Thousands of Mississippi government and school employees could be paying less and-or have better dental, vision and other supplemental insurance coverage if they had a statewide contract.
But instead, each of more than 100 state agencies plus school districts and higher education entities has its own smaller contract with its favorite insurer. There is no requirement to competitively bid or get proposals for the best price or coverage.
And some Mississippi-based insurance companies say out-of-state companies -- some that may be sidestepping rules, regulations and taxes -- are getting many agencies' business. They say they're being shut out in a process that is not very transparent or open for competition or regulated for fairness.
The issue has mostly stayed off state leaders' radar, because employees, not state taxpayers, bear most of the cost of supplemental insurance and "cafeteria plans." The only recent push for change -- consolidated dental coverage -- in the Legislature was met with a vociferous political backlash from agency leaders who don't want to change and individual insurance agents who don't want consolidation.
Rep. William Shirley, R-Quitman, authored the bill on dental coverage.
"Why not get the employee the best coverage at the best price?" Shirley said.
"We passed it on our side," said state House Insurance Chairman Gary Chism, R-Columbus. "The Senate never picked it up. It was a hot potato. Lots of members got calls from school districts, community colleges, state agencies. The agents that have the contracts had great concern. They liked what they had. Our members started saying, 'my community college board doesn't want this.'
"But to me there's no question there could be money savings," Chism said, if the buying power of 180,000 people was used instead of smaller numbers per agency.
The state provides health insurance for about 90,000 employees at government agencies and schools through a self-insured program. It competitively bids out the administration of the plan, which also covers about 90,000 dependents.
But employees have to foot the bill for supplemental coverage, such as dental, vision, long-term disability and other services, such as flexible spending accounts. State agencies do provide payroll deduction and some in-house administration work for the plans. But it's up to the agencies, ultimately the directors, what supplemental coverage is offered in-house.
The state Department of Finance and Administration has an insurance office that oversees the state's health insurance. But it has no authority over supplemental plans, said DFA Director Kevin Upchurch.
"If the state were paying, we would want to do (requests for proposals) or bid, and the result would be one provider," Upchurch said. "As a state employee, I'm grateful the state allows me to have a payroll deduction for other coverage. As the state's fiscal officer, I'm not a proponent that the state pay for dental and vision or other supplemental."
But Upchurch said he could see where there might be savings for employees from the bulk purchasing power of thousands of employees or required competition.
"I'm not aware of any prohibition that would block agencies from going in together," Upchurch said. "... You know, you've given me a good idea here ... I'm going to talk to our HR director, see what they think of this. If some agencies are not participating, maybe they can go in with (DFA) and see if we can get a better deal with more people. This is one of those deals -- I feel bad that employees have not had pay raises to keep up with inflation, especially those on the lower end of the pay scale. Anything like this would be helpful. It probably wouldn't be a huge savings but any savings would help. Maybe instead of $30 a month for vision, you might could drop it down to $20."
While taxpayers don't pay for government employees' supplemental coverage, there is some cost to them. Staffers at agencies have to deal with paperwork, payroll, the insurance contracts and RFPs when they do seek competition. Upchurch said there could be some savings in administrative costs if supplemental insurance was consolidated, perhaps run by a committee of state employees.
Some Mississippi insurance company officials say it's hard to compete for state agencies' supplemental insurance business.
"I've had people call me and say we'd like you to put in an RFP or bid on this," said Glynn Griffing, owner of Glynn Griffing and Associates. "I've gotten to where I ask them, 'Are you really interested in getting bids, or do you already know who you are going to have?' I'll say I've had enough practice."
Griffing and others have questioned out-of-state companies getting Mississippi state agency business. They have questioned whether the out-of-state firms are following state regulations or paying the state's insurance premium tax. And, they say, it just bugs them that Mississippi agencies are using out-of-state companies, sending tax dollars out of the state.
"About three years ago, this group from Tennessee had come in and was offering things -- giving away free benefits or products -- I didn't think we were allowed to do," Griffing said. "I asked and was told we could not, and they got the business. I was later told what I had been told was wrong."
"I'd just like to have something in black and white, to know what the rules are," Griffing said.
Jim Miller, vice president of Southern Administrators and Benefit Consultants, said he's seen large out-of-state companies that are sidestepping state, federal and tax regulations for cafeteria plans get state agency business.
"I can't compete with somebody who doesn't comply with the law," Miller said. "Competition is good. I don't mind competition one bit ... But we've taken over agency work from some of these others, and we have to fix things, and they start saying, 'My God, we never had to turn in these receipts or do all this paperwork before.'"
Miller, Griffing and other state insurance officials said part of the problem is state workers who handle supplemental insurance for their agencies are typically not trained in insurance work and vetting providers or services. And they may be susceptible to insurance salespeople who promise the moon. And once a company gets the business, agency officials are loathe to change or look for better prices or services.
State Insurance Commissioner Mike Chaney noted his office is a regulatory one and does not oversee the state's health insurance plan or agencies' supplemental policies. He said he supports competition for all state insurance and has advocated improvements in administration of state agencies' supplemental coverage.
Chaney said his office has received some complaints about the practices of out-of-state vendors working with state agencies.
"They are on our radar," Chaney said. "We work hard to make sure anybody that sells insurance in the state of Mississippi is following the rules. We are looking at all of them."
Much like with state officials, the issue of supplemental insurance hasn't been on employees' radar, either, said Brenda Scott, president of the Mississippi Alliance of State Employees.
"We've been tackling the bigger issues -- pay raises, state Personnel Board protection," Scott said of the union's focus. "... But if this would be a way to save employees money, then we need to look at it ... To me it seems just a common-sense thing, instead of just piecing all these little premiums to death, when a lot of people can't afford it anyway.
"Workers are looking at any kind of way to bring home more dollars."
Scott said she suspects "politics are involved" in the way it operates now.
"Just watching how the state operates everything else," Scott said. "... I would guess it would meet with resistance. I'm sure there's campaign contributions involved, politics involved. I would want it to be an open bidding process. It should be done aboveboard."
Gulfport Mayor Billy Hewes III is a former state senator and insurance company owner who championed some consolidation in state schools, contracting and services.
"I never got down into the weeds on (supplemental coverage)," Hewes said. "But you would think there would be some savings. The best example I can give is that when I was on the PEER (legislative watchdog) Committee, we looked at cellphones. Every state agency back then had a separate and distinct contract for cellphone service. We asked, couldn't we leverage that, and have uniformity?"
Hewes said he recently looked into whether the city of Gulfport could go in with other local governments for consolidated health insurance coverage.
"I'm told we're prohibited from doing that by law," Hewes said. "But state departments, I don't think there would be any prohibition. We changed the cellphone situation."