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Mayo Clinic revamps benefits: Employees to shoulder more health-care costs

Mayo Clinic plans a major overhaul of its benefit packages for employees and retirees, including shifting a higher percentage of health benefit costs to employees.

After more than a year of studying benefits, the Board of Governors approved the proposed changes, according to message that Mayo Clinic CEO Dr. John Noseworthy and Vice President of Administration Jeffrey Bolton sent to staff.

The changes are to take effect on Jan. 1, 2015.

"Our goal, as always, is to secure a highly competitive benefit package that allows us to recruit and retain world-class staff while providing sustainable benefits for the long term," stated the message.

Employees will have three health plans to chose from — Mayo Premier, Mayo Select and Mayo Basic. While employees were urged to meet with their supervisors to learn the details of their individual situations, the message did list some of the broad strokes of the changes.


"Employees will share a greater percentage of the cost of their coverage" for health benefits, it said.

A Mayo spokesman declined to give an exact percentage.

"That's tough to say because it will depend on utilization. In some cases, health-care costs may actually go down," said Mayo Clinic spokesman Bryan Anderson. "We'd strongly prefer they work with Human Resources to know what it means for them."

As part of the changes, Mayo employees at all locations will have the same medical plan options, with standard national networks, and better in-network access.

These kind of changes are happening at employees across the country, said attorney Nancy B. Vollertsen, a partner in the Lindquist & Vennum law firm in Minneapolis who specializes in employment law. She is a former managing attorney in Rochester's Dunlap & Seeger law firm and former president of the Olmsted County Bar Association.

"Mayo is putting a positive spin on change. Just like most large employers who are trying to control their health-care costs," she wrote in an email. "Mayo appears to be narrowing employees' health-care options and shifting costs to individual employees and the government."

Changes to Mayo Clinic's retiree benefits policies could make a difference to employees considering whether to retire this year or in 2015.

Mayo plans to shift retirees from group coverage to individual coverage. That means the current Mayo Medicare supplement Plan will not be available for Mayo employees who retire after Dec. 31. This change will not affect current retirees or employees who retire before Jan. 1.


Similar to IBM's plan, future retirees will choose coverage "that best fits their needs" — and budget from options in the private Medicare marketplace. Eligible retirees will receive a Mayo subsidy in the form of an annual contribution to a Health Reimbursement Arrangement account.

Details of this service are still in development, Anderson said. He added that Mayo expects to announce a new "service partner" for this in early March.

The message from Noseworthy and Bolton concluded with this statement:

"It has been about 10 years since we've made significant changes to our medical plans. We are not the same organization we were 10 years ago. Health care isn't the same as it was 10 years ago. We believe the changes we are announcing today will sustain our valued benefits for years to come. That is our commitment to you and to your families."

• Employees will pay a greater percentage of health-care costs.

• All employees across different Mayo locations will be on the same benefits plan.

• All employees will have standard national networks and better in-network access.


• Future retirees will get individual health coverage, not group coverage.

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