House eyeballing changes to state group insurance plans

House Health & Human Services Committee Chairman Jason Brodeur will be unveiling proposals to redesign the state worker group health insurance plan, including bringing more options of health plan coverage for employees to choose from.

Brodeur said he wants the state group plan, which covers more than 361,000 people, to more closely resemble a large group health plan, both in what is offered to employees and what employees pay.

One glaring difference between the state group plan and plans offered by other large employers or “on the open market,” Brodeur says, is the costs. State employees pay similar premiums whether they join an HMO or a PPO.

“In the open market, those two products are priced differently for the value benefits we get,” Brodeur said. “So I think right pricing will be one of the components we look at.”

Also, state employees have not had any increases in their insurance premiums since 2005-06. As the costs of the coverage have gone up the state has absorbed the increases. That has not occurred in the open market where employee costs have risen.

Another concern for Brodeur is the paltry participation in the high-deductible plans the state offers. Both are insignificant, with 695 enrollees and 1,743 enrollees, respectively. That’s just .0067% of participation.

Brodeur’s comments followed a presentation to his committee by Jeff Dykes, director of the Division of State Group Insurance in the Department of Management Services.

Dykes made a presentation to the committee updating them on a variety of issues impacting the state group plan, including a projected “Cadillac tax.” The tax is imposed on high-cost employer-sponsored coverage plans. There was a similar presentation in the Senate Governmental Operations Committee this week.

The tax is equal to 40% of the amount considered to be an excess benefit. Final regulations are not in place and there could be changes in enrollment and costs. Nevertheless the state was given a report showing that the tax could be as high as $15 million in 2018.

The state — and two HMOs — could be on the hook for between $169.5 million and $557.4 million over a five-year period between 2018 and 2023.

Given that news, Brodeur said, the Legislature needs to make changes this session.

“I think what we’ve seen today is we have as big a problem or bigger as anyone else,” he said referring to the Cadillac tax. “And if we don’t take action today, it’s only going to get worse.”

Redesigning the state group insurance plan has been a priority for the House the last several years but the Senate has not been willing to go along with the changes. Senate spokeswoman Katie Betta said the Senate doesn’t have any bill that touches on Brodeur’s issues. The only state group bill filed so far is SB 7026, which establishes standards for children to access therapy.