Out-of-pocket health premiums will increase for most part-time employees effective Sept. 1. Since most out-of-pocket premiums are dropping for full-time employees (as reported in last month’s issue of A&M System News Online), many part-time employees may be wondering why their premiums aren’t following suit.

One misconception part-time employees may have is that the A&M System negotiates different rates for full-time employees than they do for part-time employees. This is not true.

“The total monthly premiums for each health plan are the same for all employees, regardless of whether they're full time or part time,” said Ellen Gerescher, employee benefits manager for System Human Resources. “When total premiums increase, they increase the same amount for both groups. This year, all health plans increased their total premiums.”

So why would one group see a decrease in out-of-pocket costs while the other would see an increase? Gerescher said this has to do with the difference in the employer contribution amount each group receives.

“Two years ago, the state legislature reduced the employer contribution by half for part-time employees,” Gerescher said. “Although the contribution is going up this year, part-time employees will receive only half the increase that full-time employees will receive. Unfortunately, this increase is less than the increase in total health plan premiums, resulting in higher out-of-pocket costs for part-time employees.”

To better understand this, consider how the employer contribution will offset the A&M Care 350 employee-only premium for full- and part-time employees beginning Sept. 1. The employer contribution for full-time employees will increase by $53.21, while the contribution for part-time employees will increase by $26.61 (half of the increase in the full-time contribution). The employee-only premiums (before the state contribution is applied) for the A&M Care 350 plan will increase by $33.53. The increase in the full-time contribution will more than cover that, resulting in a $19.68 decrease in out-of-pocket costs for full-time employees. The increase in the part-time contribution will not cover that, resulting in a $6.92 increase in monthly out-of-pocket costs for part-time employees.

A complete list of premiums is available online at sago.tamu.edu/shro/Ae/rates_05.html. If you have questions, contact your Human Resources office.