HomeMy WebLinkAbout01-20-05 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting
Chapter 172 Employee Retiree Insurance and Benefits
Board Meeting Minutes 01/20/2005
The Chapter 172 Employee Retiree Insurance and Benefits Board meeting was called to order at
5:31 p.m.
Attendance: Sherri Sampson, Pat Rothermel, Clark Askins, Kim Meismer
Sherri Sampson welcomed Board Members. Moved to meeting agenda items.
Mr. Askins is working on Trust Agreement for Board members.
Guest Speaker from CCBS arrived early, Bob Tracy. Mr Tracy was asked to discuss Agenda
item 4. Mr. Tracy discussed CCBS, consultants for the pool, and then the goals of the collective
purchasing cooperative for multi city health benefits. Trustees would like more time to discuss
this issue. Tentative meeting date set for February 9th at 5:35 p.m. Mrs. Meismer requested
specific detail on prior experience and success with this type of cooperative healthcare purchase.
Mr. Tracy explained this would be the first project of this type. Trustees would like references
from other participating cities such as Pearland, Friendswood, Webster and League City;
Confirmation ofHGAC involvement as well.
Clark Askins left at 6:00 p.m. and Pat Rotherme left at 6:30 p.m. Meeting adjourned at 6:30
p.m., as only 2 trustees were able to continue. Agenda items 2 and 3 will be discussed at the next
meeting.
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CITY-COUNTY BENEFITS SERVICES
October 22, 2004
Mrs. Sherri Sampson
Director of Human Resources
City of LaPorte
604 W. FairmontParkway
LaPorte, TX 77571
Sherri,
A few weeks have passed since our initial Chapter 791 Collective Purchasing Cooperative
workshop meeting on September 28, 2004. We have been developing some strategies and
working through a few technical issues and now stand ready to focus on the single employer
based group medical cooperative.
I want to take care of a house keeping issue that is very important to taking collective ownership
of the Co-op. We have to put a name on this Co-op. Here is my attempt. The Co-op is all about
building alliances/synergy. In addition, the Co-op's ability to control its development and
decision making authority is paramount to its success. I have been having discussions with
Houston Galveston Area Council (HGAC) pertaining to playing a role in the various Co-ops that
C-CBS is developing. It is obvious that HGAC brings a certain "brand" name that is recognized
and respected in the public sector as well as an umbrella effect from housing and adding strength
to Chapter 791 purchasing cooperatives which will satisfy Chapter 252 bidding requirements. I
invited Bob Wooten, Coordinator, Program Development for HGAC, to our meeting and he is
very interested in pursuing a role for HGAC. We are continuing to develop that role. In the
meantime, I want the group to consider the following name; Houston Galveston Area Council -
Region 1 (HGAC-Rl) for our Co-op.
Representatives from the following Cities were in attendance on September 28,2004;
Dickinson
Friendswood
La Marque
La Porte
Pearland
Santa Fe
Texas City
Webster
West University
Houston Galveston Area Council (HGAC)
245 Commerce Green Blvd., Suite 290
Sugar Land, Texas 77478
(281) 295-3006 (Phone)
(281) 295-3020 (Fax)
(800) 308-2896 (Toll-Free)
bob.ueacy@c-cbs,org
h..n........ C't1n('bv<4>c:-cbs.Of2
6112 Skahan Lane
Austin, Texas 78739
(512) 468-2250 (Phone)
(512) 288-6014 (Fax)
(800) 308-2896 (Toll-Free)
terry.hale@c-cbs.org
The synergy of this group is capable of reinventing the wheel. The concept is to build a large
single employer based model using proven managed care techniques and principles necessary to
spread risk and manage claims for long term cost stabilization. Remember, the concept is to
build (1000 member units) to spread risk actuarially; similar to larger entities, minimizing large
claim impact on smaller separate entities.
In review, the HGAC-Rl group medical model will be a health insurance purchasing cooperative
on a regionalized basis. Following are points unmatched by any cooperative offered in today's
marketplace.
