News Archive

EUTF Update: Awarding of contracts

July 22, 2011

The State Procurement Office has just posted information regarding the award of contracts for the EUTF medical plans and prescription drug plan for the period 01/01/12 – 06/30/15 for actives (bargaining unit employees and retirees under 65) and 01/01/12 – 12/31/14 for retirees (65 and older). The following are the awards:

  1. All retiree and active medical plans except for the active supplemental plan – HMSA (incumbent was HMSA and HMA)
  2. Active supplemental medical plan – Royal State National (incumbent)
  3. Chiro plan – Royal State National (incumbent)
  4. Retiree and active prescription drug plan – CVS/Caremark (Longs) (incumbent was informedRx)

This award does not include the award related to the closed panel HMO plans (incumbent Kaiser), which has not been determined.

Please note that the medical plans with HMSA are now fully insured with participation. Under a regular fully insured plan, the employer and employee will only pay premiums each month to the insurer. If the actual medical claims exceed the premiums, the insurer bears the loss, and vice versa, if the premiums exceed the claims, the insurer keeps the difference. However, under the fully insured with participation, if actual claims are less than the premiums, the excess will be refunded by HMSA to the EUTF. In addition, if the claims exceed the premiums, the insurer will bear the loss. So in essence EUTF retains the upside but passes the downside risk to HMSA. Premiums will be compared to claims based on each contract year (active 01/01/12 – 06/30/13, 07/01/13 – 06/30/14 and 07/01/14 – 06/30/15; and retirees 01/01/12 – 12/31/12, 01/01/13 – 12/31/13 and 01/01/14 – 12/31/14). Note: with this fully insured contract, the rates will be set for the period from 01/01/12 – 06/30/13 so members can budget accordingly.

Under the prescription drug plan, CVS/Caremark (Longs) will be offering the members the ability to fulfill mail order at their local Longs Drugs while still keeping the mail order pricing the same for both the member and the EUTF. In addition, the mail order facility for CVS/Caremark will be in Mililani rather than Florida under informedRx. Please note that CVS/Caremark has an extensive network of pharmacies, more than just the Longs Drugs pharmacies.

Note: The prescription drug plan remains under the self funded model.

Open enrollment will be from October 3, 2011 to October 21, 2011.

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