Governor Proposes Higher Employee Contributions

MARCH 5, 2015: Monthly insurance premiums for the 425,000 enrollees of the state’s Group Insurance Commission (GIC) will increase starting in June.

The increase in monthly premiums is the result of higher medical inflation across nearly all GIC plans. Essentially, the price of medical care and prescription drugs is once again on the rise.

Governor Proposes Higher Employee Contributions

MARCH 5, 2015: Monthly insurance premiums for the 425,000 enrollees of the state’s Group Insurance Commission (GIC) will increase starting in June.

The increase in monthly premiums is the result of higher medical inflation across nearly all GIC plans. Essentially, the price of medical care and prescription drugs is once again on the rise.

GIC Commissioners approved an average premium increase of 5.7% across all insurance plans offered by the state. Retirees enrolled in the Optional Medicare Extension (OME) plan will see their monthly premium rise $2.49 (90/10), $3.75 (85/15), $4.99 (80/20). The increased premium amounts represent an overall increase of 6.5%.

Members not enrolled in Medicare, but are enrolled in the GIC Indemnity Plan (UniCare) face a 4.3% increase. Harvard Pilgrim Independence clocks in at 9.2% and Tufts Navigator at 7.3%.

“We never want to see any of these costs go up, regardless of the reason why. And we can’t forget that these higher monthly premiums are on top of the higher copayments and deductible that were just approved last month,” says Association Legislative Director Shawn Duhamel. “Many retirees are going to have a hard time finding a way to pay these bills. Thankfully, most of our members are enrolled in the OME plan, where the dollar increase is modest.”

Members can look to the May 2015 edition of the Voice for a full report on all GIC costs for FY16.

Employees & New Retirees Could Pay 25%

Using the reported $1.5 billion FY16 budget deficit as reasoning, Governor Charlie Baker has proposed increasing all active state employee and new (not current) state retiree insurance contribution rates to 75/25 beginning July 1, 2015.

Currently, active employees hired prior to July 1, 2003 contribute 20%, while employees hired after that date contribute 25%.

There are now three separate state retiree contribution rates depending upon date of retirement: 90/10 (prior to 7/1/94), 85/15 (7/1/94 – 1/31/10) and 80/20 for those retiring after 1/31/10. Baker’s proposal would create a new fourth tier of retiree contributions for those who retire beginning July 1, 2015.

“While we’re grateful that the Governor saw fit to hold older retirees harmless, something every governor since Bill Weld has done, our Association strongly opposes his plan to increase rates on active employees and new retirees. In light of the higher out-of-pocket costs, these employees and retirees are already paying more than their fare share of insurance costs,” said Association President Frank Valeri. “More must be done to hold the health care providers and drug companies responsible for increasingly high prices. The answer to controlling costs does not come from shifting new costs onto people who cannot afford to pay.”

Baker’s budget now goes before the House, where Ways and Means Chairman Brian Dempsey will conduct a full review. The House is expected to debate and vote on its version of the budget in late April, before the Senate takes up the document in late May.

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