County ‘Alliance’ Plan Helps Control Retiree Health Care Costs
Better retiree benefits, taxpayer savings, and guaranteed rates.
With health insurance premiums continuing to rise, counties, local governments and school districts are looking for better ways to manage costs and maintain or improve the quality and integrity of the coverage offered to their retirees.
Last year, Broome County took an innovative leap and partnered with neighboring counties, municipal governments, and schools to launch the Broome County Purchasing Alliance (Alliance). The program is a shared service model that brought the highest quality Medicare Advantage and Prescription Drug (MAPD) retiree health benefits program to participating entities. The Alliance partnered with the Statewide Purchasing Alliance of NY (SPANY) to design, build and manage this initiative and secure retiree health insurance coverage through an MAPD program. The Alliance allows most all municipal entities in New York to participate.
In 2021, the Alliance generated $9.1 million dollars in premium savings to qualifying participating public entities and achieved an average annual savings of 26 percent, with several counties achieving a projected 3-year savings of over $3 million. The program is providing equal or better coverage and significant savings with rate guarantees through 2024 through one of the highest rated MAPD carriers in the country, UnitedHealthcare (UHC).
Broome County Executive Jason Garnar stated "The Alliance has helped thousands of retirees in our region to keep the health coverage they're used to while also saving money on premiums. Using the Alliance's ability to leverage collective buying power, we have saved millions of dollars for municipalities and school districts. We're proud to be a model for the State and hope that others will join this effort.”
Working with NYSAC, Broome County is now extending those benefits, after review and approval of required data, to other interested public entities across the state.
NYSAC President Marte Sauerbrey said “Tioga County joined the Alliance last year and is projected to save $3.2 Million, with a Shared Services match, over the next three years. It just made sense for NYSAC to partner with Broome County and offer this benefit to other counties, towns, villages, cities, and school districts. The more local governments who participate in the program, the more savings, and the more benefit there will be to our taxpayers. It is really a win, win, win program.” Sauerbrey is chairwoman of the Tioga County Legislature.
“This is a best practice in cooperative purchasing, and we are pleased to partner with Broome County and the Alliance's members to offer it to other counties, community colleges, and local governments across the state,” said NYSAC Executive Director Stephen J. Acquario.
How It Works
The Alliance's MAPD program pools the purchasing power of multiple municipalities, community colleges, and school districts to reduce costs, risks, and future rate instability for retiree health coverage by securing competitive coverage and rates for participating entities.
The program is designed for the Medicare-eligible retirees (those 65 years and older, and pre-65 members with certain qualifying disabilities) who are covered under the municipalities' health insurance plan. The Alliance's national provider network is a Passive PPO program that includes all doctors that accept Medicare as In-Network to help ensure that all participants have the same or more robust coverage than the existing program. Additionally, most plan retirees pay lower copayments and out of pocket expenses, with no copayments for all generic prescriptions. The Alliance plan also provides a bonus prescription list that includes drugs that are excluded by Medicare but commonly used by retirees.
The benefits gained by smaller municipal groups include a rate guarantee through 2024, lower premiums, more competitive options, benefit enhancements and provisions, only available to large groups.
Most retirees participating in plans 1 and 2 receive lower copayments and out of pocket expenses with all generic prescriptions classified in tier 1 at $0 Copay. Refer to plan summaries for complete details. Plan designs can be viewed on the SPANY.ORG website.
All participating entities were successfully transitioned without any issues. UHC's Retiree Solutions assembled dedicated service teams for the Alliance to coordinate all retiree onboarding, implementation, and open enrollment without disruption to their health coverage or the municipality's staff. Their seamless transition process includes scheduling and holding both in person and virtual retiree informational meetings.
Additional Alliance Benefits
The Alliance handles the entire process with no disruption to retirees' coverage, and no impact on the local governments' staff time or resources.
In addition to lower costs and guaranteed savings, participating entities may also qualify for the County Wide Shared Services Initiative (CWSSI) matching grant on their first-year savings. Participation in the Alliance may also lower the entity's GASB liability.
Requirements to Participate
Entities must have a minimum of 25 Medicare primary retirees participating in their plan. The entity must have an obligation to provide retiree coverage through their collective bargaining agreements and contribute a minimum of 50 percent of the premium costs. Entities may offer only one UHC plan to their retirees. Existing UnitedHealthcare Medicare Advantage clients are not eligible for this program. UHC clients for Medicare Supplement and/or Part D plans would be eligible.
How to Join
To participate in the Alliance program beginning January 1, 2023, each entity must pass a resolution by their governing board. Sample resolutions can be found here. Each entity must register on the website, submit a copy of the passed resolution, census of covered Medicare retiree population (date of birth, gender, zip code, in this format), and current summary plan description through the web portal by August 1, 2022. Once your group has received approval from UHC to participate in the program, group onboarding begins on August 15th.
Visit https://gobroomecounty.com/purchasing/bcpa to learn more and get registered!