2018 RETIREE ANNUAL ENROLLMENT PERIOD 11/15/17 11/29/17

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1 RETIREE WELL BEING FAIR PRESENTATION November 15, RETIREE ANNUAL ENROLLMENT PERIOD 11/15/17 11/29/17 PLAN DESIGN CHANGES FOR FY19 PLAN YEAR (Effective 03/01/18)

2 TOTAL MEDICAL PLAN COST What was the total dollar amount that Harris Health spent last plan year to pay our Medical Claims, Pharmacy Claims and Administrative Fees? A. $67,480,000 B. $87,360,000 C. $120,000,000 harrishealth.org 1

3 TOTAL MEDICAL PLAN COST ANSWER: C. WHICH EQUALED $120,000,000 harrishealth.org 2

4 MEDICAL COST INCREASE What % did our Medical Plan cost increase from FY16 to FY17? A. 8.2% B. 11.1% C. 5.4% harrishealth.org 3

5 FY17 MEDICAL PLAN COST ANSWER: C. 5.4% Remember Our Harris Health group Medical Plan is funded from our own Harris Health bank account. As plan administrator Cigna does not fund the Plan, we do! harrishealth.org 4

6 HISTORICAL COST & TREND PER EMPLOYEE/RETIREE PER YEAR $12,500 $11,000 $9,500 $8,000 $6,500 $5,000 $8,906 Latest 12 month spend $120M: 72.8% Medical, 20.8% Rx, 6.4% Admin/Stop Loss 6% $9,398 7% $10,064 4% $9,616 $10,246 $11,791 $12,259 $11, % $12,433 $11,798 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 *FY13 changed TPA to Cigna. **FY17 extended Deductible and Out of Pocket maximum by 2 months. 7% 15% Cost PEPY * 4% 8% 5.4% Harris Health has remained below U.S. medical trend for 4 years based on the Aon Hewitt Global Medical Trend Rates Survey Report, with trend at 6% in ** Data Source: March 2017 FMR. harrishealth.org 5

7 FY19 MEDICAL PLAN DESIGN CHANGES Low Deductible Medical Plan Option 1. Individual Deductible is increasing to $ Family Deductible is increasing to $2, Individual Out of Pocket is increasing to $3, Family Out of Pocket is increasing to $9,000. IN NETWORK BENEFITS harrishealth.org 6

8 FY19 MEDICAL PLAN DESIGN CHANGES (Continued) High Deductible Plan Option Individual Out of Pocket is increasing to $3,750. All 3 Medical Plan Options Autism related Speech, Physical and Occupational Therapy & Applied Behavior Analysis (ABA) these services are no longer subject to Annual Limits, but will be subject to Medical Necessity review (a/k/a Prior Authorization). IN NETWORK BENEFITS harrishealth.org 7

9 FY19 MEDICAL PLAN DESIGN CHANGES (Continued) Available to The Telehealth Copay is being reduced to $10 across all 3 Medical Plan options. both our Pre 65 and Post 65 covered Retiree population. harrishealth.org 8

10 PHARMACY CLAIM COST What % of our total Medical Plan spend last year was used to pay for our Pharmacy claims only? A. 33.6% B. 10.5% C. 20.8% harrishealth.org 9

11 FY 17 TOTAL PHARMACY COST ANSWER: C. 20.8% WHICH EQUALED $24,960,000 harrishealth.org 10

12 HOW DID OUR PHARMACY COST COMPARE TO 32 OTHER HOSPITAL SYSTEMS? (For Retail Pharmacy and Mail Order.) Are our outpatient prescription drug costs A. HIGHER or B. LOWER? harrishealth.org 11

13 HOSPITAL PHARMACY BENCHMARK METRICS HARRIS HEALTH SYSTEM 32 HOSPITAL SYSTEMS IN GULF REGION BENCHMARK VARIANCE Gross Cost PMPM $ $ $13.50 Plan Cost PMPM $ $94.10 $19.72 PMPM = Per Member Per Month Rx = Prescriptions ANSWER: A. HIGHER harrishealth.org 12

