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.

Objectives

In Fiscal Year 1998, the Commission will continue its commitment to reducing costs while ensuring access to superior health benefits through the pursuit of three new rate-stabilizing strategies:

• integrate its self-insured mail-order, retail, and out-of-network pharmacy benefits to achieve costs savings and improve the safety of its drug plans;
• evaluate its range of health plan offerings and investigate risk-adjusted rating methodologies of reimbursement to ensure lowest cost; and
• analyze the health care utilization 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.

Budget Recommendations

In Fiscal Year 1998, funding required in many accounts will be less than Fiscal Year 1997 spending levels because of savings initiatives and careful management. The main premium account (1108-5200) will be reduced by $22 million from the Fiscal Year 1997 spending level, and the dental vision account (1108-5500) will be reduced by $331,000 as a result of increased employee contributions from 15% to 25% as well as aggressive rate negotiations. The prescription drug account (1108-5220) will be reduced by $2.65 million from the Fiscal Year 1997 spending level because of the integration of the self-insured drug plans. These recommendations also include consolidation of the prior-year payments account (1108-5230) with the current-year premiums account (1108-5200).

Budgetary Direct Appropriations

GROUP INSURANCE COMMISSION ADMINISTRATION
1108-5100	For the administration of the group insurance commission	2,001,024

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 nineteen hundred and ninety-eight; provided, that the secretary of administration and finance shall charge the division of employment and training and other departments, authorities, agencies, and divisions which have federal or other funds allocated to them for this purpose for that portion of insurance premiums and plan costs as he determines should be borne by such funds, and shall notify the comptroller of the amounts to be transferred, after similar determination, from the several state or other funds, and amounts received in payment of all such charges or such transfers shall be credited to the General Fund; provided further, that not more than fifty million one hundred seventy-seven thousand five hundred five dollars shall be expended for prior-year payments for costs incurred through the commission's self-insured health plans; provided further, that the group insurance commission shall obtain reimbursement for premium and administrative expenses from other non-state funded agencies and authorities; provided further, that notwithstanding the provisions of section twenty-six of chapter twenty-nine of the General Laws, the commission is hereby authorized to negotiate, purchase, and execute contracts prior to July first of each year for a policy or policies of group insurance as authorized by chapter thirty-two A of the General Laws; provided further, that notwithstanding the provisions of chapter one hundred fifty E of the General Laws, and as provided in section eight of said chapter thirty-two A, and for the purposes of section fourteen of said chapter thirty-two A, the commonwealth's share of the group insurance premium for state employees who have retired prior to July first, nineteen hundred and ninety-four shall be ninety percent, and the commonwealth's share of the group insurance premium for state employees who have retired on or after July first, nineteen hundred and ninety-four shall be eighty-five percent; provided further, that the commonwealth's share of such premiums for active state employees shall be seventy-five percent of such premiums and rates; provided further, that notwithstanding the provisions of chapter one hundred fifty E of the General Laws, employees of the Massachusetts bay transportation authority and of regional transit authorities shall continue to pay the same percentage, if any, of their health insurance premium as they paid on June first, nineteen hundred and ninety-four; and provided further, that active employees of the Massachusetts bay transportation authority and of regional transit authorities shall pay fifteen percent of such premiums and rates	456,356,022

MAIL ORDER PRESCRIPTION DRUG BENEFIT PLAN
1108-5220	For the mail order prescription drug program	15,003,000

GROUP INSURANCE PREMIUM FOR RETIRED GOVERNMENTAL EMPLOYEES
1108-5350	For elderly governmental retirees' premiums	1,873,266

GROUP INSURANCE PREMIUM FOR RETIRED MUNICIPAL TEACHERS AND THEIR DEPENDENTS
1108-5400	For retired municipal teachers' premiums	22,016,857
	Local Aid Fund 100%

DENTAL AND VISION BENEFITS
1108-5500	Notwithstanding the provisions of chapter thirty-two A of the General Laws to the contrary, for the provision of dental and vision benefits for those active employees of the commonwealth, not including employees of authorities and any other political subdivision, 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 twenty-five percent of the monthly premium established by the commission for such benefits	2,875,557

Trust and Other Spending

1120-2300

BASIC HEALTH AND OPTIONAL MEDICARE EXTENSION INSURANCE RATE STABILIZATION

960,000

1120-2611

GROUP INSURANCE TRUST FUND - EMPLOYEES

160,000

1120-3100

ELDERLY GOVERNMENTAL RETIREES HEALTH AND OPTIONAL MEDICARE RATE STABILIZATION

50,000

1120-5611

ACCUMULATED NET INTEREST FROM EMPLOYEES' PREMIUMS

350,000