On December 13, the Group Insurance Board (GIB) met to deliberate again on whether to move forward with a self-funded model for the state employee health care program, but again delayed making a decision on the program structure.
To recap, the GIB last met on November 30, mostly in a session that was closed to the public, to deliberate on the responses to a request for proposals (RFP) on a data warehouse vendor and on the RFP responses to its self-funding proposal. At the November 30 meeting, part of the discussion involved a regional fully-insured model as an alternative to self funding. (See previous The Valued Voice article.)
At the December 13 GIB meeting, Department of Employee Trust Funds (ETF) staff elaborated on the options for restructuring the state employee group health care program and offered seven possible scenarios for the GIB’s consideration during another closed session meeting. The scenarios are described in more detail in a memo dated December 8.
The December 8 memo indicates the results of the RFP process for seeking a vendor to implement self funding yielded a potential for "significant" cost savings. However, ETF has not provided the public with an estimate of what those savings might be.
Despite not revealing a cost savings target, the ETF memo lays out seven options for the GIB’s consideration. The seven include: one model similar to the current fully-insured model with as many as 16 vendors participating; two other fully-insured regional models with fewer health plans participating; two hybrid models involving regional self funding and regional fully-insured options; one regional self-funded model; and one statewide self-funded model. The ETF memo indicates that neither ETF nor their consultant recommends the statewide self-funded model.
All of the scenarios would have ETF establishing the premium level, rather than negotiating the premium level as they do today. The premium level according to ETF would be set so that GIB can achieve the same level of savings as they might under a self-funding arrangement. Any plan not able to achieve those premium levels would likely no longer participate. ETF notes in the memo that another alternative is for the GIB to direct ETF to pursue a fully-insured strategy but move to a self-funded strategy if plans appear unwilling to participate in the fully-insured option.
Any model that involves self funding would trigger a review by the Joint Finance Committee before a contract could be finalized. Other models could be approved by the GIB and implemented by ETF under their current statutory authority. The Group Insurance Board is expected to reconvene again in January to continue its deliberations.