CalPERS, the largest US public pension fund, has shortlisted seven candidates for its $1.65bn (£1.15bn) health care benefit business.
Originally, the CalPERS board of administration rejected all HMO bids submitted for the 2002 health plan, claiming that the proposed costs were too high. However, CalPERS has now reduced the number of candidates down to seven, of which six currently provide health benefits to the funds members.
The shortlisted candidates are the existing HMO's Blue Shield, Health Plan of the Redwoods, Kaiser, Maxicare, PacifiCare and Universal Care. The seventh candidate is Western Health Advantage, who was added to the lineup as CalPERS believes that it offers affordable rates, is willing to submit to a multi-year rate agreement, and will serve Colusa County and five others that have above average costs.
CalPERS also revealed that a HealthNet bid was thrown out, as it failed to respond to CalPERS requirements by making its bid conditional on a variety of grounds. CalPERS' Health Benefits Committee gave HealthNet 48 hours to comply with the bid requirements or face termination in January 2002. The other HMO’s that will be dropped are Aetna and Cignas. Lifeguard earlier announced that it had voluntarily withdrawn its bid, citing business reasons.
Pending board approval, CalPERS will enter into further negotiations with the remaining HMOs during the next two weeks, with final decision being made on April 17.
By Geoffrey Ho
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.