Legislative Report

Report 09-04
Feb. 20, 2009

COMMITTEE DISCUSSES HEALTH PLAN CHANGES

The Joint Committee on Employee Hospital and Medical Benefits on Thursday reviewed a draft bill that would make extensive changes to the State Health Plan with the aim of restoring the Plan’s fiscal stability in 2009-10. The highlights of these changes are presented below.

• Appropriate $250 million for the current year to maintain operation of the Plan through June 30.

• Eliminate the PPO Plus (90/10) option effective July 1, 2009. The PPO Choice (80/20) and the PPO Basic (70/30) options would continue.

• Increased prescription drug co-payments effective July 1 as follow:
  • For preferred branded prescriptions without generic equivalents  $35
  • For non-preferred branded prescriptions  $55
  • For non-acute self administered specialty medications, 25% of the Plan’s cost not to exceed $100 per prescription through an exclusive vendor.

• Standard monthly prescription decreased from 34-day supply to 30-day supply.
  • Increased annual deductibles as follow:
  • For the 80/20 option: $600 in-network, $1200 out of network
  • For the 70/30 option: $800 in-network, $1,600 out of network

• Increased co-payments for doctor visits as follow:
  • Primary care physicians: $25 for 80/20 option and $30 for the 70/30 option
  • Specialists: $60 for the 80/20 option and $70 for the 70/30 option
  • Urgent Care: $75 for the both PPOs
  • Inpatient services: $ 200 under the 80/20 option and $250 for the 70/30 plan

• Coverage for routine eye exams is eliminated effective January 1, 2010.

• Increases in monthly premiums for spouse and dependent coverage as follow:
  • Between 7.3 and 7.9% effective July 1, 2009
  • Between 7.3 and 7.9% effective July 1, 2010
    (note: percentages will by finalized in the near future)

• New Comprehensive Wellness Initiatives are established:
  • Tobacco Cessation: effective July 1, 2010, all plan members who do not have primary coverage by Medicare and who smoke will be assigned to the Basic 70/30 PPO unless they can attest that they have quit.
  • Weight Management: as of July 1, 2011, all plan members who are not do not have primary coverage by Medicare and who have a body mass index of 40 or greater will be assigned to the Basic (70/30) unless their obesity is due to a specific medical condition.

We expect that this bill will be formally introduced next week and will receive early consideration in order that some of the proposed Plan changes can be put in place by July 1. We will keep you informed of the development of this legislation in future Reports.

OTHER BILLS OF INTEREST

Two bills that pertain to retirees were introduced this week. These are summarized below.

Senate Bill 233: Equal Treatment of Gov’t. Retiree Benefits
(Primary Sponsor: Senator Hoyle)

This bill would North Carolina state and local government pension paymetns from state individual income taxation regardless of when the retiree attained vested rights. The bill has been referred to the Senate Finance Committee

Senate Bill 204: Retired Nurses Return To Work
(Primary Sponsor: Senator Purcell)

This bill would permit retired nurses who are receiving a pension under the Teachers’ and State Employees’ Retirement System to return to work as nursing instructors without loss of retirement benefits. The following qualifications would apply:

• The nurse must be retired under a full service retirement  (30 year of service at any age, 25 year of service and at least age 60, or 5 years of service and at least age 65.)
• The nurse must be retired for at least 6 months before returning to work.
• The nurse could not work more than 3 years under this provision.
• The community college or university seeking to rehire retired nurses as instructors would be required to certify that there is a shortage of qualified instructors, have posted the vacancy for at least 2 months, and solicit applications through local news and other media.

The bill if approved by the General Assembly would become effective on July 1,   2009 and sunset on June 30, 2013. SB 204 has been referred to the Senate Committee on Pensions, Retirement, and Aging.