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HomeMy WebLinkAbout09-06-07 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Minutes Thursday, September 6, 2007 The Chapter 172 Employee Retiree Insurance and Benefits Board Meeting was called to order at 5 :44 pm by Robert Swanagan. Attendees: Clark Askins Karen Beerman Matt Daeurner Michael Dolby Juliane Graham Sammy Jacobs George VanDyke Robert Swanagan Absent: 172 Board Member 172 Board Member 172 Board Member 172 Board Member 172 Board Member 172 Board Member 172 Board Member Staff Representative Steve Valerius 172 Board Member Guest: Kathy Clark, HRH Consultant Sabina Leins, HRH Consultant Robert Swanagan called the meeting to order at 5:44 pm. The Minutes of the July 24, 2007 Chapter 172 Meeting were reviewed for approval by the board. Comments Sammy Jacobs: I have no problems with the minutes. However, I do take exception to the comments made by Steve Valerius on the last page of the minutes where he made the comments we could have all showed up if we wanted to attend the meeting, I think his comment was inappropriate. Comments Robert Swanagan: This will be duly noted in today's meeting minutes. Motion was made by Michael Dolby to accept the minutes as written and seconded by Karen Beerman. The motion carried. Robert Swanagan introduced HRH consultants Kathy Clark and Sabina Leins and noted that Sabina Leins had transitioned other clients from Hurnana to Aetna and would be assisting the City of La Porte's effort in doing the same. The meeting was turned over to guest, Kathy Clark and Sabina Leins of HRH. Consultants Kathy Clark and Sabina Leins presented information to Chapter 172 members Aetna Insurance Plan Design. Kathy Clark: I apologize for the quickness that we had to call this meeting. However, we are getting down to the wire and had to move forward with all the things we needed to do to get things completed with Aetna to put a system in place. We can conduct the Open Enrollment in October but we do need to get the Aetna system prepared for implementation. Tonight we will compare the similarities of Humana to Aetna to look at the difference between the two as we conduct Plan Design. Here are copies of all four of the plans that we have with Humana now for your review. I will now ask Sabina to go over this with you. Sabina Leins: Point Of Service Plan (POS) is what Aetna has which is similar to the Humana PPO Plan. By and large, the deductibles are the same, the out-of-pocket cost are the same and so are the co-pays. Both have two PPO Plans one with a $500 and the other has a $300 deductible which are essentially the same. What I wanted to point out is under the "not urgent use of an Urgent Care Provider." Aetna standard is not to cover that claim. Most importantly, if you don't like that you need to determine how you would want it handled. EXAMPLE: Suppose you had a child with a really high fever. You don't have to go to an Emergency Room or Urgent Care Facility. If either one of these are used there is a higher Co-Pay. Therefore, you might want to consider having it covered the same as it is currently covered under Humana as a Specialist visit. Comment Matt Daeumer: Personally, I would have no problem paying the same Co-pay for using an Urgent Care Facility or Emergency Room at the same amount we pay for seeing a specialist. Question Michael Dolby: Is there a reason why you didn't start with the deductibles and work your way back? Sabina Leins: No, for the most part all ofthem are the same. I just wanted to concentrate on the items that are different, as we look at Plan Design. This way you are not wasting time looking at everything, just those things that are different. Comments Juliane Graham: So, are we saying we are pretty good with the cost right now and are not looking at saving money? Comments Robert Swanagan: We are certainly looking at controlling cost, however, we are looking to enhance the service to employees and retirees wherever we can. We also realize this is an estimate. and things can happen. Question Karen Beerman: I just noticed this, what is Preferred Care? Is that like in network, out of network? Answer Sabina Leins: Yes, everybody has a different name for it. Question Karen Beerman: Ambulance 10%, is that what we pay? Answer Sabina Leins: The participant pays 10% of the cost and the plan pays 90% of the cost. Question Karen Beerman: How are you out of network, or In network with an ambulance? Comment Matt Daeumer: My question is, if I call the La Porte EMS