14 NEW BRAND NAME DRUG DEDUCTIBLE Why is Harris Health implementing a Brand Name Drug Deductible? ANSWER: Our Harris Health prescription drug cost is above Benchmark as evidenced by the slide we just reviewed. harrishealth.org 13

15 NEW BRAND NAME DRUG DEDUCTIBLE How much will the new Brand Name Drug Deductible cost me? ANSWER: $100 Per Member Per Year harrishealth.org 14

16 GENERIC VS BRAND NAME DRUG COSTS Are Generic medications cheaper than Brand name drugs? If so, why? ANSWER: The Reasons: YES. Brand name makers often invented the drug, a process that can cost hundreds of millions of dollars. This is the rationale for drug patents. Patents give pharmaceutical companies a period of years when only they can make money on a product. Their investment includes advertising, like TV commercials and billboards, that s why you don t generally see Generic ads. harrishealth.org 15

17 GENERIC FILL RATE What is our generic dispense fill rate? A % B % C % harrishealth.org 16

18 OUR GENERIC DISPENSE FILL RATE IS: Hospital Pharmacy Benchmark Metrics Harris Health System 32 Hospital Systems in Gulf Region Hospital Benchmark Variance Generic Fill % 82.33% 85.11% 2.78% NOTE: For every 1% that the Generic fill rate increases, the gross cost for Pharmacy will decrease by 3% or approximately $663, ANSWER: A % harrishealth.org 17

19 FY19 REFERENCE BASED PRICING ELIMINATED 1. The Mandatory Generic Drug Program will now apply to all medications filled under the Plan (with certain exceptions tied to Diabetic medications/supplies). 2. All Drug Therapy Classes currently covered under our Reference Based Pricing (RBP) program will now fall under our Mandatory Generic Drug Program. harrishealth.org 18

20 FY19 MANDATORY GENERIC PENALTY If you fill a Brand name medication under our Mandatory Generic Drug Program, you will pay the Brand Copay PLUS any amount over the Generic medication cost. The Medical Plan will NOT PAY this cost difference and this cost difference WILL NOT go toward your annual Out of Pocket maximum. harrishealth.org 19

21 MAINTENANCE MEDICATION FILLS What is the lowest cost way to fill your outpatient Maintenance Medications? A. RETAIL or B. MAIL ORDER Maintenance Medications are those drugs that you take for chronic or long term conditions, such as High Blood Pressure, Heart Disease, Asthma and Diabetes. harrishealth.org 20

22 MAINTENANCE MEDICATION FILLS ANSWER: B. MAIL ORDER Why? Each time you purchase Maintenance Medication at an in network retail pharmacy you are paying a regular Copay for your medication. With Mail Order you purchase a 3 month supply of medication but you pay 2.5 times your regular Copay. This means that you save 1 Copay every 6 months when you utilize Mail Order. In essence, you get a1 month supply of medication free in each 6 month period or 2 months medication free each year. harrishealth.org 21

23 MAIL ORDER FILL RATE Knowing that Mail Order is cheaper than retail, what do you think our Mail Order fill rate is for Maintenance Medications? A. 3.66% B. 5.13% C % harrishealth.org 22

24 MAIL ORDER FILL RATE Hospital Pharmacy Benchmark METRICS HARRIS HEALTH SYSTEM 32 HOSPITAL SYSTEMS IN GULF REGION BENCHMARK VARIANCE Mail % Rxs 3.66% 5.13% 1.48% Rx = Prescriptions ANSWER: A. 3.66% harrishealth.org 23

