Don't charge soft-money groups for unused benefits

I work for a group that - like many in a university setting - is dependent upon soft money.   In the current financial situation, this means that every incoming dollar is crucial to the viability of our group.  I declined the health insurance offered with my position, but have recently found out that our group is still responsible for paying 100% of the ERE rate to the university, despite that I do not actually *use* the benefit.  In a corporate situation, employees turning down benefits (typically because they receive them through a spouse) are often able to negotiate for higher salaries because this represents a savings to the company.  It seems fair that our soft-money funded group should also be able to benefit from the additional savings that are accrued when I am not taking the offered benefits (and thus the university is not paying the employer portion of the insurance premium -- so there is money saved, but those savings are not passed down to our group).

(Submitted November 2015)

Notes

Special thanks to Nicole Salazar, Comptroller, for the following response:

ERE is considered a best practice at leading research institutions. The rates that the UA establishes are reviewed and approved annually by the Department of Health and Human Services - Cost Allocation Services (DHHS/CAS). There are a large number of benefits that come with ERE, for example:
• Efficiency in planning and budgeting
• Simplifies and improves the preparation, administration and monitoring of budgets for fringe benefit expenditures
• Consistency in accumulation and allocation of fringe benefits expenses to all functional activities as required by Cost Account Standards 501 and 502
• Allows increased recovery of fringe benefit costs from all funding sources
DHHS/CAS approves the University's ERE rates and prescribes the divisions that can be utilized. Presently pools are determined by the benefits that are offered to the employee. Employees can opt not to take benefits offered to them based on their pool. Opting out has no effect on the structure of the pool due to DHHS/CAS's direction of benefit eligibility. Please contact Financial Management with additional questions at fin-mgmt@fso.arizona.edu.

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Comments

Submitted by mkelly3 on
It is amazing what we get charged for these days. Your department should not be charged for benefits you do not use. It is easier for the UA to not have to determine the difference but they should make it a priority. I do not use my health benefits either--the college should not have to pay the University more money for my unused benefits. They already take a huge amount. It is just silly.

It is just like paying for a cheeseburger when you order a hamburger--being done everywhere these days with no reduction in price for less of a burger.

Submitted by mbruck on
I suspect that the ERE rate is based on an average benefits package. Charging each position for exactly the amount of benefits selected and received might be possible, but it could also have some negative side effects. The fixed rate would also be easier to build into grant budget/staffing proposals.

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