New Employee Health Insurance Deal Provides Additional Savings for Taxpayers

Taxpayers and employees will be paying less for state employee health insurance in 2013. On September 10, the Executive Council approved the Department of Administrative Services’ recommendation for health insurance plans in 2013. The new plan is expected to reduce the cost of the health plans by over $22 million from the 2012 costs.

As in previous years, Wellmark will be the primary provider of health insurance coverage to state employees. The cost of Wellmark’s indemnity or preferred provider organization (PPO) plans is expected to fall by 6.2 percent for single coverage and 6.3 percent for family coverage. That amounts to a monthly premium reduction of$45-47 for single coverage and $112 decrease for family coverage. Under these plans, employees with family coverage are required to contribute 15 percent of the monthly premium. Their contribution will go down $17 per month.

Wellmark’s managed care plans will also provide cost reductions. The premium for single coverage will decline 6.6 percent from 2012’s premium levels and family coverage costs will go down by 6.7 percent. For both classes of managed care plans, employees are not required to provide a contribution. The managed care plans are available to employees in 96 counties, not Allamakee, Fayette, nor Winneshiek.

In terms of overall cost to the state, the managed care plans provide the bulk of the coverage to state employees. While these plans cost less than two-thirds what the indemnity and PPO plans cost, the total bill for them is projected to be $189 million in 2013. The total cost for the indemnity and PPO plans will be $129 million.

Dental insurance coverage will grow slightly. The premium for state employee coverage will increase by 4.6 percent over the 2012 rate. Single employees will again not be required to make a contribution, while employees with family coverage will continue to contribute one-third of the money premium cost. The total dollar increase is approximately $850,000 and nearly half of that amount will come from employees with family coverage.

The one area that is seeing a big jump is the cost of the life insurance plans provided to state employees. The premiums for the basic life insurance coverage will jump approximately 28 percent. The state’s insurance consultants reviewed the rate increase and said it was justified, based on the claims experience over the past few years.