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Harvard University to bump up health insurance premiums 7.3%

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Health insurance premiums for Harvard University employees will increase by an average of 7.3% next year, the university told covered plan members Tuesday.

The premium hikes reflect increasing claims costs and medical price inflation, Cambridge, Massachusetts-based Harvard said on the employee benefits section of its website.

The university covers roughly 34,000 individuals in its active health plans.

According to Harvard Magazine, the announcement contrasts with a 2.7% reduction in health insurance premiums from the 2015 plan year, when Harvard shifted costs to plan members by implementing annual deductibles and coinsurance.

For health maintenance organization and preferred provider organization plans, and a new point-of-service plan that offers lower out-of-pocket costs in exchange for higher premiums, in-office copays will increase to $30 from $20, the university said.

To offset the increase in premiums, Harvard said on its website that salary tiers will shift upward in 2016 so more employees will be eligible for lower premiums. Harvard said it will continue to provide eligible employees “an equal dollar premium subsidy by salary tier for all plans.”

In addition, the university will consolidate its two reimbursement plans into one so as “to enhance benefits at the lower end of the salary scale,” according to Harvard's website.

The announcement comes after Harvard Provost Alan Garber previewed the changes in an Aug. 27 email to faculty and staff.

“Medical price inflation and an increase in claims have contributed to a projected rise in expenditures, so health insurance premium rates (combined employee and employer contributions) will increase over last year for all plans,” Mr. Garber said in the email.