The panel tasked with setting state employee health insurance rates voted Monday to provide relief to workers who shouldered years of skyrocketing increases after the state slashed its own contributions.

State employees will see 6 percent reductions or keep payments flat next year while the state increases payments by 4.5 percent.

The Kansas Employees Health Care Commission voted unanimously to make the changes and slam the brakes on a five-year trend in which premiums for some state employee groups increased by 115.5 percent.

Members of the five-member commission include Kansas Insurance Commissioner Vicki Schmidt, a Republican, and Duane Goossen, the interim secretary of administration under Gov. Laura Kelly, a Democrat.

Kelly said the commission's action to lower health insurance costs for state employees and their families was "long overdue."

"The high costs associated with the plans were inflated to pay for tax cuts that our state couldn’t afford," the governor said. "Those same policies would often force employees to decide between basic health care for their children and spouses and other necessities like food. It is no way to live."

Under former Gov. Sam Brownback, the state reduced contributions by 8.5 percent in 2015 to free up cash and balance the state budget, then imposed rate increases from 2016-18 of 36.7 percent, 30.4 percent and 31.7 percent for employees with spouses or families participating in the state insurance plan.

"There was no way an employee could have begun to plan for those types of increases," Schmidt said. "Our employees are working hard every day, and I think it was pretty shocking in October to get that brochure."

As the burden of supporting the health fund shifted to employees, fund reserves dropped from $195 million in 2014 to a low of $24 million in 2017.

"You can argue pretty conclusively the reason the balance slipped so low is the state lowered its contributions substantially at a time when expenses were going up," Goossen said.

Under changes adopted Monday, the reserve balance is expected to increase from $48 million to $52 million next year.

Before taking action, the commission heard from Cheryl Buxton, president of the Employee Advisory Committee, which is made up of current and former employees who are active in the health insurance plan.

Buxton said employees wanted no change to employee-only rates and a 5 percent reduction for employees with spouses and families, as well as a 5 percent cut for retirees who saw a 74.1 percent increase over the past five years.

The committee instead approved a 6 percent reduction for spouses, families and retiree rates while holding others flat.

Costs vary depending on the plan type and group. Employees with a spouse currently pay between $93 and $263 in biweekly premiums. For an employee only, the biweekly cost ranges from $23 to $40.

Buxton said employees will be pleased with the combination of decreased health insurance costs and a pay increase the Legislature included in the new state budget.

"That's going to be a win-win on two fronts in one year," Buxton said.

Goossen said the state still is "a long way" from restoring the relative balance between employer and employee for overall health plan costs. Commissioners expressed interest in passing along more savings, but long-term outlooks showed modest increases would be needed to maintain a targeted reserve balance as health costs rise.

"I would not support getting wild and crazy with minus 30 percent increases," Schmidt said. "We have to be responsible, I understand. We're adulting now."

The committee also approved savings for employees using Plan C, a high-deductible plan. After the deductible is met, employees will pay 10 percent of health costs instead of the current 20 percent rate.

Additionally, employees who leave state jobs will be allowed to keep their health insurance through the end of the month. A Brownback-era policy kicked workers off the insurance plan the day their employment ended.

 

HEALTH INSURANCE RATE CHANGES

Group201520162017201820192020

State
-8.5%
0%
7%
7.7%
3.3%
4.5%


Employee
0%
6.4%
9%
7.7%
3.3%
0%


Employee and spouse
0%
36.7%
30.4%
31.7%
16.7%
-6%


Employee and children
0%
6.4%
9%
7.7%
3.3%
0%


Employee and family
0%
36.7%
30.4%
31.7%
16.7%
-6%


Retirees
0%
21.3%
46.1%
0%
6.7%
-6%

Reserve funds201420152016201720182019

Balance
$195M
$125M
$32M
$24M
$31M
$48M