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HomeMy WebLinkAbout06-07-07 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Minutes Thursday, June 7, 2007 The Chapter172 Employee Retiree Insurance and Benefits Board Meeting was called to Order at 5:42 pm by Robert Swanagan. Attendees: Clark Askins 172 Board Member Karen Beerman 172 Board Member Juliane Graham 172 Board Member Sammy Jacobs 172 Board Member George Van Dyke 172 Board Member Robert Swanagan Staff Representative Absent: Michael Dolby 172 Board Member Matt Daeumer 172 Board Member Steve Valerius 172 Board Member Guest: Kathy Clark, HRH Consultant Neal Welch, HRH Consultant John Joerns, Interim City Manager Robert Swanagan opened the meeting by thanking each member for attending the 172 Board Meeting and apologized for the cancellation of the May 30th meeting. The Meeting Minutes for the February 19, 2007 meeting were reviewed for approval. After review of the minutes Board Member, Sammy Jacobs made a motion that the minutes be approved as written. Board Member Clark Askins 2nd the motion. The motion carried. Comments from Robert Swanagan When we held our last meeting we knew we were going out for a Medical Insurance RFP because it was time for renewal and we had some concerns about the level of service we had received from Humana. However, we did not want to alert Humana because we had some issues we wanted to finalize before we announced we would be putting out an RFP. We have put out an RFP and the deadline for receiving proposals was May 24, 2007. We received five (5) proposals and wanted to make sure the Board Members of Chapter 172 were totally involved in the process of evaluating proposals received. Also, to make sure you would have a full understanding of all of the components used to evaluate the proposals and make a good recommendation to Council. It is also critical that you have a process that allows you to bring different perspectives of the impact on both active and retired employees. To start this process we wanted to have our resident Insurance consultants from HRH, Neal Welch and Kathy Clark come out and provide details about the different components that you will be looking at to evaluate the proposals received. We also will pass out tentative timelines that will include dates for recommendations to Council, provide information to employees and retirees, Open Enrollment and insurance implementation. Presentation from Neal Welch HRH Consultant regarding the background of the City of La Porte's insurance plan: We have a Self Insured Health Plan and we hire an Administrator in this case, it is the Insurance Company, Humana. This is the third year of a three year contract. They administer the plan the only difference is we (the City of La Porte) holds the risk instead of Humana. In return we get to make a lot more of the rules that are in the plan. We don't have to pay commissions, taxes, fees and licenses. Humana receives a fee per employee, per month from the City of La Porte to administer the plan that we jointly come up with to cover active employees and retirees. When we say we are putting the Health Plan out for bid essentially what we are doing is not just looking for a healthcare premium because we establish the premium ourselves and what we charge ourselves, active employees and retirees for the coverage. Weare shopping all of the components of what would be included in the healthcare program. I will pass these out to you now so you can see what those components include. To choose the company we will be using next year we use a combination of investigating, scoring, evaluating, interviewing and seeing what will best fit for the employees and retirees of the City of La Porte. Question from Chapter 172 member Karen Beerman: Is the EAP contract tied to the Health Insurance with Humana? It is a very good benefit. Response from Robert Swanagan: No, the UT Employee Assistance Program is a separate program from the Health Insurance and has a separate contract. Neal Welch: Let's talk about the Self-Funded Medical Marketing. Claims Administration: They pay our claims and therefore, is a big piece of the program. Surprisingly, today it is less and less involved than it was years ago because so many claims are processed electronically. There is a set of electronic rules that go into an abstract and the computer makes a decision and it may apply a deductible, co-insurance, determine eligibility and ineligible expenses, eligible and ineligible plan participants. On an average today you don't include Pharmacy. By the way, 100% of Pharmacy claims are processed electronically. When you pay your co-pay the claim goes into their computer to what we call a PBM (Pharmacy Benefit Management) company thru Humana. The claim gets paid quickly because the health plan pays, the employee or retiree pays and it is a done deal. Because so many claims today are electronically processed almost everyone of them is from a hospital and many are from physicians. The actual cost of operating your plan is no greater than it was twenty (20) years ago. There are a lot of efficiencies if a human being doesn't touch all but 15 or 20% of those claims, the cost goes down. There are a lot of evaluations in the RFP like