OPEA

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One of the most important concerns for OPEA was that state employees not lose money from their paychecks in this challenging year of furloughs and stagnant salaries. Since 2001, the state employee benefit allowance has been the average of the high option health plan premiums, plus the average cost of all the dental plans, plus basic life and disability. In addition, employees who cover dependents are provided with funds for
75 percent of the premium of health only for their dependents.

Over the years, the cost of the high option HMOs, which few employees choose, has increased dramatically, driving up the cost of the benefit allowance. In addition, as plans entered and left the program, the benefit allowance would vary from year to year.

An example of the vagaries of the benefit allowance is the possible scenario for 2011. One HMO, Aetna, has announced it will not participate in plan year 2011. Therefore, only three HMOs and HealthChoice will be used to calculate the benefit allowance, compared to four HMOs and HealthChoice in 2010. This one change will cause state employees to lose between $35 and $115 from their paychecks, depending on how many dependents are covered. (Calculations are approximate and based on 2010 premiums)

Aetna 729.71
Community Care 790.58
Global 351.06
Pacficare 617.3
HealthChoice 451.66

Health premium portion of the benefit allowance for a single employee with Aetna bidding 588.06

Heath premium portion of the benefit allowance for a single employee without Aetna bidding  552.65

Single employees will lose $35.41 from their monthly checks when Aetna leaves the state plan. This is increased to $113 for employees who cover their families.

Under the provisions of SB 2052, only one HMO will be offered. If that HMO is a lower priced plan, and the current benefit allowance calculation was maintained, the benefit allowance could drop drastically, even below the HealthChoice premium. Of course, the one HMO option could be a more expensive plan and raise the benefit allowance. However, under SB 2052 the HMOs must competitively bid, so the HMO chosen should have a cost closer to HealthChoice.

To preserve funds in state employees’ checks, SB 2052 freezes the state employee benefit allowance at the 2010 level. In subsequent years, the health insurance portion of the benefit allowance will be the 2010 allowance or the HealthChoice High premium, whichever is higher.