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An Unexpected but Welcome Gift: A Medical Insurance Holiday at Olin

This holiday season staff and faculty at Olin College, who participate in the college’s medical insurance program, received an unexpected gift. In an email, they learned that they would not have to pay their monthly medical insurance premium in December. On average, this totaled $274 per covered employee. 

This announcement comes in the wake of more good news for participants in the medical insurance plan. In 2014 and 2015, participants saw no increases in their premiums and, in 2016, participants actually saw a decrease of 2 percent. The New Year will ring in without a premium increase as well for those employees enrolled in the high-deductible medical plan.

These low to no rate increases are in stark contrast to the estimated 5 percent and above premium hikes faced by many Americans in 2016.

The unexpected good news is a result of a fast-growing collaborative effort on the part of small and mid-sized colleges and universities in New England to self-insure through a program known as edHEALTH. The program allows the participating institutions to come together and negotiate as a large group, thus increasing negotiating power in the insurance market.

Currently 12 colleges and universities participate in the program, covering close to 10,000 employees.

By providing a structure which allows small institutions to self-insure and reducing unnecessary overhead costs through economies of scale, the participants generally save a minimum of four to six percent annually compared to a fully-insured plan. In the first years of operation, all participants realized savings and, in many cases the savings exceeded expectations.

That has been the case at Olin College, where the savings were so favorable that the decision was made to offer a medical insurance premium holiday.

Harvard Pilgrim Health Care and Tufts Health Plan provide network and claims processing services for edHEALTH. As a result, the conversion to a self-insured product has been seamless for employees.

“We expected savings through this program but these results have exceeded all of our expectations and we wanted to share those extra savings with employees,” said Executive Vice-President of Olin College, Stephen Hannabury. “

In 2017, edHEALTH expects continued growth as officials are in active conversations with schools from Vermont to Pennsylvania.