Posted on: Friday, June 24, 2005
HMSA cuts premium for state, city workers
By Rick Daysog
Advertiser Staff Writer
State and county employees insured by Hawaii Medical Services Association will save up to $321.62 a year on their health insurance premiums under a $25.7 million rate decrease for local government workers announced yesterday.
"That's fantastic," said Mike Shiroma, an employee in the city's department of community services. Shiroma, whose wife also works for the city, said he would pay down his mortgage with his $300-plus savings.
State and county governments would save a total of about $17.7 million, based on figures provided by the trust fund.
The trust fund, which controls health insurance benefits for government workers, negotiated a premium holiday in which HMSA will not bill any of the 39,000 active state and county employees for one month during the 2005-2006 plan year. That will save employees and governments a total of $20.5 million.
The 10-member trust fund board also said that HMSA will cut rates 5.6 percent to 7 percent for 28,000 government retirees. Since governments pay the entire premium for retirees, all of the $5.2 million in savings will go to state and county governments.
The rate cut for retirees goes into effect on July 1.
"The premium holiday will provide much needed relief to both our public employees and public employers," said Katherine Thomason, chairwoman of the trust fund board. It "shows the commitment of our whole board of trustees to hold down the costs for public employees and retiree benefits," she said.
Under the premium holiday, an individual state or county employee will save $106.62 while the state or county government will save $159.92. Government workers with family plans will save $321.62, and the state or county government will save $482.42.
Active state and county employees pay for 40 percent of the premiums on their medical and prescription drug plans and the government covers 60 percent.
HMSA's monthly rate for individual retirees without Medicare assistance will drop to $322.82 from $347.70 while monthly rates for retiree family plans will fall to $902.64 from $972.24, according to the trust fund.
The board said that rates for other carriers, including Kaiser and Hawaii Dental Service, will remain unchanged.
The premium discount comes as HMSA faces competition from out-of-town insurer Summerlin Life & Health Insurance, which began operating in Hawai'i last year. Summerlin criticized the trust fund board last year when it awarded a two-year health insurance contract to HMSA without competitive bidding.
In May, HMSA received state approval to increase rates by up to 4.9 percent on average for small businesses, the insurer's smallest increase since 1998. The new rates affect 11,000 small businesses employing 141,000 people. HMSA has nearly 700,000 members.
Reach Rick Daysog at rdaysog@honoluluadvertiser.com or 525-8064.
The Hawaii Employer-Union Health Benefits Trust Fund said it negotiated the one-year discount for its 67,000 subscribers to HMSA.
