Regional
9:59 pm
Mon July 1, 2013

State Employee Health Benefit Rates Rise

Health Benefits have risen for New Mexico State Employees. Starting today, rate premiums will rise 15 percent. That rise is likely to affect over 70,000 people covered by the state plan.

A new plan design will also take effect with deductibles increasing from $150 dollars to $350 annually. The out of pocket max will also rise from 3,000 to $3,500.

The State employee insurance plan also is moving to a calendar year, making the current deductible $175 for the rest of 2013. In January, the annual deductible will be $350 dollars.

A.J. Forte, Risk Management Director for the State of New Mexico calculates cost for the state insurance benefits. According to Forte, he was left will little options when trying to bring in revenue.

“The only way for us to bring revenue in is through premium increases. If we don’t do premium increases, we have to do plan redesign. And that means going from a one hundred-fifty dollar deductible to three hundred-fifty dollars,” said Forte.

Forte met with his actuaries to look at the data. After receiving monthly projections, his department realized that in order to keep the funds solvent they would need to increase premiums and also present a new plan design to state employees.

“So at the end of fiscal year 2013, because of five years of flat premiums, five years of no plan redesign we were going to be thirty-five million dollars in the hole. We were going to be insolvent. If you look forward to fiscal year 2014, we were going to be almost seventy million dollars in the hole, and that is why we had to make so many plan design changes and the fifteen percent increase to get us trending back in the right direction,” said Forte.

The rise in rates has some state employees very concerned and others may be forced to make tough decisions. Eric Simon works as a state employee. He is also the president of the Las Cruces chapter of the American Federation of State, County, and Municipal Employees Union. Simon said the rising cost means less dollars going into the local economy.

“It's disappointing to see that go into effect. State employees are underpaid and under supported by the current administration as it is. So it is going to make it a lot harder for the state employees that I represent, myself included, to put money back into the community. We like to spend locally economy,” said Simon.

Rising rates means less dollars flowing into the local economy, but according to Simon the real impact will be employees being able to spend less time with their families, due to working a second job.

“A lot of them are actually considering going into different lines of work; where these benefits might be a little less expensive and less competitive, or just take second jobs,” said Simon.

According to A.J. Forte, health care inflation continues to impact the state employee benefit fund. Either way, rates for state employees will rise forcing some tough financial decisions for many employees.