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Board approves one-year extensions for Colonial Life and Health Advantage; Health Advantage PMPM to rise to $22.51
Summary
The board approved a one-year renewal for Colonial Life that raises the state's cost for the $10,000 life benefit by about $70,000 (from roughly $920,000 to $990,000, paid from a FICA savings account) and approved an extension for the Health Advantage third-party administrator, moving PMPM from $20.55 to $22.51, a plan-wide increase of about $3.7 million.
The State Board of Finance approved one-year contract extensions for two Employee Benefits Division (EBD) contracts to preserve operations while the legislature considers a permanent governance structure.
Jake Bleed, EBD administrator, explained the first renewal for Colonial Life would allow continued provision of optional supplemental life products. Colonial Life requested roughly a 10% rate increase that would raise the state—s cost for the basic $10,000 life benefit by about $70,000 (from about $920,000 to about $990,000 annually). Bleed said those funds would be paid from a FICA savings account and would not affect employee health insurance rates.
Bleed then described the Health Advantage contract (the primary third-party administrator) and the negotiated change in administrative fee from $20.55 to $22.51 per member per month (PMPM). Bleed said the plan covers about 160,000 members and estimated the increase at roughly $3.7 million across the plan, split as about $1.4 million for state employees and $2.3 million for public school employees. He noted Blue Cross was the successful bidder in the 2018 RFP and that the contract—s structure allows annual extensions up to a seven-year maximum.
Board members asked how the additional cost would be absorbed. Bleed said the trust funds that receive premiums for state and public-school plans would be used and that Milliman actuarial work and legislative review had informed the recommendation. The board voted to approve the Colonial Life renewal and then approved the Health Advantage extension; the chair noted two votes opposed on the Health Advantage item.
