Department of Civil Service

NY07-07

TO: New York State Health Benefits Administrators
FROM: Employee Benefits Division
SUBJECT: April 1, 2007 Health Insurance Rate Change and Special Option Transfer Period
DATE: February 16, 2007

Beginning in January 2006, a surcharge was added to the premiums for coverage under the New York State Health Insurance Program (NYSHIP) to pay for the reimbursement of Medicare Part B premium paid by Medicare-eligible individuals. This action was challenged in court and a recent Appellate Court Division decision ordered the removal of the Medicare Part B surcharge component from the 2006 and 2007 Empire Plan and HMO rates.

This memo describes the actions we are taking to address the decision. Please read it in its entirety because our enrollee communications to active employees instruct them to contact you with any questions. We have done our best to address issues and questions you may receive from them in this memo and to provide additional resources to help you handle them.

As a result of the Court’s action, 2007 NYSHIP premium rates will be revised effective April 1, 2007. The biweekly contribution toward the cost of health insurance for most employees will decrease. However, for employees enrolled in HMOs that are more costly than The Empire Plan, their bi-weekly premium contribution will increase. This is because, while the State pays 90% of the cost for Individual coverage and an additional 75% for the cost of dependents for Family coverage for active employees, the State’s contribution for HMOs is capped based on The Empire Plan’s premium. Since the 2007 rates currently in effect also included the cost of the Medicare surcharge, the premium for The Empire Plan was higher than it should have been, resulting in an overpayment of the State’s share of the premium for employees enrolled in those HMOs which cost more than The Empire Plan.

Payroll Effective Dates for April 1, 2007 Rate Change

Administrative Lag Exempt: March 21, 2007
Institution Lag: March 29, 2007
Administrative Lag: April 4, 2007

Special Option Transfer Period

A limited option transfer period will be conducted through March 30, 2007. ONLY enrollees whose premium will increase as a result of the April 1, 2007 rate change will be permitted to change their health plan option during this special option transfer period, regardless of the tax status of their premium contributions. Option transfer requests must be post marked by March 30, 2007. Please see the attachment regarding instructions for the special option transfer period.

Enrollee Communications

Each enrollee will be sent a new rate chart and a letter that explains the rate change and the special option transfer period for eligible enrollees. Copies of the different versions of the enrollee letters are provided with this memo. Each enrollee will receive the version of the applicable letter based on the enrollee’s status as of February 1, 2007. For example, if an active enrollee retires effective March 15th, they will receive the active letter. Please be sure that you provide a copy of the appropriate letter to any enrollees in your agency that change status or are hired after February 1st. Please note that any enrollee who was in a waiting period on February 1, 2007 will not receive a letter and you should be sure to give them the appropriate version. Below is a summary of the material being sent to each enrollee group:

Copies of each of the seven packages are enclosed for your information.

Information on the Internet

Information regarding these mailings and the new rates will be available on the Department of Civil Service web site at www.cs.state.ny.us. To view the latest Special Option Transfer information available, go to the DCS site, www.cs.state.ny.us, click on Benefit Programs, then on NYSHIP Online. Select your group if prompted, and then click on Health Benefits. Choose Rates and Health Plan Choices. Additional information will also be available under What’s New? on the NYSHIP Online home page.

This information is also available on the Division’s administrative web site for HBAs, HBA Online at www.cs.state.ny.us/ebdonline. Select Health Plan Choices on the home page to go to Option Transfer information or Publications and Forms to view current publications.

To Order Health Benefits Materials

A Special Order Form for the rate change letters and forms is enclosed so that you may order additional materials during the Special Option Transfer Period. If you need more publications, please fax the Special Order Form using the number provided on the form. To order either version of Choices during the Special Option Transfer Period, please use your regular Publications Supply Order Forms or order online on HBA Online. If you have questions about these publications, contact the EBD Communications Unit at (518) 457-7577.

Retroactive Adjustment

In addition to the April 1, 2007 rate change, a retroactive adjustment will be done to account for the removal of the Medicare Part B surcharge from the rates that were charged to enrollees between January 1, 2006 and March 31, 2007. This is a complex process that will take several months to complete. We will let you know as soon as possible how and when the retroactive adjustments will be made.

Questions:

• If you have questions on how to process the Special Option Transfer transaction on NYBEAS, please refer to the enclosed attachment, SPECIAL OPTION TRANFER PERIOD HBA INSTRUCTIONS.
• A Question and Answer (Q&A) bulletin will be posted to our public web site at www.cs.state.ny.us and our HBA website at www.cs.state.ny.us/ebdonline the near future. An explanation of how rates were calculated for those HMOs with a rate increase will also be available. A broadcast message will be sent when this information is available online.
• If you continue to have questions regarding the rate change and special option transfer period, we have set up a dedicated toll free number that will be available at least through April 30, 2007. This number will be staffed with representatives from BlueCross BlueShield, who have received extensive training from the Employee Benefits Division. You may call with questions concerning this rate change or the special option transfer period between the hours of 8:30 a.m. and 5:00 p.m., Monday through Friday at
   1-866-849-8847
  
  Please note this number is only for questions related to the April 1st rate change and the Special Option Transfer Period. It will only be available for a limited time beginning February 21, 2007.
  You may refer enrollees to this number on a limited basis. DO NOT distribute this number to employees. Please give it out ONLY if an enrollee needs further assistance and you have made every effort to satisfy his or her concerns, including calling this number yourself to obtain the information the enrollee is seeking.
• For questions regarding the benefits offered under the different health insurance options, please advise the enrollee to call the telephone number listed on the option page for each option in the Choices guide.

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