Blue Ribbon Panel on Public Employee Health Benefits

 

Subcommittee on Benefits

 

Minutes of the<MeetNo1> 3rd Meeting

of the 2005 Interim

 

<MeetMDY1> July 12, 2005

 

The<MeetNo2> 3rd meeting of the Subcommittee on Benefits of the Blue Ribbon Panel on Public Employee Health Benefits was held on<Day> Tuesday,<MeetMDY2> July 12, 2005, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Representative Jimmie Lee, Chair, called the meeting to order, and the secretary called the roll.

 

Present were:

 

Members:<Members> Representative Jimmie Lee, Chair; Senator Tom Buford, Representative Harry Moberly Jr; Jerry Bailey, Victor Cooper, Shawn Crouch, Cheryl Hayes, Brent McKim, Richard Remmers, Jude Thompson, and Nancy Toombs.

 

LRC Staff:  Greg Freedman, Rhonda Franklin and Jamie Griffin.

 

The minutes of the July 8, 2005, meeting were approved.

 

The subcommittee met and discussed the suggested recommendations from the July 8, 2005, and adopted the following recommendations and forwarded them to the Blue Ribbon Panel on Public Employees Benefits.

 

 

 FINAL RECOMMENDATIONS

SUBCOMMITTEE ON BENEFITS

BLUE RIBBON PANEL ON PUBLIC EMPLOYEE HEALTH BENEFITS

July 12, 2005

 

1.         Continue on a calendar year basis for 2006 plan year, unless concerns about a plan year based on fiscal year are resolved.

 

2.         Retain similar plan structures after June 30, 2006 and retain co-pay structures as currently used.

 

3.         Permit adoption of HRA/HSA instead of the Essential plan. Premiums for all plans will continue to be based on the experience of the entire state group.

 

4.         Continue to provide fully paid individual coverage. Increase the state contribution for family coverage, including providing the same level of subsidies for retirees.

 

5.         Change the current employer contribution for those waiving coverage under the state plan to a health reimbursement account (HRA) and reduce incrementally over 5 years the state contribution for persons who opt out of the state plan. Investigate the feasibility of providing a larger employer contribution to those employees who do not have other coverage and who use their employer contribution to provide medical services for their dependents.

 

6.         Expand wellness programs to promote good health.

 

7.         Recommend that the membership and responsibilities of the group evaluating the drug formulary be spelled out in statute. Stipulate that they may consider factors other than medical necessity for therapeutically equivalent drugs.

 

8.         Subject the state plan to the utilization review statutes KRS 304.17A-600 to 304.17A-633 that provide for internal and independent external appeal processes. The decisions made as a result of the external review are binding and are to be based upon medical necessity.

 

9.         Develop consumer-friendly information tools so members can compare providers relative to their cost and quality.

 

10.       Require the Commonwealth, not the members to pay any out-of-pocket administrative fees, including any fees associated with HRAs or HSAs, and require the accounts be offered through the Commonwealth.

 

11.       Establish tiered co-pay structure for prescription drugs to encourage the use of therapeutically equivalent alternatives and develop a program to inform members about the cost of therapeutically equivalent alternatives.

 

12.       Keep the current reduction of prescription drug co-pays after 75 prescriptions during the plan year.

 

13.       Explore the possibility of participation in a multi-state consortium to purchase prescription drugs.

 

14.       Require the Secretary of the Personnel Cabinet to promulgate administrative regulations to establish the state employee health insurance plan.

 

15.       Require the Secretary of the Personnel Cabinet to provide detailed calculation outlining the development of the funding rates, including base claims, trend assumptions, administrative fees, and any other plan adjustments every six (6) months and as requested by the House or Senate Appropriations and Revenue Committee. The report shall be made available to the State Group Health Insurance Board, the Employee Advisory Committee, and legislative committees of the General Assembly, upon request.

 

16.       Require an ongoing evaluation of network requirements and provider reimbursements to assure access to quality care.

 

17.       Establish by statute a Self-Insurance Premium Pool for deposit of all employer and employee premiums, drug rebates, and other program income. The use of these funds would be restricted in use for claims payment and to hold required reserves for the self-insurance program. Any funds that remained in the Pool after all claims and administrative fees had been paid would not lapse and all interest, investment proceeds, and other income shall accrue to the Pool.

 

18.       Evaluate member cost sharing so members can continue to receive preventive and cost-effective care so their conditions do not worsen.

 

19.       Provide network for retirees and other covered individuals who are outside of Kentucky.

 

20.       Provide clear, consistent, and easily accessible coverage and provider network information.

 

21.       Require Medicare be deemed the primary coverage for dependents eligible for Medicare, except where prohibited by federal law. Require this information to be clearly communicated to members.

 

22.       Require the Personnel Cabinet and the Cabinet for Health and Family Services to study for future implementation a tiered co-payment system for hospitals based on outcomes and report to the General Assembly.

 

23.       The Commonwealth should consider implementing a sliding scale for contributions based on the state employee's salary. This would allow lower paid individuals to have a higher percentage of their premium subsidized, thereby encouraging enrollment into the plan.

 

The meeting adjourned.