Consultant Recommends Self-Insurance for State Employees

The Wisconsin Group Insurance Board met Tuesday and discussed a report (below) recommending self-insurance for state employees beginning in 2018. The board is scheduled to meet and vote on the recommendation on February 17.

Currently state employees can choose from 18 insurers, and state employees comprise 14 percent of the state’s health insurance market. Under self-insurance, the state would pay for benefits directly and assume risk. A private insurer would likely be hired to manage the program for the state.

Segal Consulting maintains a switch to self-insurance could save the state $42 million. A preliminary report from Segal in March suggested savings of $50-70 million, while a 2012 Deloitte report noted self-insurance could save the state $20 million but had the potential to cost as much as $100 million.

The Assembly passed a bill Monday that would require Joint Finance Committee approval of any self-insurance contract. A spokesperson for Governor Scott Walker told the Associated Press the governor would likely sign the proposal. Committee co-chair Representative John Nygren (R-Marinette) said the committee will work with the Legislative Fiscal Bureau to determine how self-insurance may impact the state’s insurance market after the oversight bill is signed into law.

The Group Insurance Board approved several changes to state employee health plans earlier this year in an effort to cut costs to the state. Much of the savings will be realized through new deductibles and doubled out-of-pocket expenses for workers.

WI Group Insurance Board Segal Report