RALEIGH — State Treasurer Dale Folwell told reporters in late December he had rejected a “stealth effort” by the N.C. Office of State Human Resources (OSHR) to change the NCFlex provision that is part of the health benefits offered to thousands of teachers and public employees statewide.
NCFlex is a state-sponsored benefits program providing supplemental benefits to eligible employees. The benefits include Flexible Spending Accounts for health care and dependent daycare, as well as things like dental, vision, group term life, and various disability benefits.
Folwell said he had received information from “third parties” that OSHR was attempting to move its NCFlex enrollment program out of the existing platform, BenefitFocus, and into a contract with Empyrean, the company now being used by the University of North Carolina System.
The treasurer said that the legally required notice of such a move was not sent to the State Health Plan for teachers and state employees.
“We had no knowledge this was going on,” said Folwell. “The Flexible Spending Plans are not run by the treasurer’s office. These are all programs run through the governor’s office and Barbara Gibson of OSHR.”
Gibson was appointed to the position by Gov. Roy Cooper in January 2017. Prior to joining OSHR, Gibson was head of Human Resources at the N.C. Department of Justice for 16 years. She also served eight years as human resources director at the N.C. Department of Labor.
Folwell’s staffer, in response to a question about the legality of transferring the NCFlex program, said “OSHR and DST have a contract to run NCFlex together, and so they need to communicate to us when they are changing the terms of the program, which they have not done.”
“OSHR is trying to contract with the UNC System to remove themselves “from the platform we have worked so diligently on for the last seven years,” Folwell said, noting that extensive work had been done to make the NCFlex system for enrollment more “user friendly.”
The treasurer cited it taking “28 clicks” to enroll when he first took office. Now it takes just eight.
“I don’t know what drove OSHR to do this, but I suspect if you just follow the money, you’ll get to the right answer,” said Folwell. He later added, “We worked really hard to get things synchronized on a calendar year and now they are trying to make this transition in the middle of the year.”
Folwell also said he was given information the change was going to happen in mid-2024, which he said would cause major issues with the transition of the State Health Plan’s Third Party Administration (TPA) from Blue Cross and Blue Shield of North Carolina to Aetna.
Folwell called the possible move “very concerning.”
“With all the problems going on in state government right now, I don’t know what problem they’re trying to solve,” said Folwell.
Folwell said his office has “pretty much been stiff-armed” when it came to getting information from OSHR about who the current contractor for NCFlex is for the program. The treasurer also said that he had received reports OSHR had requested other agencies sign non-disclosure or confidentiality agreements so that his office would not be made aware of the transfer.
State Health Plan Executive Director Sam Watts sent an official inquiry letter about possible changes to NCFlex to OSHR on Nov. 15, 2023.
OSHR issued a nine-page response on Dec. 14, 2023, through its legal counsel that cited the UNC shift to Empyrean as beginning in summer 2022 and that UNC had transitioned its remaining flex benefits as of Jan. 1, 2024. OSHR’s response also claimed the State Health Plan’s assertions that OSHR violated notification processes “lack merit.”
Watts responded to OSHR’s letter on Dec. 20, 2023, reiterating objections to OSHR failing to notify the State Health Plan of its intentions to transition NCFlex to a new provider and the health plan only discovered the change through third parties.
“Diverting Plan and vendor staff and resources away from the Aetna transition directly impairs the success of the TPA transition and the health of the Plan and its members,” Watts wrote. “Accordingly, the Plan can only support a January 2025 or later transition of NCFlex from the BenefitFocus platform to the Empyrean platform. To protect the Plan and our members, the Plan will not support any decisions by OSHR to make a mid-year 2024 transition.”
In response to questions about Folwell’s claims, OSHR indicated to North State Journal that there had been conversations about moving NCFlex.
“OSHR has talked to the UNC System and its vendor Empyrean about potentially moving to the Empyrean platform, which could possibly provide a better enrollment experience to state employees and save taxpayer dollars,” OSHR’s Melody Hunter-Pillion wrote in an email to North State Journal.
“OSHR has been talking with stakeholders, including the UNC System, Empyrean, and the State Health Plan, to gather information and explore options,” wrote Hunter-Pillion. “There is no secret plan and no change is imminent. We welcome the opportunity to collaborate with the Treasurer’s Office on all shared interests.”
“No change is expected for several months, and OSHR looks forward to discussing details of any change with the State Health Plan before any plans are finalized,” Hunter-Pillion said in the email. “That discussion will include the best time for NC Flex and the State Health Plan to transition between vendors.”
In response to OSHR’s statement, Folwell told North State Journal, “This is an attempt by OSHR Director Barbara Gibson, under the Cooper administration, to torpedo a process that we have worked long and hard to make simpler for our customers.”
“It’s my belief based on the secrecy of this idea that they are trying to steamroll it through before Gov. Cooper leaves office,” Folwell added.
Folwell reiterated that the State Health Plan was not notified about the change and that the State Employees Association was also not notified.
“There needs to be an investigation done into OSHR about the entire NCFlex program,” said Folwell. “And that investigation needs to include anything they are trying to do with or without UNC to bring other vendors onto this platform which will create total chaos for the members.”