State Employee Health Insurance System to Closely Resemble Private Sector Health Plans

A proposal that would make major changes in the state-employee health insurance system was approved by a House Committee. This proposal shifts the responsibilities to workers and makes the system closely resemble private-sector health plans. Under this proposal, the state would annually set aside a certain amount of insurance money for each employee and give options about how the money could be spent. This is different from the current system, wherein the state selects health benefits for employees. The proposal would mean shifting from a "defined benefit" plan to a "defined contribution" plan.

The changes would come into effect in 2014. The bill calls for the Department of Management Services to hire a benefits consultant, which would submit a plan by Jan. 1st 2013, for carrying out the changes.

The bill calls for future contributions from the state to be "actuarially equivalent" to the state's current share of benefit costs. The amounts contributed annually are subject to legislative budget decisions, as per the Bill.

The House Committee approved a proposal wherein the responsibilities under the state-employee health insurance system would be shifted to workers thus making it resemble private-sector health plans.

Source-Medindia