Economic Recovery Plan FAQs
Last update: Monday, June 1, at 12:15 p.m.
Click on the links below to jump to each phase of the Economic Recovery Plan:
Question goes here
Q: Will we be integrating learners into virtual care? If so, what are the plans to accommodate with a more robust platform that allows more than two users simultaneously?
A: Yes, we are working closely with the different clinical units and the Virtual Care team to integrate learners into virtual care. There is the technology to provide virtual care learning opportunities. Our current platform allows two providers and a patient to participate in a video visit. Later in July, a new platform will enable the programs to have additional users on a visit.
Q: Will a recruitment video and materials be created that can be used across departments, divisions, and programs?
A: A task force is assessing learner and faculty recruitment needs across the organization, and also evaluating existing materials and delivery models. The Department of Communications will partner with this task force to provide several different tools to use in the recruitment process, including video.
Q: Are platforms which provide access to virtual recruitment fairs for future PhD students an acceptable purchase?
A: At this time, access to virtual platforms are not permitted unless determined essential to conduct business.
Q: The health system is projecting a loss of $130 million to $230 million by fiscal year end. Is that loss part of President Schlissel’s $400 million to $1 billion estimated loss for the university?
A: Yes, the university’s projected losses include Michigan Medicine’s estimates.
Q: What is the main driver behind the Medical School’s projected $80 million to $100 million negative variance from pre-pandemic expected performance?
A: The main driver is the reduction in wRVU payments for clinical services to clinical departments, primarily as a result of reduced volumes related to COVID-19, most notably in ambulatory clinics, operating rooms, and procedures.
Q: What is the current situation with Funds Functioning as Endowment (FFAE)? How long will the funds remain frozen?
A: FFAEs are placed into the University’s investment fund and must remain invested for at least five years before the principal amount can be withdrawn. Currently, FFAEs are frozen (no additions or removals) and, at present, we do not know how long these funds will remain inaccessible. These funds are frozen due to liquidity issues and has prompted an effort to preserve cash across the institution. The Medical School’s Associate Chief Financial Officer meets regularly with campus finance colleagues and will share updates as they become available. At this time, departments may utilize cash balances but should aim to reduce all cash expenditures as much as possible through the end of June 2021.
Q: How long will Dean’s commitments be frozen?
A: At minimum, Dean’s commitments will be frozen through the end of FY20. It is currently unclear how long the commitments will remain frozen into FY21. As we gain a better understanding of our cash position and to what extent we meet or exceed projections, we’ll have the opportunity to reevaluate the freeze as we head into FY21. That being said, there is an exception process for select commitments as needed.
Q: Most of our department’s discretionary spending is start-up, bridging, and retention. How should we approach these commitments?
A: Departments are being asked to thoughtfully consider cash expenditures at this time. We recognize everybody still has to meet their salary commitments, and we fully support that for faculty and staff. We need to continue to invest in our faculty and their research programs. The specific discretionary expenditures that are limited at this time are noted in the discretionary spending chart. Departments may maintain the mission critical investments in faculty that include start-up, bridging, and retention.
Q: With the freeze in spending, some of our faculty are interested in donating personally to support society dues for residents. Is there a way to do a pre-tax donation for this purpose?
A: There is not a donation mechanism available for this purpose. However, departments may fund up to two society membership for residents during FY21 per the discretionary spending grid.
Q: Is there a difference in the approval of monetary transfers of monthly allocation and ongoing support versus a new request?
A: All are being reviewed to be as comprehensive as possible. If the expense is truly operational, in support of mission critical activities, we expect those transfers to occur.
Q: Will there be adjustments to the quarterly endowment returns?
A: We have a favorable long-term portfolio policy and any external impact is factored into a 28-quarter average. Therefore, we tend to weather market volatility as part of the current investment strategy.
Q: How does leadership intend to address faculty morale issues now, given that the faculty will be expected to work more for less?
A: We recognize faculty and staff have experienced both professional and personal hardship during the pandemic. Leadership will continue to provide avenues to hear input on how these experiences are impacting morale and how to best move forward together. Leadership will also work with department and area leaders to prioritize work under this new normal to ensure faculty and staff well-being is considered so we can be successful together.
Additionally, the Michigan Medicine’s Wellness Office website at has many resources for individuals, groups and leaders.