1. The HGAC-Rl model will manage care on a local Houston area regional basis. Houston
is the managed care capital of Texas, which is the best place for us to be.
2. The HGAC-Rl model will act as a single employer model. It will not be a number of
separate entities with different agendas buying different programs from a purchasing
cooperative.
3. The HGAC-Rl model will allow competitive bidding and receive bids from all of the
traditional carriers. The participating entities will control the plan, not the vendor.
4. All Cities will have access to multiple products for all employees be it PPOs, HMOs,
HSAs etc....
5. State of the art member care coordination and disease management programs.
6. GASB 45 Retiree liability healthcare solutions.
7. An equal role in decisions necessary to steer the plan in the out years.
C-CBS is ready to take the next step. C-CBS will enter into a contract with the HGAC-Rl
Member Board to provide services for the purpose of delivering a cooperative purchasing group
medical plan and other group benefits to HGAC-R1 for consideration with a target date of
October 1, 2005. A board will be established made up of one (1) representative of each member
entity, one (1) vote. We will set up by-laws early on.
The following services are necessary to deliver a group medical product for final consideration
by The HGAC-R1 Board. C-CBS will agree to the following services, but will not be limited
only to the contracted services for the Request For Proposal (RFP) process, which include;
1. Provide overall leadership and a lead advisory role for steering this development process.
2. Develop strategy for positioning the HGAC-Rl Cooperative in the most favorable light
possible with the market. The market consists of (5) qualified group medical carriers that
are capable of being partners with HGAC-Rl; Aetna, Blue Cross/Shield, Cigna, Humana,
and United Healthcare. Chapter 791(s) are not standard operating procedures for the
carrier marketplace. It will be imperative that we present an RFP package to the market
that is based on sound underwriting principles that are the foundation for gauging and
managing risk efficiently. C-CBS is going to be spending a significant amount of time
"selling" this Co-op to the carriers. As stated, we do not want to self fund this risk at the
onset. We want the carrier to insure the risk, let the claims mature, and then begin to take
control of the funding mechanism.
3. Assist all member entities with data formatting for group risk evaluation. We will be
spending time with each member entity as you begin to pull RFP data from your member
entity current group medical plan. Information is the foundation for underwriting
methodology. All member entities will have to be diligent in this area and C-CBS will be
there to guide you through this process and assist you where necessary to pursue this
request with your current vendor. We will be providing a detailed format request.
4. Develop an RFP for Group medical coverage. Once again, the most important lynch pin
to our success. This will be the most time consuming step in the process. C-CBS will
comply all data into an electronic submission instrument to be sent "directly" to all
qualified vendors.
5. Monitor the RFP process. This is not the time to sit back and enjoy the ride. C-CBS will
be very proactive during the RFP process which will take 45 days or so. (Q and A) will
be standard procedure, clarifying positions, negotiating underwriting terms and
conditions, dealing with ongoing medical conditions, pulling and punching our way to the
finish line. C-CBS will be participating in a big way during this phase.
6. Provide detailed RFP evaluation! Advise Board on awarding Contract. C-CBS will
present data in spreadsheet fashion. This is The Boards decision, not ours to make. Yes
we will playa significant role in an advisory capacity, but ultimately, this decision is
yours to make for your covered entities. This phase will involve comparative detailed
analysis, clarifying terms and conditions, negotiating best terms and conditions, and.
setting up a presentation phase by all finalists.
7. Assist Board members with Council presentations. A representative from C-CBS will be
available for member entity Council workshops and Council meetings for awarding of
your 2005/2006 group medical contract if an HGAC-Rl contract is finalized and awarded
by The Board.
Process steps (1-7) will take a commitment from all interested member entities. C-CBS
welcomes the opportunity to playa leadership role in this exciting project. We would like to
present, for consideration, a fee for time, expenses, and services incurred by C-CBS during the
next several months in order to deliver on above referenced action items. C-CBS is proposing a
retainer fee of $25,000 to be split evenly among participating member entities. It appears that
this could be approximately $2,500.00 on the low end and $4,000.00 - $5,000.00 on the high
end.
