Employee benefits board shares the pain on increased premiums
The Public Employee Benefits Program board decided Wednesday that everyone should share the pain equally as the state raises premiums for employees, retirees and dependents.
It voted on an overall cost shifting plan that would save the state about $23 million dollars over the biennium at its Nov. 6 meeting. Members decided to look at more options after discovering that dependents actually got an increase in their subsidy levels while all other groups got their subsidy lowered.
Public Employee Benefits Program Executive Director Leslie Johnstone said the active dependent subsidy increased from 75 percent to 79 percent in the November version.
Now, she said, everybody in the benefits plan will see about 5 percent less subsidy. She said it will still be confusing to members ” especially active employees who will see their premium go from $10 to $15.
“It might look like a larger increase to the employee but it’s not that they’re going to see a 5 percent increase in their share but a 5 percent reduction in what the state pays,” she said.
And the state covers all but a small amount of the employee’s premium.
“This way every category goes down,” she said.
The revised version of the cost shifting plan still saves the state $23 million in the budget.
The total reduction in state general fund and other state money remains the same, she said.
“We are still generating $23 million in state subsidy savings, shifting costs form the state to the employee,” Johnstone said.
Overall, the program was ordered to cut $50.8 million over the biennium. That holds the benefits program budget to a total of $913.8 million for the coming biennium.
The increases to program member premiums makes up the bulk of the “cost shift” changes to solve the budget shortfall. The board decided to take half the $50 million in cuts from cost shifting ” which impacts all 40,000-plus members in the plan ” and half from plan changes. Plan changes, such as increased co-pays, impact only those who actually use the plan’s services in a given year.
– Contact reporter Geoff Dornan at email@example.com or 687-8750.