Q: Can a faculty member who is currently a lecturer be appointed to assistant professor on the clinical track or instructional track and receive a salary increase?
A: First, the faculty member must not be in a non-ACGME approved fellowship, as this would be considered a new hire and subject to the hiring freeze. A lecturer who has met the criteria for an assistant professor appointment in the instructional track or clinical track is eligible for advancement via the outlined faculty promotion process.
Q:Can the renewal of a Lecturer to a subsequent Lecturer (e.g. first-year Lecturer to a second-year Lecturer) receive any salary increase?
A: This renewal is subject to the salary freeze outlined by President Schlissel; therefore, no salary increase is permitted.
Q: Will verbal faculty offers extended prior to the faculty hiring freeze be honored, or is a written offer required?
A: President Schlissel has indicated that only prior written offers will be honored, although in very rare circumstances, exceptions may be granted. Departments should reach out to their respective Executive Vice Dean (EVD) to discuss these situations. After partnering with you to deeply understand the situation, an EVD will bring your case(s) forward to the Dean/EVPMA, the final arbiter of these decisions.
Q: Are voluntary reductions in effort for faculty an option?
A: Yes, but to be explicitly clear, reductions in effort must be completely voluntary, and faculty can exhaust time-off banks to cover these reductions. Additionally, the SPG articulates pathways for faculty leaves and reductions in effort, should faculty wish to utilize them. If a faculty member chooses to reduce his or her effort or take a leave of absence, please coordinate with the Dean’s Office so that we can partner with the necessary groups (HR, Faculty Affairs, etc.) to ensure the process is followed properly.
Q: Regardless of salary raises, will there be any change to the promotion process for clinical track faculty
A: No, these promotions are criteria-based. The Senior Associate Dean for Faculty Affairs and team are working to obtain additional information regarding clinical track pathway criteria and will present an executive faculty meeting on this topic in May 2020. We encourage departments to consider granting some leeway with promotion packet deadlines, as we expect faculty have been derailed and distracted from preparing their promotional packets, due to the pandemic.
Q: Will the faculty performance review process be delayed, or will there be changes to the process?
A: The faculty performance review process will proceed as scheduled. If a department would like an extension, a request should be submitted through the Faculty Affairs office via Alex Nosnik (email@example.com).
Q: Will departments be allowed to request faculty equity reviews?
A: Due to the faculty salary freeze, faculty equity review requests are not being accepted.
Q: Do we have to honor prior deferred compensation agreements?
A: Yes, deferred compensation agreements are contractual and will be honored.
Q: Will departments be allowed to offer retention packages – which may or may not include deferred compensation or other compensation changes?
A: Departments should identify non-financial means to facilitate retention whenever possible. Any retention actions which involve any form of additional compensation must be submitted to Faculty Affairs for review and applicable approvals before they may be communicated or offered.
Q: Will U-M reduce or eliminate effort for split U-M/VA appointments?
A: There are regular reviews of work assignments, needs, funded effort, future goals, and alignment with mission to ensure that the best decisions are made to preserve financial resources and protect future institutional stability. Having VA effort does not explicitly place U-M effort at risk.
Q: Regarding the staff hiring freeze, if a staff member is close to being fully-funded by a grant but requires a small amount of additional support from the department, is this allowable?
A: Existing commitments and arrangements will be honored as long as the position is essential to fulfilling the aims and goals of the research program. Given the current U-M hiring freeze, new research hires should be fully funded (100%) on sponsored projects or the appointment adjusted to meet the funding level (e.g., 80% grant funding would equate to a 0.8 FTE appointment). All new hire requests for research must follow the medical school-wide process for approval prior to posting, and serious consideration should first be given to other existing department research staff who may be idle or not fully funded on sponsored projects.
When appropriate, funding hires on grants should be outlined as term-limited so that the obligation at the end of the funding period may cease. Please consult with your Human Resources business partner to assess this option on a case-by-case basis.
Q: If temporary staff are fully-funded on extramural grants, are we allowed to keep them?
A: Current temporary staff who are fully-funded on federal, state, and nonprofit awards and are deemed essential to fulfilling the aims and goals of the grant or contract are allowable.
Q: I have a fully-funded faculty position on an extramural award. Am I allowed to hire?
