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.
ANDREW M. CUOMO
GOVERNOR
DEPARTMENT OF CIVIL SERVICE
ALBANY, NEW YORK 12239
www.cs.ny.gov
PA12-04
PAEX12-04
TO: Participating Agency Chief Executive Officers & Health Benefit Administrators
FROM: Robert W. DuBois, Director of the Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: February 14, 2012
Enclosed are the Fourth Quarter Empire Plan Experience Report for 2011 and the cover letter to the Chief Executive Officers. This report presents the projected 2011 Empire Plan experience and the projected 2013 premium rates.
February 14, 2012
Dear Chief Executive Officer:
Attached is the Empire Plan Fourth Quarter Experience Report for 2011. This report presents the projected 2011 Empire Plan experience, based on claims paid through December 31, 2011, and the projected 2013 premium rates.
For the 2011 Plan Year, the Empire Plan carriers project a net surplus of $210 million, 3.15% of premium. This report presents the underlying causes and assumptions for these projections. The carriers will issue the Annual Experience Statement on March 15, 2012 and the experience will be included in the First Quarter Report.
In Exhibit II, you will find the 2013 premium rates projected by the Department. These projections include a tentative dividend application amount of $74.6 million, $200.6 million less than the amount loaded in the 2012 rates, as well as a tentative $57.6 million credit for monies received from the Early Retirement Reinsurance Program (ERRP), $32.4 million less than the amount loaded in the 2012 rates. ERRP was established by the Affordable Care Act and is a temporary Federal program which became effective June 1, 2010. ERRP provides reimbursement to employer and union sponsors of participating employment-based plans for a portion of the cost of health benefits for early retirees and their spouses, surviving spouses and dependents. The Department filed an application for the ERRP subsidy on behalf of all NYSHIP participants. ERRP subsidies received by NYSHIP are credited to all payors, as is done with earned dividends and earned interest. As of December 2011, more than $4.5 billion of the $5 billion appropriated for the program had been disbursed and ERRP managers announced that no claims incurred after December 31, 2011 would be considered.
The Department projects a "best estimate" net premium increase for 2013 of 10.8% in aggregate for The Empire Plan and 12.6% in aggregate for The Excelsior Plan. While the projected increase is primarily based on carrier estimates, it is lower than the carrier estimates as it excludes the margin factor and assumes the 2012 claim base will decrease from the level used in the development of the 2012 premium. In addition, plan savings attributable to the 1/1/2013 implementation of a Medicare Prescription Drug Plan under an Employer Group Waiver Plan, was included.
Given the fiscal challenges that the State and its localities continue to face, our goal is to achieve 2013 NYSHIP rates that are as low as possible. The rate development and carrier negotiations will begin in September 2012. We intend to aggressively negotiate each premium element and include both retrospective premium agreements with the carriers and the application of dividend and ERRP monies to the rates to accomplish this goal. However, it is important to recognize that given the application of substantial dividend amounts to the 2009 - 2012 rates coupled with the relatively low earned dividend for 2009 - 2012, the dividend available to apply to the 2013 premium rates is more limited. Therefore, the percentage increase in the 2013 net premium is expected to be moderately higher than the increases in recent Plan trend. Please be assured that we will consider every possible option for achieving a rate of increase that is as low as possible for 2013 while promoting rate stability for the near future.
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
FOURTH QUARTER
Produced for
PARTICIPATING AGENCIES IN THE
NEW YORK STATE
HEALTH INSURANCE PROGRAM
by
the Employee Benefits Division
New York State Department of Civil Service
Exhibits
I. Projected 2011 Empire Plan Experience
II. Projected 2013 PA Premium Rates
III. Empire Plan PA 5-Tier Group Rates (2004-2013)
IV. Empire Plan PA 2-Tier Group Rates (2004-2013)
- NYSHIP News
NEW YORK STATE HEALTH INSURANCE PROGRAM
PARTICIPATING AGENCY GROUP
EMPIRE PLAN EXPERIENCE REPORT
FOURTH QUARTER REPORTPROJECTED 2011 EMPIRE PLAN EXPERIENCE
The Empire Plan carriers project that the 2011 premiums, which included no margin, will generate a composite surplus of $210.0 million (3.15% of premium). The 2011 annual experience projected by the insurance carriers is reported in Exhibit I.
