UNIVERSITY PARK, Pa. — When Penn State’s 2027 benefits open enrollment period begins on Nov. 2, benefits-eligible faculty and staff will continue to have access to the same high-quality health care coverage and programs. Beginning Jan. 1, 2027, employees will see an increase in their payroll contributions to keep pace with rising health care costs.
Depending on base salary, selected plan and number of people covered, benefits-eligible faculty and staff can expect to see an increase between $4.25 and $165 in monthly payroll contributions next year. For example:
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Under the Lion Traditional plan, for 2027, a monthly paid employee earning $75,000 will see their contribution increase by $20 per pay period for individual coverage or $61.88 per pay period for family coverage.
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Under the Lion Advantage plan, for 2027, a monthly paid employee earning $75,000 will see their contribution increase by $10.63 for individual coverage or $31.88 per pay period for family coverage.
Additional information listing examples of payroll contribution changes depending on selected plan, base salary and number of people covered is available on the Human Resources website.
Penn State employees’ payroll contributions are determined using a salary-based, indexed model, which has been in place since 2012 and is designed to share health care costs equitably among employees using an individual’s annual base salary to determine how much each employee contributes for coverage. Since it was passed by the Faculty Senate in 2016, Penn State continues to pay 75% of the cost of the coverage while employee payroll contributions cover the other 25%.
Plans for 2027 were discussed in consultation with key stakeholder groups across Penn State, including the Faculty Senate Benefits Committee, the Health Care Advisory Committee and the University Staff Advisory Council.
“We know how important health care is to our employees and their families, and our goal continues to be to offer as affordable, high-quality health care to our valued faculty and staff as possible,” said Jennifer Wilkes, vice president for Human Resources and chief human resources officer. “We also know from our recent surveys of faculty and staff that, for example, more than 74% of staff are pleased with their health benefits. As we do each year, we have carefully considered how best to preserve the benefits our employees depend upon, while also facing the reality of significantly increasing health care costs — an issue that is impacting employers across the nation and a long-term trend that we expect to continue into the future. Ultimately, after consulting with members of our community and with third-party experts, we have chosen stability in our plan offerings, while increasing Penn State’s own expenditures and maintaining the 25% employee cost sharing percentage to help pay the growing costs.”
As the University is in a status quo period with those faculty being represented by a union, the institution is not changing what benefits are offered or the collective 25% proportion employees contribute to health plans; similarly, while not a status quo requirement, for this year annual salary increases will continue for faculty as they have in the past.
Penn State spends more than $300 million annually to provide health care benefits for employees, and its medical and prescription drug costs are projected to increase $60 million for 2027.
The Lion Traditional, Lion Advantage HSA and Lion Advantage Flex plans will remain unchanged for 2027, with the exception of federally mandated adjustments to out-of-pocket maximums and deductibles for Lion Advantage enrollees to comply with IRS minimums. Highmark Blue Shield will remain the third-party administrator for medical services and CVS Caremark will remain the pharmacy provider.
The University is self-insured, meaning Penn State and its employees together cover the full cost of health insurance under a longstanding 75/25 cost-share model, with the University covering 75% of total employee health care costs and employees contributing 25%. This was put into place in 2016 as part of the faculty senate vote surrounding health care principles.
Additional details about Penn State’s 2027 health plans will be shared in the coming weeks, in advance of benefits open enrollment, which begins Nov. 2 and runs through Nov. 13.
Employees covered by a collective bargaining agreement should refer to their collective bargaining agreement for information about 2027 health care plan contributions and plan provisions.