PEB board pauses rate-setting for 2027, keeps January plan design after data reconciliation questions
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Summary
The Public Employees Benefits Program Board declined to set premiums Feb. 24, citing a reconciliation of employer-share transfers from AEGIS and RGGI and gaps in previously used data; the board kept the plan design adopted in January and asked staff to return in March with rates based on 2024–25 actuals plus inflation.
The Public Employees Benefits Program Board deferred setting health-insurance rates for plan year 2027 on Feb. 24, saying staff and consultants need more time to reconcile state funding inputs before finalizing premiums. Chair Jim Wells told the board that staff discovered employer-share amounts were not correctly tested for plan years 2025 and 2026 and that transfers from the AEGIS and RGGI accounts are being reconciled; staff expects to report back within a month.
The board’s consultant, Richard Ward of Segal Consulting, said Segal’s earlier projections used the higher AEGIS and RGGI amounts provided during the governor’s recommended budget process rather than the later, legislatively approved figures. Ward said the restatement reduces expected revenue by roughly $30 million a year, or about $56 million over the biennium, changing the underlying finances that shaped the draft premium proposals.
Board members debated whether actuaries should have flagged the discrepancy, and whether internal communication failures allowed mismatched numbers to be used in public presentations. Ward said actuaries rely on the data provided by the program and that some final documents were not shared with Segal until recently.
During deliberations, Member Wayne (Dwayne) Harper moved to hold the CDHP out-of-pocket maximum at the plan‑year‑2026 level for 2027; Member Jennifer McClendon seconded. The motion was debated and put to a voice vote. The chair announced the motion did not pass and the board instead decided to "continue to have the plan design as approved in January." The record does not include a numerical roll-call tally for that voice vote.
Instead of adopting rates today, the board directed staff and Segal to return at the March meeting with rate scenarios built from completed 2024 and 2025 actuals plus projected inflation for 2026–27. Staff was asked to provide (1) migration modeling that shows how participants might move between plans under alternative premiums and (2) reconciliations documenting the amounts to be transferred from the AEGIS and RGGI budget accounts into the main operating account.
Executive officer Teresa Carsten said an internal review of prior budget builds and systems coding has identified potential assets that were not previously accounted for and that the review’s findings will be available in time for the March meeting. The board also heard from members and staff about operational constraints: vendors require roughly three to four weeks to test new rates and shortening open enrollment would itself require logistical changes and likely a future agenda item.
The board will reconvene in March to consider the updated scenarios and set final rates then.