Switching health insurance carriers will save the University of Nebraska an estimated $12.3 million next year, including $6 million from its state-aided budget, the university said Tuesday.
NU will move its health insurance from Blue Cross and Blue Shield of Nebraska to UMR, a United Healthcare company, beginning in 2019 if the Board of Regents approves the plan next month.
The university will also move its dental insurance from Blue Cross to Ameritas, while keeping CVS Health as its pharmacy insurance, according to Bruce Currin, NU's associate vice president for human resources.
Changing insurance carriers will also keep premiums from increasing next year, Currin wrote in an email to employees, after premiums increased 5 percent for 2018.
More than 27,700 employees, spouses and dependents are enrolled in NU's insurance plans.
Currin said a university-wide review of programs and expenses led NU to review its plan through Blue Cross and Blue Shield of Nebraska. During that review, which began in 2017, NU asked for and received proposals from multiple vendors.
A 15-member committee, aided by Gallagher Consulting of Omaha, selected UMR and Ameritas based on cost, as well as customer care, proximity of network providers and timeliness of claims processing.
"Our goal throughout our review was to make certain we had a benefits plan that's both competitive and cost-effective for employees and their families," Currin said.
About 96 percent of the health care providers used by employees and their families through NU's former plan were in UMR's network, while about two-thirds of the employees were in the Ameritas dental provider network.
Currin said both insurers will consider adding new health care providers to their networks to "minimize the chances of any employee having to find a new doctor or dentist."
In a statement Tuesday evening, Blue Cross and Blue Shield of Nebraska said it had "just learned of the university's decision."
"We are still waiting to get details confirmed, so we are not able to comment at this time," the company said through a spokeswoman.
Saving $6 million in its state-aided budget comes as NU administrators are enacting several rounds of budget cuts simultaneously, while the additional $6 million in savings will reduce costs for positions that are within the Husker Athletic Department, are federally funded or paid for through student fees.
The review that led NU to look for a new health insurance provider sought to close a $46 million budget gap created through a combination of increasing salaries, health insurance premiums and utility costs, as well as a loss in state aid in 2017.
In addition to cutting non-academic areas on campus, NU regents also approved two years of tuition increases, including a 3.2 percent hike that will go into effect for the 2018-19 school year.
A second loss of state aid totaling $11 million will be covered through cash reserve, NU President Hank Bounds said in April, as an effort to give the university more time to implement longer-term budget reductions.
Finally, as the Legislature approved cutting NU's state appropriation by an additional 1 percent this year, NU will be forced to look for an additional $6 million to cut beginning next year.
Bounds and his team will present the proposed change in insurance carriers to the Board of Regents on June 28, along with a proposed operating budget for next year, and its next two-year budget plan that will be forwarded to the Legislature for its consideration in August.
NU spokeswoman Melissa Lee said Bounds will also update regents on the progress of its budget-cutting measures at their June meeting.