2 mins read

DakotaCare mishap costs USD $561,200

The University of South Dakota is facing $561,200 in mid-year employee health insurance increases for the 2013 fiscal year according to USD provost Chuck Staben.

Jessica Preister, USD director of budget and finance, said the original estimated cost of health insurance was $6,335 per employee, and has risen to $7,950 per employee.

The $1,615 increase per employee originally left the university $1,845,000 in accounted costs, according to Staben.

DakotaCare, the university’s employee health insurance provider, came to USD administrators with the fixed numbers in Dec. 2012.

According to Staben, the university’s budget took into account the previously provided insurance costs, and was taken aback by the unexpected hike in costs.

“We had agreed to offer this health insurance to our employees,” Staben said. “We would have to cover that either way, but now it just means we are working with less.”

However, in the recent South Dakota legislation, a pair of bills was passed in the S.D. House of Representatives, and Senate, which offer increased appropriations to state funded education via general funds dollars, helping slim down the excess costs faced by the university.

Senate Bill 90 and House Bill 1060 provided the Board of Regents extra funding to aid USD in Fiscal Year 2013. The bills granted USD $1,263,000 in aid, reducing the overall extra cost of insurance to $561,2000.

The bills are awaiting signature from S.D. Gov. Dennis Daugaard, but Staben said he would be surprised if the bills were vetoed at this point.

Preister said USD is taking into account the idea that all university faculty positions on campus are filled next term, and depends on whether the university gains or loses employees.

Priester said the remaining $561,200 would be allocated to individual USD colleges.

“Everyone will receive a share in the burden,” said Preister.

Preister said unfilled faculty slots and other additional funds scattered throughout colleges’ budgets can help make up the additional cost being divided amongst the university.

Staben and Preister both pointed towards the nationwide trend of increased health insurance costs as a reason for such a hike in prices.

“Fundamentally, it should surprise no one that health care costs are rising in the U.S.,” Staben said. “Now why anyone would not estimate the cost to be higher, I don’t know. I wasn’t that interested in the explanation. I was more focused on the cost to the university.”

Preister said increased employee insurance costs are not only reaching USD, but are being experienced by employers around South Dakota.