Ball State is starting the year in the red when it comes to the university health care budget, university officials reported during Friday's Board of Trustees meeting.
Randy Howard, vice president of Business Affairs and university treasurer, said the school faces a potential $8 million deficit, based on estimates that consider health care costs paid by the university in the first few months of the calendar year.
It's partially due to the fact that claims were $1.4 million higher than anticipated last school year.
"That sounds like a lot of money," Howard said. "But you talk to anyone that self-insures their medical care plans, and that could be one car accident or that could be two premature babies. It could be one or two tiny incidents that cause the overage."
He said $900,000 in reserves were already exhausted last year, and claims so far have been higher than projected.
"As we look at next year, we're going to have to make some significant decisions," Howard said.
His suggestions, which will be voted on during the May 4 meeting, include an annual discount for non-tobacco users-worth $300 to $600 each year-and additional out-of-network penalties for high cost procedures. The school could also save money by eliminating coverage for spouses who have access to other employer plans.
Even with significant growth in medical claim history, when adjusted for inflation, the school is paying about the same amount it was in 2007-2008.
Howard said he's also looking into adjustments for employee insurance plans. He'll be seeking input from faculty and University Senate committees before the issue is put to a vote in May.
Another way the university can gain extra money is with merchandise and sales. Last year, Howard said the school sold $3.8 million in merchandise.
According to the company that facilitates these sales, the average cost of the merchandise is $25, he said. Possible items range from spatulas to golf bags, and in all about 152,000 items were purchased last year.
In fact, Ball State is among only three Mid-American Conference schools to show a 10 percent increase in sales in the past three years, Howard said.
The university and Board of Trustees want to pursue other money-making efforts, such as a one-stop landing page online for Ball State merchandise. This would pull together various brands that sell Ball State merchandise, such as T.I.S. and Under Armour, in one online location.
During the meeting, the board also discussed future renovation projects. Next on the list, he said, is Johnson A. The project will begin sometime this fall and is scheduled for completion by Fall 2014.
Renovations will include more efficient lighting and windows, mechanical and electrical updates, air conditioning and a connection to the geothermal system. Schmidt Associates of Indianapolis was chosen as the architects for the project.
The renovation includes adding more stories to the complex and 130 more beds. Howard said it is estimated to cost $36 million.
"It is a very visible and significant focal point when you get to campus, and we think [it] will have the most impact as a renovation," he said.
Also during the meeting, the board approved a policy that allows the university to do more construction projects in-house without hiring a contractor for the job. The state's previous threshold to require public bids was $50,000, and it's now $150,000.
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