KEN KREFFT
The state of Louisiana offers quite a well-managed group health insurance program to its employees, retirees, school boards and retired teachers, and other former school employees.
Its name is the Office of Group Benefits (OGB). Its board has 11 members, of whom I am honored to be one. My position is one of three appointees by Clay Schexnayder, Louisiana Speaker of the House of Representatives. The Louisiana Senate president and the governor also each appoint three board members. The final two are elected by retired state employees and retired teachers. We are known as a Policy and Planning Board. Recommendations made on insurance plans, premiums, copays, deductibles and other similar policies, in order to take legal effect, must be approved by the Commissioner of Administration and the Joint Legislative Committee on the Budget. Most suggestions are followed and approved by the commissioner and then the JLCB.
The city of Shreveport has its own self-funded group health plan. City employees here and throughout other Louisiana cities would benefit
if our laws were changed to allow a municipal worker to join OGB. Now there are civil service prohibitions preventing a city employee
from participating in OGB. There are reasons to change state law.
OGB's premiums are much lower than Shreveport's. The average annual health premium rate increase for an OGB plan member in the past 10 years is 2.7%. OGB had a 7% rate decrease effective Aug. 1, 2012, followed by a 1.77% rate cut as of Aug. 1, 2013. We are the only major health plan in the country to lower premiums for those two years. OGB's next rate hike will be 5% to be effective on Jan. 1, 2022.
The city has decided to "eat" the $5.2 million group health increase for 2022. The funds will be from the General Fund Operating Budget Reserve. The city's record high sales tax receipts, about which I have written several Focus columns this year, make this possible.
This is merely a short-term fix good only for 2022. The city can't pay annual health insurance premium hikes every year. A really positive step would be for the Louisiana Municipal Association to work with state legislators to craft statutory authority so city employees can belong to OGB. Besides lower costs for plan members, this would afford a smooth transition as far as health insurance when Louisiana workers leave state service to become municipal employees and vice versa. This would be easier for workers in government
service to switch jobs.
The addition of thousands of municipal workers would strengthen the financial integrity of OGB, already very strong with a large operating reserve. Let's do this in 2022.