Worker ills’ costs below outlook

State staffs’ rates less likely to leap

school and state employees had fewer medical and drug expenses than projected last year, reducing the likelihood that their health insurance rates will need to be increased significantly in 2019, an actuary told an advisory panel Friday.

The lower-than-expected expenses continue a trend that allowed rates for the health plans to stay the same this year as they were last year. The plans cover about 45,000 school employees and 26,000 state employees, along with employees’ family members and retirees.

John Colberg, an actuary with the consulting firm Cheiron of McLean, Va., told the State and Public School Life and Health Insurance Board’s benefits subcommittee on Friday that 2017 was “a really good year” for the health plans.

“We’re seeing very favorable trends for both medical and pharmacy,” Colberg said.

In June, when the board set this year’s rates, Colberg said the school employees’ plans likely had enough reserves built up to keep rates the same until 2020.

But, he said then, the state employees’ plans might spend enough of their reserves that they would need a large increase in 2019.

The need for such an increase now looks less likely, Colberg said Friday.

Last year, the state employees’ plans spent $267 million on medical, drug and other expenses — about $5.3 million less than projected and $12.2 million less than the plans spent in 2016.

Similarly, the $273 million spent by the school employees’ plans was about $18.7 million less than projected and $11.4 million less than the plans spent in 2016.

The money to pay claims comes from premiums collected from employees and annual allocations of state funding. School districts also contribute a minimum of $157.50 per month for each covered employee.

Colberg said he is researching why expenses were below projections. He also cautioned that the outlook could change by June or July, when the board will set rates for next year.

Subcommittee member Jeff Altemus said he hopes the lower expenses are the result of the board’s efforts to encourage healthy behavior by school and state employees.

Last year, employees and covered spouses were required to visit the doctor and complete an online health questionnaire to qualify for

The money to pay claims comes from premiums collected from employees and annual allocations of state funding.

a $75 per month discount on their premiums.

To qualify for a discount next year, employees will have to submit to a test for tobacco use. Those who test positive will be required to enroll in a smoking cessation program.

Employees will also have to submit measurements of their height, weight, blood sugar and blood pressure.

But Altemus also noted that even a handful of large medical bills can have a big impact.

When the school employees faced large premium increases a few years ago, “it was really only six or seven claims that drove things crazy,” Altemus said.

“It wasn’t a lot of claims, it was a few very, very expensive claims,” he said.