How are UW Employee Health Insurance Benefits and Costs Established Each Year?
Good question! For many employees, health insurance benefits are the most important fringe benefit offered by the UW System. Every year, we see changes to the health insurance program even if the only change is your monthly premium contribution. Then in the fall, during the Annual Benefits Enrollment (ABE) period, you have the opportunity to enroll in the health insurance program, make changes to your coverage level or change health insurance carriers. So let’s learn about the process of establishing those annual health plan options and costs.
What is the State Group Health Insurance Program?
The State Group Health Insurance program is an employer-sponsored program offering group health insurance to employees of state agencies, UW System, UW Hospital and Clinics Authority and participating local government employers.
The UW System does not determine the benefits, premiums, employee premium contributions or which health plans are offered. Changes for 2018 are expected to be approved by the Group Insurance Board (GIB) on August 30, 2017.
Who decides how much I have to pay for health insurance premium contributions?
The health plans submit premium bids to the Department of Employee Trust Funds (ETF) each July for the following year. The bids and required claims data is examined by the Group Insurance Board’s (GIB) actuaries and negotiations are conducted by ETF. The GIB must approve the premium rates for each health plan.
While most employees do not pay the full premium cost, the full premium cost does impact the amount of the employee monthly premium contribution. Each year, the monthly amount that employees are required to pay for health insurance is established by the state Division of Personnel Management (DPM). DPM determines the employee contribution towards premium based on the provisions in Wis. Stat. § 40.05 (4) (ag) and (ah). For most employees, the monthly premium contribution may not exceed 12 percent of the average premium cost of plans offered in each premium tier.
What are premium tiers?
ETF assigns each health plan to one of three premium tiers based on the relative efficiency with which a plan is able to provide the benefits and the quality of care that is required by the GIB. Plans are given extra credit in the tier assignment process if they scored well on measures of quality, patient safety, and customer satisfaction.
For most full-time employees, your monthly health insurance premium contributions are based upon the Tier in which your health plan is placed. A plan’s Tier may change from year to year but there will always be at least one Tier 1 plan offered in your area.
Who administers the State Group Health Insurance Program?
The Department of Employee Trust Funds (ETF) and the Group Insurance Board (GIB) have statutory authority for program administration and oversight [Wis Stat § 15.165 (2) and 40.03(6)]. All health plans follow GIB guidelines for eligibility and program requirements. The health plans (except the Access Plan and Access HDHP) all offer the same benefit package called Uniform Benefits (as well as the option of electing Uniform Dental coverage for a small additional cost) and compete in an annual competitive premium rates bid process.
Who decides what’s covered under the State Group Health Insurance Program?
The GIB generally determines the coverage offered by the health plans, however, the program must also comply with applicable state and federal laws. The GIB has a fiduciary responsibility to administer the program in accordance with state statute. The GIB decisions are based on ETF recommendations, GIB actuaries and other guidance.
Who decides which health insurance carriers are offered?
In today’s environment, the health plan decides if they want to participate in the State Group Health Insurance program and determines the counties in which they will offer plan providers.
The health plans must meet strict contractual requirements and their participation is authorized annually by the GIB if they meet the required criteria. If a health plan leaves the program, its members must select a new health plan during ABE.
Who is on the Group Insurance Board (GIB)?
The GIB is an eleven-member board that meet specified membership requirements. The GIB sets policy and oversees administration of the group health, life insurance and Income Continuation Insurance plans for state and UW employees and retirees and the group health and life insurance plans for local employers who choose to offer them. The Board also can provide other insurance plans, if employees pay the entire premium.
For more information about the GIB, please click here.
What is the role of the Legislative Joint Finance Committee (JFC)?
The 2017-2019 executive state budget included a requirement that any contracts for a self-insured health insurance program must be submitted to the JFC for review. The JFC then has a 21-day during which the JFC must decide if they will act to reject or modify the contracts.
The State of Wisconsin currently administers three self-insured benefit programs: pharmacy, Uniform Dental and the state-wide Access Health Plan. The other health plans currently offered are not self-insured (they are “fully-insured”). Because the JFC rejected the contracts for a self-insured health insurance program, all health plans, including the Access Plan, will be fully-insured in 2018. The pharmacy and Uniform Dental will remain self-insured.
Source: UW System Office of Human Resources & Workforce Diversity