This projection is based on twelve months of 2011 paid claim data. The following chart presents the percentage of the projected incurred claims actually paid as well as the most recent projected 2011 trend as compared to the trend assumed during the 2011 premium rate development:
% of Actual Paid Claims to Projected Incurred Claims
Projected 2011 Trend 2010 2011 @ Final Renewal @ 2011 4th Quarter Blue Cross Hospital 99.4% 86.3% 11.9% 10.4% UHC Medical 99.9% 91.7% 8.7% 6.9% UHC MHSA 99.5% 84.7% 8.0% 24.4% UHC Rx 99.9% 96.1% 11.8% 9.4% The 2011 projected dividend for each carrier as compared to the margin level used in the 2011 premium development is as follows:
Margin 2011 Projected
Dividend/(Loss)Increase/(Decrease)
over MarginBlue Cross Hospital $0 $34,709,000 $34,709,000 UHC Medical $0 $71,164,000 $71,164,000 UHC MHSA $0 ($24,570,000) ($24,570,000) UHC Rx $0 $128,690,000 $128,690,000 Total $0 $209,993,000 $209,993,000 The overall improvement in the 2011 experience from the level projected at the time the premiums were developed is primarily due to the following three factors: 1) a $70 million decrease in the 2010 claim base, 2) the decrease in the 2011 trend from 10.6% to 9.4% and 3) an $80 million increase in pharma revenue. In retrospect, the 2011 premium was conservative. Factors that contributed to the conservative premiums were the unknown impact from the Federal Health Care legislation and the assumption that 2011 would be the last year of the prescription drug contract insured by United Healthcare; this contract is being extended for two years to accommodate the implementation of a Medicare Prescription Drug Program, as explained below.
Offsetting the surplus is the $24.5 million projected loss on the Mental Health and Substance Abuse Program. The loss is primarily attributable to the large increase in utilization of services. For 2011, the number of services per 1000 contracts has increased 12.7% for network claims and 37% for out- of-network claims. In addition, the 2010 claim base has deteriorated by $4 million since the 2012 premium rates were developed.
2013 PROJECTED PREMIUM RATES
Empire Plan carrier rate proposals for 2013 are required to be submitted to the Department by September 1st. Upon review of the documentation by the Department and Buck Consultants, we will negotiate aggressively with each of the carriers to achieve appropriate reductions in the submitted premium levels. Additionally, we will continue to use retrospective agreements with the carriers and the prudent application of dividends as well as Early Retirement Reinsurance Program (ERRP) subsidies to lower the Plan's net premiums. Our goal is to achieve the lowest rates possible for 2013 while maintaining rate stability for the coming years. Taking these rate factors into account, the Department's best estimate of the projected 2013 net premium increases, as presented in Exhibit II, are 10.8% and 12.6% for the Empire Plan and the Excelsior Plan, respectively. Future quarterly reports will reflect updates to these estimates as 2012 experience is incurred and analyzed.
The Department estimates the 2013 gross premium paid to the carrier will increase 6.9%. This is based on an estimated 2012 claim base projected to generate a 1% loss, 8.6% trend, 0% margin and plan savings of $260 million attributable to the implementation of a Medicare Prescription Drug Plan (PDP) effective 1/1/2013. The PDP, which will be implemented under an Employer Group Waiver Plan (EGWP), will have the same benefits as the Empire Plan. The savings is attributable to premium funding provided by CMS, additional manufacturer discounts on drugs in the "donut hole" and federal funding on catastrophic claims. The EGWP is more cost effective than the Retiree Drug Subsidy approach which will be eliminated as an option effective 12/31/2013. The carrier projected 2013 gross premium increase of 14.9% is considered to be too conservative as it included the margin and excluded the EGWP savings.
The projected 6.9% increase in gross premium will be negatively leveraged by a reduction in the application of available dividends and ERRP funds resulting in a projected 10.8% increase in premium charged to payors in 2013. While $175 million in dividend is anticipated to be available on 12/31/2012, DCS anticipates the application of $75 million in the 2013 rates. The balance is necessary to fund anticipated retrospective premium payments for 2012 and potentially 2013. With the inclusion of anticipated ERRP amounts, credits of $132 million are anticipated for 2013. This credit is $233 million less than the 2012 credit resulting in the higher rate of increase to the net premium as compared to the 6.9% increase in gross premium. The actual amount of dividend/ERRP credits to be applied in the 2013 premium rates will be determined in October 2012 based on a number of factors including, but not limited to, the following:
- The final results of premium negotiations with the carriers, which include projections of the incurred 2012 experience as well as estimates of the 2013 trend, both of which are affected by the Federal health care legislation and, possibly, future NYS legislation. Of particular note is the fact that 2013 is the final year of the Prescription Drug Contract. Carrier premium requirements in the last year of a contract tend to be more conservative.
