State worker benefits restored
December 3, 2013
Using reserves built up by lower-than-expected demand for medical services, the Public Employee Benefits Program board voted last week to restore some benefits to state workers.
The Consumer Driven Health Plan — the plan used by most state workers — will again cover 80 percent of bills from the point where the deductible is met until the out-of-pocket maximum is reached. That had been cut to 75 percent because of the state's financial crunch during the recession.
The deductible will drop from $1,900 to $1,500 a year for an individual worker and from $3,800 to $3,000 for a family.
The out-of-pocket maximum remains $3,900 for an individual employee and $7,800 for a family, after which the plan pays the whole medical bill.
A significant amount of that deductible can be covered by the employee's Health Savings Account, said PEBP Executive Officer Jim Wells. Employees get to decide how much to put in their HSA each paycheck, but Wells points out that anything they do add is pre-tax, saving the employee whatever percentage he or she pays the IRS.
Over and above the employee contributions, the state will again contribute $700 to that account, plus $200 for each dependent up to three added people. That makes the state's maximum contribution to a family $1,300.
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In addition, the board voted to raise the maximum annual dental coverage to $1,500 from $1,000, which it was lowered to because of the state's economic woes. Employees will still get coverage for four cleanings and exams a year.
Finally, the board voted to cover one annual vision exam for workers.
The board was able to improve benefits because its reserves have grown more than PEBP budgeted for, Wells said.
Wells projects those reserves will reach $47.5 million. Other decisions made by the board are expected to reduce that reserve to about $33 million. The plan enhancements approved last week will take an estimated $8.1 million off that total.
The single most expensive enhancement is adding $500 a year to the maximum dental benefit, at $3.2 million. Reducing the deductibles will cost $2.1 million, and raising the percent of costs the state covers back to 80 percent will cost $1.5 million. The added vision examination will cost about $1.3 million.