Download TOPIC: State Employee Health Benefit Changes OFFICE: Center for

TOPIC: State Employee Health Benefit Changes
OFFICE: Center for State and Local Government Excellence
QUESTION / ISSUE:
DATE: 11/15/2011
We’re looking for reliable data in these areas, ideally for the last three years, but even one year would be
helpful.
What changes have been made in these areas for general state government employees since 2009:
1.
2.
3.
4.
Increase/decrease in employee contributions
Elimination of retiree health care
Elimination of subsidy for retiree health care
Increase/decrease in retiree contributions
Arizona
1. See attached, 2009-2010 rates with change to 2011 rates, 2012 rates same as 2011.
2009 Retiree
rates.xls
2011 Retiree
rates.xls
2012 Retiree
rates.xls
2011 Active Rates
26 pays % change.xls
2. Not eliminated
3. Not eliminated
4. 2009 -2012 attached, rates for 2011 and 2012 are the same.
We have also had a legislative change requiring a 90 day wait period for insurance coverage
for new hires. There has also been retirement reform with the biggest change being a 6
month wait before new employees are able to participate in the Arizona State Retirement
Plan.
Colorado
The table below shows some rough numbers of employee versus state contribution to our
employee benefit plans. The amounts include: COBRA premiums, employee premium, state
premium, fines, insurance recoveries, interest, and minor transfers into the fund. In Colorado
the employee is the payor of last resort for health care after the General Assembly decides
on a contribution.
Employee
Employee Percent
State
State Percent
Total
2008-09
$76.9
29%
$186.7
71%
$263.6
Year
2009-10
$73.7
26%
$208.9
74%
$282.6
2010-11
$80.1
27%
$214.6
73%
$294.7
Retiree health care is managed through our PERS (PERA). The state contributes a 1.02
percent of covered wages to a trust fund in PERA that provides a minimal subsidy
($230/month for those under 65 and not eligible for Medicare, and $115/month for those over
65 or eligible for Medicare) to retirees health care premiums in the health care plans it
provides.
There have been no changes in benefits or contributions for the retirees’ health care.
Minnesota
1. The premiums, employer contributions and employee contributions for health benefits
have remained unchanged from 2009 through 2011. Health benefits are negotiated as a
component of the collective bargaining process, which is currently ongoing. As no
agreement is currently in place to cover 2012 benefits, an interim solution is in place until
such agreement can be reached. The interim solution continues health benefits at the
2011 benefit level, premium level, and employer and employee contribution levels.
2. There has been no reduction to the health care benefits offered to retirees since 2009.
3. There has been no reduction to the subsidy for retiree health care since 2009. Retirees
over age 65 are eligible to participate in retiree group coverage offered through the state
of Minnesota. Retirees over age 65 pay 100% of premiums. This is a long-standing
practice. Retirees under age 65 are allowed to continue to participate in the active
employee plan. Most early retirees pay 100% of the premium. There are a few job
classifications that qualify for an early retirement incentive, which is a continuation of all
or a portion of the employer contribution. For these early incentive participants, there has
been no material change in the plan.
4. Early retirees under age 65 are allowed to continue participation in the active employee
plan. As stated in item #1., there have been no changes to benefits, premiums or
contributions in the active plan since 2009.
Over age 65 retirees – The following chart provides the premiums of the three options
offered to over age 65 retirees:
Plan
Coordinated Plan – BCBSM
Ucare for Seniors
HealthPartners Freedom Plan
Monthly Individual Premium
2009
2010
2011
2012
$301.91
$301.91
$301.91
$302.80
$247.00
$256.00
$241.00
$250.00
$245.60
$257.40
$241.80
$240.40
Montana
Technical Inquiry
Request 11_2011_Health cAre Benefits.xls
Nebraska
Nebraska has not had any changes in these areas. Health insurance rates have changed,
but the employee/employer percentages have not changed. The state of Nebraska has never
provided retiree health care coverage.
New York
1. The recent collectively bargained increases in NYS employee contribution rates for
NYSHIP coverage are the first changes since 1983. Effective 10/1/11 the following
groups have a change in contribution rate from 10% of the cost of enrollee coverage and
25% of the cost of dependent coverage to 12%/27% for EEs below salary grade 10 and
16%/31% for those in salary grade 10 and above: CSEA, MC , PEF and employees of
the Unified Court System.
2. None
3. Not sure what is meant by subsidy – NYS reimburses enrollees for the cost of Medicare
Part B premiums for themselves and dependents when Medicare provides primary
coverage. Also, the state receives subsidies from the Federal government as the result
of its providing coverage to retirees – the Retiree Drug Subsidy which is the result of the
Medicare Modernization Act of 2003 and the Early Retiree Reinsurance Program which is
the provided for under the Patient Protection and Affordability Act (Federal health care
reform). Neither is a direct subsidy to the retiree.
4. As permitted under Civil Service Law, the collectively bargained changes in contribution
rates were extended to NYS retirees who retired on or after 1/1/83 – the contribution rate
was increased from 10%/25% to 12%/27%. For retirees who retire on or after 1/1/12 the
contribution rate will be salary grade sensitive, 12%/27% for those who retire from SG <
10 and 16%/31% for those who retire from SG 10 and above.
Oregon
For the state of Oregon the Employee will have an increase in contribution to the health care
plan beginning January 2012.
Pennsylvania
1. Increase/decrease in employee contributions - Employee contributions are determined
through collective bargaining. In October 2010, employee contributions increased from
2% of bi-weekly gross base salary to 3% of bi-weekly gross base salary. Employees are
eligible for a waiver of 50% of the employee contributions if they participate in the
wellness and disease management program.
