State workers will pay larger share of their benefits
State workers will see higher deductibles among other changes to their benefits in the next two years under the plans approved Thursday by the Public Employee Benefits Program board.
The exact numbers won’t be available until as late as March when the board sets the premiums, deductibles and other rates.
Gov. Jim Gibbons ordered the board to make budget cuts just like other state agencies. Their share comes to $55 million over the biennium, according to Executive Director Leslie Johnstone.
The first half ” $27.5 million in cuts ” was made by “cost shifting” approved by the board in September. The big change was reducing the percentage of premium costs paid by the state subsidy. In addition, the board voted to eliminate the subsidy for retirees with less than 15 years service who retire after June 30, 2010. Retirees currently qualify for the subsidy after just five years service. They voted to split the Medicaid Part D subsidy received by eligible employees instead of giving the entire subsidy to them.
But the board strongly agreed with Johnstone that they should not touch the Rate Stabilization Reserve to balance its budget at this point.
Thursday’s meeting was called to deal with the $27.5 million in reductions to be made through plan design changes.
First, there will no longer be two tiers in the self-funded plan. The high-deductible tier will go away. And the Health Assessment Questionnaire, which allowed employees to cut their deductible in half, will be eliminated. That means the current $500 low deductible ” which employees could cut to $250 by filling out the assessment ” will increase to between $850 and $900, Johnstone said.
The estimated savings between those changes, she told the board, is about $22 million over the biennium.
And for future years, the board voted to index the annual out-of-pocket maximum and annual deductibles to the health care cost inflation rate. The out-of-pocket maximum would increase at half the inflation rate, while increases in the deductible would match that annual rate.
Between the two, that will save about $2.5 million in the second year of the biennium and more in the future by shifting more costs to the workers.
The board voted not to index co-payments for such things as office visits and drugs but, instead, handle those changes as needed.
They also voted to eliminate the ADD/ADHD psychotherapy and neuropathy benefits which just started this past July, saving another $1.1 million.
Finally, the package includes negotiations with the plan’s HMO providers to reduce cost increases to not more than 5 percent even though health care inflation is expected to be about 9 percent. That and other HMO changes are projected to save $5.4 million over the biennium.
Altogether, that comes to more than the $27.5 million needed. Johnstone said she and staff will redo the numbers and give the board a better idea what the new deductibles and other rates will be when the budget is sent to the governor’s office.
She emphasized that the real premium rates and other numbers won’t be finalized until March.
The board voted unanimously to approve the plan.
– Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.