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HomeNewsLocal newsSenators Learn of Option to Offset Employee Health Insurance Increase

Senators Learn of Option to Offset Employee Health Insurance Increase

Beverly Joseph, chairwoman of the Government Employee Services Commission Health Insurance Board of Trustees, testifies virtually before the Legislature on Tuesday. (Legislature photo)

The Senate Committee of the Whole on Tuesday reviewed the government’s group insurance agreement renewals during a hearing at which the lawmakers learned of an option to offset a portion of the $5.6 million increase to government employee health insurance.

Beverly Joseph, chairwoman of the Government Employee Services Commission Health Insurance Board of Trustees, said the cost of all health insurance coverages will increase from $171.5 million to $177.1 million in the coming fiscal year. Most of the increase, more than $4.5 million, is attributed to coverage provided by Cigna Health.

“When you combine the employee, retiree, and government costs for all insurance coverages – including dental, vision, and life – for the upcoming fiscal year, we are essentially looking at a 3.3 percent increase,” Joseph said. “We implore the government to absorb a portion of the increase to minimize the cost increases for employees and retirees.”

In fiscal year 2021, the Senate absorbed the increases to employees and retirees. Joseph said this action allowed employees and retirees to pay the same insurance premiums as they did in both the two previous fiscal years – 2019 and 2020.

“Due to this, employees are not paying 35 percent of the cost-share. They are paying approximately 29 percent of the cost share and the government is paying 71 percent of the cost share,” Joseph said.

But should the government revert back to a 65/35 percent split, “this will drastically increase an employee’s or retiree’s payroll contribution and almost the entire increase will be on the backs of the employees and retirees.”

Gehring Group CEO Kurt Gehring said through negotiations with Cigna Health, a new option has become available to the Legislature to aid in offsetting the increase. This option has come in the form of the Premium Stabilization Fund, a government reserve fund that currently has a balance of $7 million.

“The most important thing about the Premium Stabilization Fund this year is, in past years when we have been able to negotiate renewals down from Cigna, they made a requirement that the Premium Stabilization Fund stays intact. But what we were able to negotiate is that if the Senate would like to take up to $4.7 million, that’s available to offset this increase once the renewal moves forward,” Gehring said. “Again, it depends on how the Senate would like to handle that or wants to move forward with that.”

Since there was an increase in premiums, Joseph said “it was vital” to the board to ensure there were no changes to employee copayments, deductibles, or out-of-pocket maximums.

“Cigna agreed not to change any of the plan benefits, nor did they decrease the level of services that are offered with the current plan,” Joseph said.

Should the Legislature approve the group medical health insurance and dental health insurance agreements with Cigna Health, it will be the third renewal between the company and the Government of the Virgin Islands.

Sens. Samuel Carrion, Dwayne DeGraff, Novelle Francis Jr., Alma Francis-Heyliger, Donna Frett-Gregory, Kenneth Gittens, Franklin Johnson, Carla Joseph, Steven Payne Sr., Milton Potter, Kurt Vialet, Javan James Sr., Genevieve Whitaker, and Janelle Sarauw were present for the hearing. Sen. Marvin Blyden was absent.

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