JANUARY 10, 2009: State insurance officials have halted talk of mid-year increases in copayments and deductibles, which had been eyed to cover recent budget cuts. In October, $32 million was cut from the Group Insurance Commission’s FY09 Budget.

The budget cut was the result of the sudden economic crisis that has overtaken the country. Last fall, with state officials estimating an FY09 Budget deficit exceeding $1.2 billion, Governor Deval Patrick was forced to use his emergency 9C powers to reduce state spending. At the time of the GIC’s reduction, the governor proposed an increase in active state employees’ insurance contributions to cover the $32 million reduction. To date, Legislative leaders have not brought the proposal forward for a vote.


In November, GIC officials warned that without higher monthly premiums from active employees, the agency maybe forced to raise the copayments and deductibles paid by all state and local employees AND retirees insured under the state-run insurance plans. Making matters worse was the potential magnitude of such increases, which could more than double beyond current levels.


With less than six months remaining in the current fiscal year, GIC Executive Director Delores Mitchell announced in January that mid-year increases in copayments and deductibles were not only unlikely, but also difficult to administer. She called on the 15-member Commission to leave the current copayment/deductible structure in place, while weighing changes for the coming fiscal year beginning July 1.


Mitchell is on record opposing higher copayments and deductibles, stating that she believes that the current price levels are at the higher end of both the public and private insurance offerings. But with the Legislature responsible for setting the percentage of monthly insurance premiums paid by employees and retirees, GIC officials could be forced to raise out of pocket expenses if contribution rates remain at current levels.


Active employees hired prior to July 1, 2005 contribute 15% toward their insurance, while those hired on or after that date pay 20%. The governor has proposed a three-tier contribution plan, based on employee salaries: Under $35,000 would contribute 15%; $35,000-$54,999 would contribute 20%; and those employees with salaries above $55,000 would contribute 25%.


The governor would maintain retiree contributions at the current 90/10 (pre-7/1/94 retirees/survivors) and 85/15% (7/1/94-present). Insurance premiums of local employees/retirees entering the GIC through coalition bargaining agreements will remain at the levels agreed to under the Public Employee Committee agreements.