CapitolBeatOK Staff Report

Published: 27-May-2010

Legislation intended to streamline state and education employee health insurance in an effort to lower costs passed the Oklahoma House today (Thursday, May 27). Senate Bill 2052, by House Speaker Chris Benge, consolidates the State and Education Employees Group Insurance Board and the Employees Benefits Council into one entity called the Oklahoma Health and Wellness Board.

Last year, Benge created the State Employee Health Insurance Review Working group, comprised of a bipartisan group of House and Senate members and the state Insurance Commissioner. The reforms made in this bill are based on the recommendations of that group.

Further, the legislation requires a competitive and winner-take-all bidding process for a statewide HMO for state employees, in addition to current PPO insurance offerings. This change will work to lower the cost of an HMO plan through volume purchasing and decreased administrative costs, and will in turn bring the state employee benefit allowance more in line with actual health insurance costs.

The state employee benefit allowance is frozen, and will be indexed to the cost of the basic HealthChoice insurance plan.

“In this tough economic environment, we were very methodic with the changes we made to ensure state and education employees continue to receive their current salary and benefits, while still making significant changes to save the state money overall,” said Benge, a Tulsa Republican. “These reforms are not decisions we made overnight, but through careful bipartisan work and consideration over more than a year. I am proud of the work done by the working group and believe this legislation will ensure quality benefits for state and education employees continue while also saving taxpayer dollars over the long-term.”

The Oklahoma Education Association and the Oklahoma Public Employees Association have both endorsed the bill.

Currently, the benefit allowance is calculated based on an average of all the current insurance plan offerings, including two HealthChoice options and multiple HMO plans. Though the majority of state employees select one of the HealthChoice plans, the more-expensive HMO plans drive up the benefit allowance to a level often above the actual cost of the employee’s health insurance costs.

“In addition to allowing the taxpayers to realize millions of dollars of savings through the consolidation of duplicative administrative functions this legislation implements innovative and proven solutions for driving down health insurance costs,” said Rep. Jason Murphey, a Guthrie Republican who serves as chairman of the House Government Modernization Committee.

The legislation also directs the new board to create a wellness program for state employees and requires the board to spend surplus funds on wellness programs, health savings accounts (HSAs) or flexible spending accounts (FSAs). Utilization of HSAs, FSAs and successful wellness programs have been proven to contain the growth of rapidly increasing health care costs by encouraging personal responsibility and better health outcomes.

Finally, the bill requires an annual ongoing savings of 15 percent on administrative overhead and directs the board to eliminate any duplicative positions, services or assets.

“This is the result of 15 months of cooperative effort. Many people gave a lot of time and sacrifice to make this happen,” said Rep. Lewis Moore, a Republican from Arcadia. “State employees will get quality benefits, state agencies will see stability in benefits costs, taxpayers get savings and we save a ship headed for disaster.”

The bill passed the House with a vote of 87-9 and now moves to the governor for final review.