The completion of the official RFP phase outlined above will transition HGAC-Rl to "ongoing
plan management". C-CBS will be organizing enrollment process, getting the case through
policy issuance, dealing with member services and HR support services, finalizing the integrated
billing function, establishing client service support staff of awarded contract carrier, and many
other action items for overall plan management. In addition, C-CBS will playa hands on role for
managing the financial/performance of the plan including monitoring loss ratios and claim
performance in relation to expected levels. Evaluating trouble spots and meeting with the Board
on a routine and as needed basis to keep our collective fingers on the trigger at all times. C-CBS
will be providing a plan management proposal for consideration the The Board in the near future.
In summary, C-CBS is looking for a limited amount of member entities to expend a certain
amount of energy to develop a Collective Purchasing Cooperative, in a proven model, to stabilize
group medical costs. If an attending entity from the September 28th meeting chooses not to
participate, we will have others ready to jump in. I want to keep this positive, however, there are
no assurances that your member entity will be afforded the opportunity to participate once final
decisions are made for the RFP. If not, your fee will be refunded.
I, Bob Treacy, will be calling you over the next week. Time is of the essence. We will move
forward as soon as we have a commitment from 750 employees. Call me @ 281-295-3011 with
any questions or Email me at bob.treacv@c-cbs.org. I am shooting for a committed timeline of
November 7,2004 if possible. I will be in touch.
Burke O. Sunday, LIC
Terry Hale
Draft
H-GAC REGION - 1
INTERLOCAL AGREEMENT
Whereas, the undersigned municipality, county, or political entity represents that it is a
political subdivision of Texas and that its governing body has acted by majority vote, at a
duly called and posted public meeting, to authorize participation in this Interlocal
Agreement;
Whereas, the undersigned political subdivision has examined all the facts and issues it
deems relevant and determined that it is in the best interest of the political subdivision, its
employees, officials, retirees and dependents to enter into this Interlocal Agreement to
obtain one or more employee benefits;
Whereas, the undersigned political subdivision understands that the purpose of this
Interlocal Agreement is to:
(1) provide uniformity in benefits including accident, health, dental, life, short term
disability, vision, and long-term disability coverage to employees of political
subdivisions;
(2) enable the political subdivisions to attract and retain competent and able
employees by providing them with accident and health benefits coverages at
least equal to those commonly provided in private industry;
(3) foster, promote, and encourage employment by and service to political
subdivisions as a career profession for persons of high standards of competence
and ability;
(4) recognize and protect the political subdivisions' investment in each permanent
employee by promoting and preserving economic security and good health
among those employees;
(5) foster and develop high standards of employer-employee relationships between
each political subdivision and its employees; and
(6) recognize the long and faithful service and dedication of employees of political
subdivisions and to encourage them to remain in service of their respective
political subdivisions until eligible for retirement by providing health benefits to
those employees.
Now, therefore, in consideration of the covenants, promises and agreements herein set
forth, the undersigned political subdivision, together with the other political subdivisions
executing identical Interlocal Agreements, enters in to this agreement for the purpose of
providing certain benefits for employees, officials, retirees and dependents.
HGAC Region - 1
lnterlocal Agreement
Draft
1. Each participating political subdivision shall adopt one or more of the
benefit plans offered through this Interlocal Agreement. The benefits, at
the participating entities option, may be offered to their employees and
their dependents, officials and their dependents, and to retirees and their
dependents. Notwithstanding any other provision hereof to the contrary,
failure of a participating political subdivision to adopt a benefit planes)
within the adoption schedule set forth by the administrative agency,
whether during the initial term or any renewal term, shall be deemed a
termination and withdrawal from this Interlocal Agreement by the non-
adopting political subdivision.
2. Each political subdivision shall determine the political subdivisions
contribution towards the selected benefits. Each political subdivision
agrees to fund 100% of the employee contribution for at least one of the
medical benefit plans for active employees. All contributions shall be paid
from then current revenues.
3. Participation in the medical benefits provided through this Interlocal
Agreement requires 100% employee participation by eligible employees.
