At its September meeting, the Arizona Board of Regents voted to approve its Regulatory Reform Initiative, and will present it to the Arizona Legislature in hopes of winning the Legislature’s approval.
Part of the larger update to the board’s Strategic Plan, a sizeable chunk of the Regulatory Reform Initiative concerns how employee benefit coverage is administered throughout Arizona’s public university system.
Currently, university employees’ benefits are dictated by the state of Arizona, which lumps university employees into the same category as normal state employees in terms of their benefit packages and eligibility.
According to the state of Arizona’s 2015 New Hire Benefit Guide, employees who work half-time, or .500 full time exchange, are eligible for benefits.
In its proposed Regulatory Reform Initiative, the board seeks the power to be able to dictate their own employee benefits’ eligibility benchmark and, more importantly, to design its own employee benefit package as a whole.
“[The proposed initiative] allows the universities more flexibility in their benefits design, and right now, given the pressures around all of our budgets, we need to make sure that we are offering benefits and prioritizing resources,” said Eileen Klein, president of the Arizona Board of Regents. “So that’s really what’s happening behind the proposal.”
The proposed initiative would take effect in two parts. The first and broader part would allow the regents and Arizona’s public universities to move away from the state-implemented benefits package.
According to Klein, this would give the regents the power to custom-design employees’ benefit packages, as well as giving universities the option to become self-insured. This would allow the universities to move away from the state of Arizona’s employee health care marketplace and to tailor health care to the specific needs of university employees.
“Right now we feel like the university employees are paying higher-than-necessary premiums, and we would like the ability to be able to design our own benefits so that we can best meet the needs of the employees of the universities and lower their costs,” Klein said.
Klein noted that the regents have no intention of disrupting the current contract that state employees have for health care; rather, they would like to see these changes implemented in 2020-—when the state’s health care contract is up for renewal.
To address the benefits issue, the regents will ask the state Legislature to approve the second portion of the initiative, which grants the regents the ability to dictate which university employees are benefit-eligible. This will allow the universities more flexibility and a better ability to work with budgetary constraints while still being a part of the state’s benefits system.
During their September meeting, the regents expressed an interest in adjusting the current employee benefit eligibility benchmark from .500 FTE to .750 FTE, or from 20 to 30 hours a week, respectively.
“I think that aligns with what the federal government requirements are,” Klein said, referring to what is becoming the national benefit eligibility trend for university employees.
According to the 2014-2015 University of Arizona Fact Book, there are roughly 3,000 part-time university employees.
If the initiative is approved by the Arizona Legislature, part-time employees not meeting the .750 FTE benchmark could lose their benefit coverage.
While graduate assistants and some student employees do qualify for some university benefits, Allison Vaillencourt, vice president for Institutional Effectiveness and Human Resources, pointed out that their coverage falls under a different category than normal university employees, and that they would be unaffected by any adjustment.
“Graduate students are considered a different type of person [by the university], so we don’t consider them in the regular employee insurance plan, so they would not be affected by this,” Vaillencourt said.
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