- The actual impact of collective bargaining on the Plan's benefit design.
- The ability, or lack thereof, to stabilize the premium over time (2013-2017).
- The status of the economy, as well as the State and Local Government fiscal climate.
Exhibit III presents The Empire Plan individual and family 5-tier billing rate history since 2004. Exhibit IV presents, for illustrative purposes only, the 2-tier rate history from 2004 to 2012.
2011 PROJECTED EMPIRE PLAN EXPERIENCE
In (000's)BLUE CROSS HOSPITAL UNITED HEALTHCARE MEDICAL Core UNITED HEALTHCARE MEDICAL NY Enhancement UNITED HEALTHCARE MEDICAL PA Enhancement UNITED HEALTHCARE MEDICAL Combined UHC MHSA Core UHC MHSA NY Enhancement UHC MHSA PA Enhancement UHC MHSA Combined UHC DRUG TOTAL (A) Premium (1) 2,271,647 1,942,411 282,000 283,467 2,507,878 129,820 4,973 4,266 4,266 1,752,102 6,670,686 (B) Incurred Claims (2) 2,077,331 1,708,203 247,967 250,019 2,206,189 125,181 8,866 8,866 8,961 1,534,961 5,961,489 (C) Administrative Expense (3) 159,607 187,243 21,597 21,685 230,525 18,128 1,246 1,246 1,247 88,451 499,204 (D) Gain/(Loss) (A-B-C) 34,709 46,965 12,436 11,763 71,164 (13,489) (5,139) (5,139) (24,570) 128,690 209,993 (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: Carriers 2011 4th Quarter Experience Reports
2013 Premium Projections
Empire Plan
Department Best Estimate Projections Monthly Gross Premium Rates (1)
2012Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 751.55 810.61 7.9% 712.75 798.22 12.0% Family Plan Prime 1,645.31 1,776.61 8.0% 1,562.80 1,749.93 12.0% Individual Medprime 447.66 457.17 2.1% 419.24 443.64 5.8% Family - 1 Medprime 1,341.42 1,423.15 6.1% 1,269.28 1,395.33 9.9% Family - 2+ Medprime 1,037.53 1,069.71 3.1% 975.77 1,040.75 6.7% Aggregate 6.9% 10.8% Department Optimistic Projections Monthly Gross Premium Rates (1)
2012Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 751.55 786.30 4.6% 712.75 773.91 8.6% Family Plan Prime 1,645.31 1,723.30 4.7% 1,562.80 1,696.62 8.6% Individual Medprime 447.66 443.45 -0.9% 419.24 429.92 2.5% Family - 1 Medprime 1,341.42 1,380.46 2.9% 1,269.28 1,352.64 6.6% Family - 2+ Medprime 1,037.53 1,037.61 0.0% 975.77 1,008.65 3.4% Aggregate 3.7% 7.4% Department Pessimistic Projections Monthly Gross Premium Rates (1)
2012Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 751.55 834.94 11.1% 712.75 822.55 15.4% Family Plan Prime 1,645.31 1,829.89 11.2% 1,562.80 1,803.21 15.4% Individual Medprime 447.66 470.89 5.2% 419.24 457.36 9.1% Family - 1 Medprime 1,341.42 1,465.85 9.3% 1,269.28 1,438.03 13.3% Family - 2+ Medprime 1,037.53 1,101.80 6.2% 975.77 1,072.84 9.9% Aggregate 10.1% 14.2% (1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
(3) Projected Rates2013 Premium Projections
Excelsior Plan
Department Best Estimate Projections Monthly Gross Premium Rates (1)
2012Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 647.47 691.29 6.8% 613.90 671.90 9.4% Family Plan Prime 1,417.28 1,514.82 6.9% 1,346.35 1,473.37 9.4% Individual Medprime 381.00 397.15 4.2% 344.73 384.95 11.7% Family - 1 Medprime 1,150.80 1,220.66 6.1% 1,077.16 1,186.40 10.1% Family - 2+ Medprime 884.31 926.52 4.8% 807.97 899.48 11.3% Aggregate 8.8% 12.6% Department Optimistic Projections Monthly Gross Premium Rates (1)
