V.I. government health insurance premiums will drop in 2012 as the V.I. Legislature on Thursday ratified a group insurance plan for government employees, dependents and retirees that reduced costs from $122.7 million to $122.1 million, saving more than $600,000, without reducing services.
The contract, which begins Oct. 1, provides medical, dental and prescription services with CIGNA, Life Insurance from Aetna, and vision care from Standard Insurance.
The cost savings offered represents a reduction of 0.5 percent and ensures that coverage remains the same in 2012.
John Abramson, chairman of the Government Employees Service Commission (GESC)/Health Insurance Board of Trustees, said there are several specific reasons for the cost savings.
“Improved claims experience, a competitive market place, hard bargaining by our consultants and careful stewardship of the plans by the Health Insurance Board have all contributed to this positive news on rates and contributions for 2012,” he said in the testimony given Thursday.
Abramson added that there will also be “improvements in the vision care benefits and increases to the amounts of optional life insurance that active and retired members will be able to purchase for themselves and their dependents.”
Sen. Patrick Simeon Sprauve, chairman of the Committee on Health and Hospitals, said that the Senate was working to keep costs from escalating during tough economic times by requesting regular updates from GESC.
“It was important to us to all of us to work to keep costs down,” he said. “It was also our goal to make certain to pass those savings onto the consumer.”
He said that the plan included a wellness program that came about from hearings held in his committee.
Sprauve also added that much of the funds for health care used by government employees have been kept in the territory.
An On Island/Off Island Report submitted to the Senate by CIGNA indicated that more than 57 percent of the funds paid out for health care for government employees was spent in the territory and Puerto Rico, while 42 percent of the funds had been spent on the U.S. mainland.
Stephen Burrows, a GESC consultant, said that recent surveys conducted by Kaiser Health found that the V.I. government package was 25 percent lower than the national average paid out by other local and state governments in the United States.
“Across the board more than 65 percent of the costs for benefits were paid by the government, while 35 percent has been paid by employees,” Burrows said, adding that participating entities, including the University of the Virgin Islands and the V.I. Port Authority, have been included in the premiums paid to date.
Documentation provided to senators by GESC in a report prepared by the Health Insurance Office/Division of Personnel indicated that, as of Oct. 1, active employee’s biweekly health coverage costs for employee medical and dental costs will be $94.11 with the employer share at $174.77 for a total of $268.88.
The same report indicated that the biweekly health coverage costs for family medical and dental will be $165.89 with an employer contribution of $308.09 for a total of $463.98.
In addition, semimonthly payroll deductions for medical and dental for retirees would be $94.11 with the employer share of $174.77 for a total of $268.88, while semimonthly payroll deductions for retirees seeking family medical and dental would be $168.88 with an employer share of $313.64 for a total of $482.53.
Sen. Sammuel Sanes, a member of the Committee on Health and Hospitals, said he was pleased with the outcome of the insurance plan to be offered to government employees in 2012.
“We increased services, reduced costs and closed the gap necessary to continue to provide insurance for both active and retired employees,” Sanes said. “In times of tough economic woes we have to do what’s best for the people.”