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
LOLA W. BRABHAM
Acting Commissioner
PE19-11
TO: Participating Employer Chief Executive Officers and Health Benefit Administrators
FROM: James DeWan, Director of the Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: July 12, 2019
Attached is the Empire Plan First Quarter Experience Report for 2019. This report presents the final 2018 experience, the projected 2019 experience based on claims paid through March 31, 2019, and the projected 2020 premium rates. For the 2018 Plan Year, the Department of Civil Service (Department) declared a net dividend of $312.2 million for the Empire Plan, representing 3.5% of premium. The underlying causes for this amount are discussed in the report.
For the 2019 Plan Year, the Empire Plan vendors project a net surplus of $92.3 million, or 1.0% of premium. Since the 2019 experience projections are based on only three months of paid claims data, the projections are expected to change as actual claims materialize throughout the remainder of the year.
Exhibit III presents the projected 2020 Empire Plan premium rates. These projections include a tentative dividend application amount of $225 million, which represents an application of $75 million more than the dividend credit included in the 2019 rates. The "best estimate" projected net premium increase for 2020 is 5.7%, in aggregate, for The Empire Plan. These projections are based on several assumptions made by the vendors and the Department and include a projected aggregate claims trend of approximately 8.8%. These assumptions are likely to change prior to the development of the final 2020 premium rates.
Given the ongoing fiscal challenges faced by the State and its localities, our continuing goal is to achieve 2020 NYSHIP rates that are as low as possible while promoting rate stability for the near future. The 2020 premium rate development and related proceedings will begin in September.
I hope this report is informative. If you have any questions, comments or suggestions, please do not hesitate to contact me.