HMO Rates to Increase

Volume 118, No. 7July, 2018

Martha Hyde

Folks who choose the HMO option as an alternative to the Local 802 health Plans A or A+ will soon see dramatically higher premiums. Local 802 Musicians’ Health Fund has offered the option of an Empire Blue Cross HMO for a number of years. This offering goes back to a time when the Fund covered major medical services through Plans A and B and hospitalization was only available through a stand-alone Blue Cross policy or as part of a collective bargaining agreement. Beginning in 2007 the Fund added a third level, Plan A+ which covered hospitalization in addition to services covered by Plan A.The HMO was another way to get full coverage that included hospitalization. Since 2014, the two levels of the health plan (Plans A and A+) have been full coverage, including preventive care and hospitalization, with no annual or lifetime caps on the coverage.

At the time the HMO was introduced, it offered good value to the Fund because the premium for the HMO was known at the beginning of each plan year, making it a predictable cost. At that same time, the expense of paying major medical benefits directly from the self-insured plan (Plans A and B) was much less predictable. The trustees decided to encourage folks to sign up for the HMO by subsidizing the cost – paying a portion of the premium rather than having the participant pay the whole premium on top of the participant premium of Plan A or B. This has changed in the ensuing years. The premiums for the HMO have risen sharply and at the same time the trustees have made design changes to the plan, changing Plan B to dental and vision benefit coverage and bringing Plans A and A+ into compliance with the Affordable Care Act. They also found ways through plan design to control rising costs. Each time the HMO premiums have risen, the subsidy has cost the Fund more for each person on the HMO. A few years ago, the trustees decided to pass a portion of the premium increases on to the participant. More recently, they decided to terminate any new enrollment in the HMO. This has helped bring down costs but the premiums are still rising and the Fund is still bearing much of that burden. Here are the current premiums the HMO is charging. The letters in the top lines (D1, D2, and M1) refer to regions. Look at your HMO card to see which region you are in.

D1 (Downstate 1)
Individual: $1,106.71/month
Family: $2,877.45/month

D2 (Downstate 2)
Individual: $1,181.49/month
Family: $3,071.88/month

M1 (Mid-Hudson)
Individual: $1,210.39/month
Family: $3,147.01/month

Here are the current premiums Fund participants are paying:

Current rates (all regions)
Individual: $207/month
Family: $628/month

Individual: $452/month
Family: $1,183/month

– plus –

  • $100/month for individual Plan A or A+
  • $400/month for family Plan A or A+

If a Plan A participant has family coverage, the total premium is $1,583 with the Plan A family premium added in, far less than the actual cost to the Fund per month for that member in any region. The added minimum employer contribution to qualify for the coverage only adds about $167 a month. The Plan A+ participant pays $1,028 plus a minimum employer contribution of $375 a month, also adding up to much less than the cost of the HMO coverage.

The trustees decided this year to pass the entire premium increase on to the participants on the HMO. The HMO plan year begins on May 1 so the Fund is still bearing some of that cost. However, beginning September 1, the HMO premiums for Fund participants will rise to these rates:

All regions
Individual: $289/month
Family: $842/month

Individual: $518/month
Family: $1,397/month

– plus –

  • Individual: $100/month Plan A or A+
  • Family: $400/month Plan A or A+

These numbers reflect the amount the HMO premiums rose on May 1, 2018.

The trustees also decided the Fund will no longer subsidize the HMO premiums at all beginning September 1, 2019. The HMO plan year begins on May 1, 2019, so sometime after that, the Fund will notify you of your full HMO premium, which will be in addition to the Plan A/A+ premiums of $100/month for an individual and $400/month for a family. You can use the current HMO rates (D1, D2, M1) for reference. The rates will likely rise next year.

For more information on these changes, please contact the Local 802 Health Department at (212) 245-4802.

Martha Hyde is a multi-woodwind player who performs on Broadway. A member of Local 802 since 1980, she is also a trustee on the Local 802 Health Benefits Fund.