Customer Service, how much time does it take to answer the telephone, error rate, abandonment rate and how is there Website Customer Service? Internet Technology: Today an awful lot of people answer questions about their health plans using their own computers, what Doctors are in the system, what does my plan look like, which Pharmaceutical is in tier one, tier two, or tier three? Almost ever piece of information about that health plan is out there on the web custom designed for you. Comment Karen Beerman: As far as this evaluating you are talking about, who captures this information? Response Neal Welch: There are standard templates in the documents that we ask those submitting an RFP to populate with just about everything that is in the document. That include Pharmacy information, provider information, what hospitals, what Doctors, how do you do something and what is the price of this? etc. With 25 or 30 Public Sector plans undeI management by us, we have a little bit of an opinion about who is doing well and who isn't. There are financials to look at; most of these companies are publicly traded so WE can find out all sorts of information including, ratings from independent rating agencies, In the Public Sector for instance, we can't place insurance coverage with anything les~ than an A Rated Company. It can be a A-, A, A+ or A++. Disease IMedical Management: Essentially what we are talking about here is how good of a job can this firm do in helping our folks with chronic and serious illness management of their care? We can't do that as plan sponsors; we can know about an individual's circumstance and try to be an advocate from an HR standpoint. But we certainly depend upon the folks who administer these plans to be our advocate in these kinds of situations. Certainly there are some subjective issues related to Disease Management and Medical Management because we are talking about human beings talking to human beings. It is kind of the opposite of auto adjudicating a claim. Here we are really talking about reaching out to the employee or retiree and saying, "hey I understand you are dealing with this particular medical issue, what can we do to help?" So, there is a little bit more subjective component to Disease and Medical Management but that is how we help not only manage the cost of the plan but also provide the benefit that has some meaning to the plan participants. Preferred Provider Networks: The Doctors that participate in their particular networks. In our plan 98% of claims paid are paid in network Therefore, we are very interested in providing as many good providers of service in all specific disciplines. We want to make sure that not only do we have the best Doctors, but Doctors that are convenient to our plan participants. You will see information including zip codes that are where our active and retiree participants live. Pharmacy Benefit Management: This is the PBM. What we are looking for there is the right pricing on Drugs. We are also looking to see what tier some of those drugs are in so we can compare with our co-pays. We look at their capabilities for mail order, administration, special programs, step therapy, and high cost of injected drugs. There are all sorts of pieces of that economic pie that we want to preview and select accordingly. Question Karen Beerman: Do you have the capability of going in and extracting our employees and plan participants to see what prescriptions and medications that are most often prescribed? Answer Neal Welch: In a group your size almost everything that is in an RFP will be unique to your group. This includes your zip code, your drugs, your healthcare expenses, your chronic illnesses. Wellness Programs: We spend a lot of time concentrating on the 20% of the people that constitutes 80% of the expense. But we also want to do something for the 80% of the people that constitute 20% of the cost. So, we want to know what kind of programs and I will not call them just Wellness, there are health awareness programs. There are all sorts of names for them but essentially, what kinds of programs electronically, thru the web, what kind of programs will they bring specifically to the City of La Porte's employees and retirees. In many cases this becomes a pledge of money. We might say we want these particular things. The City of La Porte has one of the most successful Health Fair's and we might want to ask them to support that activity in some manner. Weare deploying programs thru some of the companies that provide expertise to our participants in each illness field such as Diabetes, High Risk Maternity, Cardio Vascular, Oncology and other topics. These people are more than happy to do that kind of work for us because even though we are self funded and hold the risk it puts them in a far better light making sure our people are well educated. Flexible Spending Account: This is for active employees that would like to set aside money during the year to pay for deductibles, co-pays, co-insurance and etc. We like to combine the administration of that plan together so that an individual would only have to submit one claim with a part of it being paid potentially by the Medical Plan and the remainder being paid by the Flexible Benefits