Reduced or blended ERE rate for UA dual career couples

For married couples with both spouses working at the UA, it would seem to make sense -- and assign expense appropriately to the hiring units -- to have a reduced or blended ERE rate, taking into consideration a single family enrollment in health care benefits.  Perhaps one spouse would be the "primary" benefits enrollee, with full ERE rate, and the other would be "secondary", with a reduced rate.

In the current hiring climate, units are extremely averse to adding benefits-eligible employees.  As a result, units are forced to employ a greater number of workers and assign them to work fewer hours per capita in order to keep them below the threshold for benefits eligibility.  This practice usually proves to be inefficient in the long run, due to greater turnover, absenteeism and a less experienced workforce.  In addition, workers are under stress because they are under-employed and thus unable to adequately provide for their families.

An additional flag in UAccessEmployee and the necessary data mining in UAccessAnalytics should provide the information necessary to determine the components of a "secondary employee" reduced rate.

 

Notes

Thanks to Denise Dellinger, Principal Accountant with FSO, for providing 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. However, 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.

(December 2015)

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