A: Presently, faculty positions that are fully-funded on federal awards are generally permitted. All new faculty position requests must follow the Medical School process for review. Care should be given to evaluate the long-term plan for support of the position beyond the end of the project. You should work with your department to assess ongoing salary support past the term of the grant should the hire not obtain independent funding within the initial project period.
Q: I have an ongoing research project that is funded with discretionary funds. Can I continue my work on this project, including spending for existing salaries and supplies?
A: Michigan Medicine is significantly curtailing discretionary spending. Research experiments in progress may finish; however, use of discretionary funds should be limited to expenditures essential to achieving the research aims. Existing personnel funded from discretionary sources may continue. New projects dependent on discretionary funds should not be started. For specific information about permitted discretionary expenses please refer to the Michigan Medicine FAQs.
Q: I have a research project that is ongoing and funded from my startup funds. Can I continue to do work on this project, including spending for existing salaries and supplies?
A: Yes, research projects in progress can continue, and expenditures that fulfill the aims and goals of the project are allowable. Salaries of existing personnel who have been funded by startup funds may continue. Non-research expenditures are limited as directed in President Schlissel’s letter of April 20th and further elaborated on in the Michigan Medicine FAQs. New hires should be limited and essential to advancing the research program. All new hire requests for research must follow the Medical School-wide process for approval prior to posting, and serious consideration should first be given to other existing department research staff who may be idle or not fully funded on sponsored projects.
Q: I have a research project that is ongoing from internal pilot funds. Can I continue my work on this project, including spending for existing salaries and supplies?
A: Yes, research projects in progress can continue, and expenditures that fulfill the aims and goals of the project are allowable. Non-research expenditures are limited pursuant to President Schlissel’s letter of April 20 and further elaborated on in the Michigan Medicine FAQs. New hires on internally funded pilot awards will not be permitted.
Q: Our center/program runs a pilot grant program. Will we be allowed to continue to offer pilot awards?
A: Michigan Medicine funding for pilot programs is eliminated as part of the Economic Recovery Plan effective immediately. Any pilot proposals that have already been awarded as part of your program may be honored.
In the instance that a pilot program is a component of an extramural award and is explicitly stated as part of the institutional cost share, Michigan Medicine will honor its prior commitments. Award information may be reviewed with the Medical School’s Grant Services & Analysis Office (firstname.lastname@example.org) in consultation with the Executive Vice Dean for Research to make a determination regarding your specific award. Future cost share requests for pilot programs will be considered only if they are a sponsor requirement.
Q: Can faculty discretionary funds continue to be used for a graduate student stipend which is not covered by a training grant?
A: Yes. Stipend shortfalls are a necessity in providing these training slots. The only alternative is to not fill the position in order to not incur the incremental cost.
Q: Biosciences Initiative – what does this mean for faculty recruitment and core equipment purchases?
A: Appropriate expenses incurred in FY20 and submitted to the Biosciences Initiative for reimbursement will be paid in full. Moving forward, all Biosciences awardees will be notified that they are under the same restrictions for FY21 as described in President Schlissel’s letter of April 20 and elaborated on the U-M Office of Research FAQ page. Faculty with written offers that were made under these proposals before the hiring freeze will be honored. The core equipment program will be placed on hold until budget restrictions are lifted.
Q: Will the institution cost share on grants being submitted?
A: Prior cost-share commitments for externally sponsored grants and contracts will be honored by the university. Cost share requests will be considered in light of the financial environment during the remainder of FY20 and FY21. Please work with your department leadership and the Grant Services & Analysis office (email@example.com) on cost-share requests.
Cost sharing just to demonstrate “institutional commitment” will not be supported. Instead, focus on the rich institutional environment, collaborations that can strengthen the proposal, and the depth of resources already available on campus. Specific cost sharing to support shortfalls caused by the sponsor’s structure of the funds available (e.g., NIH salary cap limits, tuition/stipend limits, etc.) will be generally permitted. However, prior due diligence should be done with your department to ensure that the funds will be available. Additional investments beyond required elements (i.e., for additional programmatic components or “nice to have” items) are strongly discouraged. This approach will still position Michigan Medicine in a competitive light and be consistent with sponsor expectations.
