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.
PE16-06
TO: Participating Employer Chief Executive Officers & Health Benefit Administrators
FROM: David Boland, Director of the Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: March 23, 2016
Attached is The Empire Plan Fourth Quarter Experience Report for 2015. This report presents the projected 2015 Empire Plan experience, based on claims paid through December 31, 2015, and the projected 2017 premium rates.
For the 2015 Plan Year, the Empire Plan vendors project a net surplus of $139.0 million, or 1.9% of premium. The underlying causes for the projected surplus are discussed in the report.
Exhibit II presents a range of the projected 2017 Empire Plan premium rates. These projections include a tentative dividend application amount of $155 million, $25 million less than the dividend credit included in the 2016 rates. The “best estimate” projected net premium increase for 2017 is 7.5%, in aggregate, for The Empire Plan. These projections are based on a number of assumptions made by the vendors and the Department of Civil Service. While the actual increase in the premium has been historically less than the increase in premium projected in the 4th Quarter Reports, the 2017 premium increases projected in this report are viewed to be fairly aggressive.
Overall, the projected 2017 plan year premium increases are consistent with claim trends experienced in 2015 and the trend projections for the 2016 plan year. While Medical and Hospital program trends have remained relatively stable over the past year, the trends for the Prescription Drug and Mental Health and Substance Abuse programs are expected to remain above the program trends experienced a few years ago.
Given the ongoing fiscal challenges faced by the State and participating employers, our continuing goal is to achieve 2017 NYSHIP rates that are as low as possible while also promoting rate stability for the near future. The 2017 premium rate development and related actions will begin in September.
I hope this report is informative. If you have any questions, comments or suggestions, please don’t hesitate to contact the Financial Management Unit at (518) 402-4739.