Wisconsin Governor Explores Self-Insurance for Employees

October 2, 2013

Wisconsin Gov. Scott Walker is considering a proposal to shift state employees from health maintenance organizations to a state self-insured program.

Employers that are self-insured carry the risk for losses and pay benefits directly to employees. At least 20 states have self-insurance programs for their employees, according to the National Conference of State Legislatures. Currently, the state contracts with 18 HMOs to cover its 236,000 employees.

A report by Deloitte consultants said the state could save 4 percent to 5 percent a year by becoming self-insured, with savings mainly coming from taxes and fees imposed for fully-insured programs under the Affordable Care Act.

Switching to a self-insured program “may be advisable in some regions of the state,” the report said, if insurance companies that get substantial discounts from doctors and hospitals handle claims in those regions, the Journal Sentinel reported.

The report said the state should ask for proposals from insurance companies interested in administrating the self-insured program and study the issue further.

The Group Insurance Board committee will consider seeking the proposals Oct. 11, said Rob Marchant, deputy director of the Department of Employee Trust Funds, which oversees state employee benefits.

“If on balance they received a proposal they wanted to proceed with, they could, but they aren’t bound to,” Marchant said. “This is a way that they can get actual solid numbers and data.”

The earliest potential starting date for self-insurance would be Jan. 1, 2015.

Topics Wisconsin

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