25 FY19 LIVONGO ENGAGEMENT DIABETIC MEDICATION COST WAIVER Eligibility = Pre 65 Retirees and Spouses (with Harris Health primary coverage) Diabetic members actively engaged* in the Livongo program offered through Harris Health will receive their Generic Diabetic medications and Insulin at no cost as long as they remain engaged in the program. *Engagement is determined by the vendor. Why isn t this same benefit being offered to Post 65 Retirees? Medicare is your primary payer. Harris Health, not Medicare, selected Livongo as our preferred Diabetic program and is rewarding our Pre 65 Plan participants for being actively engaged in their Diabetic care. harrishealth.org 24

26 FY19 PREVENTATIVE STATINS $0 COPAY The United States Prevention Services Task Force has recommended that adults without a history of Cardiovascular Disease use a low to moderate dose Statin for the prevention of Cardiovascular Disease events and mortality when all of the following criteria are met: (1) you are aged 40 to 75 years; (2) you have 1 or more Cardiovascular Disease risk factors (i.e., Dyslipidemia, Diabetes, Hypertension, or Smoking); and (3) you have a calculated 10 year risk of a cardiovascular event of 10% or greater. If you meet all of these criteria: 1. Lovastatin will now be covered at a $0 copay OR 2. With Prior Authorization you may be able to fill Simvastatin or Atorvastatin at this $0 copay. harrishealth.org 25

27 FY19 HARVONI HEPATITIS C PROGRAM The financial incentive program for using Harvoni to treat Hepatitis C was previously discontinued by the manufacturer and is therefore no longer available under our Harris Health sponsored medical plan. harrishealth.org 26

28 FY19 OPIOID EARLY FILL WINDOW A tighter Early Fill Window for Opioid medications will take effect 03/01/18. The patient must utilize 90% of their prescription before it can be refilled. OPIOID USE IS AN EPIDEMIC IN THE U.S. TODAY In the U.S. Harris Health : So why are we tightening our Early Fill Window? We have 261 Harris Health members receiving Opioids that are NOT in compliance with CDC Opioid guidelines and 7.4% of our Opioid utilizers (144 members) have significant clinical risks, taking doses above the recommended dose and/or duration period. harrishealth.org 27

29 FY19 PHARMACY COPAY CHANGES Drug Copay Generic Brand Name Formulary Brand Name Non Formulary Retail $10.00* 20% / Max $ % / Max $ Mail $25.00* 20% / Max $ % / Max $ Specialty $ $ $ Compound $50.00 $50.00 $50.00 *If the cost of your prescription is less than the copay amount, you will pay the lower amount. Definitions: 1) Brand name formulary drugs are Brand name drugs included on the plan s Formulary. 2) A Formulary is a list of preferred prescription drugs, both Generic and Brand name, covered by your Medical Plan that offer the greatest overall value. harrishealth.org 28

30 FY17 MEDICAL PLAN ENROLLMENT VS PMPM COST % Enrollment (Outer Ring) $394 15% $380 Claim Cost (Inner Ring) Claims 48% PMPM 37% Participant Enrollment Counts by Medical Plan Option KelseyCare = 4,654 Low Deductible = 3,813 High Deductible = 1,476 9,943 $714 PMPM = Per Member Per Month High Deductible Low Deductible KelseyCare KelseyCare is running 81% below the Low Deductible option with inpatient costs 69% below the Low Deductible inpatient costs. harrishealth.org 29

31 WHO COSTS THE PLAN THE MOST? A. The Employee/Pre 65 Retiree OR B. The Spouse harrishealth.org 30

32 EMPLOYEE/PRE 65 RETIREE VS SPOUSE COST $700 $600 $500 $400 $300 $200 $100 $0 Cost Per Member Per Month (PMPM) $292 $274 $219 $378 $511 Core Claims High Cost Claims Total Employee PMPM Spouse PMPM $652 ANSWER: B. SPOUSE COSTS ARE 27.6% GREATER THAN EMPLOYEE/ PRE 65 RETIREE COSTS. Data Source: IDAP, incurred March 2016 February 2017, paid through March Excludes Post 65 Retirees. Costs include Medical and Pharmacy. harrishealth.org 31

