Lincoln University administration told faculty and staff Thursday that a partial solution has been found to employees' concerns about increased health insurance premiums, but the solution is not sustainable.
The source of money will come from previous refinancing of debt that primarily deals with residence halls and cafeteria services.
The Lincoln University Missouri National Education Association union and LU's Faculty Senate took issue last month with the university's plan to pass on increases in health insurance premiums by provider Anthem Blue Cross/Blue Shield to LU employees.
LU's position was the premium increases could not be absorbed by the university, and the university's Benefits and Compensation Committee had worked to find "the least cost-prohibitive plan available for employees."
On Thursday, LU President Jerald Jones Woolfolk told 80-100 faculty and staff that a way had been found for the university to help offset the increases.
"We will be contributing $300,000," Woolfolk said.
Absorbing all of the premium increases would have cost the university $470,000 a year, according to LU.
Woolfolk said the $300,000 is coming from auxiliary funds, and the transfer was approved by the university's Board of Curators.
The Board of Curators met earlier Thursday, and in a brief open session, they unanimously approved a reduction in appropriations to the auxiliary system budget from $10.40 per credit hour to $4 per credit hour. That means $178,522 will be available in LU's Fiscal Year 2020 general budget to help offset the health insurance increases.
The auxiliary system primarily refers to the university's residence halls and cafeteria food service.
LU Board of Curators President Frank J. Logan Sr. later said the amount will cover the premium costs for the remainder of the current 2020 fiscal year.
The change will already be in next year's budget, when it comes time for its approval, Logan said - and the total deferred from the auxiliary system budget over 12 months will be $300,000.
Woolfolk warned faculty and staff on Thursday that "this is not an effort that's going to be sustainable every year," as the university can't continue to take money from students' experiences; it's students that drive the university's economy.
According to LU's most recent audit, direct auxiliary expenses totaled $4.7 million last year, and revenues from the system totaled $7.6 million.
However, $2.2 million in the auxiliary budget was also mandatorily transferred last year to pay for debt, including interest. That contributed most to an almost $156,000 net loss in the auxiliary budget last year.
Sandy Koetting, LU's vice president for administration and finance, said at the faculty and staff meeting Thursday that the refunding of 2007 bonds in June allowed for the budget modification.
The $300,000 put toward the health insurance premium costs means the expected $127.11 increase single employees on the plan would have faced each month has been reduced to a $46.11 increase.
That's still almost double what single employees currently pay - an increase from a $23.74 premium to $69.85, instead of the $150.85 that was expected.
Mike Scott, an LU biology professor and vice president of LUMNEA, said the union has accepted the offset to the cost increases given by LU, but the offset will not lower the other premium increases to plans for employees with a spouse, a child or a family.
The increases are set to take effect Jan. 1, LU previously said. The increases in the premiums for the other, non-single plans will range from 34-49 percent.
Scott said the majority of the 308 employees in LU's insurance pool have single plans.
"It's a step in the right direction," and that's where things will stand, he said of the $300,000 offset given.
"While we believe that any increase in out of pocket costs is inexcusable, LUMNEA felt that this was the best financial commitment we could get," according to a statement Scott said was emailed to all faculty.
"We are exploring other options," other providers for future coverage, Woolfolk said, including looking into joining the Missouri Consolidated Health Care Plan. The plan provides coverage to "employees and retirees of most state agencies, as well as public entities that have joined MCHCP," according to the Jefferson City-based plan's website.
Logan said there was also some discussion at Thursday's Board of Curators meeting - most of which was in closed session - about other actions the university could take in the future to sustainably support the budgeted offset to premium increases, but the primary focus was on the present moment.
LU Faculty Senate's letter last month to Woolfolk had stated, "The total alleviation or defraying by the university on behalf of its employees of a rise in health care coverage costs is a prime opportunity for your administration to demonstrate that it values and respects its workers."
Woolfolk told faculty and staff Thursday she was not in that business. "You can't buy respect. So, I'm not trying to buy respect," she said. "Once you sell your integrity, you can never buy it back."
She encouraged the university's employees to work together to help students succeed and address the university's low graduation and retention rates.