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News: Legislative Updates

GIB Discusses Self-Insurance

Thursday, December 1, 2016  
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The Group Insurance Board is set to discuss proposals to potentially shift the state's health insurance plan to a self-funded model Wednesday.

The board received nine formal proposals in response to an RFP issued earlier this year, according to a memo for board members. Respondents were allowed to bid on any of four defined regions or submit a statewide proposal. 

Fifteen vendors submitted a letter of intent. Two that submitted a letter of intent, but declined to submit formal proposals sent follow-up letters to the Department of Employee Trust Funds explaining why. 

A large, national vendor said the mandatory requirements were beyond the scope of similar work they do for other public sector employers, according to the memo.

A smaller regional plan declined to participate because it could not compete without "significant investments" given proposed regions and administrative requirements, the memo noted.

ETF rated the responses, which ranged from 594 to 791 out of 1,000 points. An ETF spokesman did not respond to a request for more information about the proposals or letters.

Under a self-insurance proposal, the state would assume the risk and pay claims rather than the plans currently serving the program. Differing reports have said the move could save the state up to $42 million annually or cost nearly $100 million.

The board is set to decide on potential changes to the program at its December meeting. If members decide to move forward with a self-insurance proposal, any contract would head to the Legislature's budget-writing committee for final approval. 

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