2. Elimination of retiree health care - The commonwealth continues to provide retiree health
care to non-Medicare and Medicare-eligible retirees. In 2008, the required years of
credited service was changed from age 60 with 15 years of service to age 60 with 20
years of service. There have been no changes in eligibility requirements since 2009.
3. Elimination of subsidy for retiree health care - The commonwealth has never provided a
subsidy for retiree health care.
4. Increase/decrease in retiree contributions- Retiree contributions are determined by
retirement date as follows:
 Pre July 1, 2004 – No contributions.
 July 1, 2004 through June 30, 2005 – Retiree contribution is 1 percent of final
annual salary.
 July 1, 2005 to June 30, 2011 – Retiree contribution is 3 percent of final annual
salary. Effective January 1, 2012 Medicare-eligible retiree contribution will
decrease to 1.5%.
 Pst July 1, 2011 - Retiree contribution is 3 percent of final average salary as
determined by the commonwealth pension system for determining pension
payment. January 1, 2012 Medicare-eligible retiree contribution will decrease to
1.5 percent.
South Carolina
1. For 2009, 2010 and 2011, there were no changes in the employee’s contribution for
health premiums for the State Health Plan. For 2009 and 2010, there were no changes
in the employer’s contribution for employee health premiums for the State Health Plan.
However, in 2011 the employer contribution for employee health premiums increased
10.3%.
2. Retiree health care has not been eliminated.
3. Subsidy for retiree health care has not been eliminated.
4. For 2009, 2010 and 2011, there were no changes in the retiree’s contribution for health
premiums for the State Health Plan. For 2009 and 2010, there were no changes in the
employer’s contribution for retiree health premiums for the State Health Plan. However,
in 2011 the employer contribution for retiree health premiums increased 10.3%.
For your reference, attached is a summary of the State Health Plan’s rate increase history
since 1999:
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Texas
Contribution Increases
Employer Rate
Employee Rate
Increase
Increase
18.0%
0.0%
10.0%
0.0%
20.0%
10.4%
9.5%
22.6%
0.0%
36.9%
0.0%
27.6%
6.1%
29.7%
4.8%
0.0%
3.1%
0.0%
9.7%
0.0%
0.0%
0.0%
0.0%
0.0%
10.3%
0.0%
4.5%
4.5%
Total
14.0%
8.0%
18.3%
11.7%
6.9%
6.6%
13.0%
3.2%
2.1%
6.7%
0.0%
0.0%
7.2%
4.5%
1. Employee contributions have increased since 2009, the state continues to pay the
premium for the employee.
2. Eligible retirees continue to receive health care benefits.
3. The state supplied part of retiree health care has remained in place since 2009. The state
continues to pay the premium for the retiree.
4. Retiree contributions for the premiums for covered dependents have increased.
Virginia
1. In addition to the employee contribution to the health insurance (HIF) premium, the
subsidy from the Health Insurance Fund is shown. The Employer contribution is NOT
shown.
 FY2009 – Employee contribution - $41 single, $101 dual and $144 family
coverage
HIF subsidy - $3 single, $6 dual and $11 family coverage
 FY2010 – No change from prior year
 FY2011 - Employee contribution - $43 single, $102 dual and $150 family
coverage
HIF subsidy - $6 single, $15 dual and $18 family coverage
 FY2012 – No change from prior year
2. See #4
3. See #4
4. State early retirees and Medicare-eligible retirees pay the full premium for their health
care costs.
 Early retiree premiums for COVA Care basic:
o FY2009 rates - $452 for single, $842 for dual and $1,231 for family.
o FY2010 rates - Increased to $485 for single, $898 for dual and $1,313 for
family coverage.
o FY2011 rates - Increased to $500 for single, $925 for dual and $1,352 for
family coverage.
o FY2012 rates – No change from prior year.
 For Medicare-eligible retirees, premiums run on a calendar year. For the
Advantage 65 plan:
o CY2009 $270 single
o CY2010 $258 single
o CY2011 $227 single
o CY2012 $220 single
In general, introduction of the state Medicare Part D prescription drug plan has resulted in
lower prescription drug costs which have impacted the premium.
West Virginia
1. FY10: Increased 8.8 million/9%
FY11: Increased 4.5 million/4%
FY12: No increase if employees participated in wellness program and completed Living
Will Affidavit. $14 increase per month if they didn’t.
2. No.
3. No for current retirees and employees, but yes for anyone hired after 7/1/10. They will
not be able to receive subsidized healthcare upon retirement.
4. FY10: Increased non-Medicare rates 2.7 million/10%
FY11: Increased all retiree rates 2.5 million/4%
FY12: No increase if retirees participated completed Living Will Affidavit. $4 increase per
month if they didn’t.
Wisconsin
1. Employee contributions have more than doubled.
2. Retirees can continue to select from plans offered by the state, including Medicare
supplements.
3. The subsidy for the sick leave annuity for health insurance payments after retirement has
not changed.
4. Retirees are responsible for 100% of the premium either by paying directly from their
retirement annuity or via a sick leave annuity they can bank upon retirement. These
dollars can only be used for health insurance and cannot be a cash benefit to the
individual.
Wyoming
1. The state contribution has increased at the same rate the health insurance premiums
have increased. The state pays about 85% of the premium, so as the increases happen,
it is shared between employer and employee.
2. No
3. No, in fact Wyoming only started subsidy of the retiree health care in July 2008.
4. No