Group Insurance

2010 Annual EnrollmentDental Information Medical/Basic Life Insurance Optional Life InsuranceEmployee Assistance Program Long-Term Care Dependent Eligibility Information Group Insurance Plan Information Campus Office Contacts

Premium Holiday Information

 

The Office of Benefits Administration for the State of Tennessee has released important news about your health insurance premiums.  The State Insurance Committee at their last meeting approved a 6 percent increase in the medical premium to be effective for plan year 2010.  Additionally, the Committee approved two medical premium holidays.  As a result of this decision, the medical portion of your group insurance premium will not be deducted from your December 2009 and January 2010 paychecks.  This will not affect your insurance coverage.  The premium for your life insurance coverage included in the basic health plan and premiums related to any other optional plan will continue to be deducted from your paycheck.  Your group insurance premium including the 6 percent increase will be deducted from your February 2010 and following paychecks.

 

The medical portion of your group insurance is found in the following chart and is also available in the 2010 INSURANCE CHANGES AND ANNUAL TRANSFER PERIOD documentation distributed this week.

 

 

 

Laurie Lee, Executive Director of the State’s Benefits Administration Office, provided the following information regarding the premium increase and premium holiday, how costs are managed, and what is coming for the future. 

Premium Increase and Premium Holiday

You may wonder why both an increase and two premium-free months were approved at the same time.

 

The simple answer is because each action responds to a different situation.

 

1. First, as with all health plans across the country, our costs continue to rise. In Tennessee, we have the added challenge of covering an aging population with an increasing number of cases of high cost diseases such as diabetes, hypertension and heart disease. As a result, our costs have increased an average of 7 to 8 percent each year. The health insurance plans must prepare for the increase in costs we expect to see next year, which is why we have a premium increase. In a tight budget year we are able to increase premiums less than our expected medical expenses due to cost-saving changes we made in the plan. Even with this premium increase, the State will continue to pay the majority of the cost (80 percent) of the new premium.
2. Second, the State’s insurance plans are self-funded, and the funding comes from both you, through your premiums, and the State. This money is put into a reserve fund, which is essentially a “bank account” for the insurance plan. When you or a dependent has a medical expense, we pay your insurance carrier -- BlueCross, CIGNA or United -- from this account. One of our jobs is to estimate 18 months in advance how much money we will need to cover these medical claims. We are also required to maintain a cash surplus in our insurance fund “bank account” that exceeds the estimated cost of the plan by 5 to 10 percent to cover unexpected expenses. On those rare occasions when we have more money than is required, we give it back to our plan members. In 2009, we returned the excess by not increasing premiums. The premium holidays, combined with a premium increase, give you more money now while making sure our premiums match next year’s costs.

How We Continue to Manage Costs

This year, the State took several steps to efficiently and responsibly manage the plan’s finances, which have contributed to the less-than-expected 6 percent premium increase as well as the premium holidays in December and January. These include:

 

1. Increased co-pays for the most expensive brand-name drugs to encourage the use of generic medications. Even with these new co-pays, members pay only a fraction of the actual costs for their prescriptions.
2. Plan coverage for generic proton pump inhibitors only for the treatment of acid reflux.
3. A Dependent Eligibility Verification that will result in savings to the state of more than $10 million annually through the voluntary drop of 4,700 ineligible dependents.

What’s Coming

This spring we will introduce a single pharmacy benefits manager, which will strengthen our buying power. This will provide the State with better pricing for medications and will save money for members and the plan.

 

We continue to explore new ways to preserve our comprehensive and affordable health benefits. In the future we want to offer health plans that will reward smart choices and offer a broader range of price points. You will be hearing more about these ideas in the months ahead.

Insurance Continuation

• COBRA
• Retirement - TCRS
• Retirement - Non TCRS

 

Contact

Robert C. Chance

Director

P115 Andy Holt Tower

Knoxville, TN 37996

865-974-5251 Phone

865-974-3530 Fax