State employee medical plan premium rates announced, up 17.9 percent

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State employee medical plan premium rates announced, up 17.9 percent

Tue, 10/21/2014 - 4:40am -- tim

The annual open enrollment period for State employees to choose among medical plans begins November 1. Human Resources Commissioner Maribeth Spellman announced today that the plans will see a 17.9 percent premium increase in 2015 for active State employees and non-Medicare retirees, while Medicare retirees will see a decrease or very small increase (-2.3 percent or +1.0 percent) depending on their plan.

The increase for active employees is driven primarily by significantly greater than expected high cost claims experience beginning in the 3rd quarter of 2013, which correlates with increased inpatient utilization, including hospital admissions and days spent in the hospital.

Spellman noted that the spike in high cost claims began prior to Blue Cross Blue Shield of Vermont (BCBSVT) taking over as administrator of the state’s medical plans. In 2014, the State selected BCBSVT to administer the medical plans, and Express Scripts and Northeast Delta Dental for its pharmacy and dental coverage. Although still higher than projections, the claims experience in recent quarters is not as high as the 3rd quarter spike of 2013.

The Commissioner said that over the past two years, state employees have seen no rate increases and have had seven premium holidays worth $1,183 for a family in the most popular health plan. With the anticipated increase in premium rates for 2015, active state employee medical plans will be in line with the increases seen over the same 3 year period of time in comparable public employee plans, such as the Vermont teacher medical plans.

Retiree rates are benefitting from pharmacy discounts offered through the Employer Group Waiver Plan (EGWP), the Commissioner said, which allows the State to utilize federal subsidies in providing pharmacy services. This new feature for 2015 was the result of collaboration between the State and employee groups.

The State employee plan is self-insured and this rate increase is necessary to offset plan's deficit and maintain solid financial footing.

While Commissioner Spellman acknowledged that the premium increase for active employees is not welcome news, she appreciated the willingness of VSEA and VTA leadership to meet with her team recently to discuss the reasons for the increase and the wisdom of addressing the plan deficit in the near term.  She also noted that other aspects of the state employee plan have performed as expected, including new wellness programs. BCBSVT has been a strong partner in employee wellness initiatives, providing the State with $250,000 for expenditure on wellness initiatives. With these resources the State has developed a comprehensive Wellness Program – some highlights:

  • So far this year, 2,958 employees have completed the personal health assessment, providing valuable insight into the actual health and mental health issues impacting employees and the guidance to tailor Wellness Program initiatives to tackle those issues;
  • 1,254 employees and retirees have received in person biometric screenings (blood pressure, blood sugar and cholesterol) to date.

Source: State of Vermont 10.20.2014