Program A: State Group Benefits Program
Program Authorization: Act 745 of 1979; Executive Order No. McK 69-70; R.S. Title 42, Chapter 12, Sections 821, 851, and 871-879
PROGRAM DESCRIPTION
The mission of the State Group Benefits Program is to provide cost-effective, high-quality health, life and flexible benefit plans, distinguished by efficient and effective customer service.
The goal of the State Group Benefits Program is to develop and explore a multitude of benefit options that will appeal to a diverse workforce. These options will include multi-priced plans, indemnity and manage care options as well as adding certain core dental and vision options to these plans.
The State Group Benefits Program provides the opportunity for eligible individuals to obtain group accident and health benefits and group life insurance geared to the needs of the plan members. A Board of Trustees administers this program and provides direction in developing cost containment features in order that an affordable group insurance program may be available to its plan members.
OBJECTIVES AND PERFORMANCE INDICATORS
Unless otherwise indicated, all objectives are to be accomplished during or by the end of FY 1999-2000. Performance indicators are made up of two parts: name and value. The indicator name describes what is being measured. The indicator value is the numeric value or level achieved within a given measurement period. For budgeting purposes, performance indicator values are shown for the prior fiscal year, the current fiscal year, and alternative funding scenarios (continuation budget level and Executive Budget recommendation level) for the ensuing fiscal year (the fiscal year of the budget document).
RESOURCE ALLOCATION FOR THE PROGRAM
SOURCE OF FUNDING
This program is funded from Self-generated revenues including premiums collected from plan members and their employers, as well as earnings of program funds.
ANALYSIS OF RECOMMENDATION
|
GENERAL FUND |
TOTAL |
T.O. |
|
DESCRIPTION |
|
|
|
|
|
|
|
$0 |
$454,667,465 |
358 |
|
ACT 44 FISCAL YEAR 1998-1999 |
|
|
|
|
|
|
|
|
|
|
|
BA-7 TRANSACTIONS: |
|
$0 |
$15,370,113 |
0 |
|
Ba-7 for medical cost increases |
|
|
|
|
|
|
|
$0 |
$470,037,578 |
358 |
|
EXISTING OPERATING BUDGET – November 20, 1998 |
|
|
|
|
|
|
|
$0 |
$212,100 |
0 |
|
Annualization of FY 1998 -1999 Classified State Employees Merit Increase |
|
$0 |
$204,905 |
0 |
|
Classified State Employees Merit Increases for FY 1999 –2000 |
|
$0 |
($53,123) |
0 |
|
Risk Management Adjustment |
|
$0 |
$1,600,000 |
0 |
|
Acquisitions and Major Repairs |
|
$0 |
($1,676,728) |
0 |
|
Nonrecurring Acquisitions and Major Repairs |
|
$0 |
$26,165 |
0 |
|
Legislative Auditor Fees |
|
$0 |
$1,389 |
0 |
|
Maintenance of State-owned Buildings |
|
$0 |
$953 |
0 |
|
UPS Fees |
|
$0 |
($239,583) |
0 |
|
Attrition Adjustment |
|
$0 |
($184,000) |
0 |
|
Salary Funding from Other Line Items |
|
$0 |
($32,271) |
0 |
|
State Treasury Fees |
|
$0 |
$4,501 |
0 |
|
Civil Service Fees |
|
$0 |
($20,000) |
0 |
|
Other Nonrecurring Adjustments – Professional service contract – contract legal services |
|
$0 |
($9,900) |
0 |
|
Other Nonrecurring Adjustments - Professional service contract to provide space planning and design services to assist in the planning and implementation of an office space utilization project. That project has been completed. |
|
$0 |
$51,440 |
0 |
|
Other Adjustments - Printing cost for new Preferred Providers’ Organizations (PPOs) directories |
|
$0 |
($150,000) |
0 |
|
Other Adjustments - Professional services contract for imaging system |
|
$0 |
$24,058,546 |
38 |
|
New and Expanded Adjustments – Staffing, operational costs and funding for anticipated participant usage |
| |
|
|
|
|
|
$0 |
$494,184,997 |
396 |
|
TOTAL RECOMMENDED |
| |
|
|
|
|
|
$0 |
$24,147,419 |
38 |
|
DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET) |
|
|
|
|
|
|
The total means of financing for this program is recommended at 105.1% of the existing operating budget. It represents 104.8% of the total request ($471,743,266) for this program. The increased funding over existing operating budget reflects additional costs of $24,058,546 associated with projected medical inflationary costs and increased participant usage. One of the program’s authorized health maintenance organizations (h.m.o.) has elected to discontinue providing medical services for state workers effective July 1, 1999. With the withdrawal of that h.m.o., the program anticipates an increase of approximately 17,000 to 18,000 plan members July 1, 1999 into the State Group Plan. This influx will have several health options to choose from and the program will need to expand customer service and claims processing divisions in order to service the influx of participants. Funding and position authorization for 38 new positions has been included in the total recommended to enable the program to effectively handle the projected new workload. The major difference between total request and total recommended is the additional $24,058,546 associated with projected medical inflationary costs and increasing cost projections for Fiscal Year 2000. At the time of budget request submission, the program administers were still evaluating service demands and medical inflationary cost projections for Fiscal Year 2000. Those costs have since been projected and are included in the total recommended.