If you would like help evaluating your institutional environment statement, please contact the Grant Services & Analysis office (firstname.lastname@example.org) for support.
Q: Given that we sent our offer letters before the hiring freeze and since we have NIH-funded slots, can we move forward with the hires?
A: Generally, we expect that prior written commitments that were made will be honored. Explicit cost share agreements (as documented in your award information from campus) should be upheld whenever possible. Any change in plans or unit decision to withhold funding for a previous commitment should be reviewed carefully within the award terms. Sponsor engagement for permission to reduce the commitment should be sought, when necessary. Award information may be reviewed with your local research administrator, ORSP Project Representative, or the Medical School’s Grant Services & Analysis Office (email@example.com) for the nuances of your specific award.
Q: Regarding a question on the continuation of institutional commitments to T32 programs to cover tuition and stipends, as the NIH does not cover our full cost. Should we still anticipate this type of institutional coverage in our proposals?
A: Yes. The Office of Graduate and Postdoctoral Studies (OGPS) and Rackham have already confirmed that they will continue covering 50% of the tuition shortfall, when requested and approved prior to proposal submission. Stipend shortfalls will continue to be the responsibility of the unit to cover. As this is a condition of award and non-recoverable from the sponsor, it should be reviewed to be sure department resources are available and then move forward.
Q: Can existing subscriptions, including software, be maintained?
A: Unless an existing subscription is determined essential to conduct business, departments and units should either cancel active subscriptions if a prorated refund will be issued or cancel at the time of renewal. New subscriptions are not permitted.
Q: How does the Economic Recovery Plan impact Blue Cross Blue Shield of Michigan (BCBSM) funded initiatives at the University of Michigan?
A: These work agreements can be considered extramurally-funded programs which allows initiatives to continue as defined in the BCBSM/UM agreements. New faculty and staff hires will need to go through the established position review processes.
Q: I am interested in voluntarily reducing my salary through FY21 as a way to demonstrate solidarity with the organization and support our economic recovery. Is this an option for me, and if so, how do I it?
A: All employees are welcome to make a voluntary, modest salary reduction (i.e. 5%) to support our economic recovery through FY21. If you wish to do this, please complete the online form for faculty or for staff.
Another option is to make a donation to our Employee Emergency Needs Fund. This philanthropic fund will provide grants for our lowest-resourced employees who are in need of financial assistance as a result of the pandemic. Information on how to access this direct financial support with be forthcoming from HR. You can give online here or mail a check made payable to the University of Michigan: Employee Emergency Need Fund, Michigan Medicine Office of Development, 1000 Oakbrook Drive, Suite 100, Ann Arbor, MI 48104
Q: Can Michigan Medicine use the COVID-19 Philanthropic Fund to help offset financial losses?
A: Though Michigan Medicine has suffered significant financial impact due to the COVID-19 pandemic, our community has rallied around us to provide gifts of food, PPE, and financial support. While private philanthropy cannot be used to directly offset our financial losses, it has helped provide emergency assistance, comfort, and appreciation for our employees, as well as fund innovative research projects that will help us combat COVID-19.
Following are examples of the support provided through private philanthropy:
· 17,000 meals donated
· 500,000+ pieces of PPE from businesses and individuals
· Care packages and apparel for employees
· Scrubs embroidered with “Hail to the Front Line”
· Public recognition of front line employees through advertisements and other media
· Funding of COVID-19 related research, such as investigations into antibodies and immunity, viral transmission, ways that we can improve patient monitoring and treatment, and more
Funds will be used in the coming weeks for more employee recognition, wellness, and support efforts. Some funds will be used to support employees’ physical and mental health as they continue to experience the impacts of the pandemic.
Part of the COVID-19 Philanthropic Fund was used to establish an Employee Emergency Needs Fund. This fund allows us to provide awards for employees who are experiencing immediate, severe, and temporary financial difficulty as a result of the pandemic. Information on how to request support will be forthcoming from Human Resources.
Q: Which academic appointments are and are not eligible for the voluntary furlough or a reduced appointment?
A: Academic units may decide to offer the voluntary furlough program to employees, following the guidelines set forth in the UHR website (https://hr.umich.edu/working-u-m/my-employment/2019-novel-coronavirus-covid-19/temporary-staff-furloughs-temporary-reduction-hours).
