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Monday, April 21, 2014

Fund: Aetna extension will allow the govt to look for a better deal

Following disclosure last week by Gov. Eloy S. Inos of the contract extension of Aetna International, the firm that handles the health insurance coverage of government personnel and retirees, the NMI Retirement Fund on Friday bared that the new agreement will extend the contract by up to 60 days to allow the administration to negotiate an affordable health insurance policy for all enrollees.

Fund administrator Lillian M. Pangelinan made the announcement to affected members in a memorandum Friday, indicating the government’s commitment to provide for members’ health insurance needs, balanced with the CNMI government’s financial condition.

The Group Health Life Insurance Program is a benefit program of the government that is administered by the Retirement Fund. For many years, Aetna International has been servicing the members’ health insurance coverage while Individual Assurance Company takes care of the life coverage. Both contracts will expire on Dec. 31.

Early this month, the government issued separate RFPs, or requests for proposal, for both policies. For the health coverage, only two firms submitted bids, one of which later cancelled. Aetna is not among any of the two initial proposers.

According to Pangelinan, the RFP for health policy was officially cancelled on Dec. 27 after it was determined that the RFP submissions were not in the best interest of the CNMI.

“To ensure all active CNMI government employees and retirees continue to have healthcare coverage, the CNMI government and GHLIP entered into an agreement with Aetna International to extend the current insurance policy for up to an additional 60 days. This extension will allow the government to negotiate an affordable health insurance policy for all enrollees. However, because of the rising cost of health care, the extension also comes with a 40-percent increase in premiums,” Pangelinan said in her letter Friday.

She said that Aetna will hold off on issuing the January billing until it can effectuate the appropriate system changes and anticipates the billing to be out in mid-January.

“At this time, the government is still working on how to implement the premium changes for the extension period, including how the costs will be shared between the government and the enrollees, therefore enrollees should not see an increase in their premiums until this change is effectuated,” added Pangelinan.

Aetna had agreed last year to a reduction of 18.31 percent for the one-year coverage of members for 2013. Fund records show that there are approximately 2,400 individuals who benefit from the health coverage plan.

It was revealed that there are 1,078 members who are enrolled in the policy as employees who are paying $350.28 per annum at present. For an employee with one dependent, the present rate is $718.06; there are 804 enrolled under this category.

For those in the family category, the rate is $1,120.87; there are 500 members enrolled in this category.

The 2013 policy brought the government substantial savings of $339,644 monthly—or $4.075 million in the 12-month period. The health insurance coverage is paid 50-50 share by the government and employee.

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