Gov. John deJongh Jr. on Friday called on the Health Insurance Board of Trustees to negotiate a contract extension to avoid a lapse in health insurance for government workers, retirees and their dependents when the current contract with CIGNA expires on Sept. 30.
He acknowledged receipt of renewal contracts but said he cannot accept them because they were not signed and they were not in line with the government’s budgetary constraints.
The 30th Legislature on Thursday issued a statement saying they were frustrated by a lack of information on the plan being negotiated.
In a letter to Board Chairman Clemmie Moses Friday, deJongh acknowledged receipt of two insurance renewal documents that arrived at Government House late Thursday. He said the package contained unsigned documents including the renewal medical insurance and dental insurance agreements with CIGNA, but he pointed out that the renewal documents were not signed by the chairman of the Government Employees Services Commission / Health Insurance Board or any of the signatories to the agreements, according to a Government House news release.
He said in the form the renewal documents were submitted, “There is no indication that the parties agree with the terms of the renewal.”
DeJongh said Friday encouraged the board to apply for an extension for not more than 60 days “to allow the board, the executive and the Legislature to develop a plan which adheres to our budgetary limitations and to avoid any disruption or access to care for our employees, retirees and their dependents.”
DeJongh cautioned the board not to negotiate the health insurance contract in a vacuum without taking into consideration the dire financial realities facing the territory, according to a Government House news release.
“The board has known since June 23 that $150.9 million was the most the government could pay for a one-year health insurance contract,” deJongh said. “The failure of the board to negotiate a contract that is within the government’s budget limitations and or a contingency plan for when the current contract expires at the end of the month has left insurance coverage for government employees, some retirees and their dependents hanging in the balance.”
DeJongh told the board chairman that his administration is ready to assist the Health Insurance Board to achieve the goal of securing a contract extension until a new contract can be successfully negotiated, according to a Government House news release.
Senators met with officials from the GESC/ Health Insurance Board of Trustees on Wednesday to discuss the renewal of the health insurance plan.
Steve Burrows, of Buck Consultants for GESC/Health Insurance Board of Trustees, said, “Under the board’s recommendations for FY 2015, the government would contribute $103.8 million, or an increase of $6.2 million from FY 2014. Under the administration’s proposal, the government would contribute either $9.8 million if the cost sharing remains at 65/35 or $90 million if the cost sharing was changed to 60/40,” according to a news release from the 30th Legislature.
“The former represents a small increase in the government contribution of $0.5 million and shortfall of $5.7 million from what the board is recommending,” he said, according to the Legislature’s news release.
Burrows said they were anticipating the shortfall based on previous data.
“We are assuming the estimated gap based on the information sent down from the executive branch,” he said.
Kenneth Hermon, director of Personnel, read a portion of a letter from deJongh. The letter stated that the governor is concerned about the board’s estimations of the shortfall for FY 2015 because it is calculated based on old data and past circumstances, according to the Legislature’s news release. The board overestimated the government’s contributions of $9 million, according to the news release. It is important that the board develop a benefit plan that costs $150.9 million instead of the $159 million, because the government would not be able to afford it, according to the news release.
Sen. Nereida Rivera O’Reilly stated that she was unsure of what the $150.9 million covers; whether it is the 60/40 or 65/35. She asked if “the board meet with the governor prior to this meeting?” Chairperson of GESC/Health Insurance Board of Trustees Clemmie Moses said they had not, according to the Legislature’s news release.
“No and we are unsure of what the monies will cover,” Moses said, according to the Legislature’s news release.
Sen. Kenneth Gittens said there must be better communication between officials of GESC and the administration, according to the Legislature’s news release.
Sen. Clifford Graham asked, “What will happen on Tuesday, Sept. 30 at midnight?” GESC officials said the health insurance contract will expire and there will be no health coverage from CIGNA for the government of the Virgin Islands after Tuesday if the contract is not signed,” according to the Legislature’s news release.
