Tag Archive for Employee Trust Funds

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

Out-of-Pocket Health Care Expenses to Rise for State Employees

The State of Wisconsin Group Insurance Board met today and voted to increase out-of-pocket health care expenses for state employees, including University of Wisconsin-Madison faculty. The changes go into effect January 1, 2016, and will net the state approximately $85 million over two years.

Governor Scott Walker proposed the changes as part of the 2015-17 biennial budget, which required the Department of Employee Trust Funds to identify and implement $81 million in savings from January 1, 2016 to June 30, 2017. The changes should also eliminate the so-called Cadillac Tax on employers who offer high-cost plans to their workers, set to go into effect in 2018.

Much of the savings will be realized through new deductibles and doubled out-of-pocket expenses for workers. Employees with single coverage will pay a $250 deductible and a maximum out-of-pocket expense of $1,000 annually, while employees on the family plan will pay a $500 deductible and out-of-pocket maximum of $2,000 annually. Essentially this is a pay cut of as much as $750 to $1,500 annually depending on the health insurance benefit plan an employee chooses.

Edited at 8:10 pm with correct figures for essential pay cut.