PROFESSIONAL SERVICES
|
$360,000 |
|
Actuarial Services for rate calculations, claims projections, etc. |
|
$25,000 |
|
Medical and Dental consultation to expedite the processing of medical claims |
|
$75,000 |
|
Medical assistance for the appropriate processing of medical claims and case management treatment plans by the board and its personnel. |
|
$300,000 |
|
Technical Assistance for computer programming/testing services for newly acquired computer equipment and other computer related needs |
|
$150,000 |
|
Technical Assistance for computer/consulting services for Imaging |
|
$49,000 |
|
Technical Assistance to assist the agency in the planning and implementation of self-generated Dependent Care |
|
$49,000 |
|
Technical Assistance, Training and Program services for the Cafeteria Plan software |
|
$883,300 |
|
Utilization Review - pre-certification of inpatient hospital confinements, case management, etc. |
|
|
|
|
|
$1,891,300 |
|
TOTAL PROFESSIONAL SERVICES |
OTHER CHARGES
|
$1,525,266 |
|
Cafeteria Plan including Child Care Reimbursement |
|
$675,000 |
|
Dependent Life Payments |
|
$314,616,709 |
|
Health Claims Payments |
|
$74,600,000 |
|
Health Maintenance Organization Payments |
|
$1,000 |
|
Hospital Audit Fees |
|
$101,000 |
|
Legal Fees/Settlements |
|
$123,174 |
|
Legislative Auditor expenses |
|
$21,950,000 |
|
Life Claims Payments |
|
$6,000,000 |
|
Mental and Nervous Disorder Claim Payments |
|
$50,835,659 |
|
Paid Prescriptions |
|
$127,000 |
|
Specialized training for claims payments, processing, etc. |
|
|
|
|
|
$470,554,808 |
|
TOTAL OTHER CHARGES |
ACQUISITIONS AND MAJOR REPAIRS
|
$90,000 |
|
Five (5) replacement vehicles to be used as regional pool cars to visit hospitals and agencies; and to enroll and train new participant groups |
|
$65,875 |
|
Replacement office equipment including modular chairs, fax machine, desks, file cabinets, telephones, and phone accessories |
|
$9,900 |
|
Three (3) replacement laptop computers to replace older model 286 and 386’s. |
|
$342,900 |
|
One hundred twenty-seven (127) personal computers with 64 + MB RAM (pentium level) to replace old 486 and 386 machines as the agency moves to microsoft office products for greater staff efficiency. One hundred twenty-seven (127) network cards |
|
$414,000 |
|
One hundred fifteen (115) image stations (pentium level) to replace old 486 image stations to increase speed of accessing images in claims processing |
|
$16,800 |
|
Fourteen (14) laser printers to replace older IBM 4019 printers with new HP printers for printing images |
|
$400,000 |
|
Two (2) server upgrades to replace 570 series to enhance throughput and response time of RIMS system |
|
$105,000 |
|
Seven (7) scanning stations to replace six year old scanning equipment with newer, faster, more efficient scanners |
|
$35,525 |
|
New office equipment including bookcases, fax machine, file cabinets, printer stands, chairs, desks, copiers and conference table |
|
$120,000 |
|
One (1) JVR system fax back with Internet option |
|
$194,697 |
|
New office equipment including modular chairs, fax machines, desks, file cabinets, and telephones for thirty-eight (38) new positions |
|
|
|
|
|
$1,794,697 |
|
TOTAL ACQUISITIONS AND MAJOR REPAIRS |
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