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GIB Finalizes State Employee Choices and Premiums for 2018

Current program structure maintained; premiums to remain flat

September 01, 2017

On August 30, the Group Insurance Board (GIB) met to finalize options for the state employee health care program for the 2018 benefit year. The current program model—a fully insured model with health plans participating in various service areas across the state—will remain for 2018, although with some notable changes. This news came after more than two years of in-depth discussions over whether the program should be modified to either a self-funded model or new fully-insured model with fewer plans in four selected regions.

Earlier this year, the state’s Joint Finance Committee (JFC) did not approve the GIB request to move to a self-funded model. At the August 30 meeting, the Department of Employee Trust Funds (ETF), which administers the program, indicated it evaluated bids, consulted with the Board chair, and made the determination that it was unlikely to achieve meaningful savings in 2018 by moving to a regional structure. Therefore, ETF proceeded with negotiations for the current program structure for 2018, and on August 30 released details about premiums and health plans within that structure.

First, there will be no increase in premiums in the state program. This is achieved in part through negotiations with health plans, but also by drawing down $29 million from the program’s reserves for 2018. The high level of reserves was an issue identified by the Legislature earlier this year. In voting against the proposal to self insure, the JFC instead directed the ETF to achieve $63.9 million in savings over the 2017-19 biennium from insurer negotiations, by buying down reserves and through plan design changes.

Although there will be no increase in premiums in the state program overall, the Department of Administration’s Division of Personnel Management determines the employee contribution to the premium, and the state’s contribution to the Health Savings Account. These amounts will be released in September. ETF noted local government employees and retirees will have a 3.3 percent premium increase.

Second, the GIB meeting included a discussion on the number of health plans participating in the program for 2018. As reported in The Valued Voice last week (see www.wha.org/wha-newsletter-8-25-2017.aspx#s5), six health plans have decided to stop participating in the plan. ETF notes these plans will not be allowed to re-enter the program for three years. In the short term, these decisions are estimated to affect about 53,000 enrollees who will have to change plans.

According to a memo released by ETF, approximately one percent of the program enrollees will have to change their current doctor. They also found 15 facilities and 13 providers that previously had significant utilization—defined as claims of greater than $100,000 annually—will no longer be in-network for any plan. The ETF memo did not elaborate on which facilities or providers will be affected. A separate memo did, however, elaborate on ETF’s network adequacy policy, indicating health plans must ensure at least 90 percent access in the county for the inpatient hospitals, primary care physicians (which includes internal medicine, family medicine and general medicine) and chiropractors, or meet certain minimum requirements. The memo also provides the health plans that will be participating in the state employee health care program by county. That memo can be found at: http://etf.wi.gov/boards/agenda-items-2017/gib0830/item7c.pdf.
 

This story originally appeared in the September 01, 2017 edition of WHA Newsletter