Program. Other Vendors: There will be some other vendors that will be associated with the Medical Plan Administration and we look at that in the evaluation. Additional comments Neal Welch: I will tell you it is a lot of work. The first time you see the evaluation sheet you will kind of want to say, "This is not what I do for a living." That is why we are here to help get you thru the process. In your case you can get as involved, engaged or disengaged as you want. Part of the reason we do an RFP versus a Bid is because when we ask for proposals it gives us a chance to do a better job of getting down to a point where we can ask for a Best And Final Offer (BAFO) with multiple vendors. In that BAFO we are able to ask for the best value for the dollars the City spends. Question Sammy Jacobs: I was looking at that when we were discussing the Pharmacy part. Are we going to go back and look at the Pharmacy part to see if we can purchase on a multi-month basis like we had at TML? Answer Neal Welch: We certainly can look at that! We are essentially able to make that decision. However, in Humana's case we were not. But in many cases we make that decision, do we want it to be two months, do we want it to be two and a half month? That is our call because it is just a "cost sharing arraignment" between the plan and the employee/retiree. In the case of Humana, when we brought the Smart Suite of four programs we didn't have a choice. You are absolutely right! I think that is an excellent point and it is something we should look at. Comments Kathy Clark: We did receive a proposal from Humana on this RFP. With regards to Life Insurance and Accidental Death and Dismemberment were able to cut the rate 3 cents below the rate we were paying. That guarantee rate was up April 1, 2007. We were able to secure a carrier that would not increase our rates on the next renewal because they are a financially sound company. The company selected was ING. We actually missed the 4-1 effective date so we stayed with Lafayette Life through the end of April and Council approved the contract with a 5-1-07 effective date. Therefore, the rate changed effective 5-01-07. Neal Welch Comments about Stop Loss Insurance: We made a recommendation to Council on the Stop Loss Insurance that was approved. However, ten (10) days before the anniversary date of the plan the company was down- graded from stable to unstable. We had to go back to the table using the same RFP and re-negotiate the Stop Loss with another company, which made us move the Life Insurance at the same time. The Stop Loss and the Life Insurance was bundled together. If the insurance was down graded from an A- to a B we would have had to go out to bid anyway. Because we have a rate guarantee for three years we will not have to put out an RFP for the Life Insurance for three years. Administrative Report Robert Swanagan, Human Resources Staff As you can all see we had a lot of information to cover. However, we wanted to make sure you were current on all of the insurance related issues. Also, we want to make sure at the other meeting we inform all active employees and retirees of our meeting dates and time. This way they can attend our Chapter 172 Meetings to observe the process and contact their respective representatives with questions, concerns and issues. Comments Kathy Clark, HRH Consultant: One thing I do want to inform you of, we are going out for bid on the Vision and Dental Insurance and we want you to be able look at that for a 1-01-08 effective date along with the Medical Insurance. This way we can conduct all of the enrollments at the same time. With regards to the Dental we have had some complaints about the network and Customer Service not only from the City of La Porte but some of our other clients that use this same carrier. We have been pleasantly surprised about the rates we have received for these services. There are many things about the services that are being upgraded in the Dental Plans that are very good. Question Karen Beerman: Do you plan to have one meeting before the recommendation is made to Council in July? Response Robert Swanagan: Not one! We plan to have as many meetings as the Chapter 172 Board thinks are needed to allow you guys to make the best recommendation possible. Neal and Kathy will make a recommendation after evaluating the RFPs received for conformity to attempt to limit the number of meetings you have, understanding your busy work schedules. Chapter 172Training Robert Swanagan: I was able to get CDs of the training materials that can be signed out for by Board Members. They can take them home and review at their leisure. This will satisfy the other required training besides the final eight (8) hour facilitated by Mrs. Smith with TML on Saturday, June 23rd. We are attempting to limit the amount of time required on your behalf. She will also come up with a way to take care of those people that might not be able to attend the training on the 23rd of June. Robert Swanagan moved that the meeting be adjourned at 6:32 pm. Motion was made by Karen Beerman to adjourn the meeting. Sammy Jacobs seconded the motion. Respectfully submitted, 1(..l, ~--~-- Robert Swanagan, Human Resources Staff Approved this 20th day of June, 2007.