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Health insurance rates jump 10% for Hawaii public workers

By Star-Advertiser staff

LAST UPDATED: 5:40 p.m. HST, Aug 2, 2011

Hawaii's public workers will see a 10 percent hike in medical insurance rates as of Jan. 1 on top of paying a larger share of their monthly health premiums. 
The Hawaii Employer-Union Health Benefits Trust Fund said rates for active employees will jump 10 percent over current rates and will be in effect for 18 months. 
Most state and county workers in Hawaii already saw a $45 to $250 drop in take-home pay last month since they are now paying a larger share of their health insurance costs under a new contract that took effect on July 1.
More than 36,000 workers in the Hawaii Government Employees Association, University of Hawaii Professional Assembly and Hawaii State Teachers Association have a new collective bargaining agreement that calls for workers to now pay 50 percent of their health insurance premiums, up from 40 percent or less.
The agency that administers health and other benefits for about 200,000 active and retired public workers and their dependents has changed from self-insured preferred provider plans with Hawaii Medical Service Association and HMA Inc. to fully insured plans solely with HMSA. 
The fully-insured agreement caps costs to EUTF and makes HMSA responsible for paying all claims even if it exceeds the cap. The state's largest health insurer has also agreed to refund any surplus to EUTF if medical costs are lower than anticipated.
Under the previous self-insured contract, the EUTF was responsible to pay all claims by members. 
Meanwhile, health premium rates will decrease about 5 percent for a 12-month period for public worker retirees at the start of next year. 
The EUTF also offers its members plans with Kaiser Permanente Hawaii, which is still in the process of being finalized.
The agency also said it changed its pharmacy benefit manager for prescription drug coverage to CVS Caremark, parent company of Longs Drugs Stores from a mainland provider. The change is expected to save the state about $24 million in the first year.
The next rate adjustment for active employees will be July 1, 2013, while rates for retirees will change Jan. 1, 2013.

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