Dwaine Duckett, UC's Vice President of Human Resources, talks about next year's health care benefits. Watch the video.

Like employers everywhere, UC has seen its health care costs rise each year for more than a decade. Since 1999, health insurance costs nationally have gone up by 131 percent, outpacing both wages and inflation.

UC has done its best to shield employees from the full extent of the increases by continuing to pay roughly 88 percent of all health care premiums, a percentage that has remained steady even as costs have climbed.

That will be true again in 2010, with UC and employees shelling out nearly $1.2 billion for health and welfare benefits. UC is paying approximately $95 million more than in 2009.

"We have a long tradition of investing heavily in employee health and welfare programs," said Dwaine Duckett, UC vice president for Human Resources. "People make UC the great institution it is, so providing excellent employment benefits is a strategic priority."

Unsustainable cost increases

Duckett and others expect costs to continue on a steep upward trajectory into 2011 and beyond. He says that if UC is going to maintain high-quality health and welfare programs, it must rethink its approach.

Neither UC nor its employees can sustain the continual cost increases, Duckett said.

"We need to start innovating," Duckett said. "Unless we redesign our programs, we will jeopardize our ability to provide quality care to employees."

The Human Resources department, together with UC experts and others from the health care field, will spend much of 2010 focused on ways to maintain strong, high-quality health care programs while keeping costs sustainable.

"We'll be asking staff for their input and feedback," Duckett said. "We want to know what health care choices are most important to them."

UC pays a larger subsidy than most employers

UC pays a far larger share of health care costs than most California employers. Nationally, employers pick up about 73 percent of health care premiums, compared with UC's 88 percent. Even among comparator universities - a group of peers that UC uses for benchmarks on salaries and other data - UC provides a larger subsidy.

President Mark G. Yudof, mindful of the financial sacrifices already being made under the furlough program, directed Human Resources to keep employee health care costs down as much as possible in the 2010 benefits package. Health benefits are just as robust as in past years, and premium increases have been kept to the absolute minimum.

Open Enrollment, the annual window for making benefits changes, runs from Oct. 29 through Nov. 24. Employees will find that there have been few plan changes in 2010, and in many cases, coverage levels have been expanded.

Under the 2008 Mental Health Parity Act, mental and behavioral health benefits have been expanded. Several health insurers no longer have maximum stays for psychiatric in-patient care, for example.

Co-pays for generic drugs are also lower under most plans. In addition, the legal plan is open for enrollment.

As always, faculty and staff should review all their benefits, and not just health care, with an eye on making the right choices for the coming year.

How employees can save money

In addition, there are some easy ways to save money. The Health Flexible Spending Account is a good way to cover anticipated medical expenses while lowering your federal tax bill, for instance. And if you have supplemental disability coverage, you can save quite a bit by extending the waiting time for benefits from 30 to 90 days. This makes the most sense for employees whose sick leave accruals are sufficient to tide them over until disability benefits kick in.

Review your benefits and consider changes at: http://atyourservice.ucop.edu/open_enrollment/