As most of you are already aware, the University has experienced a significant increase in medical premiums since July 1 of last year. Overall, in one year the cost of medical benefits has increased 37%. When forced to transition medical carriers mid-year the University made the decision to absorb all of the additional premium increases when we moved from UnitedHealthcare to Blue Shield in order to avoid mid-year increases to plan participants.

During our benefits renewal process this year, the University conducted a full market review of all of our benefits including the medical insurance. In reviewing the proposals that the University received, both senior administration and University Council determined that Blue Shield continues to be the most viable medical insurance carrier for the upcoming plan year.

Every effort was taken to address issues and concerns that have been brought forward as a result of the transition to Blue Shield. The University recognizes the loss of Loma Linda as a provider group. Had the University determined that we could have maintained a comparable plan structure and benefits level and included Loma Linda as a provider group we would have done so. This year the University has increased the 2nd tier of the Point of Service (POS) Plan to include preventive care. The enhanced POS plan will allow routine examinations and well baby appointments to be covered under the second "in-network" tier.

The University is continuing in aggregate to maintain the same employee contribution level that it has historically contributed. The University continues to absorb the majority of the medical insurance premium increase. For all Blue Shield plan participants the employees' share of the medical premium will increase $10.00 per month. The University is pleased that we have been able to maintain the premium increase to this level in light of the significant medical plan costs.

When Kaiser HMO was introduced last plan year the premium rates were slightly higher than the UnitedHealthcare HMO rates. The University has adjusted the employee share of the premium to be comparable with the Blue Shield HMO rates.

It is important to note that the University has been able to maintain the same employee share of premiums for dental insurance, life insurance, and long-term disability insurance. Consequently, you will not have any rate increases if you participate in any of these plans. Furthermore, all of the carriers for these plans remain the same.

It is a challenging time in the benefits areas. Many colleges and universities, as well as other employers, are experiencing rate increases comparable if not larger than what Redlands has experienced. The University will continue to strive to maintain benefits that are competitive and meet the needs of our employees and their dependents. Please be assured that the University will pulse and examine trends related to benefits throughout the plan year in order to meet the future needs of our employees in the most effective and efficient way possible.

Please remember that open enrollment will be held at the Orton Center on April 24 and 25. All open enrollment materials are due to Human Resources no later than Thursday, May 31. Your assistance and cooperation in submitting these materials is greatly appreciated.