An employee is considered to be eligible, for purposes of this Interlocal
Agreement, ifthe employee is not covered by another group health plan.
4. Benefit planes) for participating political subdivisions shall be adopted by
a majority vote of participating subdivisions.
5. The (agency) is appointed as the initial
administrative agency for benefits procured through this Interlocal
Agreement for H-GAC Region - 1. By majority vote of the participating
political subdivisions, the administrative agency may be changed or rotate
between participating political subdivisions.
6. A participating political subdivision may terminate its participation in the
benefits provided through this Interlocal Agreement by giving one
hundred and eighty (180) days written notice to the other participating
political subdivisions. Terminations shall only be effective at the end of a
Plan Year.
7. Each participating political subdivision agrees to furnish all information
necessary for carrying out the purposes of this agreement and to secure
sealed competitive proposals pursuant to Chapter 252 of the Local
Government Code. The participating entities to this agreement hereby
designate the Sealed Competitive Proposal process, as set forth in Chapter
252 of the Texas Local Government Code, as process to be used for
procuring benefits.
HGAC Region - I
Interlocal Agreement
Draft
8. The designated newspaper of the (agency) is
hereby designated as the official newspaper of the H-GAC Region - 1
Interlocal Agreement for the purpose of complying with the public notice
provisions of Chapter 252 of the Texas Local Government Code.
9. The undersigned political subdivision appoints Terry Hale and/or Robert
Treacy, of City-County Benefits Services, a.k.a. Sunday and Associates,
Inc., as the agent of record for managing the sealed competitive proposal
process pursuant to Chapter 252 of the Local Government Code, securing,
and placing the benefits to be provided to the undersigned political
subdivision. This designation of Terry Hale and/or Robert Treacy, of
City-County Benefits Services, a.k.a. Sunday and Associates, Inc., as the
agent of record is effective 10/l/05 and it supersedes and replaces any
prior designation of agent of record by the undersigned political entity.
10. The undersigned political subdivision shall designate and appoint a
coordinator of department head rank or above as the individual to provide
any notices required under this Agreement and to be the entities voting
representative for selecting benefits to be offered through this Agreement.
The undersigned political subdivision reserves the right to change the
coordinator from time to time.
11. If any part of this Agreement is declared invalid, void or unenforceable,
the remaining parts and provisions shall continue in full force and effect.
12. The undersigned political subdivisions agree that venue for any dispute
arising under the terms of this agreement shall be Harris County, Texas.
13. This Agreement represents the complete understanding of the political
subdivision participating in this Agreement and may not be amended,
modified or altered without the written agreement of all political
subdivisions participating in this Interlocal Agreement.
14. The initial term of this Agreement shall be from the day of
, 2005 and continue until September 30, 2006. Absent notice
of termination the undersigned political subdivision may annually extend
this agreement by accepting the rates and planes) offered through this
Interlocal Agreement for subsequent plan years (e.g. 10/1 through 9/30f).
HGAC Region - 1
lnterlocal Agreement
Draft
This Agreement is entered into for the undersigned political subdivision under
authorization of:
at a duly called meeting held on
(political Subdivision)
,2005.
(month)
(day)
By:
(signature)
(Typed or Printed Name)
(Title)
(Date)
HGAC Region - 1
lnterlocal Agreement
Draft
**********************************************************************
To Be Completed By Participating Entity
Participating Entity
Benefits Coordinator
Mailing Address
Phone
Fax
E-Mail
HGAC Region - 1
lnterlocal Agreement
DISCUSSION OUTLINE
DECKMBER 16,2004 MEETING
I. REVIEW DISCUSSION OUTLINE OF SEPTEMBER 28. 2004 (REFER
TO RECORD SECTION)
II. UPDATE OF ACTIVITES;
. STRATEGY MEETING WITH AETNA, BLUE CROSS/BLUE SHIELD
TEXAS, CIGNA, HUMANA, UNITED HEAL THCARE.
. DEVELOPMENT OF HGAC-R1 INTERLOCAL AGREEMENT.
