The Empire Plan is a unique health insurance plan designed especially for public employees in New York State. Empire Plan benefits include inpatient and outpatient hospital coverage, medical/surgical coverage, Centers of Excellence for transplants, infertility and cancer, home care services, equipment and supplies, mental health and substance abuse coverage and prescription drug coverage.
ELIOT SPITZER
GOVERNOR
DEPARTMENT OF CIVIL SERVICE
ALBANY, NEW YORK 12239
www.cs.ny.gov
NANCY G. GROENWEGEN
COMMISSIONER
PA07-28
TO: Participating Agency Health Benefit Administrators
FROM: Robert W. DuBois, Director of the Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: January 4, 2008
Enclosed are the Third Quarter Empire Plan Experience Report for 2007 and the cover letter to the Chief Executive Officers. This report presents the projected 2007 Empire Plan experience and approved 2008 premium rates.
January 4, 2008
Dear Chief Executive Officer:
Attached is the Empire Plan Third Quarter Experience Report for 2007. This report presents the projected 2007 Empire Plan experience based on claims paid through September 30, 2007, as well as the approved 2008 premium rates.
For the 2007 Plan Year, the Empire Plan carriers project a net dividend of $372.3 million, 7.1% of premium. This report presents the basis for these projections and future reports will include revisions based on additional claims experience. The approved 2008 premium rates are presented in Exhibit II and reflect a net premium increase of 5.4%, in aggregate.
I hope this report is informative. If you have any questions, comments or suggestions, please don’t hesitate to contact me.
Sincerely,
Robert W. DuBois, CEBS
Director
Employee Benefits Division
EMPIRE PLAN EXPERIENCE REPORT
Third Quarter - 2007
Produced for
PARTICIPATING AGENCIES IN THE
NEW YORK STATE
HEALTH INSURANCE PROGRAM
by
the Employee Benefits Division
New York State Department of Civil Service
Nancy G. Groenwegen
President, New York State Civil Service Commission
Exhibits
- Projected 2007 Empire Plan Experience
- 2008 Approved PA Premium Rates
- Empire Plan PA 5-Tier Group Rates (1999-2008)
- Empire Plan PA 2-Tier Group Rates (1999-2008)
NEW YORK STATE HEALTH INSURANCE PROGRAM
PARTICIPATING AGENCY GROUP
EMPIRE PLAN EXPERIENCE REPORT
3rd QUARTER REPORT
PROJECTED 2007 EMPIRE PLAN EXPERIENCE
The Empire Plan carriers project a composite dividend of $372.3 million (7.1% of premium), or $239.1 million more than the margin loaded in the 2007 rates. The 2007 annual experience projected by the insurance carriers is reported in Exhibit I.
This projection is based on only nine months of 2007 paid claim data. The following chart presents the percentage of the projected incurred claims actually paid as well as the current 2007 trend as compared to the trend assumed during the 2007 premium rate development:
| % of Actual Paid Claims to Projected Incurred Claims | Projected 2007 Trend | |||
|
2006
|
2007
|
@ Final Renewal
|
@ 3rd Quarter
| |
|---|---|---|---|---|
| Blue Cross Hospital | 99.0% | 61.5% | 12.9% | 10.8% |
| UnitedHealthcare | 99.7% | 63.0% | 12.6% | 8.0% |
| GHI | 99.6% | 59.7% | 4.0% | 10.1% |
| Blue Cross Rx | 99.9% | 71.0% | 12.0% | 8.2% |
The 2007 projected dividend/(loss) for each carrier as compared to the margin level used in the 2007 premium development is as follows:
|
Margin
|
2007 Projected Dividend/(Loss)
|
Increase/(Decrease)
| |
|---|---|---|---|
| Blue Cross Hospital | $34,710,000 | $100,321,000 | $65,611,000 |
| UnitedHealthcare | $49,267,000 | $136,854,000 | $87,628,000 |
| GHI | $2,573,000 | (5,055,000) | ($7,628,000) |
| Blue Cross Rx | $46,622,000 | $140,183,000 | $93,561,000 |
| Total | $133,172,000 | $372,303,000 | $239,131,000 |
The increase in the dividend projection is primarily attributable to a $112 million decrease in the 2006 claims base projected during the development of the 2007 rates and $93 million attributable to a decrease in the 2007 projected trend for the prescription drug, hospital and medical plans coupled with an increase in the projected pharman revenue for the prescription drug plan. For GHI, the decrease in their projected 2007 dividend is primarily attributable to the projected increase in claim costs associated with compliance to Timothy’s Law, which became effective on January 1, 2007. This increase in projected claim costs is reflected in the increase in the projected 2007 trend.