33 FY19 PREMIUM RATES FOR CURRENT RETIREES AND RETIREES UNDER GRANDFATHER STATUS High Deductible KelseyCare Low Deductible harrishealth.org 32

34 MEDICAL PLAN OPTIONS The real question is WHICH OPTION IS RIGHT FOR YOU? IN NETWORK BENEFITS COST COMPARISONS Notes: 1. Your Out of Pocket (OOP) limits equal the accumulation of your Deductibles, Copays and Coinsurance. 2. Premiums noted above are based off our FY19 Premium Rate Tables for Current Retirees and Future Retirees under Grandfather status. 3. Maximum Affordable Care Act (ACA) annual Out of Pocket limits for FY19 are $7,350 per Individual and $14,700 for Family. harrishealth.org 33

35 FY19 DENTAL PPO PLAN CHANGES 1. Composite Fillings will be covered on back teeth. 2. Missing tooth will be covered. 3. Periodontal Maintenance will be covered 4 times per year. 4. Implants will be covered at the same frequency as Crowns. 5. Surgical Extractions and General Anesthesia will be covered under Major Services. 6. Out of Network reimbursement will be covered at the 80 th percentile. 7. Full mouth X Rays will move to 1 in 60 months. 8. Crowns/Inlays/Onlays/Bridges/Dentures/Implants will move to 1 in 84 months. PPO = Preferred Provider Organization harrishealth.org 34

36 WHY ARE WE MAKING DPPO CHANGES? These Dental PPO (DPPO) Plan design changes are being made based on: Dental Survey results, Standard of Care guidelines, Acceptable practices, Current literature, Benchmark comparisons, and Better alignment to covered services offered under our DHMO Plan. This fully insured Plan continues to be administered by MetLife. harrishealth.org 35

37 FY19 DENTAL HMO (DHMO) PLAN 1. There are no Plan design changes for the coming plan year. 2. This fully insured Plan continues to be administered by MetLife. Remember All DHMO dentist changes must be submitted to MetLife by the 25 th of each month for services as of the first of the following month. harrishealth.org 36

38 FY19 VISION PLAN 1. This fully insured Plan continues to be administered by Davis Vision. 2. There are no Plan design changes for FY19. harrishealth.org 37

39 PENSION PLAN VALUATION DATA Audited once a year. The 2016 plan (calendar) year was audited by BPS&M. Our 01/01/17 audit report reflects: Total Active = 2,617 Deferred Vested = 1,366 Receiving Benefits = 2,942 TOTAL = 6,925 Actuarial Liability = $833,499,031 Market Value Adjustment (MVA)/ Actuarial Liability = 71.4% Funded Annual Required Contribution (ARC) = $29,432,523 harrishealth.org 38

40 PERSONAL ASSISTANCE We re here for you! 1. Now that you ve heard our presentation, we have Employee Benefits staff here today to assist you with your 2018 Annual Enrollment elections. 2. Cigna, MetLife and Davis Vision are also all here today to assist you with claims processing and coordination of benefit questions. harrishealth.org 39

41 IMPORTANT DATES TO KNOW: FY19 HARRIS HEALTH RETIREE ANNUAL ENROLLMENT PERIOD IS: 11/15/17 11/29/17 Approved benefit election changes will be effective 03/01/ MEDICARE ENROLLMENT WINDOW: 10/15/17 12/07/ AFFORDABLE CARE ACT (ACA)/HEALTH INSURANCE MARKETPLACE ENROLLMENT WINDOW: 11/07/17 12/15/17 harrishealth.org 40

42 FINAL NOTES 1. No hard copies of this presentation will be distributed today! We are going green, saving trees and money! 2. However, you can visually review and print your own hard copy, if you so choose. To do so: Go to the Internet, Type Click on Employees, Click on Retiree/COBRA Resources Then click on FY19 Retiree Plan Design Changes. harrishealth.org 41

43 HR SR VP & EMPLOYEE BENEFITS PERSONNEL THANK YOU! harrishealth.org 42