$94 million online insurance system giving users major headaches

$94 million online insurance system giving users major headaches

$94 million online insurance system giving users major headaches by Timothy Montales

A $94 million online health insurance system has some Illinois state employees and agencies confused and the Rauner administration rushing to eliminate the system’s bugs.

A ruined system that has refused coverage without notice and halted payroll deductions has been the subject of complaints from state workers, while the head of the Teachers Retirement System, which has 106,000 retirees who rely on the coverage, has highlighted that neither the specifications nor the system account for Medicare coverage, according to the Associated Press.

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Morneau Shepell was the only company to respond to the Department of Central Management Services’ November 2015 request, which was posted for just 26 days, to create a web-based portal to manage health insurance options. Documents report that CMS staff members were informed to proceed without following rules for ensuring minority-owned business participation, as reported by the Chicago Sun-Times website.

The state has paid the company $375,000 but owes $9.4 million for more than a year’s work. CMS has yet to submit a voucher for the entire fiscal year that ends June 30, while officials say that a two-year stalemate over a state budget has yielded too little money to cover state bills. However, from four accounts assigned to cover Morneau Shepell costs, CMS has paid more than $29 million for other bills in the 2017 fiscal year.

The program replaced a paper-driven system which was administered by dozens of CMS and state government employees, with no workers laid off. The online framework permits them to perform “higher-level” healthcare tasks for which there was previously little time, said Teresa Flesch, benefits director, CMS, and she added that the state will save $500 million every year as the website becomes fully functional as a “marketplace” that allows employees and retirees to customize benefits to bring healthcare costs to a reasonable level.

Richard Ingram, executive director, Teachers Retirement System, forecasted that it could be a while, and added that the program was not 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. It’s been one pain after another trying to implement the plan,” he mentioned.

Tim Blair, director, State Employees Retirement System, stated that few would question the need to forego a paper process, yet the problems indicate a rush. “It just seems like it was done quickly,” he said.

“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.


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