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Government Employees, Retirees to Face Increased Premium Costs

Sept. 29, 2006 — Active government employees and retirees will be paying more for medical and dental insurance coverage beginning Oct. 1.
During a Committee of the Whole hearing Friday, representatives from the Government Employees Services Commission (GESC)/ Health Insurance Board of Trustees, along with various health insurance companies, said the increase, which will now be factored into premium costs, totals approximately 9.3 percent for group medical and disease management insurance, along with the employee assistance program.
According to Paulette Rabsatt-Simmonds, chair of the GESC/Health Insurance Board of Trustees, there will also be a 7 percent rate increase for dental insurance.
Maureen Venzen, chief of group health insurance, gave senators a more realistic picture of the new premium structure, by citing how much more each active government employee and retiree will have to pay.
She said active employees will have to pay, every two weeks, $5.92 more for medical and dental insurance, while government employees with a family medical plan will have to pay an additional $8.57.
Employees with family medical and dental insurance will have to pay an extra $10.29 every two weeks, while retirees under the age of 65 with a medical plan will have to pay an additional $5.92
Retirees with a medical and dental plan will have to pay an additional $10.90 every two weeks, while a retiree with a family medical and dental plan will have to pay $8.76 more in premium costs.
To offset the high rate increase in medical insurance, the Health Insurance Board dipped into its Premium Stabilization Reserve, Rabsatt-Simmonds added. She explained that if the government experiences a surplus in medical insurance premiums at the end of the year — after paying off claims, administrative costs and various other expenses — the money is then deposited into the reserve and used to "buy down the rate increase."
"This is so we pass as little of the increase onto the members and the government as possible," she said, adding that the fund currently has a balance of a "little over" $1 million.
After the meeting, Rabsatt-Simmonds said the government has the option to renew the plans every year. "This year, all the plans were put out to bid," she said, adding that the government was able to negotiate "some" rate guarantees for both life and dental insurance.
She explained that premium rates for life insurance have been capped, and will remain the same for the next three years, while dental insurance cannot increase by more than a certain percentage (Rabsatt-Simmonds could not recall the exact figure).
At the end of the meeting, senators went into a full legislative session and approved the plans, which include: a) life, accidental death and dismemberment insurance (which includes medical); b) dental; and c) a voluntary vision care program.
Life, Accidental Death and Dismemberment Insurance
Rabsatt-Simmonds said the medical coverage plan, offered this year by CIGNA, is "very close" to the government's existing medical plan, which expires Oct. 1.
There are certain changes, however, including: a $5 increase in office visit co-pays; an increase in prescription drug co-pays for generic (from $7 to $15) and brand name (from $10 to $20) retail drugs; and an increase in mail-order co-pays for generic (from $14 to $20) and brand name (from $20 to $40) drugs.
CIGNA has also offered other "plan design changes," which do not result in additional costs for the government, Rabsatt-Simmonds said. These include the addition of annual prostate screening examinations, along with an increase in organ transplant coverage.
Members who have exceeded the $1 million lifetime maximum for medical coverage will no longer be able to receive the $1,000 automatic renewal benefit reinstatement, however. After the meeting, Rabsatt-Simmonds said that the "reinstatement," which provides members with $1,000 annually once they have exceeded the $1 million limit, is "no longer supported" by CIGNA's systems.
During the meeting, Rabsatt-Simmonds also noted that a new asthma program has been added to the government's disease management program.
CIGNA has also been selected as the government's carrier for dental insurance, replacing Metropolitan Life Insurance Company (MetLife), Rabsatt-Simmonds said. After the meeting, she added that the plan no longer offers flat benefit amounts toward dental costs, but rather establishes a co-insurance structure similar to that offered through the medical coverage plan.
"The lack of a co-insurance component on the dental has been a repeated concern communicated to the board over the years, as well as a source of confusion in members' understanding of the difference between their medical and dental benefits," Rabsatt-Simmonds told senators during the meeting.
After the meeting, she explained that CIGNA will be partnering with V.I. Equicare to establish a preferred provider organization (PPO) which will offer in-network benefits to members.
The current dental plan covers: 72 percent of members' dental costs; 49 percent of preventive health care costs; 40 percent of basic dental costs; and 40 percent for major restorative dental procedures.
In-network benefits for members will kick in on Jan. 1, 2007, once the PPO is established. In the interim, deductibles and annual maximums have been waived for members and will be covered by CIGNA until Dec. 31, 2006, Rabsatt-Simmonds said.
Under the new plan, members will be reimbursed 100 percent for diagnostic dental care costs; 80 percent for preventive dental care costs; 50 percent for basic dental costs; and 50 percent for major restorative dental procedures.
Out-of network benefits are also included in the plan, and cover 75 percent of diagnostic care costs; 50 percent of preventative dental care costs; 40 percent of basic dental costs; and 40 percent of costs associated with major restorative dental procedures.
The proposed vision care plan — the first one offered by the government — is voluntary and completely paid for by the employee. It will cover eye exams once a year, lenses once a year, and frames once every two years.
The plan will involve a $15 co-pay for in-network services and provides an allowance of: $40 for eye exams, $40 to $80 for lenses, $45 for frames, and $150 for contact lenses. The introductory rate for individual coverage is $5.35 per month, or $2.68 per pay period. The rates for family coverage are $14.20 per month or $7.10 per pay period.
The vision plan will be implemented by Dec. 1.
Present during Friday's meeting and session were Sens. Craig W. Barshinger, Berry, Roosevelt C. David, Liston Davis, Adlah "Foncie" Donastorg, Pedro "Pete" Encarnacion, Juan Figueroa-Serville, Neville James, Norman Jn Baptiste, Terrence "Positive" Nelson, Usie R. Richards, Ronald E. Russell and Celestino A. White Sr.
Sens. Louis P. Hill and Shawn-Michael Malone were absent.
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