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Friday, April 18, 2014

Transfer of GHLIP to govt entity set

The Group Health Life Insurance Program and the Home Mortgage and Credit Program would soon be off the Settlement Fund trustee’s hands as the programs will be transferred to the central government.

Settlement trustee Joyce H. Tang reported to the court that she aims to have the programs transferred to the government by the end of the second quarter of this fiscal year.

“The settlement trustee will work with the government to transfer these programs by the end of the second quarter,” Tang’s latest filing indicates.

Prior to the bankruptcy case filed by the NMI Retirement Fund, the administration disclosed that GHLIP and the Workers Compensation Commission would be removed from the Fund’s administration so that the pension agency could focus on operating the members’ defined benefit plan.

Government agencies that may handle these programs include the departments of Commerce, Finance, or Office of Management and Budget.

The Aetna Health Insurance Plan expired on Dec. 31, 2013. The plan was extended for an additional two months at an increased rate to allow the government to negotiate with the carrier. Under the 2013 government-sponsored health plan, premiums paid totaled $18 million, half of which was paid by the government and half was paid by employees and retirees. Of the $9 million paid by the government, approximately 78 percent (or $7 million) was for retirees’ coverage and 22 percent ($2 million) was for active employees.

The government recently finalized its negotiations with Aetna. Under the 2014 plan, two health plans are offered: the low option plan and high option plan. The main difference between the two are the premiums charged and whether provider coverage in U.S. is included in the plan. The low option does not include U.S. providers in its network and premiums are about 20 percent to 21 percent lesser than the high option.

In her report to the court, Tang said that retirees who are currently enrolled can choose between the two plans. Retirees who opted out, however, cannot re-enroll as they are prohibited from doing so by CNMI law.

It was learned that the deductibles for the low option and high option plans were increased. Under the old plan, deductible amounts were $300 for single, $600 for couple, and $900 for family category. The new plan’s deductibles are now $500 for single, $1,000 for a couple, and $1,500 for a family.

“The increase of deductibles combined with other plan changes such as excluding U.S. in the network providers allows the government to offer a more affordable rate to attract active employees to stay in the plan,” Tang’s filing states.

Meantime, the government-sponsored life insurance program will be renewed this year.

“The rates increased by 11.1 percent across the board. The coverage limit for active employees is limited to 1.8 times the employee’s annual salary. The coverage limit for retirees is 1.8 times the reduced pension payments,” Tang said, adding that the maximum coverage for both active employees and retirees is $90,000.

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