2008 PREMIUM RATES
Exhibit II presents the projected 2008 Empire Plan gross and net premium rates. In aggregate, the Empire Plan gross premium is projected to increase approximately 6.2% while the net premium is projected to increase approximately 5.4%. The 2008 rates are based on a 2007 premium level generating a 7.1% dividend, an aggregate trend of 10.8% and a margin level equal to 2.7% of premium. In addition, $332.0 million in all-payor dividend was used to mitigate the gross premium increase.
Also contributing to this favorable rate increase is the use of retrospective premium arrangements. A retro premium arrangement provides for the payment of a reduced premium level throughout the year with a provision for an additional premium payment at settlement in the event that claims and expenses exceed the premium paid throughout the year. This strategy is used when we believe the carriers’ premium demand is overly conservative. Any necessary retrospective premium payment would be funded through available dividends. While the retro premium liability is approximately $53.2 million, the State and its benefit consultant, Buck Consultants, do not expect that any retro payment will be necessary.
Exhibit III presents the individual and family rate history for the Core plus Medical and Psychiatric Enhancements option based on the five-tier Empire Plan billing rate history in effect since January 1, 1999.; Exhibit IV presents, for illustrative purposes only, the two-tier rate history from 1999 to 2008.
2007 PROJECTED EMPIRE PLAN EXPERIENCE
In (000's)
|
BLUE CROSS HOSPITAL
|
UnitedHealthcare MEDICAL Core
|
UnitedHealthcare MEDICAL NY Enhancement
|
UnitedHealthcare MEDICAL PA Enhancement
|
UnitedHealthcare MEDICAL Combined
|
GHI MHSA Core
|
GHI MHSA NY Enhancement
|
GHI MHSA PA Enhancement
|
GHI MHSA Combined
|
BLUE CROSS DRUG
|
TOTAL
| |
|---|---|---|---|---|---|---|---|---|---|---|---|
| (A) Premium (1) |
1,605,960
|
1,576,424
|
242,738
|
220,593
|
2,039,755
|
74,166
|
10,639
|
9,134
|
93,939
|
1,477,566
|
5,217,220
|
| (B) Incurred Claims (2) |
1,400,260
|
1,350,239
|
197,604
|
193,910
|
1,741,753
|
80,494
|
1,349
|
545
|
82,388
|
1,268,414
|
4,492,815
|
| (C) Administrative Expense (3) |
105,379
|
132,236
|
14,676
|
14,236
|
161,148
|
16,224
|
273
|
109
|
16,606
|
68,969
|
352,102
|
| (D) Gain/(Loss) (A-B-C) |
100,321
|
93,949
|
30,458
|
12,447
|
136,854
|
(22,552)
|
9,017
|
8,480
|
(5,055)
|
140,183
|
372,303
|
(1) Earned Premium - Premium which pays for coverage for the period reported (accrual basis).
(2) Incurred Claims - Represents the cost of covered services provided during the period reported by the insurance company (accrual basis).
(3) Administrative Expenses - All charges by the insurance carrier other than for the payment of claims. Includes carrier’s cost to administer the program, interest charges, and other retention.
