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State System announces changes to employee health care plan to reduce costs, help keep universities affordable

Revisions will save about $3.5 million annually, align benefits with other college and university plans in Pennsylvania, across nation

Contact: Kenn Marshall, (717) 720-4054 or (717) 329-0809
Harrisburg – Pennsylvania’s State System of Higher Education today announced changes to its employee health care plan that are expected to result in initial cost savings to the System of about $3.5 million a year, helping to keep the 14 state-owned universities affordable to students and their families.
The changes, which will take effect Jan. 1, will more closely align the State System’s health care plan with those provided by other colleges and universities in Pennsylvania and across the nation. About 15 percent of all State System employees will be affected, including managers and administrators, university health center nurses, and campus police officers and security guards.
Those affected by the changes will contribute from about $3 to $14 more per pay period toward the cost of their insurance, depending on their level of coverage. All affected employees will pay the higher premium while other plan adjustments, including a $250 deductible—with a $500-a-year per family limit—for some medical services will affect employees based on their usage of the plan.
“Our students are our number one priority, and these changes will allow us to reduce our costs to help ensure the preservation of high-quality, high-value educational opportunities for those students,” said Chancellor Frank T. Brogan. “Our employees will continue to have access to a comprehensive package of health care coverage for themselves and their families at modestly higher rates.”
The State System has been developing these adjustments over the past year, working with its health care provider on plan revisions that will both lower the cost of coverage and continue to provide a level of benefits to employees that will be extremely competitive in the higher education market, all without negatively impacting the student learning experience or reducing other important services.
“Changes such as these, along with potential pension reforms that the Commonwealth is considering, can generate essential cost savings in order to help keep tuition affordable,” Mr. Brogan said.
As state support has declined steadily over the last decade, the 14 State System universities have been required to make a variety of spending cuts, trimming an estimated $300 million from their operating budgets over the last 10 years. They have done so by implementing various strategies, including collaborative purchasing, investing in more cost-efficient energy systems, automating some processes and services, reducing staffing levels, deferring some maintenance work and sharing a broad ranges of administrative services.
Even with those efforts, some costs, including employee health care and pensions, have continued to rise. Several revisions have been made to the employee health care plan in recent years to help slow the annual cost increases. The changes announced today are a continuation of that effort.
The State System already will save about $2.7 million in health care costs this year as the result of recent collective bargaining agreements reached between the Commonwealth and the American Federation of State, County, and Municipal Employees (AFSCME) and the System and the State College and University Professional Association (SCUPA), whose members receive their health care coverage through the Pennsylvania Employee Benefits Trust Fund. Those two unions combined represent about 4,100 State System employees.
The changes announced today to the State System-run health care plan will cover the System’s approximately 1,500 nonrepresented employees, including the chancellor, university presidents and other administrators, as well as members of two of its other unions—the Office of Professional Employees International Healthcare Pennsylvania (OPIEU), which represents about 85 university health center nurses; and the Security, Police and Fire Professionals of America (SPFPA), which represents approximately 225 campus police and security officers.
Language included in both the OPEIU and SPFPA contracts with the State System calls for their members’ health care coverage to match that provided to nonrepresented employees. The changes for these three groups will save the State System about $3.5 million a year.
Under the health care plan run by the State System, covered employees currently pay between $5 and $36 for prescriptions. With the changes that will take effect in January, they will pay between $10 and $50 for each prescription they purchase.
Pennsylvania’s State System of Higher Education is the largest provider of higher education in the Commonwealth, with about 107,000 degree-seeking students and thousands more who are enrolled in certificate and other career-development programs. Collectively, the 14 universities that comprise the State System offer more than 2,300 degree and certificate programs in more than 530 academic areas. Nearly 520,000 State System university alumni live in Pennsylvania.
The State System universities are Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester Universities of Pennsylvania. The universities also operate branch campuses in Oil City (Clarion), Freeport and Punxsutawney (IUP), and Clearfield (Lock Haven), and offer classes and programs at several regional centers, including the Dixon University Center in Harrisburg and in Center City in Philadelphia.