2012Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 647.47 681.29 5.2% 613.90 661.90 7.8% Family Plan Prime 1,417.28 1,492.80 5.3% 1,346.35 1,451.35 7.8% Individual Medprime 381.00 391.35 2.7% 344.73 379.15 10.0% Family - 1 Medprime 1,150.80 1,202.84 4.5% 1,077.16 1,168.58 8.5% Family - 2+ Medprime 884.31 912.88 3.2% 807.97 885.84 9.6% Aggregate 5.6% 9.2% Carrier Best Estimate Projections Monthly Gross Premium Rates (1)
2021Monthly Gross Premium Rates (1)
2013 (3)Monthly Gross Premium Rates (1)
% ChangeMonthly Net Premium Rates (2)
2012Monthly Net Premium Rates (2)
2013 (3)Monthly Net Premium Rates (2)
% ChangeIndividual Plan Prime 647.47 722.85 11.6% 613.90 703.46 14.6% Family Plan Prime 1,417.28 1,582.87 11.7% 1,346.35 1,541.42 14.5% Individual Medprime 381.00 426.25 11.9% 344.73 414.05 20.1% Family - 1 Medprime 1,150.80 1,286.27 11.8% 1,077.16 1,252.01 16.2% Family - 2+ Medprime 884.31 989.65 11.9% 807.97 962.61 19.1% Aggregate (1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
(3) Projected Rates
EMPIRE PLAN
PA 5 TIER GROUP RATES
2004-2013 Monthly RatesIndividual Planprime
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 630.73 -0.5% 598.58 1.0% 2010 660.24 4.7% 612.34 2.3% 2011 734.00 11.2% 693.92 13.3% 2012 751.55 2.4% 712.75 2.7% 2013 Department Projection 810.61 7.9% 798.22 12.0% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception of 5 Tier Structure (1996) 7.7% 8.3% Most Recent 10 Years 7.4% 7.7% Most Recent 5 Years 5.1% 6.3% Family Planprime
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 1,350.26 0.3% 1,282.17 1.9% 2010 1,431.43 6.0% 1,330.93 3.8% 2011 1,598.49 11.7% 1,513.92 13.7% 2012 1,645.31 2.9% 1,562.80 3.2% 2013 Department Projection 1,776.61 8.0% 1,749.93 12.0% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception of 5 Tier Structure (1996) 7.5% 8.0% Most Recent 10 Years 7.8% 8.1% Most Recent 5 Years 5.8% 6.9% Individual Medprime
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 384.38 -3.2% 359.22 -0.3% 2010 400.76 4.3% 367.37 2.3% 2011 446.90 11.5% 405.64 10.4% 2012 447.66 0.2% 419.24 3.4% 2013 Department Projection 457.17 2.1% 443.64 5.8% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception of 5 Tier Structure (1996) 4.8% 5.4% Most Recent 10 Years 4.2% 4.2% Most Recent 5 Years 3.0% 4.3% (1) Represents premiums paid to the carriers.
(2) Represents cost to a participating agency.Family - 1 Medprime
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 1,103.90 -0.5% 1,042.81 1.6% 2010 1,171.95 6.2% 1,085.94 4.1% 2011 1,311.39 11.9% 1,225.62 12.9% 2012 1,341.42 2.3% 1,269.28 3.6% 2013 Department Projection 1,423.15 6.1% 1,395.33 9.9% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception of 5 Tier Structure (1996) 6.3% 6.8% Most Recent 10 Years 6.7% 6.8% Most Recent 5 Years 5.2% 6.4% Family - 2 or More Medprime
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 857.54 -1.8% 803.45 1.1% 2010 912.48 6.4% 840.98 4.7% 2011 1,024.28 12.3% 937.31 11.5% 2012 1,037.53 1.3% 975.77 4.1% 2013 Department Projection 1,069.71 3.1% 1,040.75 6.7% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception of 5 Tier Structure (1996) 5.0% 5.7% Most Recent 10 Years 5.1% 5.1% Most Recent 5 Years 4.3% 5.6% (1) Represents premiums paid to the carriers.
(2) Represents cost to a participating agency.
