This past weekend, HB 1704 (Benge, Coffee) was rolled out. This legislation is a massive overhaul of the Oklahoma State and Education Employees Group Insurance Board and the State Employees Benefits Council. The bill is over 280 pages long and includes significant changes to the program. OPEA has had an opportunity to review the proposed legislation and to share ideas with legislators on what the bill includes what it excludes, and why they are proposing certain items. The Association has had in-depth discussions with Senator Cliff Aldridge, R-Choctaw and Senator Bill Brown, R-Broken Arrow as well as high ranking members of the House Staff.
"OPEA has expressed our concerns and suggested changes," said OPEA Executive Director Sterling Zearley. "The Association’s objectives are a better insurance product for state employees and more choice for rural areas. More importantly, the goal is to protect funds in state employee paychecks."
"Clearly, there are issues with the current way the state handles the insurance options," added Zearley. “Passing on an increase in premiums to state employees is not an option."
Some of the items included in the bill, at this time, that OPEA has discussed with legislators include:
- Reserves. Any money in OSEEGIB reserve funds over $120 million would be used to fund either Health Savings Accounts (HSA), Flexible Spending Accounts (FSA), or contributed to SoonerSave.
- Freezing the Benefit Allowance. The legislation proposes freezing the stat e employee benefit allowance for three years. OPEA has raised concerns over this point, because state employees have not had a raise since October 2006 and freezing the allowance will cause state employees to lose money. The Association has recommended that any change in the benefit allowance would include indexing to HealthChoice rate increases.
- Benefit Allowance Savings. The bill also requires that any money in the benefit allowance after the purchase of benefits be placed in an HSA or FSA. OPEA has recommended that the expenditure of benefit allowance dollars be left at the discretion of employees. Some state employees purchase less expensive benefits to help supplement their family budget with benefit dollars.
- HMO Choices. The legislation requires one competitively bid HMO. This would allow the state employees in rural areas a choice other than HealthChoice. However, this may be difficult, since currently no HMO covers the entire state.
Administrative savings.
- Administrative Savings. The proposed draft mandates that 15 percent of the administrative costs to run the plan be returned to the state General Fund. While there may be savings in a consolidation of agencies, 15 percent is high. A good portion of the administrative cost for OSEEGIB is for claims processing and payment into the State.
- High Risk Pool. These savings would be on an annualized basis and should not impact the cost of premiums.
- Wellness. The proposed legislation requires all employees to participate in the state wellness program. OPEA is concerned at how this program would be incentivized. There should be rewards of some sort, including monetary.
- Composition of the Board. The proposed language does not allow for any plan participants to be on the board. OPEA has asked for a seat on the board, either as an official member or as an ex-officio member of the board.
OPEA is involved in the discussions of the proposed language and will be holding a meeting with the OPEA Board of Directors in the near future to further discuss the ideas and proposals.
"Watch the website closely for further updates in the insurance program," concluded Zearley. "During the last weeks of session things happen quickly. We may have a quick call to action on this important issue."
Posted on
Wed, May 19, 2010
by Trish Frazier