's associate vice president and chief human resources officer, said the changes would begin to take effect Jan. 1, 2016. Anyone who retires from the university before that date would not be affected, he said.

Employees who retire on or after that date would be required to pay part of the premium for their retiree medical benefits, Hilburn said. Those employees' contributions would be determined by their age when coverage begins and how long they worked for the university.

Employees who spent more time at the university would qualify for larger contributions toward their cost of coverage, he said.

Hilburn said he expects those changes could save the university $2.3 million in the first year alone.

OU would see that figure grow in the years following that, as the impact of payments by retirees begins to grow.

The proposed policy is in the planning stages, Hilburn said.

Human resources officials hope to submit a proposal to OU President David Boren next month, he said.

Higher costs, more participants

Over the past five years, the university's employee and retiree medical insurance bill has shot up about 49 percent, jumping from $37.7 million in 2007 to $56 million in 2011.

Today, there are 300 more active employees and 400 more retirees participating in the plan than there were in 2007, Hilburn said. That increase, coupled with rising insurance premiums, has left the university in a difficult financial position, he said.

“The costs of providing retiree medical benefits are consuming a growing share of university resources.” Hilburn said. “Making thoughtful changes now to this valuable benefit program is the fiscally responsible approach to take and is in the best long-term interests of our employees, retirees and the university.”

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