SUBJECT:  Consolidated Billing Project, Phase I

Effective with July 2000 earnings, the University of California will implement the first phase of the Consolidated Billing Project. The Consolidated Billing Project was launched during the Spring of 1999 following the discovery that UC was unnecessarily paying more than a million dollars in benefit costs annually.

Most campus departments are conscientious about updating leaves of absence or separations in a timely manner. With the implementation of this project, failure to update an employee's record by the posted compute date may result in the employee receiving coverage that he/she is not eligible for, and an irrevocable assessment to the department for both the employee and employer cost of the premiums. Departments are now required to insert a separation date along with an appointment end date for benefits eligible positions. This can be accomplished by using the Separation Bundle (SEPR) in PPS.

A recent snapshot of the UCSD payroll indicated that there are at least 800 individuals who are erroneously enrolled in plan coverage. The total estimated annual cost of these ineligible enrollments is $100,000.00. Under the Consolidated Billing Project, the corresponding costs of these enrollments will no longer be covered by the Office of the President, but instead will be directly assessed against departmental fund sources. Below is an example to illustrate the potential monthly cost that a department may incur for an employee when updates are not performed in a timely manner.

Coverage - Family Plan
Medical - UC Care
Dental - Delta Dental
Vision - Vision Care
Legal - Signature Legal

Employee Cost
$54.83
$ 0.00
$ 0.00
$13.00
Sub Total $68.03

Employer Cost
$475.90
$ 97.04
$ 12.27
$ 0.00
Sub Total $585.21

Potential Department Cost. . . . . . . . $653.24

The intent of this project is to:
- Improve enrollment reporting to carriers
- Reduce insurance costs
- Streamline campus/carrier processing
- Produce timely, accurate UC-wide financial statements
- Respond to internal audit findings

Phase I will incorporate Medical, Dental, Vision and Legal insurance plans. Phase II will incorporate Life, Disability and Accident insurance plans. The implementation date of Phase II will be announced.

To comply with this project, the Payroll /Personnel System (PPS) will be enhanced to have the functionality to accept and generate coverage end dates and the ability to maintain historical premium activity. The payroll computation process will also be modified to assess the U niversity's full contribution starting with the biweekly pay period ending July 8 and the monthly pay period ending July 31. This enhancement to the Payroll Personnel System (PPS) will require departments to properly maintain employees' records in PPS.

Special information sessions will be held to facilitate implementation of the Consolidated Billing project. A schedule of these sessions will be released soon. In the interim, any questions regarding the Consolidated Billing Project may be addressed to Eric Holmes (534-3249) in the Payroll Office or Sally Brainerd (822-1814) in the Office of the Controller.

                                                Don Larson
                                                Controller