EMPIRE PLAN
PA 2 TIER GROUP RATES
2004-2013 Monthly Rates
(For Illustrative Purposes Only)Individual
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 527.09 -1.8% 497.91 -0.2% 2010 557.46 5.8% 515.75 3.6% 2011 621.78 11.5% 581.69 12.8% 2012 619.95 -0.3% 584.75 0.5% 2013 Department Projection 661.16 6.6% 647.84 10.8% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception (1986) 7.4% 7.5% Most Recent 10 Years 6.4% 6.6% Most Recent 5 Years 4.4% 5.5% Family
Year Gross Rate (1) % Change Net Rate (2) % Change 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% 2009 1,230.02 -0.3% 1,165.24 1.3% 2010 1,297.06 5.5% 1,203.56 3.3% 2011 1,441.84 11.2% 1,353.97 12.5% 2012 1,478.23 2.5% 1,398.52 3.3% 2013 Department Projection 1,580.61 6.9% 1,551.39 10.9% Average Percent Increase
Gross Rate % Change Net Rate % Change From Inception (1986) 7.9% 8.0% Most Recent 10 Years 7.0% 7.2% Most Recent 5 Years 5.2% 6.3% (1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Fourth Quarter Report - 2012
Federal Health Care Reform
Employer Group Waiver Plan: Effective January 1, 2013, NYSHIP will implement a Medicare Prescription Drug Plan (PDP) under an Employer Group Waiver Plan, or EGWP (pronounced "egg-whip"). The EGWP will replace the current prescription drug benefit for Medicare primary enrollees and dependents. The EGWP will include a "wrap" which will enhance the PDP benefits so that they will be virtually the same as the non-Medicare Empire Plan drug benefits. There will be some differences due to CMS requirements for PDP coverage; those differences will be beneficial to the covered individual.
Under the current NYSHIP prescription drug benefit, some employers receive a credit on their agency bill for distributions from the Retiree Drug Subsidy (RDS). Under the EGWP, employers will no longer receive this credit. However, due to changes resulting from Federal Health Care Reform, the EGWP will provide NYSHIP with significant financial advantages over the RDS. Savings under the EGWP will be attributed to premium funding provided by CMS, additional manufacturer discounts on drugs in the "donut hole" and federal funding on catastrophic claims. Although employers will no longer see an RDS credit on their agency bill, savings from the EGWP will be reflected in the overall premium charged to PAs. Additional information regarding the implementation of the EGWP will be provided to PAs as soon as it is available.
W-2 Health Cost Reporting: The Patient Protection and Affordable Care Act (PPACA) amended the Internal Revenue Code (Code) to require employers to report the aggregate cost of employer-sponsored group health plan coverage on Form W-2 for taxable years beginning on or after January 1, 2011. Previous guidance from the IRS delayed reporting until taxable years beginning on or after January 1, 2012, reported in early 2013. The IRS has recently issued Notice 2012-9 [http://www.irs.gov/pub/irs-drop/n-12-09.pdf], which provides further interim guidance on the reporting requirement. In addition to other clarifications, the Notice provides that the transition relief for those employers required to file fewer than 250 Form W-2s will continue unless and until further guidance is issued.
Early Retiree Reinsurance Program (ERRP): This temporary program is intended to encourage employers to continue to provide coverage to retired employees who are not yet eligible for Medicare coverage by reimbursing 80% of the cost of claims greater than $15,000 and less than $90,000. As of December 2, 2011, the ERRP had disbursed more than $4.5 billion of its $5 billion funding allocation. The ERRP Center has implemented a cut-off for submission of claims. The Center will not accept claims submitted after December 31, 2011 for reimbursement. We anticipate receipt of an additional $96.2 million from the ERRP during the 2012 plan year for claims incurred prior to the December 31, 2011 cut-off. All proceeds of the reinsurance program are being used in the same manner as plan dividend to help offset future premium increases for all plan participants.
Employee Benefits Division staff continues to review and monitor updates and clarifications related to Federal Healthcare Reform and its numerous provisions which NYSHIP will be required to implement in the future. We will continue to provide information as it becomes available.
2011 Regional Meetings for Participating Agencies
The 2011 Regional Meetings were held October 4 - October 6 in Saratoga Springs, Suffern and Hauppauge. The meetings were attended by over 600 representatives of PAs from across the State. The Regional Meetings provide us with the opportunity to connect with PAs and provide necessary program updates, including benefits information, rate projections and policy changes, as well as information concerning the administration of NYSHIP at the agency level. The meetings also provide PAs with the opportunity to ask questions to staff of both the Employee Benefits Division and the NYSHIP insurance carriers. We look forward to seeing you at the 2012 Regional Meetings.
