SPRINGFIELD — Health Alliance Medical Plans and Coventry Health Care have been awarded new contracts to provide fully-insured HMO health plans for state employees and retirees for at least the next three-and-a-half years.
But with the potential for five renewals on those contracts, they could be in place much longer.
State employees and retirees are currently covered under emergency benefit contract extensions that run through June 30, 2013, a date intended to give the state time to get through an insurance contract rebid process.
The new contracts are set to run Jan. 1, 2013 through June 30, 2016, with the potential for five one-year renewals.
Both will offer HMO coverage to state employees and retirees in 96 counties in Illinois, according to the Illinois Department of Healthcare and Family Services.
"It's our current footprint that we have with the state, all four regions in Illinois," Health Alliance General Counsel Lori Cowdrey Benso said .
The state sought supplemental requests for proposals to rebid insurance contracts in the settlement of a lawsuit filed by Health Alliance over the 2011 insurance bid awards, Benso said. Health Alliance agreed to dismiss its lawsuit in exchange for a chance to bid again on a new contract.
The Illinois Department of Healthcare and Family Services didn't initially choose to contract with Health Alliance in its selection of 2011 health benefits providers for state employees and retirees, saying its new menu of insurance choices would save taxpayers $1 billion.
Health Alliance was later restored as a choice for employees and retirees under emergency contracts as legislative and legal battles were waged over the 2011 contracts.
State Rep. Chad Hays, R-Catlin, called the rebid and selection of the two insurers good news for downstate employees and retirees.
Hays continues to contend the 2011 insurance contracts were "bungled" by the state agency from the start.
"We put a lot of employees and retirees through a lot of anxiety that was absolutely unnecessary," he said. "I think all of the above (news) is very, very good for all of the employees and their families."
Agency spokesman Mike Claffey declined to comment about the 2011 process.
"It has been a challenging procurement, and we're glad it has been resolved and we're glad we're able to provide some good quality options for our members, and were moving forward," Claffey said.
Benso said it will be up to the state when employees and retirees enroll as a result of the new contracts. The second emergency contract covering those enrollees will continue through the new enrollment process, she said.
"We're excited to continue our partnership with the state of Illinois and make sure there is a smooth transition for state members that are affected," she said.