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 1999, the Commission will continue its commitment to reducing benefit costs while ensuring access to high quality health benefits through the pursuit of the following rate-stabilizing strategies:

• collaborate with major vendors to combat cost pressures by developing more provider networks and more cost-effective quality improvements;
• evaluate its range of health plan offerings and investigate risk-adjusted rating methodologies of reimbursement to ensure lowest cost; and
• 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.

Budget Recommendations

The Fiscal Year 1999 funding recommendation reduces the premium and plan costs account (1108-5200) by $38.1 million and the dental vision account (1108-5500) by $250,619 from the Fiscal Year 1998 spending level to reflect an increase in the employee contribution from 15% to 25%. This budget proposal reflects that the Commonwealth assumes responsibility for the costs associated with providing health benefits to former employees and retirees of Franklin, Middlesex, Worcester, and Hampden counties.

Budgetary Direct Appropriations

GROUP INSURANCE COMMISSION OPERATIONS
1108-5100	For the operation of the group insurance commission	2,071,362

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 1999; provided, that the secretary of administration and finance shall charge the department 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 $52,000,000 shall be expended for prior-year payments for costs incurred through the commission`s self-insured health plans; provided further, that the 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 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; provided further, that the commonwealth`s share of such premiums for active state employees shall be 75 per cent of said premiums and rates	506,861,756

GROUP INSURANCE PREMIUM FOR RETIRED GOVERNMENTAL EMPLOYEES
1108-5350	For elderly governmental retirees` premiums	1,723,565

GROUP INSURANCE PREMIUM FOR RETIRED MUNICIPAL TEACHERS AND THEIR DEPENDENTS
1108-5400	For retired municipal teachers` premiums and the audit of said premiums	23,580,543
	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 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 25 per cent of the monthly premium established by the commission for such benefits	3,334,257

Trust and Other Spending

1120-2300

BASIC HEALTH AND OPTIONAL MEDICARE EXTENSION INSURANCE RATE STABILIZATION

950,000

1120-2611

GROUP INSURANCE TRUST FUND - EMPLOYEES

200,000

1120-3100

ELDERLY GOVERNMENTAL RETIREES HEALTH AND OPTIONAL MEDICARE RATE STABILIZATION

250,000

1120-5611

ACCUMULATED NET INTEREST FROM EMPLOYEES` PREMIUMS

330,000