Public Employee Benefit Program strikes deal to significantly lower HMO premium increases

The Nevada Public Employee Benefit Program has cut a deal with its providers that keeps rates for most state workers flat while reducing the increase on HMO members to just a few dollars a month.

Participants raised serious concerns in January when they were told HMO costs could rise as much as $100 a month. And since the state’s benefits budget is set in stone until the 2017 Legislature, that cost would have been on the backs of the employees.

PEBP Board members including Jacque Ewing-Taylor said the increase was unacceptable and directed staff to negotiate a better deal.

Executive Officer Damon Haycock said the Consumer Driven Health Plan most state workers use saw costs rise 9.8 percent across medical, pharmacy and dental programs. But, he said, that increase was eliminated through the new pharmacy benefits contract the state negotiated.

The result, he said, is those members will experience no premium increases and their benefits package will remain the same as it is currently.

Haycock said the HMO plan remained the big issue and, when the state couldn’t reach a better deal with Anthem, his department suspended negotiations. Haycock said, instead, PEBP made a deal with the existing providers — Hometown Health in the north and Health Plan of Nevada in the south — to continue current contracts until June 30, 2017.

Haycock said member premiums will increase in July. That means their benefits package also remains the same as it now is. But the premiums will rise.

“Costs are increasing and somebody has to pay for them,” he said.

But they won’t go up anywhere near the $100 members were originally afraid they’d see.

For individual employees, HMO premiums will increase $3.48 a month in July. That’s 2.1 percent. For an employee, spouse and children, the increase will be $8.25 a month or 2.7 percent.

For retirees, the increase is a bit higher in dollars — $8.07 per individual and $21.69 for a retiree and spouse. But it’s about the same percentage hike — 2.2 and 2.5 percent respectively.

The plan approved by the PEBP board also provides consumer-driven plan members with the same Health Savings Account contributions as they received this plan year — $700 for the participant and $200 apiece for up to three dependents.

Those participants also will get one-time supplemental HSA/HRA contributions of $400 and $100 apiece for up to three dependents.

Haycock said the deal finishes off spending down the plan’s excess CDHP reserves. There will be about $5 million in that account at the end of the 2017 plan year, far below the $100 million in that reserve a few years back.

Those reserves paid the cost to improve benefits for members in the consumer driven plan. Once they are gone and, with costs increasing, Haycock said the 2017 Legislature will have to decide what to do with the benefits program — not only the benefits but those extras such as the HSA contributions.

“We were told to prepare for a flat budget,” Haycock said. “Well, you know what happens if we have a flat budget but costs are going up.”

PEBP provides benefits to some 25,000 active employees, their spouses and children as well as nearly 4,000 non-Medicare retirees. Altogether, the plan ensures some 42,000 people.


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