Sept. 17, 2008 — Legislation submitted by the governor earlier this week seeks to renew the government's health-insurance plan, which has jumped from an overall cost of $96.5 million to $103.8 million for fiscal year 2009.
The current health-insurance package — for which the government covers 65 percent of premium costs while employees pick up the remaining 35 percent — expires at the end of the month. To avoid a gap in employee health-insurance coverage, senators have to renew the contract within the next couple weeks so the proposed plan can go into effect by Oct. 1.
An effort to meet all legal requirements laid out in the V.I. Code caused delays in the renewal process, deJongh said in a letter to Senate President Usie R. Richards sent Tuesday along with the bill.
"As you are aware, any health insurer contracting to provide coverage for employees of the government of the Virgin Islands must do so through a preferred provider organization (PPO) in the Virgin Islands," the governor explained. "In this instance, CIGNA has been negotiating separate agreements with the only preferred provider organization in the territory, V.I. Equicare Inc."
Difficulties in resolving various issues related to the agreement prevented the government's Health Insurance Board from hammering out its contract with CIGNA, the deJongh wrote.
The governor and some of his senior staff members met in August with members of the Health Insurance Board, along with V.I. Equicare and CIGNA representatives, to help iron out the issues and finalize an agreement.
"I am pleased to state that the parties did resolve their contentions and I now present to the 27th Legislature the second renewal agreement," deJongh wrote to Richards.
Under the renewed plan, the government will spend the most on medical and prescription drug benefits
"For the fiscal year ending Sept. 30, 2008, it is estimated that total annual cost for this coverage will have totaled $96.5 million — of which the government will have paid 65 percent and employees/retirees will have paid 35 percent," deJongh wrote. "For FY 2008, we are now recommending a $7.3 million increase to $103.8 million. The payment percentages between the government and employees/retirees remain as is, bringing the government's increase to about $4.8 million."
Dental benefits are the second-highest cost, he said.
"For the fiscal year ending Sept. 30, 2008, it is estimated that total annual cost for this coverage will have totaled $3.6 million," deJongh said. "For FY 2009, we are recommending an increase to $3.7 million. Since the payment percentages between the government and employees/retirees remain as is, the government's increase is $125,000."
The dental-insurance agreement does not require Senate approval since there were no changes made to the plan for FY 2009, according to deJongh.
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