Fund Administrator Richard Villagomez said, “Aetna has agreed to postpone the implementation date of the renewal terms from November 1, 2011 to January 01, 2012.”
He assured retirees and those covered, “Coverage and premiums will remain intact and the same until January 01, 2012.”
But beyond the said date, there will be an increase in premiums, the bulk of which is the direct result of additional coverage mandated by Health Care Reform Act if applicable, said Villagomez.
President Obama signed into law legislation that would overhaul the nation’s health care system, tighten regulations on insurance companies and extend coverage to over 30 million uninsured Americans.
Villagomez said the Group Health and Life Insurance Trust Fund and the Administration have been discussing with Aetna the renewal options for health insurance.
He also said that applicability of the Health Care Reform Act to the CNMI plan is being reassessed at the request of some lawmakers and the Fitial administration.
While they are still studying this, Aetna agreed to put in abeyance the rate increases.
Villagomez said, “If applicable, the coverage mandated by the Health Care Reform Act is nice but it is not free. It will increase premiums that we all have to pay for active employees, retirees and the CNMI government.”
The Fund pays 50 percent of the premium while the retiree and active members foot the bill for the other 50 percent.
Reprogramming of funds
The Fund on Thursday reprogrammed its budget for FY’11 to reflect its unrealized losses with securities lending.
As the Fund administrator does not have the budget authority to move funds around, Villagomez presented the changes to the budget for the board’s approval.
Villagomez said, “The bulk of this change is the $62,060 in professional services fees.”
The fees were incurred as the Fund ended its relationship with MNI Securities.
“When we exited the relationship with MNI we incurred unrealized losses,” he said.
For Villagomez such unrealized losses were not budgeted for as they had to be realized losses.
The move to revise the budget for last fiscal year, according to Fund Deputy Administrator Esther Ada, was necessary so it doesn’t show a negative variance.
“It is just reprogramming within our funds. The bottom line doesn’t change,” Ada said.
We are just finalizing the books, Villagomez said.
Fund legal counsel explained that Villagomez does not have the expenditure authority — the ability to reprogram the budget.
The Fund, however, tabled for executive session the discussion of FY’12 budget.
With the enactment of the beneficiary derivative lawsuit act, the Fund needed to accommodate two new positions, two in-house board counsels.
The controversial law was signed in early September after the Fund had already submitted its budget, so it was not anticipated.
Ada said the Fund was allowed to have two more counsels; however, the Legislature didn’t provide the pension agency any funding.
The Fund board decided to move the discussion to executive session.
P.L. 17-55 or Appropriations and Budget Authority Act of FY 2012 took away the Fund’s ability to move money.
