Since the State released new health insurance premium rates last week, we’ve had a number of questions about health insurance rates and the tentative contract agreement you are currently considering for ratification.
The 2016-2019 Tentative Agreement makes NO changes to negotiated health benefits. PEF negotiates the percentage of the health insurance premium the employee pays, but we do not negotiate premium rates.
By law, Empire Plan and HMO premium rates are set every year by the Department of Civil Service. Again, these rates are not negotiated by PEF. Premium rate increases become effective regardless of whether there is a contract in place or whether the PEF/State 2016-2019 Tentative Agreement is ratified. The 2016-2019 Tentative Agreement makes no change to enrollees’ premium contribution percentage. Employees will continue to pay 16% of the total premium for individual Empire Plan coverage, and 31% for dependents’ Empire coverage.
Premium rates (not percentage contributions) are adjusted every year by the Department of Civil Service based on enrollee utilization and projected medical costs. The rate adjustments vary depending on which health insurance plan employees use (e.g., Empire Plan v. HMO, and Individual v. Family coverage).The premium rates for 2017 have been finalized by the Department of Civil Service. For the Empire Plan, which is the plan that the vast majority of PEF members use, the rates were increased by $3.20 per pay period for individual coverage, and $16.40 per pay period for dependents’ coverage. These increases were due to projected cost increases in the Hospital, Medical, Mental Health and Substance Abuse and Prescription Drug programs for 2017, and deficits based on 2016 premium levels which underestimated costs in the Hospital, Medical and Mental Health and Substance Abuse programs.
As always, we recommend that all enrollees review their plan options carefully each year during the annual Option Transfer Period which runs through December 16, 2016.
The PEF Contract Team will be holding contract ratification meetings in every PEF Region in the coming weeks, and I encourage you to attend a meeting to get your remaining questions and concerns addressed. The team continues to unanimously support ratification of this Tentative Contract Agreement.
PEF Contract Team Chair