Upcoming Events
Employee Benefits Division staff will be exhibiting on behalf of NYSHIP at the following annual events, and will be available to answer any questions you may have:
NYS Association of Towns Annual Meeting
January 30th - February 1st
New York CityNYS Conference of Mayors Winter Legislative Conference
February 26th - 27th
AlbanyTug Hill Commission Local Government Conference
March 29th
Watertown2011 Participating Agency Self-Audit
If your agency has not yet completed the 2011 Self-Audit, it is very important that you complete it as soon as possible. The Self-Audit can be accessed at http://www.cs.ny.gov/paaudit/index.cfm.
NYSHIP Coverage for Volunteer Firefighters and Ambulance Workers
To date, 38 PAs have elected to extend coverage to qualified members of 177 volunteer fire and ambulance companies. For information on this coverage, refer to Memo PA10-29/PAEX10-25, issued September 1, 2010, which summarizes the provisions of Chapter 71 of the Laws of 2010 which amended Civil Service Law to extend NYSHIP eligibility to active members of volunteer fire and ambulance companies and to provide guidelines to PAs for administering this new legislation. As indicated in the memo, an agency is permitted, but not required, to provide coverage. PAs that elect to provide coverage are required to submit the form, Notice of Election to Extend NYSHIP Coverage to Volunteer Firefighters and/or Ambulance Workers, which was included with the PA Memo.
Agency Experience Reports
Agency specific Empire Plan and Excelsior Plan financial experience reports are available from the Employee Benefits Division upon request. These reports are calendar year based and provide aggregate data broken down by Plan component - hospital, medical/surgical, mental health/substance abuse and prescription drug. To obtain a financial experience report, PAs may submit an official written request on agency letterhead indicating the calendar years for which reports are desired. The request may be directed to the Employee Benefits Division - Director's Office. Please note: 2011 experience reports will not be available until April 2012.
GASB 45 Assumptions Report and Census Data
The 2011 Buck Consultants report Development of Recommended Actuarial Assumptions for New York State/SUNY GASB Valuation - Participating Agency Version is now available online at: http://www.cs.state.ny.us/gasb_pa/2011PAAssumptionsReport.pdf. 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 an agency's NYBEAS file is up-to-date, including correctly identifying and coding retirees before requesting census data. Requests for census data can be e-mailed to: Kevin.Hill@cs.state.ny.us. Please include your name, agency name, five digit agency code, phone number and e-mail address. For additional information about GASB 45, please refer to Memos PA06-11 and PA06-18.
Prompt Payment of NYSHIP Premium
The Employee Benefits Division continues to aggressively monitor 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 premium. To avoid disruption of NYSHIP coverage, agencies must ensure submission of premium payments by the due date, as we must submit premium to the NYSHIP insurers on time. Agencies may wish to consider submitting payments electronically to promote timely payments.
Mailing of HBA Memos
As you may be aware, it is mandatory that all Participating Agencies have access to the New York State Benefits Eligibility and Accounting System (NYBEAS) and HBA Online. On January 27, 2012 we issued Memo PA12-02/PAEX12-02, which notified agency HBAs that we will no longer be mailing printed copies of HBA Memos. All new HBA Memos are posted to HBA Online, with a notification sent through NYBEAS. As a result, it is very important that a representative of your agency access NYBEAS and HBA Online frequently to ensure receipt of the most up-to-date information from the Employee Benefits Division. It is also very important that your agency maintain current contact information and system access permissions with the Department of Civil Service. If your agency needs to request new permissions or needs to update its current permissions, please contact the Civil Service Help Desk at (800) 422-3671 or (518) 457-5406 to request a copy of the Information Resource Management Form IRM-302.
Availability of Reports Electronically
The Empire Plan Experience Reports are available through the following direct link to our website: http://www.cs.ny.gov/employee-benefits/pa-market/financial-reports.cfm.
CEO, CFO & HBA Name & Address Changes
Agencies must notify the Employee Benefits Division of any changes in the names and/or addresses (including e-mail addresses) of agency CEOs, CFOs and/or HBAs to ensure that our mailing and contact lists are up-to-date. Any updates should be e-mailed to Deborah.DOrazio@cs.state.ny.us.
