SPRINGFIELD – A $94 million online health insurance system has some Illinois state employees and agencies flummoxed and Gov. Bruce Rauner’s administration scampering to rid the system of bugs, according to interviews and documents reviewed by The Associated Press.
State workers have complained of a gummed-up system that has rejected coverage without notice and inexplicably stopped payroll deductions. The head of the Teachers Retirement System, where 106,000 retirees count on the program for insurance, points out that neither the specifications nor the system accounted for Medicare coverage.
Georgia-based Morneau Shepell was the only company to respond to a quickly executed November 2015 request from the Department of Central Management Services to design a web-based portal for managing health insurance options. The request was posted for only 26 days. Documents show CMS staff members were told to proceed without following guidelines for ensuring minority-owned business participation.
The state has paid the company $375,000 but owes $9.4 million for more than a year’s work. CMS hasn’t submitted a voucher for the entire fiscal year that ends June 30. Officials said that’s because of the two-year stalemate over a state budget that’s resulted in too little money to cover state bills. But from four accounts designated for covering Morneau Shepell costs, CMS has paid more than $29 million for other bills in fiscal 2017.
A spokeswoman for Morneau Shepell did not respond to requests for comment.
The program replaced a paper-driven system administered by dozens of employees in CMS and across state government. None of those workers was laid off. The online framework frees them up to do “higher-level” health care work for which there was little time previously, CMS benefits director Teresa Flesch said. She maintains that the state will save $500 million annually when the website is fully functional as a “marketplace” where employees and retirees can customize their benefits to bring “Illinois’ health care costs to a reasonable level.”
Richard Ingram, executive director of the Teachers Retirement System, said that could be a while. He said the program wasn’t adequately tested before it went online.
“It was poorly scoped out in terms of what was required to do the work, particularly for the retirement systems,” Ingram said. “It’s been one pain after another trying to implement the plan.”
Ingram said CMS has cooperated in working out the kinks, but he questioned the forethought. About 70,000 TRS retirees have Medicare coverage, yet Ingram said when he asked where Medicare options were on the website, developers asked, “Why would you need that?”
Tim Blair, director of the State Employees Retirement System, said few would question the need to abandon a paper process, but the problems indicate a rush.
“It just seems like it was done quickly,” he said.
CMS posted the request for proposals on Nov. 4, 2015. It was open for 26 calendar days.
“Due to years of underfunding of the group health insurance program, there was an urgency to achieve cost savings so we could pay our bills more timely, and there was significant cost savings associated with the plan design,” Flesch said.
Despite a requirement that vendors submit plans to ensure 20 percent participation in the contract by minority- or women-owned establishments under the state’s Business Enterprise Program, contract documents include a note that CMS “has been directed to move forward without the inclusion of a BEP goal.”
CMS spokesman Richard Bossert would say only that “the decision was made by CMS at the time of procurement.”
“Since Morneau Shepell was the only bidder, if BEP goals were not waived, the state would have received no bids at all,” he said. But the waiver note was dated Nov. 3, the day before the procurement request was even made public.
State employees have run into problems with the portal, too. An employee of the Department of Healthcare and Family Services, Dale Webb, said it’s a good thing he monitors his paycheck, or it could have been months or more before he noticed his life insurance premium payroll deduction had stopped early this year. The missed money was taken out of a later check.
Aaron Runge, a correctional officer at Menard prison in southern Illinois, visited the website in November to add the family’s new baby as a dependent. He didn’t submit a required birth certificate and wasn’t notified that his application was incomplete. By the time he learned, Morneau Shepell said the baby’s $2,000 in medical bills couldn’t be covered retroactively. Runge got the situation rectified through a grievance handled by his union.
“With the old system, you didn’t have to deal with a company out of Atlanta, Georgia. They could care less,” Runge said. “You lose the personal touch and knowing that your situation is covered.”