The Group Insurance Commission administers the health, life, dental, vision, and disability insurance coverage for Commonwealth employees and retirees, as well as their survivors and dependents. The Commission is committed to providing the highest quality insurance programs possible, while simultaneously keeping costs under control. The Commission achieves this balance by working with its selected vendors to contain costs through plan design and aggressive rate negotiations.

In Fiscal Year 2000, the Commission will continue its commitment to reducing plan costs while ensuring access to high quality health benefits through the pursuit of the following rate-stabilizing strategies:

• introduce a new provider network for pharmaceuticals that offers better discounts that will help control the escalating cost of prescription drugs;

• establish standard fee schedules for various out-patient services such as skilled nursing care, non-surgical procedures, selected high volume ambulatory surgical procedures, and physician evaluations as part of the continuing process to fully implement the Market-Based Reimbursement system;

• undertake a trial run of risk-assessment and risk-adjustment methodologies to determine the relative efficiency of the individual health plans and use this information to negotiate more equitable rates that will encourage health plans to improve the health status of all their participating members; and

• continue to analyze the health care use of indemnity plan enrollees in order to identify populations in need of secondary prevention programs, to the extent that these voluntary programs successfully reduce plan members’ health risks, the Commission will be in a better position to negotiate lower indemnity plan rates.

The Fiscal Year 2000 funding recommendation reduces the premium and plan costs account (1108-5200) by $39 million and the dental vision account (1108-5500) by $487,441 from the Fiscal Year 1999 spending level to reflect an increase in the employee contribution from 15% to 25%. This budget proposal also includes $2.2 million for the costs associated with providing health benefits to former employees and retirees of Essex County.

Budgetary Direct Appropriations

GROUP INSURANCE COMMISSION OPERATIONS
1108-5100	For the operation of the group insurance commission	2,317,186

GROUP INSURANCE PREMIUM AND PLAN COSTS - COMMONWEALTH SHARE
1108-5200	For the commonwealth`s share of the group insurance premium and plan costs incurred in fiscal year 2000; provided, that the secretary of administration and finance shall charge all state agencies and authorities, as defined in section 1 of chapter 29 of the General Laws, which have federal or other funds allocated to them for that portion of group insurance premium and plan costs as he determines should be borne by such funds, and shall notify the comptroller of the amounts to be transferred from said funds, and amounts transferred or otherwise received in payment of all such charges shall be credited to the General Fund; provided further, that not more than $54,000,000 shall be expended for prior-year costs incurred by the state indemnity health insurance plan and the preferred provider organization plan; provided further, that the commission shall obtain reimbursement for premium and administrative expenses from local and other non-state agencies and authorities participating in the commission`s group insurance plans; provided further, that the secretary of administration and finance shall charge all state agencies for the commonwealth`s share of the health insurance costs incurred on behalf of any employee of any such agency who is on leave of absence for a period of more than one year, and the amounts received in payment of said charges shall be credited to the General Fund; provided further, that notwithstanding the provisions of section 26 of chapter 29 of the General Laws, the commission is hereby authorized to negotiate, purchase, and execute contracts prior to July 1 of each year for policies of group insurance as authorized by chapter 32A of the General Laws; provided further, that notwithstanding the provisions of chapter 150E of the General Laws, and as provided in section 8 of said chapter 32A, and for the purposes of section 14 of said chapter 32A, the commonwealth`s share of the group insurance premium for state employees who have retired prior to July 1, 1994, shall be 90 per cent, and the commonwealth`s share of the group insurance premium for state employees who have retired on or after July 1, 1994, shall be 85 per cent; and provided further, that the commonwealth`s share of such premiums for active state employees shall be 75 per cent of said premiums and rates	517,232,328

GROUP INSURANCE PREMIUM FOR RETIRED GOVERNMENTAL EMPLOYEES
1108-5350	For the cost of group insurance premiums for elderly governmental retirees	1,650,000

GROUP INSURANCE PREMIUM FOR RETIRED MUNICIPAL TEACHERS AND THEIR DEPENDENTS
1108-5400	For the costs of group insurance premiums for retired municipal teachers and the audit of said premiums	25,862,817
	Local Aid Fund 100%

DENTAL AND VISION BENEFITS
1108-5500	For the provision of dental and vision benefits, notwithstanding the provisions of chapter 32A of the General Laws to the contrary, for those active employees of the commonwealth, not including employees of authorities and any other political subdivisions, who are not otherwise provided such benefits pursuant to a separate appropriation or the provisions of a contract or collective bargaining agreement; provided, that said employees shall pay at least 25 per cent of the monthly premium established by the commission for such benefits	3,655,807

Trust and Other Spending

1120-2300

BASIC HEALTH AND OPTIONAL MEDICARE EXTENSION INSURANCE RATE STABILIZATION

1,033,042

1120-2611

GROUP INSURANCE TRUST FUND - EMPLOYEES

170,631

1120-3100

ELDERLY GOVERNMENTAL RETIREES HEALTH AND OPTIONAL MEDICARE RATE STABILIZATION

371,070

1120-5611

ACCUMULATED NET INTEREST FROM EMPLOYEES` PREMIUMS

398,395