. STRATEGIC ALLIANCE WITH HGAC-R1 CHAPTER 791 INTERLOCAL
AGREEMENT.
. DEVELOP ADDITIONAL PUBLIC ENTITY INTEREST.
*BELLAIRE (164 EE)
*DEER PARK
III. HGAC-Rl INTERLOCAL AGREEMENT ACTION ITEMS
. HGAC-R1 INTERLOCAL.
. ADMINISTRATIVE DISTRICT.
. PUBLIC ENTITY (PE) COORDINATOR.
. CCBS INVOICE FOR EXPLORATORY FEE; $2,500/ PE.
PAGE 1
IV. DATA COLLECTION (MAJOR MEDICAL)
AS OF LAST PLAN ANNIVERSARY OR CURRENT.
. SUMMARY PLAN DOCUMENT (BOOKLETS)
. ACTIVE EMPLOYEES & ELIGIBLE/COVERED DEPENDENTS
* GENDER
*EMPLOYEE DATE OF BIRTH
*PLAN CODES (PPO(S), HMO(S), ETC)
*DEPENDENT PARTICIPATION
(EXAMPLE EXCEL FILE)
GENDER AGE/DOB PLAN CODE COVERAGE
MIF HMO,PPO,ETC. EE, ES, EC, EF,
WAIVER
. RETIREES CENSUS FILE SAME AS ACTIVE EMPLOYEES
. CONTRACT PREMIUMS.
. PREMIUM CONTRIBUTION STRUCTURE FOR ACTIVE EMPLOYEES
AND RETIREES.
V. NEXT MEETING IN JANUARY, 2005.
PAGE 2
Presented By:
Terry Hale/Bob Treacy
City-County Benefits Services
245 Commerce Green Blvd., Suite 290
Sugar Land, Texas 77478
(281) 295-3000
Fax (281) 295-3020
September 28,2004
DISCUSSION OUTLINE
1. TARGET EFFECTIVE DATE 10/1105
. GROUP MEDICAL.
. DENTAL, LIFE, LTD, ETC. (ANCILLARY).
2. CHAPTER 791 PLATFORM MODEL
. REGIONAL SINGLE EMPLOYERlMULTI LOCATION.
. MANAGED CARE CONTRACTUALS REGIONALLY DRIVEN.
. POOLED RISK; COMPOSITE RATING.
. MULTIPLAN OPTIONS.
. CARE COORDINATION REGIONALLY DRIVEN.
(AETNA, BCBS, CIGNA, HUMANA, EHC, UNICARE) MULTI-CARRIER
P ARTICIP ATION.
3. UNDERWRITING RISK FACTORS
. MANUAL DEMOGRAPHICSIEXPERIENCE WEIGHTED AVERAGE
YEAR (1).
. P ARTICIP ATION GUIDELINES (ADVERSE SELECTION).
. PREMIUM CONTRIBUTION GUIDELINES (ADVERSE SELECTION).
. INSURED CONTRACT PLATFORM.
4. KEY TASKS
. PARTICIPATION IN THE "ILLUSTRATIVE RFP"/6 ENTITIES 1000-1500
EMPLOYEES).
. GOVERNING BOARD.
. AUTHORIZEIENGAGE THE INTERLOCAL.
. DEVELOPRFP.
. ANALYZE RFP RESPONSE FOR PRESENTATION TO THE
GOVERNING BOARD.
. RECOMMENDATION FROM GOVERNING BOARD.
. RUN THE POLITICS OF AWARDING CONTRACTS TO THE
INTERLOCAL.
. IMPLEMENTATION FOR OCTOBER 1, 2005.
5. THE "GREATER GOOD PHILOSPOHY" DEBATE
. PARTICIPATING ENTITY GATE KEEPER.
. MANUALS DEMOGRAPHICS.
. SPECIFIC AND AGGREGATE CLAIMS HISTORY.
6. PARTICIPATIONIEXIT GUIDELINES
. MULTI YEAR COMMITMENT.
. 6 MONTH CANCELLATION PROVISION.
. OCTOBER 1 ENTRY DATES.