Below are the academic employees eligible and not eligible for the program, should an academic unit wish to offer the voluntary furlough program. Eligibility does not mean that a unit will offer the program. Furloughs can be offered by a unit to employees or individual employees can request voluntary furlough. In both cases, participation is voluntary, and the unit must approve it. Units determine whether to approve requests and areas performing critical operations can opt out of the program.
|Eligible for voluntary furlough/reduced appointment:||NOT Eligible for voluntary furlough/reduced appointment:|
|Non-instructional faculty, postdoctoral research fellows, librarians, curators and archivists||Instructional faculty and graduate student assistants|
|Research track faculty||Tenure track faculty|
|Postdoctoral research fellows||Clinical track faculty|
|Curators||GSIs, GSSAs and GSRAs|
Q: Can units continue with select temporary student employment based upon existing programs?
A: All units are strongly-encouraged to reduce temporary employment; with that said, units have discretion to continue temporary student employment for select programs that are already in existence, as long as hiring costs remain within budget. Like regular staff positions, new and replacement temporary student positions require review and approval via the articulated staff hiring review process.
Q: Which discretionary spending expenses are departments and units permitted to fund on behalf of faculty, staff, and learners?
A: Please note, that for all of the expense items noted in the linked chart, gift accounts may not be used to fund these costs unless the gift agreement for the affiliated gift account specifically designates funding for one or more of these purposes.
Q: Is there a total target number for furloughed or reduction in force employees? How was this number or percentage determined?
A: Through the use of furloughs and RIFs, the current recovery plan calls for the reduction of our workforce by approximately 1,400 FTEs. This is difficult for all of us but necessary because so many of our expenses are related to salaries and benefits.
Q: How many positions have already been eliminated due to the Economic Recovery Plan?
A: We are working to reduce costs related to wages and benefits through attrition – that is not filling positions. To date, we have eliminated nearly 300 open requisitions.
Q: If a department has to reduce staff, can they determine the best way to do so (e.g. Three positions furloughed for 120 days is equivalent to 1 reduction in FTE)?
A: Yes, there are a number of options available including furlough, reduction of hours and reduction in force/lay-off. Departments should work with their Human Resources Business Partner to determine what options will work best for them.
Q: Is reduction in force based on seniority or other criteria?
A: Per the Reduction in Force SPG, 201.72, the order of reductions begins with the staff member with the least university service (seniority) in the affected classification, except that the university may retain employees, irrespective of service, who possess the necessary skills, knowledge,and abilities to perform the available work which are not possessed to the same degree by other employees in the same classification.
Q: If I am on furlough, and my department determines reduction in force is needed, can my position be eliminated?
A: Yes, positions may be eliminated prior to an employee returning from furlough as a result of organizational restructuring.
Q: If I am on EFMLA, can my job still be eliminated?
A: Yes, FMLA does not prevent employment action from occurring.
Q: If an employee loses their job, will they be prioritized for rehire in the future?
Per the Reduction in Force SPG, 201.72, employees are eligible for rehire anytime during the lay-off period. A staff member laid off or transferred from a position under the provisions of this policy will be recalled to the position before temporary or new regular staff members are hired provided the recall occurs within the time limits and the staff member has retained the ability to perform the work. Following the lay-off period, employees are able to apply for open positions they are qualified for via the normal application process.
Q: I have been redeployed to another unit, can I take a temporary furlough instead?
A: If the employee has been redeployed and there is work available, then they are not eligible for a furlough. If there is no work available on the redeployed unit for at least two months, then the two units must work together to determine a mutual end date and the employee’s eligibility for a furlough.
A claim for state unemployment compensation will not be contested by the university unless the employee was offered and declined redeployment to another position. Eligibility for and amount of unemployment benefits are determined by the state of Michigan.
Q: If reduced hours are chosen for furlough, do those employees also qualify to apply for unemployment benefits to make up the hours lost? Or does it apply only to those that take a full leave?
A: A claim for state unemployment compensation will not be contested by the university unless the employee was offered and declined redeployment to another position. Eligibility for and amount of unemployment benefits are determined by the state of Michigan.
Q: Are more furloughs and RIFs planned as part of the Economic Recovery Plan?