and they are right here is that going to be a preferred claim? Answer Sabina Leins: We will have to check into that. Comment Matt Daeumer: I would like to see a preferred/not preferred list for ambulance service. Also, look at changing it to an emergency/non-emergency basis. Comments Sabina Leins: If there is not a medical reason for them to ride in the ambulance they are not going to cover it. Comments Matt Daeumer: I understand that but, what I am talking about is that there are always medical reasons that are not emergencies. There are people that can only get transportation to their physician by using an ambulance. The La Porte EMS will standby while a private ambulance service is called. That is where I believe you should look at preferred versus/non-preferred. Question: Juliane Graham: What is the City's benefit now? Answer Kathy Clark: Ninety 90% after the deductible. Daeumer/ Graham Comments: Maybe we should just do away with the Preferred/Non- Preferred and make it 10 and 10 and pay it as in network Question Michael Dolby: On the deductibles on the back, do they have programs where there is going to be like Coverage First we have with Humana? Answer Kathy Clark: Yes, it works a little differently and we are going to go over that shortly. Question Matt Daeumer: Can we talk about office visit Co-pays? Sabina Leins: Sure, ,,- Comments Matt Daeumer: If I go to my stomach specialist he bills under the Humana plan $52 dollars. I pay $35 dollars of that so, he is getting $17.00 dollars from the plan. If I see his assistant he bills $37 dollars to the plan, I pay $35 dollars of that amount and the plan pays $2.00 dollars. That's a little heavy handed on the co-pay for the employee. The employee is paying 90% to see the P A and 60 or 70 % to see the doctor. That is higher than anything else in this plan. I would like to see us lower the office co-pays. Comments Sabina Leins: If you lower the co-pays that will increase the plan cost. Comment Sammy Jacobs: If that is the case, we need something more flexible where if you don't see the specialist you are not paying that full specialist portion. Comments Matt Daeumer: My point is Aetna is supposed to have even bigger discounts than Humana. So, I am going to be paying even more of the portion under Aetna. Comments Juliane Graham: So what you are saying is if we lower the cost to $30 dollars it is not going to increase the cost of the plan. Because the discount that Aetna is offering is going to offset that $5 reduction in the coverage. Request Matt Daeumer: Can you look at the number of doctor visit we had to see what the impact would be to the plan? Also, please look at prescription drugs for last year. This way we could see the impact on the plan if we changed the price of our tiers to $5, $10 and $25. Comments Michael Dolby: Remember, that drives the cost up and how much it is going to be is what will determine if it is cost effective. Question Juliane Graham: How do these prices compare to other plans? Comments Matt Daeumer: I know Harris County pays $2 for generic and $7 for name brand. Sabina Leins: One thing about that and you are right. Some people will take whatever the doctor gives them initially. Many people are not going to ask the doctor if there is something at this level or a generic they can take instead of the one the doctor orders. Comments Matt Daeumer: Everything I take there is not a generic for it, it's not available. I would take a generic if it was available. I understand everything I am talking about is driving the cost up. But, we have to look at the fact the plan save a million dollars last year. I am not trying to spend the entire million dollars. Comments Michael Dolby: Just remember, that if we have one big claim what could happen, it is a crap shoot. I am not saying you don't have some good ideas; it is just that it doesn't take but one really big claim to put us in the hole. Comments Kathy Clark: One of the other things you had a concern about was mail- order drugs. This comes standard in the Aetna plan. You get three months for the price of two. Comments Robert Swanagan: Remember this, all of the things we are discussing will allow HRH to go out and negotiate these items with Aetna. Question Matt Daeumer: Can we look at dropping down to $5, $10 and $25 on drug co- pays? I think we should look at it just to see if we can afford it. Comments Michael Dolby: Remember, in 2008 we will be dealing with GASB 45 and this board must be prepared to cover that short fall. We don't