. INVITATION ONLYUPONUNDERWRlTING SCRUB DOWN.
Excerpts From Texas Local Governmental Code:
CHAPTER 791. INTERLOCAL COOPERATION CONTRACTS
8 791.001. Purpose
The purpose of this chapter is to increase the efficiency and effectiveness of local
governments by authorizing them to contract, to the greatest possible extent, with one another
and with agencies of the state.
It is clear that the Legislature understands that public entities can purchase more
efficiently and more effectively through combined purchasing than they can individually.
The Interlocal Cooperation Act provides the vehicle for public entities to join together and
benefit from volume purchasing.
There are two basic models for "Collective Purchasing" of employee benefits utilizing the
Interlocal Cooperation Act. The first model is the most efficient and produces the most cost
effective results. In the first model all participating entities reach agreement on a package
of benefits that is comprehensive enough so that each entity can select the program(s) they
want for their employees, and proposals are sought for the entire benefit package. The
second model is to develop individual specifications for each participating entity and to
submit the individual specifications to the carriers at the same time.
C-CBS recommends the first model because it produces the most cost effective proposals.
Using this model for example the specifications would be for an HMO, a High Option PPO
and a Low Option PPO. The Interlocal contract would provide for all three Plans and the
entity can select which Plan or Plans they want to make available for their employees. The
number of Plans solicited is based on the needs of the participating entities and the total
number of lives.
cS 791.025. Contracts for Purchases
(a) A local government, including a council of governments, may agree with another local
government or with the state or a state agency, including the General Services Commission, to
purchase goods and services.
(b) A local government, including a council of governments, may agree with another local
government, including a nonprofit corporation that is created and operated to provide one or
more governmental functions and services, or with the state or a state agency, including the
General Services Commission, to purchase goods and any services reasonably required for the
installation, operation, or maintenance of the goods. This subsection does not apply to
services provided by firefighters, police officers, or emergency medical personnel.
./""
(c) A local government that purchases goods and services under this section satisfies the
requirement of the local government to seek competitive bids for the purchase of the goods
and services.
An additional advantage to procuring employee benefits through an Interlocal Agreement
is that it relieves each participating entity of the requirement of seeking competitive bids or
competitive proposals individually. This provides savings in two ways. The first way is very
obvious. Each entity is relieved of the expense and staff time used in obtaining competitive
bids or proposals. The second way is less obvious. Insurance companies can provide better
rates because they have less expense involved in responding to one request for proposals
than they do is they must respond to five or six proposals.
For entities that are required to use the competitive bid process there is another advantage.
Products or services procured through an Interlocal Agreement can use the competitive
proposal process, which allows for negotiations and therefore produces better proposals.
o 791.011. CONTRACTING AUTHORITY; TERMS.
(d) An interlocal contract must:
(1) be authorized by the ~overning body of each party to the contract unless a party
to party to the contract is a municipally owned electric utility, in which even the
governing body may establish procedures for entering into interlocal contracts
that do not exceed $100,000 without requiring the approval of the governing
body;
(2) state the purpose. terms. rights. and duties of the contracting parties; and
(3) specify that each party pavin~ for the performance of governmental functions or
services must make those payments from current revenues available to the paving
~
(e) An interlocal contractual payment must be in an amount that fairly compensates the
performing party for the services or functions performed under the contract.
(f) An interlocal contract may be renewed annually.
C-CBS has developed model Interlocal Agreements that meet all of the statutory
requirements for an Interlocal Contract.
o 791.013. Contract Supervisions and Administration
(a) The parties to an interlocal contract may create an administrative agency or designate an
existing local government to supervise the performance of the contract.
(b) The agency or designated local government may employ personnel, perform
administrative activities, and provide administrative services necessary to perform the
interlocal contract.
The most cost effective way to administer an Interlocal Contract is to name one of the
participating entities to supervise the Interlocal Contract and to rotate this designation
every few years. The designated entity will be the named policy holder, with the other
participating entities being named affiliates. The other alternative is to see if an established
council ofgovernments (i.e. HGAC) will serve in this capacity.