Task Force to Review BU’s Employee Benefits Program

Robert Meenan, dean of the School of Public Health, will chair the employee benefits program task force. Photo by Kalman Zabarsky

President Robert A. Brown has appointed a task force to comprehensively review the University’s employee benefits program—among them health care, retirement, tuition remission, and long-term disability. Brown will announced the initiative in an email to faculty and staff this morning.

“Our obligation is to ensure that Boston University can continue to thrive—long into the future—as an institution that offers excellent education and one where new ideas, inventions, and solutions are created and incubated,” Brown writes. “To meet this obligation, we need to recruit and retain excellent faculty and staff. Simultaneously, we need to deploy our financial resources prudently, with sober assessments of economic realities and the evolving competitive landscape for higher education.”

The goals of the task force, stated in Brown’s letter, are to ensure that University benefits support the recruitment and retention of faculty and staff, are competitive with peer institutions, are cost-effective, and are sustainable over the long term. Beginning April 16, task force members will meet twice a month, with a September 1 deadline for delivering their initial report. At that time, the report will be made available to the University community, whose members will be encouraged to comment via their respective representatives. Implementation of any changes would begin in January 2016.

Brown has appointed Robert Meenan, dean of the School of Public Health, as the task force chair and a special assistant on his staff. The task force comprises a dozen representatives chosen from faculty, staff, Human Resources, and Alumni Relations.

The president says he chose Meenan (MED’72, GSM’89), who announced in November that he would step down as SPH dean once a successor is chosen, for his understanding of the importance of benefits programs in the recruitment and retention of employees. The dean, who is also a physician, led a similar review at Blue Cross and Blue Shield of Massachusetts, where he serves on the board of directors.

“Benefits are basically a critical success factor for any organization, BU included,” Meenan says. “On the plus side, we’re always competing to retain and attract faculty and staff. On the resources side, we need to use all our resources effectively,” and that means taking a critical look at health care and retirement plans.

Health insurance is changing dramatically with the implementation of the federal Affordable Care Act (ACA) and with recent economic trends.

“Health care continues to grow more than most other costs,” says task force member Diane Tucker, the University’s chief human resources officer. “We need to bend the curve on that. We can’t sustain continued growth.”

Of great concern for the University, she says, are the ACA’s so-called Cadillac tax and the rapidly rising cost of BU’s prescription drug plan. Under the ACA, the federal government has the authority to impose a tax on health care plans priced at what it deems to be above-market value. Based on the value of the University’s current health plans, BU would pay an excise tax of approximately $2.8 million in 2018 and a total of $31.6 million from 2018 through 2024. “We would be sending a lot of money to the government,” Tucker says, instead of using those funds around campus.

Meenan says the task force will also look at the University’s retirement plan and will consider whether the current two-year waiting period for new employees to sign up should be reduced. Other considerations are whether the University should adjust the percentage of the amount it matches and whether the current plan equitably addresses the retirement options of lower- versus higher-paid employees.

Tuition remission, a signature benefit of employment at many institutions of higher education, will also be studied. Meenan points out that as BU’s student admissions standards become more selective, fewer employees can enjoy the benefit. Also under review is the University’s pension program for employees, which is considered less competitive than those at peer institutions, Tucker says. The two-year waiting period for all new employees is a particular sticking point.

“There’s potential for some major changes, and we will need to begin to think about it,” she says. “I think that there’ll be some changes that will be very positive for faculty and staff.”