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TALLAHASSEE (CBSMiami/NSF) – In a move that could affect tens of thousands of state workers, Gov. Ron DeSantis has proposed putting on hold an overhaul of the program that provides health-insurance coverage to employees.
DeSantis, in his $91.3 billion budget proposal for the upcoming year, called for a one-year delay of the changes, which were approved by the Republican-controlled Legislature in 2017.
The delay is only a proposal and would require legislative approval to take effect. But the GOP governor has support from House Speaker Jose Oliva, a Miami Lakes Republican who criticized the Department of Management Services, which administers the state group health-insurance program, for not being properly prepared to move ahead with the changes.
“Gov. DeSantis is right to seek a delay,” Oliva said in a prepared statement to The News Service of Florida. “Our focus is on modernizing the state group plan to provide employees and their families with affordable and high quality choices. We do not intend to push forward with any reforms that are not up to the highest of standards.”
But the decision to pause the changes came after a report that showed potential downsides of moving ahead now with a revamp of benefit plans and a proposal that would allow employees who choose plans with high deductibles to increase their take-home pay.
An analysis conducted by the actuarial and consulting firm Foster & Foster cautioned that the introduction of a pared-back high deductible health plan along with pre-tax health-savings account contributions could entice 29,500 state employees who turned down coverage this year to join the program.
If that were to occur, savings associated with redesigning health-insurance policies could be offset by an increase in enrollment, the analysis said. Most of the cost of coverage in the program comes from the share paid by the state, not from employee premiums.
Additionally, the analysis showed that current monthly premiums for state employees could increase and benefits decrease as the state redesigns its benefit plans.
Health insurance benefits are available to active employees and retirees and their dependents. Preliminary 2019 figures show that 136,699 full-time state employees chose to enroll in the program, and 6,144 eligible part time employees also took advantage of one of the offerings. Most full-time employees, or 59 percent, are enrolled in a health maintenance organization, or HMO. Enrollment among part time employees is nearly equal between HMOs and a preferred provider organization, or PPO, alternative.
Employees also have a choice of enrolling in standard plans or high-deductible plans. All of the plans have actuarial values of between 70 percent and 90 percent.
Plans with a 90 percent actuarial value are considered platinum. Gold plans have an 80 percent actuarial value and silver plans have a 70 percent actuarial value.
The Foster & Foster analysis showed that the average actuarial value is 83.8 percent, which is slightly below the national average for state group insurance plans but ahead of other Southern states.
State Rep. Loranne Ausley, a Democrat who represents the Tallahassee area and was opposed to the proposed overhaul, said the recommendation to at least delay implementation “sounds like good news.”
“I opposed these significant changes to the state group health insurance because there was no way to guarantee that state employees’ benefits and premiums wouldn’t be impacted,” she said.
Ausley said she has been closely watching the issue as she represents about 35,500 state employees in Leon County. She said the state hasn’t shared the Foster & Foster analysis with her.
“I have been concerned about the lack of information about the changes, so any attempt to slow down this drastic change would be good news for our hard-working state employees,” she said.
The cost of providing health care to state workers remains a sizable expense for state government. Economists estimate that Florida will spend nearly $2.9 billion this year on the employee program. And while economists agreed that the financial outlook of the trust fund that pays for the benefits has improved, it is projected to have a nearly $60 million deficit by state fiscal year 2020-2021.
To help hold down costs, lawmakers in 2017 directed the Department of Management Services to work with a consultant on redesigning the benefit plans, with the goal of increasing the financial burden placed on employees.
Lawmakers included the overhaul in a bill that also included a pay raise for state workers. The Legislature directed the state to begin offering state employees access to so-called bronze plans, which would have an actuarial value of 60 percent.
(©2019 CBS Local Media. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The News Service of Florida’s Christine Sexton contributed to this report.)