even know what that amount is going to be. We have observed some high dollar amount being predicted by other cities due to GASB. The preliminary studies seem to be around a million dollars. Discussion 172 members: Robert Swanagan, Sammy how do you think the retirees will feel about this cost structure and the enhancement of the mail order drugs? Response Sammy Jacobs: I think it will be looked at very favorable by the retirees. It is a big step right here. I have no problem with it. Comments Sabina Leins: Somebody asked the question, what do other cities do? Do you guys have that, or do you want us to get that information? All you need to do is tell me which cities you want to be compared with and I will get that information for you. This will give you an idea of what similar cities are doing. Next thing, on page three it talks about durable medical equipment. Aetna says there is an annual maximum of $10,000 which includes walkers, wheel chairs, oxygen, prosthetics and etc. You might want to raise it to at least $20,000 because the average cost for prosthetics is $20,000. Comment Sabina Leins: One of the things you will have a lot of questions about is the drug formularies. Whenever you have a change of carriers some drugs will change tiers. That is the nature of the beast. Sabina Leins: Let's talk about the PPO 500 Plan. Comments Matt Daeumer: When you look at this plan it is not a very good deal at all. This is the worst plan of them all. All of the co-pays are higher in the PPO 500 and you are paying a higher out of pocket. This is something we need to educate our employees about. Also, we do need to look at co-pays for this plan. I would keep the Office Visits the same. Sabina Leins: Please look at Section four. This is a Health Reimbursement Account Plan (HRA). You have a $1,000 deductible and a $500 benefit allowance. There are no co- pays with this plan. So, the first $500 that you incur will go to your deductible. But you have got the $500 fund for physicals, doctor visits and etc. It applies to your deductible. There are no physician or office visit co-pays in this plan. After that it is paid on an 80/20 basis. If you don't use your $500 it rolls over into the next year, now you have a $1,000. You have no deductible. However, this is the downside to this plan. If you take employee only coverage and you have a $1,000 deductible and $500 fund. For example, if you take anything other than employee only coverage the deductible becomes an aggregate deductible. There is no longer an individual deductible. Now, in the example below with a $4,500 for employee plus one after the $1,000 before the plan pays anything you are on the hook for thirty-five hundred dollars as a family. So, if you are the only one that is sick you have to meet the entire deductible. It is good for single people. Question Matt Daeumer: Can we change it to an individual $1,000 deductible? Answer Sabina Leins: You cannot. What we can do is make it a $2,000 deductible for an employee plus one. Comment Matt Daeumer: That's still not a good deal. Answer Sabina Leins: That depends, what you got to decide is if your family is going to incur more than a $1,000 worth of expenses in a given year. Comment Karen Beerman: It is a good plan if you are single. I am single. Comments Sabina Leins: What if you incur a $10,000 Claim? Then, everybody is covered. Comment Matt Daeumer: Maybe we should make the family $3,000 and if you have kids $2,000. Comments Sabina Leins: On the back they discuss out-of-pocket. We can play with these numbers. That is your 20% portion. Essentially, the rest of the plan works the same way. It is similar to an HSA. Question Matt Daeumer: What happens to the money I have put the plan if in two or three years we change to another plan? Comments Sabina Leins: It really doesn't have anything to do with Aetna. It depends upon the new carrier and if they have a similar plan that you can roll that into. If they don't you loose your money. Comment Matt Daeumer: I would like to see us look into an HSA. Comments Sabina Leins: We can do that. However, the HSA can only be offered with these two plans and not the first two plans. Also, there are some other conditions you have to meet. We will come back to you with this some other information. Motion was made to adjourn the meeting at 7:09 pm by Sammy Jacobs. Motion seconded by Clark Askins. Motion carried. Meeting adjourned. Respectfully submitted, ~~L.~~ Robert Swanagan, HR Staff''-,) Approved this 18th day of September, 2007