Source: Carrier 2007 3rd Quarter Report
Includes SEHP
Empire Plan
Participating Agency Premium Rates
Comparison of 2007 and 2008 Rates
CORE ONLY - Planprime
|
Gross Rates (1) |
Gross Rates (1) |
Gross Rates (1) |
Net Rates (2) |
Net Rates (2) |
Net Rates (2) | |
|---|---|---|---|---|---|---|
|
Planprime - Individual |
527.60
|
557.73
|
5.7%
|
491.95
|
519.35
|
5.6%
|
|
Planprime - Family |
1,116.82
|
1,186.84
|
6.3%
|
1,041.38
|
1,105.67
|
6.2%
|
CORE ONLY - Medprime
|
Gross Rates (1) |
Gross Rates (1) |
Gross Rates (1) |
Net Rates (2) |
Net Rates (2) |
Net Rates (2) | |
|---|---|---|---|---|---|---|
|
Medprime - Individual |
346.35
|
372.79
|
7.6%
|
316.56
|
336.91
|
6.4%
|
|
Medprime - Family 1 medicare |
935.57
|
1,001.91
|
7.1%
|
866.00
|
923.26
|
6.6%
|
|
Medprime - Family 2 medicares |
754.33
|
816.99
|
8.3%
|
690.63
|
740.84
|
7.3%
|
CORE PLUS MEDICAL AND PSYCHIATRIC ENHANCEMENTS - Planprime
|
Gross Rates (1) |
Gross Rates (1) |
Gross Rates (1) |
Net Rates (2) |
Net Rates (2) |
Net Rates (2) | |
|---|---|---|---|---|---|---|
|
Planprime - Individual |
600.69
|
633.79
|
5.5%
|
564.84
|
592.38
|
4.9%
|
|
Planprime - Family |
1,273.96
|
1,346.27
|
5.7%
|
1,198.07
|
1,258.78
|
5.1%
|
CORE PLUS MEDICAL AND PSYCHIATRIC ENHANCEMENTS - Medprime
|
Gross Rates (1) |
Gross Rates (1) |
Gross Rates (1) |
Net Rates (2) |
Net Rates (2) |
Net Rates (2) | |
|---|---|---|---|---|---|---|
|
Medprime - Individual |
363.02
|
397.23
|
9.4%
|
333.18
|
360.41
|
8.2%
|
|
Medprime - Family 1 medicare |
1,036.30
|
1,109.74
|
7.1%
|
966.44
|
1,026.86
|
6.3%
|
|
Medprime - Family 2 medicares |
798.65
|
873.21
|
9.3%
|
734.81
|
794.94
|
8.2%
|
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
EMPIRE PLAN
PA 5 TIER GROUP RATES
1999-2008 Monthly Rates
Core Plus Medical & Psychiatric Enhancements
Individual Planprime
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
279.56
|
4.4%
|
261.18
|
6.1%
|
| 2000 |
294.94
|
5.5%
|
286.53
|
9.7%
|
| 2001 |
325.23
|
10.3%
|
314.26
|
9.7%
|
| 2002 |
353.81
|
8.8%
|
344.66
|
9.7%
|
| 2003 |
400.00
|
13.1%
|
384.89
|
11.7%
|
| 2004 |
448.00
|
12.0%
|
438.15
|
13.8%
|
| 2005 |
490.41
|
9.5%
|
478.49
|
9.2%
|
| 2006 |
547.86
|
11.7%
|
529.76
|
10.7%
|
| 2007 |
600.69
|
9.6%
|
564.84
|
6.6%
|
| 2008 |
633.79
|
5.5%
|
592.38
|
4.9%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception of 5 Tier Structure (1996) |
8.7%
|
9.0%
|
| Most Recent 10 Years |
9.0%
|
9.2%
|
| Most Recent 5 Years |
9.7%
|
9.1%
|
(1) Represents premium paid to the carriers.
(2) Represents cost to a participating agency.
