To: Members Insured in the NLTA Group Insurance Plan
From: Tracey Payne, Chairperson, NLTA Group Insurance Managers
Re: Group Insurance Rate Changes for 2024-2025
Dear Colleagues,
On behalf of the NLTA Group Insurance Managers, I wish to inform you of the details of the annual Group Insurance Renewal that will become effective during your April payroll deductions. Each year, the various insurance policies are renewed with the insurance underwriters and the premium rates must be set at a level sufficient to pay the claims plus expenses predicted for the next insurance policy year.
Specifically, the following decisions were made by your Group Insurance Managers.
There is no change to the Dependent Life or Voluntary Life Insurance rates.
Premium rates for Basic/Voluntary Accidental Death and Dismemberment, and Long-Term Disability will not be changing.
Basic Critical Illness and Voluntary Critical Illness remain at their current rates.
The Post-65 Life Insurance rate will increase from $1.672/$1,000 to $1.76/$1,000.
While the total Basic Life Insurance rate payable for our program remains the same, the actual Teacher/Retiree cost sharing goes up very slightly as a result of our rate cost sharing agreement with the employer. This translates in an increase of $.08 cents per pay for a member with an $80,000 salary and $.05 cents per pay for a member with a $50,000 salary/pension.
Health Premiums are a significant concern for Group Insurance Managers. While all areas of health insurance coverage are experiencing inflationary and cost trend pressures, prescription drug costs pose by far the greatest challenge to the NLTA Health Plan. Prescription drugs represent approximately 75% of the program’s total claims and the NLTA Plan is subject to considerable cost increases as more popular and more expensive therapies continue to emerge. The NLTA Plan is particularly vulnerable as, unlike the majority of group plans, the program covers the full ingredient cost of the majority of prescription medications and the member is responsible for only the pharmacist charges. Additionally, the program bears the full cost of any emerging new high-priced medications.
In order to meet projected costs for the 2024-2025 year, the required total monthly rate increases are $33.99 for single coverage and $60.75 for family coverage. Group Insurance Managers understand the impact of such a substantial increase on Plan members and have elected to use the Health Rate Stabilization Fund of the Group Insurance Trust to help offset the required increase in health premiums by 25%. This will reduce the premium increase to members by $8.50/month for single and $15.19/month for family coverage.
Managers have also decided to continue to subsidize members’ Health Insurance premiums at a rate of $3.50 for single and $7.00 for family per month.
Managers recognize the need to mitigate the impact of the required increases through the use of the Rate Stabilization Fund and by continuing the Health subsidy. These measures shift some of the financial burden from the member contribution through premiums to the Group Insurance Trust Fund. The Fund is currently in a financial position to provide this support, but Managers caution that the Fund cannot sustain the trend of growing deficits. There is real risk to the Fund stability should high losses continue, which is anticipated based on membership claims experience and increasing prescription drug costs. In light of continuing deficits and the projected trajectory of health plan costs, Managers will have to implement future cost containment measures.
With the use of the Rate Stabilization Fund and the decision to maintain the Health subsidy for 2024-2025, the net result will see Health costs increase by $11.67 per pay period for single coverage and $20.06 per pay period for family coverage.
Our prescription drug program includes annual or lifetime maximums on certain drug classes, such as sexual dysfunction medications ($500 calendar year maximum), fertility drugs ($15,000 lifetime maximum) and smoking cessation drugs ($500 lifetime maximum). Effective May 1, 2024, our program will place a $4,000 calendar year maximum on anti-obesity specific prescription drugs.
Group Insurance Managers appreciate that the NLTA Health program provides access to lifesaving and life enabling protection for our members, but they are very concerned about the increasing cost of our current coverage levels, primarily with respect to prescription drugs. Managers continue to seek information and evaluate strategies to ensure that the Plan can provide high quality services to members while protecting the long-term financial stability of the plan at affordable rates.
Dental Premiums will increase this year, as dental claims continue to rise beyond the general inflation rate. The 8.5% increase in the 2023 Newfoundland and Labrador Dental Fee Guide followed by a 4.0% increase in 2024 Fee Guide have contributed to the need for a substantial change in premiums for 2024-2025.
Given this considerable increase, Group Insurance Managers have decided to maintain a subsidy for the dental plan. The monthly subsidy remains at a rate of $1.30 single and $2.60 family.
After applying the subsidy, member Dental premiums will increase by $2.88 for single coverage per pay period and $5.80 per pay period for family coverage.
For the 2024 update overview, that includes the current 2024-25 premium rates, please click HERE.
For complete information on premium changes please click HERE.
For additional information related to group insurance please check out our website at https://groupinsurance.nlta.ca/