The state’s Group Insurance Board (GIB) on Wednesday unanimously approved issuing a request for proposal (RFP) to evaluate the impact of self-insuring the group health plan for state employees starting in 2018. Following the aggressive timeline laid out by the Department of Employee Trust Funds (ETF), which administers insurance programs for state and local government employees, ETF staff will present the results to the GIB at its November 2016 board meeting.
Under a self-insurance model, the state would assume the risk for claims and would have to triple its cash reserves in order to pay claims. The state also would likely hire one or more insurance companies—potentially from outside Wisconsin—to manage the program. The current state health insurance model gives state employees a choice between multiple community-based private health plans with which the ETF contracts and that are aligned with local providers.
Moving to a self-insured model in Wisconsin would affect about 209,000 state workers and dependents, or nearly 15 percent of Wisconsin’s health insurance marketplace, and the reimbursement structure and provider networks that are associated with them. In the RFP, ETF will request information to evaluate a statewide versus regional self-insured model and the anticipated costs to the state under various proposals. In previous analyses by competing consulting firms, estimates ranged from saving the state as much as $42 million, according to the GIB’s health care benefits consultant Segal Consulting, or could end up costing the state $100 million or more, according to a previous analysis done by Deloitte Consulting.
For more information contact Chris Rasch in the Society’s Government and Legal Affairs Department.