University of Nebraska Board of Regents to discuss expanding benefits eligibility to include employees' partnersDuring its Oct. 28 meeting, the University of Nebraska Board of Regents will discuss a proposal to expand eligibility for participation in the university's benefits program to include employees' partners. The change would address fairness, equity and competitiveness for employee recruitment, retention and satisfaction and would better position the university to attract talent to Nebraska.
Under the "employee plus one" proposal, to be outlined by President James B. Milliken and Vice President for Business and Finance David Lechner, the university would extend eligibility for coverage to a qualifying unrelated adult who shares an employee's household and with whom the employee is financially interdependent, or family coverage for the employee, the other adult and their dependent children.
"I support extending equitable benefits to University of Nebraska employees," Milliken said. "This includes providing benefits for employees' partners. Every other Big Ten university provides such benefits, as do a majority of the peers of the NU campuses. We should provide similar benefits not only to be competitive in attracting and keeping top faculty and staff, but because treating our employees equitably is the right thing to do."
Milliken noted that the faculty senates on all four campuses as well as student governments in Omaha, Lincoln and Kearney have adopted resolutions urging the university to enact such a proposal. The change was endorsed recently by the University-wide Fringe Benefits Committee, and all four NU chancellors support it.
Milliken said adoption of a "plus one" proposal would bring the University of Nebraska in line with the prevailing practices of comparable higher education institutions and a large number of leading private-sector companies. All other Big Ten schools and a majority of the peers of the NU campuses offer partner benefits. Nationally, more than 300 higher education institutions offer partner benefits, including public universities and systems in at least 30 states and most of the highly ranked research institutions.
Providing benefits to employees' partners is a strong trend in the private sector also, with more than 80 percent of Fortune 100 companies and almost 60 percent of Fortune 500 companies offering health insurance benefits to employee partners. In Nebraska, a number of major companies offer such benefits, including ConAgra Foods, Union Pacific, Mutual of Omaha, Ameritas, HDR, Baker's Supermarkets, Baird Holm and Kutak Rock LLP.
NU should offer partner benefits as well in order to compete effectively in the global marketplace for talent, Milliken said. "The University of Nebraska plays a key role in the economic success of the state," he said. "If we are at a competitive disadvantage compared to all other Big Ten universities and other leading schools around the country, the talent will go elsewhere – which will adversely affect our goal to help grow a knowledge-based economy in Nebraska."
The proposal is consistent with the university's existing policy and strategic goals. In 2005, the Board of Regents adopted a nondiscrimination clause that includes sexual orientation and marital status. The university's Strategic Framework includes several objectives related to ensuring competitive employment policies and practices, including fringe benefits, in order to recruit and retain faculty and staff. The Board's philosophy has been to strive for compensation that is at least at the midpoint of peer institutions. Benefits can account for up to 20 percent of an employee's total compensation. Though benefits have traditionally been extended to the spouse and children of an employee, this has not been the case for unmarried couples, effectively resulting in less compensation for similar work.
According to the U.S. Census Bureau, about half of the nation's households are headed by unmarried adults. Only about 25 percent of households meet the "traditional" definition of the family – a husband and wife living together with their children.
In 2005, Hewitt Associates, a human resource consulting and outsourcing company, found that 64 percent of companies that added partner benefits saw a financial impact of less than 1 percent on total benefits costs and 88 percent of companies saw an impact of less than 2 percent. Historically, 1 to 2 percent of eligible employees enroll a partner for health insurance. On average, for every 1,000 employees, one to four people will enroll in same-sex coverage and 13 to 21 will enroll in opposite-sex coverage.
NU officials have estimated the cost of extending health insurance benefits to qualifying adults of the same and opposite gender to be $750,000 to $1.5 million based on an estimated increase in enrollment of 1 to 2 percent, or about 100 to 200 new employee sign-ups. Total costs for the university's health insurance plan today are more than $120 million.
The benefits expansion proposal will be introduced for discussion only at the Board of Regents' Oct. 28 meeting. The issue may be considered for action at the Regents' next regular meeting, scheduled for Dec. 8. If approved, the benefits would become available beginning July 1, 2012.
Contact: Melissa Lee
(402) 580-3297 (cell)