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Insurance costs rise for VR workers

KIM MARQUIS
Summit Daily/Brad Odekirk
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SUMMIT COUNTY – America’s health care crisis will hit Vail Resorts employees in their pocketbooks this winter as the ski company shifts rising costs to its workers starting Oct. 1.The company that owns the Breckenridge and Keystone ski resorts estimates health care costs will go up by $2.5 million this year. More than half will be absorbed through increased premiums, deductibles and co-payments for employees on the company’s plan.A Vail Resorts employee who asked not to be identified said it is “unfair” the company is shifting the increased cost burden onto its workers. “The financial sacrifices to live in this community are significant and now they’ve become more significant for Vail Resorts’ employees. They’re squeezing us,” the employee said. “It’s time for Vail Resorts to meet its employees half way.”The company spent $20 million annually the last two years on health care, and this year is again holding the line on the expense. Rick Smith, vice president of human resources, acknowledged that employees will bear the brunt of rising costs but said the expense is being maintained to stay competitive.

“If we can’t (maintain expenses) we’ll have to raise our prices or increase income somewhere,” Smith said.The company pays 70 percent of health care costs incurred in its self-managed system, while employees pay 30 percent. The company’s per-employee cost rose from $204 per month in 1999 to $450 per month in 2004. Monthly premiums for employees will go up 14 percent to 25 percent starting Oct. 1. A single employee who used to pay $84 monthly, for example, will pay $96 for coverage and a family with two children that paid $280 per month will pay $349. Premiums for a second plan offered to starting full-time employees – the thousands that will soon arrive in Summit County for the ski season – will go up to $180 per month, a 21 percent increase. Last year less than 200 people bought the plan, designed as a stop-gap for new employees.Vail Resorts employs about 4,700 people in Summit County during ski season.Workers will also face higher deductibles and co-payments. A family that paid $250 annually in deductibles and $20 for doctor visits will now pay $500 in deductibles and $25 per doctor visit.

With health care costs expected this year to increase by 14 percent to 16 percent nationwide, Smith said the company is “caught between a rock and a hard place.”Compared to other plans, Vail Resorts’ offers relatively low deductibles, even at this year’s higher amounts. The plan also pays 100 percent of costs after deductibles – a much better benefit than the typical 80/20 split, Smith said.The difference between a 100 percent plan and an 80/20 split – where an employee pays 20 percent of the bill even after meeting deductibles – could add up to thousands of additional dollars paid by a worker for say, a knee surgery, Smith said. The company had to make hard choices in tweaking its plan, Smith said. A benefit the company weighed is its “bridging” option, which allows seasonal employees like ski patrollers to keep health insurance with the company through the offseason. The cost for a single person to stay insured more than doubles, from $96 to $192 per month while “bridging,” but it would more than triple if the employee went on COBRA or had to purchase insurance as an individual, Smith said.

“So do we go to 80/20 or eliminate bridging? Taking away bridging would really hurt our core group. A number of them do it because of the health plan,” he said. The company decided this year to raise premiums, co-payments and deductibles for employees rather than eliminate bridging or switch to 80/20 coverage.About $1 million of the increased costs will be absorbed by reducing the number of employees who qualify for the plan – a move made last year when the company raised the number of work hours required to qualify – and using its position as a large employer to garner better prices from area health care providers.”We try to leverage our size when we can,” by working to secure lower rates for Vail Resorts employees, Smith said. “Our health benefits set us apart and our employees know that.”Kim Marquis can be contacted at (970) 668-3998, ext. 249, or at kmarquis@summitdaily.com.


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