The IFO is part of a coalition of unions representing state employees that negotiates health insurance benefits with the State of Minnesota. Even though healthcare costs have been escalating for years nationwide, the IFO and our union health insurance coalition partners were part of a small handful of unions in the country who were able to negotiate no changes in overall out-of-pocket costs for employees in the last round of bargaining over health care benefits for 2018 and 2019.
The union coalition for health insurance bargaining typically meets in the spring in odd number years to begin the bargaining over health insurance benefits for state employees for the next 2-year cycle. Coalition bargaining wraps up by the end of May or early June, and all proposals that are not settled during coalition bargaining remain open when the representatives for the AFSMCE and MAPE unions meet with the State in June to complete negotiations for their contracts with the State.
When the union coalition met with the State last May for this round of bargaining, it was estimated that the SEGIP plan would experience $122 million in additional costs in 2020, absent any plan design changes. The State proposed both plan design changes (i.e., increase in first dollar deductibles, increased copays and coinsurance, increase in cost of prescription drugs, and increased out of pocket maximums), and, they proposed to increase the employee’s share of the premium payments (i.e., from 5% single/15% dependents to 10% single/20% dependents).
The IFO strongly opposed plan design changes and increases to the employee’s share of the premiums. As part of the union coalition, the IFO negotiated to increase Accidental Death and Dismemberment Coverage, to add dependent children to the Diabetes Program, to improve a wellness incentive and to add a vision benefit as a new optional coverage to be available to employees in the near future. The IFO fought hard to continue to make improvements in the dental plan. Among the improvements in the dental plan is a lifetime orthodontia benefits increase from $2,400 to $3,000.
When coalition bargaining ended on May 22, the employer’s proposal for plan design changes and increases to employee’s share of premium cost went to the AFSCME bargaining table for resolution. AFSCME rejected the proposed increase to employee’s share of the premium cost and accepted plan design changes, with the agreement that the increase in medical premiums in 2020 and 2021 would not exceed 8% (as opposed to the 9.3% originally proposed by SEGIP).
As a result, there will be an increase in first dollar deductibles, increased copays and coinsurance, an increase in the cost of prescription drugs, and increased out of pocket maximums. In 2020, the monthly health insurance premiums will increase for singles by $2.56; families will pay an additional $17.40 per month in 2020.
Details of changes:
1. Health Insurance changes beginning January 1, 2020
Premiums increase for employer and employees by 7.85% in 2020.
Premiums expected to increase for employer and employees by 7.85% in 2021.
This means that beginning on January 1, 2020, premiums will be
$35.04 per month for Single coverage;
$239.02 per month for Family/Dependent coverage.
The estimated premiums for 2121 will be:
$37.79 per month for Single coverage;
$257.78 per month for Family/Dependent coverage.
Plan design changes
First dollar deductible increase for all plan benefit levels -
Level 1 from $150 single / $300 family to $250 single / $500 family;
Level 2 from $250 single / $500 family to $400 single / $800 family;
Level 3 from $550 single / $1,100 family to $750 single / $1,500 family; and
Level 4 from $1,250 single / $2,500 family to $1,500 single / $3,000 family.
Office visit copays increase $5 at all levels.
Coinsurance for lab increase (from 5%) to 10% for Levels 1 and 2.
Coinsurance for MRI/CT scans increase by 5% for all levels (e.g., Level 1 increases from 5% to 10%, Level 2 increases from 10% to 15%, etc.).
Prescription drugs increase by $4 for Tier 1 (from $14 to $18); and by $5 for Tier 2 (from $25 to $30) and Tier 3 drugs (from $50 to $55.)
Maximum drug out-of-pocket limits increase from $800 single/$1,600 family to $1,050 single / $2,100 family – for all benefit Levels.
Maximum (non-drug) out-of-pocket limits increases -
Levels 1 and 2 - from $1,200 single/$2,400 family to $1,700 single / $3,400 family;
Level 3 - from $1,600 single/$3,200 family to $2,400 single / $4,800 family; and
Level 4 - from $2,600 single/$5,200 family to $3,600 single / $7,200 family.
2. Dental Insurance Improvements
Improvements to Dental Plan benefits are tentatively scheduled to begin in January 2020, but implementation will be contingent upon legislature approval:
Lifetime maximum orthodontia benefit increases from $2,400 to $3,000.
Elimination of the two-year waiting period for repairs on a tooth that has already been repaired.
Preventative services will no longer be costed against the $2000 annual maximum payable per person.
(Currently, preventive services such as general cleanings are provided at no cost to employees two times per plan year, however, the cost of these preventive services are deducted from the $2,000 maximum amount that the dental plan will pay per individual each year.)
3. Short Term Disability premium increase
Short term disability premiums will increase by 10.4%, beginning on January 1, 2020.
4. Other Changes
Gender-neutral pronouns will replace gender pronouns throughout the insurance article.
Dependent Children will be added to the Diabetes Program, beginning January 1, 2020.
Accidental Death and Dismemberment Coverage will be increased up to $200,000.
Vision Benefit as Optional Coverage will be developed for planned implementation in 2021.
Wellness Incentive Program changes to be effective in 2021:
From $5 copayment reduction in exchange for taking health care assessment and consenting to coaching, to $70 credit in first dollar deductible for employees, in exchange for achieving a point target that is earned by employees selecting activities from an array of menu options that will include activities related to physical, social, cognitive and financial wellbeing.
Points will be able to be earned beginning January 2020, for an opportunity to realize the $70 credit in first dollar deductible beginning in the 2021 plan year.