February 19, 2010
PEIA Finance Board meets and adopts a new Plan C option
When you receive your PEIA Shoppers Guide in a few weeks you many notice a new option for PEIA participants. The PEIA Finance Board met on Thursday, February 18th and voted to offer PEIA Plan C.
Plan C is a high deductible plan with a flat premium rate. It will be available to all PEIA participants. Specifics of the plan include premiums of $51/mo single; $123/mo employee and child; and $245/mo for a family plan regardless of income levels.
The plan also has a $1,200 single / $2,400 family deductible. The deductible includes both medical and drug expenses. The out-of-pocket maximum (MOOP) for the plan is $2,400 for a single and $4,800 for a family plan. The MOOP includes all covered expenses, prescription drugs and deductibles paid.
All services would be subject to the high deductible except: preventative services that are currently paid at 100% (mammogram, pap smear, colonoscopy, etc.) and drugs on the new Preventative Drug list which will have a $5/$20/$50 co-pay. After the $1,200 or $2,400 deductible is met the payment is on the 80/20 schedule. Once the MOOP is met, the plan pays $100% for all covered medical and prescription drug costs. PEIA’s networks still apply to Plan C.
“Obviously, a high deductible plan is not for everyone,” states WVEA President Dale Lee. Lee was in attendance at the Finance Board meeting. “Quite honestly new Plan C is best suited for healthy individuals or those with higher incomes. While premiums may be lower the costs are made up by requiring participants to pay for their services through the increased deductibles and out of pocket expenses. Be cautious and give it great consideration before selecting any high deductible plan.”
PEIA Finance Board adopts plan for the 2011 Fiscal Year
December 16, 2009
Chairman Ferguson and Director Cheatham were able to come up with an additional $3.5 million dollars in funding from the Governor. The finance board elected to use this money to offset increases to employee’s. Additional money is also being taken from the PEIA Trust Fund to help ease the burden that employees would have incurred.
Unfortunately, funding fell short of preventing premium increases altogether. Additionally, when the state places funding into an account with the purpose of paying premiums, the 80/20 rule kicks-in. Therefore, employees must match any funding provided by the state going to the cost of premiums. The ratio is 80% of state money must be matched by 20% of employee money.
Details of the adopted plan include:
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A $4.5 million dollar premium increase for employees will be spread among all salary tiers based on an employee’s salary or retiree’s benefit. The increase will average out to approximately 4%, which was the number originally proposed by PEIA. PEIA chose to maintain the current method of premium calculation with the 9 salary based tiers instead of premium caps for the highest earners or across the board increase.
- Deductibles will not increase for active employees. Retirees, however, will see a $25 increase in deductibles. This translates to a $25 deductible for Medicare eligible retirees who currently have no deductible. Pre-Medicare age retirees’ deductibles increase from $375 to $400 as a result of the changes.
- The Family Out-of-Pocket Maximum (MOOP) increases to 1½ times the amount for a Single Plan Out of Pocket Maximum. The indication is the Board will likely add the final ½ times the cost in the next fiscal year to eventually double the cost of a family MOOP.
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In the most positive action of the afternoon, the Board voted to increase the lifetime maximum cap from $1 million to $1.5 million. WVEA supported this increase when it was originally proposed by the board.
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Adoption of a new High-Performance formulary where approximately 47 drugs are bumped up a tier, causing mostly co-pay increases. Most of the increases will be from $15 to $50. PEIA staff assured the Board that generics or lower tier alternatives are available for nearly all drugs being impacted by these changes.
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The Retiree Assistance program will not change. Motions were not made to alter the current program that is income-based.
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The board chose not to adopt a new West Virginia only plan, also known as Plan C. The plan would have been optional to employees, requiring members to select into the plan. Plan C would have required enrollees to visit West Virginia providers and a few selected out of state hospitals, greatly penalizing members living in border counties. WVEA opposed this program because of its negative impact on many members living too far away from in-state medical facilities.
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The Board moved to alter the current Plan B by increasing deductible levels. This allows the plan to become a High Deductible Plan, meeting IRS requirements and allowing those enrolled eligibility in health spending accounts (HSA). HSA accounts are tax-free and funds within them may be used to offset medical costs. These changes were requested by counties and municipalities who purchase PEIA insurance for employees. The deductible increases will go from $500 to $1200.
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The following premium reduction programs were adopted by the Board. The Board will receive financial information at a future meeting to decide the specific amounts of savings eligible members will receive. Details on the savings that would be passed to members were not available. WVEA will monitor these programs closely and provide information as soon as the Board finalizes the details.
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Living Will/Advance Directives Option. Members signing an affidavit, similar to the tobacco self-reporting system, stating they possess a living will with advance directives will be eligible for premium reduction in 2011. PEIA staff stated the desired actions instructed in the living will are not in question, nor will the Board be aware of the details. PEIA should never request a copy of the document or inquire about the details.
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Wellness Initiatives. Members who visit a doctor and obtain information about health statistics, such as cholesterol, waist circumference, and blood pressure will also be eligible for a premium reduction in 2011. These tests are to be conducted free of any copay or deductible. According to PEIA staff, the actual numbers/levels have no bearing on the premium reduction. To be eligible members must simply have the tests conducted and “Know Your Number” as the PEIA program states. While WVEA supports wellness and wellness programs, there is a concern in the upcoming years the discount could switch to a penalty for those whose numbers are unfavorable. WVEA will monitor the program and encourage a program that truly promotes wellness and is widely available to all PEIA participants. In the current form, the program is useful and provides vital information to members so they can make informed health decisions. WVEA will oppose any movement towards a punitive system based on numbers that label a person as unhealthy.
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The Board did not adopt a proposal to charges spouses of PEIA members enrolled in PEIA, who chose not to purchase available health care coverage at the spouse’s place of employment. The Board felt there were too many variables among families' financial and work situations.
“Clearly, PEIA’s setting of the annual plan is one of the most frustrating things we deal with each year,” states WVEA President Dale Lee. “Regardless of the situation the state finds itself in, increasing premiums in years without salary increases is simply taking money out of the employees’ pockets. It is unacceptable and unfortunately it appears to be a trend that the administration is not concerned about.”
“We did have a few victories this time around for employees; increasing the lifetime maximum cap, avoiding the spouse surcharge, and decreasing some of the proposed deductible and out-of pocket maximums increases. Those are positive actions by the Finance Board. However, the cost shifting to employees has to stop,” concluded Lee.