DUTCHESS EDUCATIONAL HEALTH INSURANCE CONSORTIUM

Transcription

1 DUTCHESS EDUCATIONAL HEALTH INSURANCE CONSORTIUM A Year in Review, 9/2014 6/2015 This document provides summary highlights of the projects or major initiatives undertaken by the DEHIC Board of Trustees and DEHIC Executive Committee during the period noted. Prepared by Rose & Kiernan, Inc.

2 DUTCHESS EDUCATIONAL HEALTH INSURANCE CONSORTIUM A Year in Review, 9/2014 6/2015 Retiree Drug Subsidy (RDS) Consortium continues to participate in the Retiree Drug Subsidy (RDS) program, sponsored by the Centers for Medicare and Medicaid. Total subsidy received for the period July 1, 2014 through March 31, 2015 is $1.4 million, with additional subsidy dollars forthcoming. As always, reconciled funds are returned to participants in the form of a premium subsidy. The Affordable Care Act (ACA) Board continues to carefully monitor the impact of the ACA on the Consortium-sponsored benefit plans. R&K webinars/seminars continue to be provided to all participant groups, as well as allied organizations. ACA refresher presentation provided on county-wide basis at Ulster County BOCES conference center, April A continued awareness is maintained relative to the impact of the Excise Tax (Cadillac Tax), and efforts to migrate membership toward lower cost benefit plans is strongly encouraged. Affordable Care Act Since the passage of the ACA in March 2010, DEHIC has worked diligently to ensure compliance with the Mandate, and has prepared its participant groups with the necessary information that ensures their readiness for each phase of the law. Large Claims Carve-out (LCCO) DEHIC has continued to work toward finalizing the Minimum Premium Agreement (MPA) language, which incorporates the language necessary to implement the LCCO. DEHIC legal counsel has completed a final agreement for review by Empire s legal department and underwriters. When approved, the corridor of large claims represented in the MPA will be $1,000,000 to $1,999,999, with DEHIC maintaining

3 responsibility for 80% of the large claims cost. The MPA will be submitted to the NYS Department of Financial Services for approval. Article 47, Review of Requirements DEHIC legal counsel and R&K consultants continue to review the application and financial requirements of this initiative, as well as prepare the needed exhibits for submission of the application to the NYS Department of Financial Services (NYS DFS). Aquarius Capital has been retained as the actuarial consulting firm to provide an analysis and attestation regarding the financial viability of DEHIC s health plan. A meeting has been established with the NYS DFS to preliminarily review the application. DEHIC s Product Development Committee will continue in their oversight of this project during July and August Three-Tier v. Four-Tier Rate Structure Throughout the plan year, the DEHIC Board has continued to review the enrollment fluctuations among each of the participant groups related to existing and proposed tier structures. Beginning March 2014, family enrollment was segregated to extract two person contracts from the eligibility file in order to report and compare data related to families, employee/spouse, and employee/child(ren). Consideration of a 4-tier rate structure is proceeding, as well. Ensuring an equitable balance in the distribution of cost (i.e., those members who might benefit v. those who would see an increase in cost) has been a priority of the DEHIC Board, in addition to guarding against the unintended consequences associated with adverse selection. A decision on this initiative will be reached once a full 12 months of data is gathered and analyzed by the Board. Revision to By-Laws, Article 5 Payment of Bills and Late Charges The Board reviewed the issue of late receipt of monthly premium payments, which occurs from time to time. In a memorandum released to DEHIC s participant groups during November 2014, they were advised that Article 5 was amended to clarify any questions regarding the payment obligation of each group, and avoid possible late penalties in any given month. Article 47 Article 47 of the NY Insurance Law authorizes certain municipal corporations to form a municipal cooperative health benefit plan in order to share, in whole or in part, the cost of selffunding employee health benefits. 3-Tier/4-Tier Rates This initiative has been under discussion by the Board for several years. The current rating structure allows for individual and family premium rates only (active and Medicare). Changing the tier structure would allow for the separation of family members (i.e., 2 adults w/ children) from a 2-adult scenario and 1- adult/child(ren) scenario, thereby adjusting the premium cost for these members.

