Scope

W.S. 28-8-107(b) authorizes the Legislative Service Office to conduct program evaluations, performance audits, and analyses of policy alternatives.  Generally, the purpose of such research is to provide a base of knowledge from which policymakers can make informed decisions.

In May 2000 the Management Audit Committee directed staff to undertake a review of Employees’ Group Insurance (EGI).  The Wyoming State Employees’ and Officials’ Group Insurance Board of Administration provides health, life, and dental insurance to about  24,000 public employees, retirees, and dependents in Wyoming, and was the subject of a 1994 program evaluation.  The Committee requested an updated analysis focusing on three aspects of the health insurance plan:  cost, membership, and placement.  We developed three objectives to examine these issues:

• Is the EGI plan cost-effective, and are participant costs comparable to those in similar plans?  Would increasing membership decrease costs?

• Are participants continuing to insure their dependents outside of the EGI plan?  If so, what is the impact on the EGI plan?

• How does the plan’s structure (placement, policy direction, staffing, and use of management information) affect the board’s ability to make strategic decisions? 

Methodology

This evaluation was conducted according to statutory requirements and professional standards and methods for governmental audits.  The research was conducted from June through October 2000.

In order to compile basic information about the EGI plan, we reviewed relevant statutes, statutory and placement history, annual reports, budget documents, strategic plans, rules, statistical reports, and other internal documents.  We reviewed a considerable body of professional literature about the insurance industry and public sector health insurance plans. 

We attended two EGI board meetings and reviewed board meeting minutes from prior years.  We interviewed current and former board members and conducted extensive interviews with EGI staff and the board’s consultant.  We also consulted with several experts in the field of health plan administration.

Finally, we identified four in-state and four out-of-state comparators in the public sector, offering a variety of plans with provider arrangements similar to EGI.  We chose out-of-state comparators based on their similar economic and demographic characteristics; in-state, we chose larger public employers.  The comparator plans offer generally similar benefits and have slightly different cost-sharing arrangements.  We compared the plans to the EGI plan using numerous variables.

Acknowledgments

The Legislative Service Office expresses appreciation to those who assisted in this research, especially the EGI board and staff, former board members, and the Departments of Insurance and Administration and Information.  We also thank the many other government, nonprofit, and private-sector individuals who contributed their expertise.  We would specifically like to thank the health insurance administrators from other states who provided information on their plans, and Centennial Consulting for information they provided on public-sector comparators.