Plan design and rates set for PY 2013
The ERS Board of Trustees approved contribution rates for benefit plans under the Texas Employees Group Benefits Program (GBP) for Fiscal Year 2013 at their May 22, 2012 meeting. The Board did not have to make any plan design changes to the HealthSelectSM of Texas plan for Plan Year 2013.
The new rates take effect on September 1, 2012. HealthSelect rates will increase 7.36%. Employers, such as the State of Texas, pick up most of the cost of the increase since qualified employees and retirees currently do not pay an insurance contribution for their own coverage. Individuals who cover family members in HealthSelect will see increases ranging from $12 to $31 per month depending on their coverage level. The rate increase is in line with the legislative appropriations set for the program in 2011.
Increased drug costs and usage are driving the rate increases. Fortunately, the plan is able to use savings from the new HealthSelect third party administrative contract, the recent dependent eligibility audit, and subsidies from the federal government for certain retiree health expenses to offset the increase. Without these savings, the plan would have had to cut benefits.
The higher drug costs also caused contribution rates for the Medicare Advantage plans to increase. Those rates are made up of two components: medical cost and drug cost. While Humana did not request an increase on the medical rate of the Humana Medicare Advantage Plan, the rise in drug expenses required an increase of $15 per month to cover a spouse in the plan.
Medicare Advantage plans continue to offer significant savings to members over traditional HealthSelect – a savings of $141.20 a month for a spouse and $282.40 for a surviving spouse.
More Medicare-eligible retirees living in the Houston area will now qualify to enroll in the KelseyCare Advantage HMO plan because their coverage area expanded to include four additional counties. KelseyCare will be available to persons living in Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller counties on September 1.
Prescription drug coverage for KelseyCare participants will switch to HealthSelect drug plan benefits, administered by Caremark, beginning September 1, 2012. This will expand the current coverage for prescription drugs to that of the HealthSelect prescription drug coverage. KelseyCare Advantage rates remain significantly less than HealthSelect rates, but will increase slightly for members who cover dependents.
Both Community First Health Plans in the San Antonio area and Scott and White Health Plan in Central Texas were approved to continue HMO coverage in those areas, with small contribution rate increases ranging from about $1 to $15 per month depending on the plan and dependent coverage level.
Rates will decrease 10% for Optional Term Life coverage. Fiscal year 2013 monthly rates for dental, Basic Term Life, Dependent Term Life, Voluntary Accidental Death and Dismemberment, and Long- and Short-term Disability coverage were approved with no increases.
Click here for a list of all Fiscal Year 2013 approved contribution rates.
It was also announced that beginning September 1, 2012, the name of the statewide Humana Medicare Advantage Employer Preferred Provider Organization (PPO) Plan will change to “HealthSelect Medicare Advantage Plan” to reinforce that it is a unique plan designed by ERS. The plan offered to GBP Medicare retirees is not the same as any of the Medicare Advantage plans offered by Humana on the private market. The name change will help to differentiate this plan to providers. Current plan members will get an identification card with the new name.
You can download the agenda items provided to the Board for more information.