4 Revision to By-Laws, Article 12 Compliance with Employee and Retiree Eligibility Standards Article 12, Compliance with Employee and Retiree Eligibility Standards, was added to the By-Laws in November 2014, and district offices were notified of the addition at that time. The new By-Law addresses the impact of timely notification of eligibility, or ineligibility, for the health plan s benefits in order that payment of benefits to ineligible persons, or the unexpected denial of benefits, may be avoided. To support this effort, a template letter was created for use by the business offices to distribute a reminder to employees/retirees regarding the eligibility provisions of the plan, and the responsibility of members to notify their business office of all dependent eligibility changes in a timely manner. Anthem, Inc. - Empire BCBS Security Breach Beginning in February 2015, Empire BCBS notified DEHIC of a security breach they sustained that impacted the records of 78 million current and former members of Anthem, Inc., the parent company of Empire BCBS. It was reported that the breach was discovered on January 29, 2015, and appeared to span back as far as Anthem immediately began working with the Federal Bureau of Investigation, and also contracted with AllClear ID, a corporation known for identity repair assistance. Anthem determined to hire AllClear ID to begin monitoring member records and identity related activity, at no cost to current and former members for two years (ending February 13, 2017). Empire communicated regularly with the district offices to ensure they had the most up-to-date information on the matter, and to provide directives that would assist in protecting against fraud. Empire released communications to all impacted members over the course of several weeks, encouraging them to work directly with AllClear ID regarding identity questions and concerns. In addition, Anthem created a unique website and toll-free number to support member inquiries. Government Efficiency Plan During the first and second quarter of 2015, discussion was held regarding the NYS Government Efficiency Plan (Property Tax Cap). While DEHIC has undertaken a range of cost-efficiency efforts in the past (e.g., dependent eligibility audit; claims audit; product Government Efficiency Plan, 1% Tax Cap Governor Cuomo and the State Legislature enacted the Property Tax Freeze Credit as part of the 2015 State Budget. The new law encourages local governments and school districts to generate long-term tax relief for New York State taxpayers by: sharing services; consolidating or merging; and demonstrating and implementing operational efficiencies. Local governments and school districts may take a variety of approaches to develop their Government Efficiency Plans, and were encouraged to facilitate a county-wide efficiency plan.

5 consolidation; etc.), only those initiatives implemented from 2014 forward may be included in an efficiency plan. Through discussions with R&K, and subsequent discussions with dependent eligibility audit firms, the BOT passed a resolution to undertake a second dependent eligibility audit during the upcoming plan year. A decision will be forthcoming on the vendor selected, as well as the start date of the audit. ACA, Small v. Large Group Definition, cont d On behalf of the Consortium, legal counsel and R&K have been pursuing an initiative to address the impact that the ACA s definition of a large employer group will have on two smaller participant districts beginning July 2016 Livingston Manor CSD and Roscoe CSD. At the present time, a change to the mandate does not appear imminent; and in May 2015, the NYS Department of Financial Services (DFS) released a Q&A advising on various criteria and their enforcement of the federal mandate. Empire BCBS also advised of legislation submitted to the NYS DFS that requests an amendment allowing smaller districts to remain in DEHIC. To date, the DFS has not responded to Empire. The initiative will continue to be pursued, including possible options for the two affected districts to consider. Product Migration and Retirement Activity Similar to the 2014 report, the Board continues to see significant interest in the new DEHIC products (Healthy Advantage PPO and EPO Select 20), including employee/retiree movement into the plans occurring over the course of the plan year. Districts who have introduced these plans during include Wappingers, Rhinebeck, Arlington, Pine Plains, Roscoe, Fallsburg, and Pawling. Many districts that introduced the plans in 2014 continue to make progress in converting additional bargaining units to these plans. The Monthly Premium Report prepared by Dutchess County BOCES provides enrollment counts among each plan and group. Beginning July 1, 2015, the EPO Select 10 benefit plan will officially be retired; therefore, any district with enrollment in the EPO Select 10 benefit plan is required to move their membership to one of the available DEHICsponsored plans, or a district-sponsored HMO. Product Migration, Benefit Plans The Healthy Advantage PPO is a benefit plan that combines a 10% innetwork coinsurance payment, as well as a $30 copayment arrangement for the member. Out-ofnetwork benefits are also available, subject to deductible and coinsurance. The EPO Select 20 benefit plan provides innetwork coverage only, based upon a $20 copayment arrangement. Group Requirement to Offer HMOs (Department of Health, Office of Managed Care) With the continued migration of bargaining and non-bargaining units into the new DEHIC plan designs, the question arose as to whether there was an

6 employer requirement to continue offering an HMO to employees, if an HMO was available in their location. The question was researched by DEHIC s legal counsel; and, following their review of the NYS Department of Health s Administrative Rules and Regulations, it was explained that school districts would need to continue offering HMOs to employees, unless the employee benefits were part of a collective bargaining agreement negotiation. DEHIC Cost & Utilization Data, Empire BCBS During April 2015, Empire BCBS prepared a cost and utilization report, specific to DEHIC s membership utilization and illness conditions. The data was reviewed with the Board during the May 2015 BOT meeting. The reporting parameters included 12-months of data, spanning January 2014 through December 2014, as well as the prior period, January 2013 through December It further included per member per month paid amounts; high cost claimants in excess of $750k; and, the place of service settings for inpatient, outpatient facility, and professional. Medical and pharmacy highlights we provided, including a review of pharmacy recommendations, clinical highlights, performance metrics, etc. Specific to prescription drug use, Empire will be creating a report related to specialty medications scheduled for patent expiration in the coming months, and the expected savings that could result based on current membership use. Empire BCBS, Special Segment Service Unit (concerns) During the plan year, there has been a growing increase in customer service concerns, expressed by both the members and the business offices. Empire was asked to address the BOT on these matters, which occurred on two separate occasions. Empire reassured the Board that initiatives are underway to ensure a higher level of customer service for DEHIC members including, but not limited to the launching of a core group of customer service representatives who are highly knowledgeable regarding DEHIC benefits, additional quality control initiatives (i.e., test calls; daily meetings; cross-training, improved reference materials), etc. A follow up meeting will be held between Empire and R&K during August to further assess the status of the quality improvement initiatives a report to the BOT will follow.