Family Planprime
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
573.33
|
3.9%
|
531.89
|
5.6%
|
| 2000 |
607.33
|
5.9%
|
590.16
|
11.0%
|
| 2001 |
673.67
|
10.9%
|
651.09
|
10.3%
|
| 2002 |
742.98
|
10.3%
|
723.97
|
11.2%
|
| 2003 |
842.38
|
13.4%
|
811.41
|
12.1%
|
| 2004 |
945.29
|
12.2%
|
924.74
|
14.0%
|
| 2005 |
1,038.64
|
9.9%
|
1,013.68
|
9.6%
|
| 2006 |
1,164.16
|
12.1%
|
1,126.19
|
11.1%
|
| 2007 |
1,273.96
|
9.4%
|
1,198.07
|
6.4%
|
| 2008 |
1,346.27
|
5.7%
|
1,258.78
|
5.1%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception of 5 Tier Structure (1996) |
8.2%
|
8.5%
|
| Most Recent 10 Years |
9.4%
|
9.6%
|
| Most Recent 5 Years |
9.9%
|
9.2%
|
(1) Represents premium paid to the carriers.
(2) Represents cost to a participating agency.
Individual Medprime
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
186.46
|
11.0%
|
175.61
|
16.0%
|
| 2000 |
217.94
|
16.9%
|
214.25
|
22.0%
|
| 2001 |
245.64
|
12.7%
|
239.94
|
12.0%
|
| 2002 |
259.96
|
5.8%
|
253.82
|
5.8%
|
| 2003 |
307.02
|
18.1%
|
297.50
|
17.2%
|
| 2004 |
341.87
|
11.4%
|
334.22
|
12.3%
|
| 2005 |
340.50
|
-0.4%
|
331.93
|
-0.7%
|
| 2006 |
359.35
|
5.5%
|
338.88
|
2.1%
|
| 2007 |
363.02
|
1.0%
|
333.18
|
-1.7%
|
| 2008 |
397.23
|
9.4%
|
360.41
|
8.2%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception of 5 Tier Structure (1996) |
5.5%
|
5.9%
|
| Most Recent 10 Years |
9.2%
|
9.3%
|
| Most Recent 5 Years |
5.4%
|
4.0%
|
(1) Represents premium paid to the carriers.
(2) Represents cost to a participating agency.
Family - 1 Medprime
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
480.95
|
6.2%
|
447.05
|
9.1%
|
| 2000 |
530.97
|
10.4%
|
518.52
|
16.0%
|
| 2001 |
595.25
|
12.1%
|
577.95
|
11.5%
|
| 2002 |
649.14
|
9.1%
|
633.13
|
9.5%
|
| 2003 |
749.40
|
15.4%
|
724.05
|
14.4%
|
| 2004 |
839.18
|
12.0%
|
820.82
|
13.4%
|
| 2005 |
888.71
|
5.9%
|
867.09
|
5.6%
|
| 2006 |
975.66
|
9.8%
|
935.32
|
7.9%
|
| 2007 |
1,036.30
|
6.2%
|
966.44
|
3.3%
|
| 2008 |
1,109.74
|
7.1%
|
1,026.86
|
6.3%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception of 5 Tier Structure (1996) |
6.7%
|
7.0%
|
| Most Recent 10 Years |
9.4%
|
9.7%
|
| Most Recent 5 Years |
8.2%
|
7.3%
|
(1) Represents premium paid to the carriers.
(2) Represents cost to a participating agency.
