State Employees See Two Premium Increases For First Time Since Summer of 2003
State employees ended up with two premium increases this summer – one for annual premium rate increases that go into effect after the GIC has negotiated rates with its health plan vendors and the other as the result of the Legislature’s premium percentage increase. The last time the legislature changed the premium percentage for state employees was in the summer of 2003, another year of tight budget constraints, as part of the FY04 Appropriation Act.
Usually GIC members only have one premium change, which reflects the rate increases negotiated between the GIC and its health plans. This year, because of the state’s fiscal crisis, the legislature changed the premium contribution split. This was then signed into law by the Governor as part of the FY10 Appropriation Act, and the new contribution percentage split went into effect August 1, 2009. State employees who paid 20% of the basic life and health insurance premium (if they were hired after June 30, 2003) now pay 25%; those who paid 15% (if they were hired on or before June 30, 2003) now pay 20%.
The GIC has heard from some employees who were unhappy with this change. However, as state employees themselves, GIC staff has a personal stake in making every effort to keep costs for members and the Commonwealth as low as possible. We were pleased to be able to negotiate a modest 3.19% premium increase for FY10, which is much lower than many employers have achieved. With a FY10 Appropriation of $1.4 billion, the GIC’s budget is formidable and the GIC needs to do its part in solving the state’s fiscal crisis. Compounding this challenge are rapidly escalating health care costs, which, for anyone who reads the paper or watches the news knows, is a problem that is in the forefront of policy debate nationally. All of us are sharing the burden of these increased costs. The GIC will continue its efforts to rein in health care costs and improve health care quality at the same time.
This information provided by the Group Insurance Commission.