8 I Summer 2018 www.anjc.info Legislative Update TECHNIQUE Council S C H O L ARSHIP WI N N E R S On July 12, State Treasurer Elizabeth Maher Muoio laid out the framework for several initial state health benefit cost-saving measures that are under way by the Murphy Administration and are projected to yield significant annual savings for taxpayers while upholding the state’s commitment to public employees. According to reports, the efforts could save more than $200 million. The cost- saving measures echo similar proposals discussed recently by lawmakers. Now that the fiscal year 2019 budget is in place, they’re the first step in what is expected to be a renewed focus in Trenton on state spending and the cost of employee benefits. The treasurer underscored the need to enact these measures swiftly in light of the presentation to the state health benefits plan commissions by AON, the state’s health consulting service, that indicated most state health benefit plans for active members could see a 6 percent increase in premiums in 2019. As part of the governor’s goal to change to create savings, they have put together an internal working group tasked with finding immediate health benefit cost savings. The working group is comprised of staff from the Treasurer’s Office, the governor’s policy team, the Office of Manage- ment and Budget, and the Division of Pension and Benefits. The initial measures are designed to produce savings through efficiencies in order to keep premiums in check while maintaining the same quality of service for members. The ultimate goal is to find the most cost-effective means to deliver quality health benefits to nearly one million state and local government and school employees. The following proposals identified by the working group, some of which were included in the budget signed by Governor Murphy, are expected to yield significant annual savings to be shared by the state, local govern- ments, school districts, and health plan members: 1. Member Eligibility Audits – It’s been nearly a decade since the Division of Pension and Benefits audited its enrollment for accuracy. An audit of dependents, spouses, Medicare-eligible enrollees, and staff at higher education institutions and other government entities, is expected to identify ineligible enrollees who can be removed from the state-adminis- tered plans. These audits have begun and are expected to be completed by the end of next year, resulting in an estimated savings of roughly $77 million. 2. Third Party Administrators (TPAs) – In addition to the fees paid by the state to third-party adminis- trators, such as Horizon, Optum and Aetna, these vendors also receive additional fees for other services provided to members. The Office of the Treasurer is actively working to ensure transparency in its relationship with these TPAs to ensure that members and the state are receiving a high return on their investment, as it relates to the quality of care received, and without the burden of unnecessary services. As part of this proposal, invoices will be verified to ensure that they reflect services provided and payment mechanisms to TPAs and providers will be streamlined in order to ensure accountability and accuracy. Implementation of these proposals are underway and expected to yield roughly $15-25 million in savings. 3. Plan Design Committees (PDCs) – Plan design committees (PDCs) have finally begun recon- vening after a long hiatus, and the administration is actively engaged in discussions with members on potential modifications to achieve reductions in premiums. In the past, PDCs had been actively engaged in several critical plan modifications that not only produced savings for members and taxpayers, but also improved the quality of service being delivered. PDCs will continue to explore several plan improvements, including a review of how out-of-network claims are administered. A bipartisan legislative group of fiscal-policy experts organized by Senate President Steve Sweeney (D-Gloucester) is expected to soon release its own proposals to lawmakers in Trenton. It will be interesting to see the difference in proposals and how the state will continue to move forward on this issue. *Treasury’s Division of Pension and Benefits oversees the health benefits of 813,180 state and local government and school employees. Of these employees, 485,882 are enrolled in SHBP; 327,298 members are enrolled in SEHBP; 502,668 of these members are active employees; and 310,512 are retired employees. Jon Bombardieri and his firm, CLB Partners, serve as the Government Affairs Counsel to the ANJC. By Jon Bombardieri ANJC Government Affairs Counsel Treasurer Unveils Health Benefit Measure to Control Costs and Savings