Washington and Lee is committed to providing its employees with a highly competitive benefits package that enhances the well-being of its employees and is consistent with the strategic objectives of the University. This befits its rich tradition as a top-quality institution of higher education, and is important in order to attract and retain high-quality faculty and staff. It is not the goal of this document to describe the specific benefits available at Washington and Lee, but rather to articulate the fundamental factors considered in constructing the University-provided and University-assisted benefits program at Washington and Lee. A summary of benefits is maintained on this website. More details are contained in the legal plan document located in Human Resources.
What are Benefits?
We define benefits as any non-wage compensation provided to employees. Implicit in the concept of benefits is that there is some advantage to be gained beyond an equivalent commitment by the University in the form of additional wage compensation. While we recognize the primacy of those benefits that have a direct financial advantage, such as a University's contribution to the health insurance premium, in this document we seek to take a more inclusive view of benefits. With such a perspective we add such additional benefits as free access to fitness facilities, or expert advice and assistance such as the Employee Assistance Program (EAP).
Who are the stakeholders and what are their interests in a Benefits program?
The Employee. By definition the most important recipients of employee benefits are the employees themselves. In a well designed University-provided or University-assisted benefits program, we recognize the following types of benefits that provide advantages to employees:
- Benefits that are exempt altogether from income taxation to the employee. (e. g., contributions to health insurance).
- Benefits that are tax-advantaged in particular ways, though not entirely exempt. (e. g., both employer contributions and employee contributions to the retirement income plan, long-term disability)
- Benefits that gain the employee the benefit of group rates as opposed to individual rates. (e. g., life insurance, health insurance)
- Benefits that provide the power of the institution in terms of negotiating ability and expert advice in-house or through consultants. (e. g., Health Advocate program, guaranteed issue in new benefits).
- Benefits that protect employees from catastrophic expenses or income interruptions (e.g. health insurance, long-term disability)
- Benefits that provide convenience and support. (e. g., wellness program, voluntary payroll deduction programs).
The University. Despite the fact that employee benefits are nominally provided to the employee, the institution has a vested interest in many benefits. These interests are often, but not always, in alignment with those of employees. In a well designed benefits program, we recognize several indirect advantages to the institution in providing benefits to its employees:
- Benefits that act as recruitment and retention tools and are competitive with those of peer institutions. (e. g., the mortgage interest benefit).
- Benefits that make employees more efficient and productive. (e. g., wellness program, health insurance).
- Benefits that express the Washington and Lee's values and educational mission. (e. g., tuition benefit).
- Benefits that develop or maintain a sense of community. (e. g., open access to fitness facilities, life insurance, retirement plan contributions).
- Benefits that protect the University. (e. g., adherence to legal requirements in benefits).
Retirees and the Broader Community. Some benefits remain with employees after they retire, thus retirees are very real stakeholders with potentially different interests, at least in degree, relative to regular employees. Likewise, some benefits extend to the broader community of Lexington and Rockbridge County. In general, the advantages of these benefits to these stakeholders coincide with those of employees and the University.
What are the underlying objectives of our Benefit program?
We have identified five encompassing objectives that should be considered when evaluating benefit programs. These objectives can sometimes be in conflict with each other, and in those cases the committee must weigh the various objectives and strike a balance to make its best recommendation.
The choice of which benefits to offer, and at what level at the University are guided by the extent to which the benefit addresses the interests of the stakeholders. Thus there is no one concept of what is most fair. The University attempts to treat all categories of employees equitably wherever possible and, for the most part, offers the same benefit package to all employees. An exception is that the University subsidizes health insurance for lower paid employees.
- Provide wise defaults for employees. Choices for enrollment in benefits should be as low cost and low effort as possible.
- Protect employees against catastrophic expenses or income interruptions. This has been, and should continue to be, an overarching goal and explains the University's provision of life insurance, health insurance and disability programs and more recently, the addition of long-term care.
- Provide a total compensation package that is strongly competitive with those of peer institutions. The University should offer all the major fringe benefits available at similar institutions. Furthermore, the University should regularly review survey data to ensure that our benefits remain competitive.
- Comply with all relevant federal and state laws. The University must comply with all relevant federal and state laws including, ERISA, COBRA, HIPPA, ADA and other laws impacting benefit plans and complies fully with accounting standards. Some elements of our program are to some extent dictated by federal and state laws.
- Manage the benefits package to get the highest total value for premium dollars and to ensure the continued financial soundness of the institution. Our benefit program is designed to take full advantage of applicable tax laws, e.g., shifting more compensation into nontaxable fringes, as well as give employees better value than they could secure individually. Almost surely, some elements in our current benefits package are there simply because they offer, or offered at least at one time, a high value to employees at a nominal cost. We should continually look at plan design alternatives and new programs that help control escalating costs. Recently, FASB 106 required a reexamination of post retirement medical benefits. Because the University honors its commitments to employees, it is critically important that we take on only those obligations we can realistically meet.
The process for structuring Benefits at the University:
Human Resources and the administrative units to which that department reports have the responsibility for the structuring of benefits at the University, as well as periodic reevaluation of their appropriateness. The Employee Benefits Committee exists as an advisory committee to provide feedback to Human Resources and the administration from the employees' perspective. Membership of the committee consists of employees and retirees of the University (all appointed by the Provost), as well the University Treasurer, and the Provost (as ex officio members). When considering benefits issues, Human Resources, the administration and the benefits committee operate under, and make decisions based on, the principles and understanding articulated in this document.
Adopted by the Employee Benefits Committee, May 2010
Revised January 2015 to reflect decision in 2014 to expand home loan program to non-exempt employees.