A: Through the use of temporary furloughs and RIFs, we will need to reduce our workforce. Leaders will be developing specific, departmental plans during the next two weeks and communicating to their teams as recommendations are finalized. Employees can still volunteer to participate in temporary furloughs until May 15.
Q: Will Michigan Medicine help me file for unemployment?
A: Yes, the university is working with the State of Michigan Unemployment Insurance Agency to initiate the claims process on behalf of employees who participate in temporary furloughs. Beginning May 11, 2020, the university will enter claims twice each week for furloughed or laid off staff. The employee will be responsible for any follow up needed with the UIA. More information will be provided to employees when the claim has been submitted.
Q: Is there a chance furloughs will be extended beyond the 120 days?
A: The current temporary furlough period is 60 to 120 calendar days. Departments have the discretion to extend that timeframe beyond 120 calendar days, if needed.
Q: Can I volunteer to come back to work earlier than my furlough end date?
A: Not unless your department operations require early recall from voluntary furlough or reduction in hours. A minimum of one-week notice will be provided.
Q: Will an employee who is on furlough still need to complete an evaluation?
A: All employees must still have an evaluation on file for FY20. It is up to the manager/supervisor whether the evaluation can be signed prior to an employee going on furlough, or if it can be completed upon the employee’s return.
Q: If an employee is on furlough, will the university pay the employee contribution for health insurance if the employee has covered dependents?
A: Yes, the university will pay the full employee health insurance contribution for employees taking a furlough regardless of whether dependents are covered or not.
Q: Can employees on furlough or reduced appointment make changes to their dependent care Flexible Spending Accounts?
A: Yes, employees have the option of reducing their dependent care FSA if they reduce their hours or take a furlough. Contact the Shared Services Center for assistance at 734-615-2000.
More information about employee benefits during furlough, reduction in hours and paid time off are available here.
Q: What are the details of the suspension of university contribution for retirement plans?
A: For the time period of July 1, 2020 through June 30, 2021 (FY21), employer contributions to employees’ retirement accounts are suspended. Employees can still make individual contributions. While we don’t take this decision lightly, we believe it is a preferable outcome to broad salary reductions and allows us to preserve as many jobs as possible. Bargained for employees should refer to their contracts. More information is available on the UHR Benefits website or employees may contact the SSC Call Center via email at firstname.lastname@example.org or phone 734-615-2000 locally, or 866-647-7657 toll free, Monday through Friday from 8 a.m. to 5 p.m.
Q: Will Michigan Medicine be offering incentives to those who retire early?
A: No, there will be no incentive for employees to retire early.
Q: Can an employee who is currently eligible to retire take the furlough and then move right into retirement?
A: Yes, if the employee is already eligible to retire.
Q: Are employees able to make a withdrawal from their retirement contributions for qualifying coronavirus distributions under the federal CARES Act?
A: Because each person’s situation is different, U-M recommends that you contact TIAA and/or Fidelity Investments, the university’s official partners for employee retirement investments, directly to arrange transactions or for further questions. Information is available on the UHR website.
Q: Does the elimination of retirement match apply to faculty and medical school staff who follow campus benefits?
A: Yes, the FY21 changes to the retirement plan apply to all faculty and staff of Michigan Medicine, which includes the U-M Medical School. Some exclusions may apply for those faculty and staff that have multiple appointments. Bargained for staff should refer to their collective bargaining agreement.
Q: Will the bargained for staff be affected by any of these expense reductions since they are under separate contract?
A: Bargained for employees should refer to their contracts regarding the expense reductions.
Q: Is the executive salary reduction of 5-15% for a finite period of time or is it a permanent reduction?
A: In addition to no merit or base salary increases in FY21, leaders are voluntarily reducing their salaries by a recommended scaled amount ranging from 5-15% through the end of FY21.
Q: What are the dates in which tuition reimbursement will be eliminated?
A: Tuition reimbursement will not be provided in the next fiscal year, from July 1, 2020 to June 30, 2021. If managerial approval was received prior to Friday, May 1, 2020, tuition may be covered if all requirements are met.
Q: Will Winter 2020 classes still be paid for?
A: Yes, if your Winter 2020 classes were approved by your department, you should continue the reimbursement process.
Q: What if your department has already approved paying for Spring/Summer classes?
