With increases to health insurance costs coming in below projections, the University of Nebraska will get some cushion as it seeks to cut $30 million from its budget by the end of the biennium.

During talks with lawmakers earlier this year, NU system President Hank Bounds estimated health insurance premiums for university employees would increase an average of 10 percent in both 2017 and 2018.

Along with collectively bargained salary increases and utility costs, as well as a loss in state aid, the projected increase to health insurance costs helped create a $49 million budget shortfall at NU.

University leaders began addressing the shortfall earlier this year, outlining plans to cut $30 million in expenses across eight nonacademic areas, while approving a tuition increase to students to close the remainder of the gap.

The actual health insurance premium increases fell well below the early projections, however, according to Bruce Currin, associate vice president for human resources, potentially giving NU some leeway in its cuts.

“I’m pleased to tell you that thanks to lower-than-expected claims and your efforts to make good choices with your health, premiums will only need to increase an average of 5.7 percent in 2018,” Currin wrote to university employees in an Oct. 18 email.

Currin said the increase — the second since 2009 — signaled a "favorable rate in today's market, where health care costs are rising and the industry is changing rapidly."

The university expects the lower premiums will help save $1.4 million this year, and will lower a projected increase to health insurance premiums next year by $3 million.

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Factoring in the actual cost of health insurance adjusts some of the numbers in the budget-cutting equation, NU spokeswoman Melissa Lee said, but “it doesn’t change the overall calculus.”

NU highlighted $29 million in potential budget cuts in August and September, targeting 72 specific items in areas that avoid the academic enterprise of the university like travel, public relations, printing and financial operations.

Some of the 10 "budget response teams" convened by NU to identify and implement cuts will find more savings than anticipated, while others may find less, Lee said in an email.

“We still need to find $30 million in cuts,” she said. “This does create some savings that will contribute to the $30M total. It’s good news.”

Reach the writer at 402-473-7120 or cdunker@journalstar.com.

On Twitter @ChrisDunkerLJS.

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Higher education reporter

Chris Dunker covers higher education.

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