To:                 State Retirees

From:             Robert Pickett Jr

RE:                  SEIB State Retiree Coverage Board Decision

The State Employees Insurance Board has always strived to make sure that state employees and retirees have the best possible insurance coverage for a reasonable cost to the employee, retiree and the state.

We are required to bid health insurance administered by SEIB every three years.  This year, United Healthcare Medicare Advantage Program underbid Blue Cross, Blue Advantage. This was possible largely because of ratings that are given by Medicare to the Medicare Advantage plans.

United Healthcare was given a 4.5 star rating while Blue Cross was rated at 3.5 stars. The higher grade allowed United Healthcare to receive a larger rebate from Medicare than Blue Cross, thereby enabling United Healthcare to underbid Blue Cross.

We could have awarded the contract to the higher bidder but that would have been perceived as irresponsible to the Legislative leadership when we approach them for funding for our health insurance.

We have been assured by United Healthcare that out of network physicians and hospitals should take your insurance if they take Medicare.

It should work like this: Out of network physicians and hospitals will bill United Healthcare and they will pay them at the Medicare rates. If we can work out the network problems that may occur, this policy with United Healthcare will be much cheaper for the state and also much better for the retiree as it contains several enhancements for retiree health coverage. If things do not work out as expected, we can always rebid the contract.

ARSEA/APEAL, SEIB and United Healthcare will be holding training sessions around the state this fall to help inform you on the new health insurance program. If you are not a member of ARSEA/APEAL, please consider joining to help support our retirement benefits and to be kept informed about issues that affect retirees.

Active employees will still be covered by Blue Cross/Blue Shield since they had the lower bid for active employee coverage.

I hope this helps to explain our actions.

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