Family - 2 or More Medprime
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
387.05
|
10.0%
|
360.66
|
14.8%
|
| 2000 |
453.22
|
17.1%
|
445.51
|
23.5%
|
| 2001 |
514.40
|
13.5%
|
502.37
|
12.8%
|
| 2002 |
555.29
|
7.9%
|
542.29
|
7.9%
|
| 2003 |
656.42
|
18.2%
|
636.67
|
17.4%
|
| 2004 |
733.05
|
11.7%
|
716.88
|
12.6%
|
| 2005 |
738.79
|
0.8%
|
720.53
|
0.5%
|
| 2006 |
787.16
|
6.5%
|
744.45
|
3.3%
|
| 2007 |
798.65
|
1.5%
|
734.81
|
-1.3%
|
| 2008 |
873.21
|
9.3%
|
794.94
|
8.2%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception of 5 Tier Structure (1996) |
5.3%
|
5.7%
|
| Most Recent 10 Years |
9.7%
|
10.0%
|
| Most Recent 5 Years |
6.0%
|
4.7%
|
(1) Represents premiums paid to the carriers.
(2) Represents cost to a participating agency.
EMPIRE PLAN
PA 2 TIER GROUP RATES
1999-2008 Monthly Rates
(For Illustrative Purposes Only)
Core Plus Medical & Psychiatric Enhancement
Individual
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
239.24
|
5.2%
|
222.00
|
8.6%
|
| 2000 |
260.67
|
9.0%
|
253.98
|
14.4%
|
| 2001 |
289.41
|
11.0%
|
280.25
|
10.3%
|
| 2002 |
313.58
|
8.4%
|
305.67
|
9.1%
|
| 2003 |
357.44
|
14.0%
|
345.36
|
13.0%
|
| 2004 |
402.70
|
12.7%
|
394.31
|
14.2%
|
| 2005 |
433.70
|
7.7%
|
423.31
|
7.4%
|
| 2006 |
477.33
|
10.1%
|
459.25
|
8.5%
|
| 2007 |
511.23
|
7.1%
|
477.96
|
4.1%
|
| 2008 |
536.84
|
5.0%
|
498.88
|
4.4%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception (1986) |
8.1%
|
7.9%
|
| Most Recent 10 Years |
9.0%
|
9.4%
|
| Most Recent 5 Years |
8.5%
|
7.7%
|
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Family
| Year |
Gross Rate (1)
|
% Change
|
Net Rate (2)
|
% Change
|
|---|---|---|---|---|
| 1999 |
539.14
|
4.8%
|
499.75
|
7.8%
|
| 2000 |
578.26
|
7.3%
|
563.03
|
12.7%
|
| 2001 |
640.64
|
10.8%
|
619.28
|
10.0%
|
| 2002 |
703.61
|
9.8%
|
685.83
|
10.7%
|
| 2003 |
805.64
|
14.5%
|
778.82
|
13.6%
|
| 2004 |
899.98
|
11.7%
|
881.48
|
13.2%
|
| 2005 |
968.40
|
7.6%
|
945.11
|
7.2%
|
| 2006 |
1,073.28
|
10.8%
|
1,034.40
|
9.4%
|
| 2007 |
1,158.16
|
7.9%
|
1,084.90
|
4.9%
|
| 2008 |
1,233.38
|
6.5%
|
1,150.41
|
6.0%
|
Average Percent Increase
|
Gross Rate % Change
|
Net Rate % Change
| |
|---|---|---|
| From Inception (1986) |
8.5%
|
8.4%
|
| Most Recent 10 Years |
9.2%
|
9.6%
|
| Most Recent 5 Years |
8.9%
|
8.2%
|
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Third Quarter – 2007
Income-Related Medicare Part B Premium Adjustment for 2007
As previously reported, a new Federal law has changed the amount charged for Medicare Part B coverage for some higher income beneficiaries. Effective January 1, 2007, some individuals are being charged an income-related adjustment in addition to the standard premium which is $93.50 for 2007. Please refer to PA Memo 07-31, issued on December 21, 2007, for a discussion of this issue and the procedures the State will follow to reimburse State and PE retirees for the additional of their Part B premium. As indicated in the PA Memo, PAs may, but are not required to, follow the same procedure.
Empire Plan Prescription Drug Program Contract Award
The Office of the State Comptroller has approved the five-year contract between the Department and UnitedHealthcare which is effective January 1, 2008. The Empire Plan Prescription Drug Program will be administered by UnitedHealthcare in partnership with Medco. Information has been distributed to enrollees and agencies regarding the change and our efforts to ensure a smooth transition.
