Like many employers, Duke is balancing rapidly escalating health care costs. As a result, health care premiums will increase in 2027 for all employees — more than they have in recent years. We are introducing a sliding-scale approach based on salary. This is a more equitable model that ensures costs are shared fairly across all employees.
Under the current model, employees in lower salary bands pay a higher share of their income for the same coverage as their colleagues who earn more. The new model rebalances the cost share and shields those in lower salary bands from disproportionate cost increases. Health care premium increases for 2027 will be based on an employee’s salary. How much you pay will be tied to what you earn. This protects employees in lower salary bands from the steepest increases.
Salary-tiered premiums do not apply to retiree health or COBRA premiums, part-time employees working less than 30 hours per week, house staff/medical residents, post-doctoral classifications paid through the non-compensatory payroll, and employees in an inactive status due to disability.
Salary Tier Determinations
How is salary calculated for tier placement for monthly-paid faculty and staff?
- Annual salary includes:
- Base monthly salary × 12 (adjusted to reflect a 40 hour per week commitment if work schedule is at least 30 hours per week, but less than 40 hours) (Wage Type 1400)
- Faculty Additional Pay (Wage Type 1183) expected to be received for 12 mos. during the fiscal year
- Leadership & Administrative Pay (Wage Type 1181 and 1145) expected to be received for 12 mos. during the fiscal year
- Based on amounts effective July 1 of the preceding plan year.
- For those hired after July 1, pay will be based on the salary and any additional pay communicated upon hire.
How is salary calculated for tier placement for full-time biweekly-paid staff?
- Hourly rate* as reflected in the SAP/payroll system (Wage Type 1000)
- Based on hourly rate for primary position effective July 1 of the preceding plan year.
- For those hired after July 1, pay will be based on the salary and any additional pay communicated upon hire.
- New hires & newly eligible employees: Rate as of eligibility date for health plan enrollment, typically 1st of the month following hire/eligibility change.
*Hourly rate is for the primary position (i.e. not secondary positions, if applicable) and excludes premium pay such as shift and weekend differentials as well as overtime.
Two legacy exception provisions continue to apply
- Faculty and staff with 20+ years of service at Duke that transition from full-time to part-time (20–29.9 hours/week) status will remain eligible for Duke’s contribution towards their health plan premium and will remain in their Tier placement as described above, and
- Active faculty holding a Regular Rank Faculty position as reflected in the SAP/payroll system that are receiving a monthly salary from Duke remain eligible for Duke’s contribution towards the health plan premium irrespective of their work schedule and will remain in their Tier placement as described above.
At what point in the year is pay assessed for purposes of salary tier placement?
- Placement in the tier is determined annually for the following calendar year, based upon the current year’s salary/rate as of July 1.
- There is no mid-year tier change that occurs if pay increases due to a raise/promotion or increase in work schedule (ex. moving from a 30 hour per week work schedule to a 40 hour per week work schedule).
- Current tier placement continues if pay reduces due to an absence covered by FMLA, long-term disability, workers’ compensation, or paid sabbatical leave.
- A mid-year tier change (reduction) may occur if salary or hourly rate is reduced due to a demotion. It would not reduce if the change is due to a reduction in work hours between 30 – 40 hours per week).
Are part-time employees eligible for Duke’s health plans?
- To be eligible to participate in Duke’s health plan, employees must have a work schedule of at least 20 hours per week as reflected in the SAP/payroll system.
- Though eligible to enroll in Duke’s health plan coverage, part-time employees with a work schedule of 20 – 29.9 hours per week do not receive a Duke contribution towards their health plan premium and pay the full premium for the selected coverage. Therefore, the salary based premium tiers described above do not apply.
- Employees dropping below a work schedule of 30 hours per week will see a premium increase to the full premium amount effective the 1st of the month following the reduction in their work schedule. (Please note, except for the two legacy exception provisions described above that continue to apply.)
Are there areas where salary-tiered premiums do not apply?
- Yes, salary-tiered premiums do not apply to retiree health or COBRA premiums, part-time employees working less than 30 hours per week, house staff/medical residents, post-doctoral classifications paid through the non-compensatory payroll, and employees in an inactive status due to disability.
How were salary tiers and premium changes determined?
- Salary tiers and premium changes were developed in partnership with actuaries and consultants with the goal of creating stable, sustainable bands that provide long-term flexibility and reduce the need for future adjustments.