A: If managerial approval was received prior to Friday, May 1, 2020, tuition may be covered if all requirements are met.
Q: My department has requested/required that I take additional courses or pursue a degree, will those classes be eligible for tuition reimbursement?
A: Departments will need to review the request and may determine eligibility for tuition reimbursement.
Q: Is the May PTO Sell Back program taking place?
A: No, this program is on hold indefinitely.
Q: If an employee is at the maximum hours/days in their PTO bank or vacation/sick time
, will the maximum be raised to accommodate additional accrual?
A: No, the maximum hours guideline will not be changing. Employees are encouraged to take time away and use the paid time off and vacation days provided to them as available within their work environments.
Q: How was the Michigan Medicine Economic Recovery Plan developed and how are decisions made?
A: In partnership and alignment with the University of Michigan and its guiding principles, the goals of our Michigan Medicine Economic Recovery Plan are:
- Strive to minimize the impact on our people. It is all of you who provide care or support from home and discover new breakthroughs or educate our next generation of providers. Your work is the foundation upon which everything accomplished at Michigan Medicine is built.
- Immediately reduce expenses to ensure that our resources are properly aligned and utilized to support our faculty, staff and learners through this crisis.
- Preserve the world-class missions that are the foundation of who we are — clinical care, research and education — while providing the best and safest care to our patients and their families.
Q: Will my department be able to fill its open positions?
A: All hiring is frozen with the exception of designated patient care staff and faculty in roles considered critical. Any outstanding offers extended to staff or faculty will be honored. We will also use redeployment to fill vacant positions where possible.
Q: Will Michigan Medicine employees be eligible for the university’s voluntary temporary furlough program and voluntary temporary reduction in hours?
A: Yes. In each case, employees would be able to return to their regular positions and hours at the end of the approved period (including any mutually agreed upon extensions). Staff with regular, non-temporary appointments in Ann Arbor, Dearborn, Flint and Michigan Medicine are eligible.
Temporary furloughs and temporarily reduced hours are voluntary, and requests must be made between April 27, 2020 and May 15, 2020. Approved voluntary furloughs and reduced hours can start upon unit approval but no later than May 30, 2020.
Q: What are the requirements and benefits of the temporary furlough program?
A: Furloughs are temporary leaves that do not lead to termination. Staff members are still U-M employees while on furlough and they return to their position on a pre-arranged date. Furloughs can be offered by a unit to employees or furloughs can be requested by individual employees. In both cases, participation is voluntary and the unit must approve it. Units determine whether to approve requests and areas performing critical operations can opt out of the program.
During the temporary furlough period, the staff member:
- does no work for the unit and receives no pay;
- remains a university employee;
- is eligible to file for unemployment compensation;
- does receive continued university benefits;
- does continue to receive the university contribution toward their benefit plans (health, dental, long-term disability, life), and the university also will pay the monthly employee contribution for health insurance; and
- retains accrued vacation and sick time (additional time will not accrue).
Q: What are the requirements and benefits of a temporary reduction in hours?
A: Staff or units may request a temporary reduction in hours (reduced effort). Staff with effort that remains at or above 50 percent retain benefits and university contributions and return to their previous level of effort on a pre-arranged date. Staff members must receive unit approval for temporary reduction of hours.
During the temporary period of reduced hours, the staff member:
- reduces weekly work hours (effort) by 15 to 45 percent (as agreed upon);
- continues benefits (with appointments remaining at or above 50% effort) at the same premium rates paid before reducing hours;
- accrues vacation (or PTO) at reduced effort;
- receives other paid-time-off benefits prorated to the reduced effort (holidays, funeral days, etc.)
- returns to their regular effort after 60 to 120 days (on the return date approved by the unit)
- Unemployment: A claim for state unemployment compensation will not be contested by the university unless the employee was offered and declined redeployment to another position. Eligibility for and the amount of unemployment benefits are determined by the state of Michigan. (The current maximum state weekly benefit is $362 and may include an additional weekly supplement of $600 or enhanced benefits from the Federal CARES Act through July 31, 2020.)
- Benefits: Upon return from furlough, the accrued employee contribution portions of the dental, life, LTD, legal and vision premiums for the period of absence would be deducted from pay. The employee portion of the health care premium is waived for the period of absence and will not need to be paid upon return. There will be no university contributions to the retirement savings plan on reduced hours or during the period of furlough.
