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Is The CT Partnership Plan The Best Health Insurance Option For You?

Salaries and employee benefit costs continue to be one of the largest expenses and biggest driving factors of increased budgets for municipalities. Of these two components, the cost of employee benefits continues to be the most pressing concern and the toughest challenge for local management teams. Annual medical and prescription drug cost trends presently average 9-11%, which is more than 4 times the current rate of inflation.

Each year our local municipalities go through the annual renewal of their employee medical and prescription drug premiums. Insurance carriers typically provide the renewal premium quote for the upcoming fiscal year and then the municipality has the option to explore quotes from other insurance carriers in the state, who can provide benefits that are “substantially equivalent” to the plans they currently offer their employees. In the spirit of true competition, this gives the municipality much needed leverage to secure the most competitive price for the benefits they offer their employees.

In Connecticut, there are six licensed private carriers available that can offer medical and prescription drug coverage to public sector groups: Aetna, Anthem, Cigna, ConnectiCare, Harvard Pilgrim and United HealthCare/Oxford Health Plans. These carriers provide medical and prescription drug coverage to the majority of our local public sector groups.

However, even with this highly competitive environment, medical and prescription drug premiums continue to rise. In an attempt to provide local municipalities with another option, the state of Connecticut opened a new pool called the CT Partnership Plan in 2012.

The CT Partnership Plan was created to be a group separate from the state’s employee health insurance pool. The hope was that this group would grow large enough to become solvent, and not reliant upon the state’s employee pool. One of the goals of this plan was to offer Connecticut cities, towns and schools many of the same benefits offered to state employees. The medical and prescription drug benefits would be the same as the state’s employee plan, the benefits would be offered exclusively through United Healthcare/Oxford, and pricing would depend on the unique characteristics of each group applying for coverage.

In the first 3 years of the CT Partnership Plan’s existence it attracted only nine groups, and it was no coincidence that it was those groups with the highest premium renewals.  In February of 2016, the Connecticut Office of Policy and Management (OPM) got together with the State’s Employee Bargaining Agent Coalition (SEBAC) and agreed to put changes into action for the CT Partnership Plan that would make it easier and more cost effective for local municipalities to join this pool. The CT Partnership Plans 2.0 became effective July 1, 2016.

Here are some of the highlights featured in the CT Partnership Plan 2.0:

  • Groups that join become part of the state employee’s pool with over 120,000 members.
  • Groups joining have access to the exact same medical, prescription, dental and vision benefits offered to state employees.
  • United Healthcare/Oxford is the medical carrier. CVS/Caremark is the prescription carrier. Cigna is the dental and vision carrier.
  • Groups joining will pay the exact same rates as the state and renew each July 1st at the state’s rates.
  • Rates are different for active employees vs. retirees.
  • As long as groups apply as an “entire” city, town or board they are guaranteed acceptance.
  • There is a three year commitment to the CT Partnership Plan 2.0. Leaving early may involve financial penalties.
  • Joining the CT Partnership Plan 2.0 is a mandatory subject of bargaining.

As you may imagine there are many details that need to be understood and explored to determine whether this new option is right for your city, town or school. For a full explanation of the CT Partnership Plan 2.0, please refer to the website and seek advice from your local insurance advisor.

Since July 1, 2016, more than 30 new groups of varying sizes have joined the CT Partnership Plan 2.0 with the most common reasons being price and benefits. When considering this option, do your homework:

  • Compare rates for both active employees and retirees.
  • Complete an evaluation of the United Healthcare/Oxford freedom network for your employees.
  • Perform a benefits analysis to determine if the CT Partnership Plan 2.0 benefits are substantially equivalent to the plan you currently offer.
  • Complete a prescription formulary disruption analysis to determine what drugs may or may not be covered by the new plan.
  • Meet with your labor attorney to determine the necessary steps to consider joining.

The evaluation process takes a considerable amount of time. If you have any interest in exploring this option, my advice would be to get started early, inform all constituents involved, and be sure to weigh out the pros and cons.