Medicare Part D Employer Subsidy Update
To date, NYSHIP applied for and received estimated Employer Subsidies covering January through November 2006 and January through September of 2007; the most recent subsidy was applied to the bill issued in December for January 2008 coverage. As indicated in the previous report, the Employer Subsidy for December 2006 has not yet been released pending the completion of the 2006 reconciliation by CMS; by including the December subsidy as a part of the final reconciliation the need to recover any subsidy overpayments will be minimized. We will continue to distribute subsidy payments as soon as possible following receipt from CMS.
Prompt Payment of NYSHIP Premium
The Employee Benefits Division has been aggressively monitoring agencies that fail to submit premium payments in a timely manner. This procedure includes suspension of claims for enrollees of any agency that falls three months behind in their premiums. To avoid disruption of your employees’ benefits, please be sure to submit your premium payments by the due date, as we must submit premium to the Empire Plan insurers on time. You may wish to consider submitting your payments electronically to promote timely payments. Attached are guidelines to initiate electronic transfer of funds.
NYSHIP Representation at Municipal Events
During the next quarter, NYSHIP’s Empire Plan will be represented at the following event:
- The 2008 Training School and Annual Meeting sponsored by the NYS Association of Towns on February 17-19, 2008, in New York City.
If you are planning to attend an event, please stop by the NYSHIP exhibit
GASB 45 Census Reports
As indicated in previous reports, NYSHIP will provide agency census reports upon request for use in complying with the provisions of GASB 45. Since the data included in these reports will be current at the time they are provided, it is important that your agency NYBEAS file is up-to-date, including correctly identifying and coding retirees before requesting census reports. To request a copy of your agency’s census information, please send an e-mail to: Melinda.Beyer@cs.state.ny.us and include your name, agency name & code number, mailing address, phone number and e-mail address. For additional information about GASB 45, please refer to PA Memos 06-11 and 06-18.
Transmission of Reports Electronically
Many agencies receive the Empire Plan Experience Report via E-mail. If you would like to be added to our distribution list, you may contact us at the address or E-mail below.
Transmission of Reports Electronically
Many agencies receive the Empire Plan Experience Report via E-mail. If you would like to be added to our distribution list, you may contact us at the address or E-mail below.
CEO & HBA Name and Address Changes
Please be sure to notify EBD of any changes in the names and/or addresses (including E-mail address) of your agency’s CEO or HBA, so that we may keep our mailing lists up-to-date. This updated information should be sent to:
Debbie D’Orazio
NYS Department of Civil Service-
Employee Benefits Division-
Alfred E. Smith State Office Building
Albany, NY 12239
or E-mail: Deborah.Dorazio@cs.state.ny.us
GUIDELINES TO INITIATE ELECTRONIC TRANSFER OF FUNDS
The Employee Benefits Division offers NYSHIP Participating Agencies and Participating Employers the option of submitting monthly premium payments electronically. The information necessary to effect electronic transfer of funds is as follows:
Bank Name: J.P. Morgan Chase Bank
12 Corporate Woods Boulevard, 4th Floor
Albany, NY 12211
ABA Number: 021000021
Account Name: NYS Employee Insurance Pending Account
Account Number: 573882053
Please notify the Employee Benefits Division one day in advance of your intent to wire transfer the funds by contacting:
Fran Cohen at (518) 457-5350 or by e-mail at Fran.Cohen@cs.state.ny.us
Please provide the $ amount to be transferred and your Health Insurance Agency Code, to allow us to track your payment in the event a problem occurs.
Any questions may be directed to Fran Cohen.
Report - PDF Version
Exhibits I - PDF Version
Exhibits II - PDF Version
Exhibits III - PDF Version
Exhibits IV - PDF Version
NYSHIP News - PDF Version