- Job security: The unit will hold a position for the employee to return to at the end of the approved period, including any extensions. If business circumstances change to such an extent to indicate a Reduction-in-Force is warranted, the relevant policy/contract language would apply.
- Paid Time Off: The employee’s regular available paid time off balances will be maintained. Emergency COVID-PTO banks will no longer be available to those who take a furlough. The federal Emergency Paid Sick Leave Act (EPSLA) paid time off bank will remain available until program expiration on December 31, 2020.
- Early recall: If university operations require early recall from voluntary furlough or reduction in hours, a minimum of one-week notice will be provided.
Q: Why would we freeze salaries for 2021 when we don’t know the duration or the final impact from the pandemic?
A: Last week, we shared with you that, after losing $45 million in March, we expect losses in April to be between $60-$70 million. In the forecast for this fiscal year, ending June 30, we are projecting a loss at the health system ranging from $130-$230 million. At the medical school, we are projecting an $80-$100 million negative variance by the end of this fiscal year. These losses are based on very solid projections, and we believe action now can prevent the need to make more significant reductions later.
Q: Will merit be issued?
A: There will be no merit or base salary increases in the upcoming budget for the fiscal year, with the exception of those related to faculty and staff promotions that have already been approved and adjustments prescribed by existing collective bargaining agreements.
Q: Will construction stop on the new inpatient tower?
A: In accordance with Gov. Whitmer’s directive, contractors have paused construction on campus. We will re-evaluate our financial ability to resume projects already in construction and projects that are proposed for design. In the case of the new inpatient facility, we need to balance expenses with the fact that our lack of access, particularly facilities to care for the most critically ill, has resulted in turning away many patients. This would have been the case in the COVID-19 pandemic had the rate of increasing infections continued. The new inpatient tower is a long-term, long-planned investment that must be considered carefully for our future.
Q: If I had already been approved to present at an education conference, am I forced to withdraw?
A: Please talk with your direct supervisor. The previous restriction we had enacted for professional travel and associated expenses remains in effect throughout Michigan Medicine.
Q: Isn’t the government bailing out hospitals? How can we be losing so much money?
A: The health system has and will see federal and state aid in the form of grants and loans. To date, we have received $42 million and $1.4 million in grant funding from the federal and state governments, respectively. The federal government has provided $275 million in advance payments representing up to six months of expected future claims. Payback of this advance will begin in August 2020 as claims are processed.
The health system will also pursue FEMA funding for expenditures made in preparation for the pandemic. In the short-term, relief will be provided through the Medicare program increasing payments through December 2020. Approximate effect is up to $10 million.
While we will be actively pursuing every grant and advancement available to us, the total will not be nearly enough to offset the dollars lost in the pandemic.
Q: What measures are being taken to reduce discretionary spending?
A: We are placing restrictions on expense categories classified as discretionary spending. Non-essential expenditures are to be suspended and new financial commitments are to be avoided until further notice.
- Travel and expenses: Consistent with earlier communication, restriction for professional travel and associated expenses remains in effect throughout Michigan Medicine.
- Hosting events and expenses: At this time, hosting of events and expenses associated with hosting will be restricted. This includes food and beverage at meetings, events, etc.
- Professional development expenses: While Michigan Medicine continues to support career and professional development, expenditures associated with professional development are restricted until further notice.
- Consulting expenses: Use of consultants will be restricted with exceptions being critical support of patient care. A Corporate Officer approval is required for all existing vendor and consulting agreements before a continuation of work is authorized.
Q: What else can we do to help the organization reduce expenses?
A: Each of you can assist by reviewing the areas of non-critical expense in your departments and discontinuing or postponing those activities.
- Review purchase requests for supplies, equipment and services and pause all those that you can between now and the end of the fiscal year.
- Defer or eliminate scheduled expenses without compromising essential deliverables by conferring with departmental leadership
- Identify non-value added tasks that can improve department efficiencies.
Q: When will we re-open services and begin to ramp back up our operations?
A: Planning is under way to develop a strategy to re-open select services while continuing to meet the needs of COVID-19 patients. Decisions will be made based on the unique needs and health conditions of patients who have deferred their health care. More information will be shared when available.