Senate Discusses Option to Supplement Increase of Health and Dental Insurance For Government Employees
Solutions to absorb costs of increased health and dental insurance premiums was the focus of Tuesday's Committee of the Whole meeting, as lawmakers work to wrap up budget enabling legislation before the end of September
2021-09-15 12:41:29 - VI News Staff
Senators heard from the Division of Personnel and the Government Employees Service Commission (GESC) Health Insurance Board on possible strategies. According to GESC Chairwoman Beverly Joseph, “For all health insurance coverages combined (including dental, vision and life), plan outlays will be increasing from $171.5 million in FY21 to $177.1 million in FY22." She said the increase was approximately $5.6 million, or 3.3 percent. The increase is attributable to the rise in medical, dental, and life insurance premiums, she added, and said the GESC board recommended accepting the renewal rate.
“Cigna is allowing the government, at its discretion, to take a premium credit in the amount of $4.7 million from the Premium Stabilization Reserve Fund to offset the increase to the government and allow the government to absorb the increase on behalf of the employees," Ms. Joseph said. This would offset the $5.6 million increase.
Kurt Gehring, CEO of Gehring Group, the consulting firm used to assist the government in the negotiations, explained how funds accrue in the Premium Stabilization Reserve (PSR). “CIGNA gives us guaranteed administrative costs and guaranteed numbers to say these are the fixed costs that we need. At the end of the year there is an accounting done on the launch ratio and if there is a surplus, that surplus is put into the Premium Stabilization Reserve. That's why we thought it was so important this year in order to assist with the possible funding of the increase that you have the ability to take the PSR money after the renewal.”
The four matters that were discussed at Tuesday's hearing were:
The Third Renewal of the Group Medical Health Insurance Agreement between the Government of the Virgin Islands, through the GESC/Health Insurance Board of Trustees, and Cigna Health and Life Insurance Company for Group Health Insurance
The Third Renewal of Group Dental Health Insurance Agreement between the Government of the Virgin Islands, through the GESC/Health Insurance Board of Trustees, and Cigna Health and Life Insurance Company for Group Dental Insurance
The First Renewal of the Agreement between the Government of the Virgin Islands, through the GESC/Health Insurance Board of Trustees, and Standard Insurance Company for Group Life and Accidental Death and Dismemberment Insurance