Iowa Executive Council approves 6.7 percent rise in state insurance costs

DES MOINES - The Iowa Executive Council voted 4-0 Monday to approve a two-year extension of state group insurance rates that would boost the state's share for health premiums by 6.7 percent for next year, effective Jan. 1.

The new rate schedule, with minor design changes for health, dental and life insurance coverage provided by Wellmark Blue Cross-Blue Shield, would raise the overall cost of next year's contract to $484.6 million to cover 31,748 state employees through Dec. 31, with the state's estimated share increasing to $463.8 million and employees paying nearly $20.8 million.

At present, the state pays $447.5 million for its employees' group insurance program, while the 32,427 covered participants pay nearly $15.1 million of the overall $462.6 million contract.

Janet Phipps, director of the Iowa Department of Administrative Services, which negotiated the proposed contract extension with Wellmark officials, said the state has experienced an increase in health insurance claims this year but not the significant cost increases that occurred last year, which led to a spike in current-year rates.

Department of Administrative Services officials said the health premiums negotiated for the overall state plan next year appear to be reasonable and in line with rates that large entities with similar employee bases are experiencing.

'I'm very comfortable with it,” said State Treasurer Michael Fitzgerald, who made a motion that the council approve the extension.

The council consists of Fitzgerald, Gov. Terry Branstad, State Auditor Mary Mosiman, State Agriculture Secretary Bill Northey and Secretary of State Paul Pate, who was not present at Monday's meeting.

'It works for me,” Northey said before the decision, which extends the Wellmark contract through Dec. 31, 2018.

While the state's overall share for health premiums will increase by about 6.7 percent, the bargaining unit for the State Police Officers Council will pay 10.9 percent more in health premium rates, which SPOC members can reduce by $65.42 a month by participating in the state's health wellness program based on collective bargaining. Noncontract state employees can recoup up to $111 via wellness participation, according to DAS documents.

Under an arbitration settlement reached last spring, members of the American Federation of State, County and Municipal Employees, or AFSCME, the state's largest public employees union, are paying a $20 monthly contribution for their health insurance coverage, while noncontract workers pay 20 percent of their health premiums via executive order.

The state's contract includes multiple plans for single and family insurance coverage. with various rates, co-payments and deductibles for state-employee groups.