BATON ROUGE – Following the implementation of a Jindal administration governmental streamlining effort to centralize administration of plans at the Office of Group Benefits (OGB), Commissioner of Administration Kristy Nichols announced today that for the upcoming fiscal year plan members will receive a 1.77 percent reduction in the monthly premiums they pay for coverage under OGB’s self-insured health plans (HMO, PPO, and the Consumer-Driven Health Plan-HSA).
Because OGB health plan premiums are deducted from state employee paychecks a month in advance, this new rate reduction will be reflected in their July paychecks, and follows a previous premium rate reduction of 7 percent implemented in July 2012. Retirees’ benefit checks disbursed at the beginning of August also will reflect the change.
“By centralizing administration of plans, we continue to provide plan members with quality care and service in the most efficient, cost-effective way, and we’re happy to be able to share those savings with plan members,” Commissioner Nichols said.
As a result of this premium reduction, state agencies will save approximately $10.4 million during the upcoming fiscal year, while school boards will save $8.5 million, and state employees and retirees will save $4 million.
OGB offers a number of health plan options, including an HMO, PPO, and Consumer Driven Health Plan-HSA. While the HMO and the CDHP-HSA option have long been administered by a third-party administrator, the PPO was the only plan directly administered by the state, making Louisiana one of only two states in the country whose state government administered a health insurance plan.
Starting in January of this year, the PPO was included in a centralization of administration of these plans through Blue Cross and Blue Shield of Louisiana, generating annual cost savings of more than $20 million from economies of scale, technology cost reductions, and administrative cost reductions.
Also as a result of this effort, customer service centers have increased from 7 to 8, and PPO plan members have gained access to a nationwide healthcare provider network, a benefit HMO members already had. PPO members also now have access to other benefits previously available to HMO plan members, such as discounts on gym memberships, hearing aids, diet programs and other services.