- March 2009 > Insurance Insights
Even though Annual Enrollment 2009-2010 does not officially begin until July 1, 2009, the Office of Employee Benefits has already begun planning its communication strategies and information campaign. As in past years, OEB will be rolling out one to two benefits topics in each of the upcoming newsletters leading up to Annual Enrollment. Topics to be highlighted include plan design changes, beneficiary designation forms, the online Annual Enrollment presentation, and more.
OEB’s monthly newsletter, “A Matter of Health,” will be your primary source of information related to Annual Enrollment and benefits information, so please watch your email inbox closely on the first Wednesday of each month for your electronic newsletter to arrive.
The Office of Employee Benefits (OEB) is statutorily required to solicit bids from insurance carriers once every six years, or sooner at the discretion of OEB. For insurance plans effective September 1, 2009, the following insurance plans were submitted for competitive bid to the Texas Marketplace:
Within the next few months, final analysis of competitive bids will be completed and vendors will be selected. Following the selections, OEB will announce the chosen vendors in the “A Matter of Health” newsletter, as well as provide details on any plan enhancements.
Question: UT SELECT PPO Medical Insurance – Single Choice Option
Why does UT System offer only one choice for medical insurance?
Answer: Beginning September 1, 2007 (or September 1, 2006 at select institutions), the HMO medical plan was discontinued as a health plan option for employees, retired employees and dependents of the University of Texas System.
The following events led to the discontinuation of the fully insured HMO medical plan option. Prior to FY2007, HMO claims costs had been steadily increasing each year at a greater rate than UT SELECT claims costs. However, by revising the HMO benefits and limiting the increase in the rates through negotiations with the HMO vendor, OEB had been able to control the out-of-pocket premium costs for HMO enrollees. For FY2007 (beginning 9/1/06), the HMO vendor proposed rates that were significantly higher than the previous year, and even following extensive negotiations the result was an out-of-pocket premium cost for “Employee/Retiree Only” coverage for the first time in UT history. As a result of these significant premium increases, there was a large migration of UT enrollees from the HMO plans to the self-funded UT SELECT plan, which continued to offer ”Employee/Retiree Only” coverage at no out-of-pocket cost and lower out-of-pocket premiums for dependent coverage.
When negotiations began with the HMO vendor for FY2008 (beginning 9/1/07), the proposed increase in premium rates again were much higher than the UT SELECT plan which would have resulted in even greater out-of-pocket costs for the UT participants who remained enrolled in an HMO. Unfortunately, it became apparent to both UT and the HMO vendor that with the decreasing enrollment in the HMO insurance plan, the continued escalation in HMO claims experience, and the increasingly higher HMO out-of-pocket premium costs, maintaining the expense of two similar medical plan options had created the situation that the HMO medical plan was no longer an affordable option for OEB or UT participants. OEB consulted with the System Wide Insurance Advisory Committee who concurred, and the HMO medical plan option was dropped from the UT group insurance program effective 9/1/07.
One of the primary advantages to maintaining the UT SELECT PPO plan in its self-funded format is OEB’s ability to effectively and timely enhance benefits offered to its employees, retirees and dependents as needed. For example, in September 2008, OEB announced the enhancement of the preventive care benefits with no out-of-pocket costs to the participant to include colonoscopies in addition to immunizations, routine mammograms, and osteoporosis screenings (network conditions may apply).
The Office of Employee Benefits continues to monitor the insurance industry closely and will always seek to maximize the benefits and coverage options for UT employees, retirees and dependents.
If you have a Benefits question, submit your question by replying to the “newsletter email” or by sending an email to email@example.com.
UT System Employee Benefits Web site: www.utsystem.edu/benefits/
UT System Retirement Programs Web site: www.utretirement.utsystem.edu
Your Local Benefits Office: http://www.utsystem.edu/benefits/contacts#1