Joint Labor Management Benefits Committee

Transcription

1 Joint Labor-Management Benefits Committee COMMITTEE REPORT Date: June 8, 2016 To: From: Subject: Joint Labor Management Benefits Committee Staff Flex Benefits Program Provider Sections, Rate Renewals, and Benefit Design for Plan Year 2017 JOINT LABOR-MANAGEMENT BENEFITS COMMITTEE MEMBERS: Management Wendy G. Macy, Chairperson June Gibson Tony Royster Matthew Rudnick Miguel Santana Employee Organizations Cheryl Parisi, Vice-Chairperson Paul Bechely Chris Hannan David Sanders Gregory West RECOMMENDATION: A. Provider Selections - That the JLMBC recommend to the General Manager Personnel Department that: (1) Kaiser Permanente be selected as the provider of the Staff Model HMO option for a three-year contract beginning January 1, 2017, through December 31, 2019, providing however that the Personnel Department further negotiate with Kaiser as part of contract development expanded commitments in the areas of Wellness and onsite member advocacy resources. (2) Anthem Blue Cross be selected as the provider of the Flex Program s PPO, HMO Full Network, and HMO Narrow Network plans, as well as an alternate regional network plan ( Vivity ) to be added as an additional option for Flex members, for a three-year contract beginning January 1, 2017, through December 31, (3) EyeMed be selected as the provider for a stand-alone vision option for Flex members for a three-year contract beginning January 1, 2017, through December 31, B. Annual Service Provider Rate Renewals - That the JLMBC recommend to the General Manager Personnel Department approval of annual renewals for the following Flex Benefits service providers: (1) Standard Insurance for the Flex Program s Life, Disability & AD&D insurance plans for a 0% rate increase for Plan Year (2) WageWorks for the Flex Program s tax-advantaged savings accounts third party administration for a 0% rate increase for Plan Year (3) Managed Health Network for the Flex Program s Employee Assistance Program services for a 0% rate increase for Plan Year C. Plan Design That the JLMBC approve the following recommended plan design changes for Plan Year 2017: JOINT LABOR-MANAGEMENT BENEFITS COMMITTEE

2 (1) Dental - Adjust the benefit levels for the Dental PPO Plan to include a Diagnostic & Preventive Waiver; equalize the In/Out of Network Annual Maximum at $1,500; and increase the Reasonable & Customary Out-of- Network reimbursement from the 51 st to the 90 th percentile. (2) Vision Establish a stand-alone vision plan for Flex members as a base benefit and administer on a composite rate basis at the benefit levels as identified in this report and its attachments. (3) Disability - Increase the monthly disability earnings cap for 2017 to $3,166 per month. DISCUSSION: This report provides information to the JLMBC regarding decision points involving the provider selections, rate renewals, and plan design features for the 2017 Flexible Benefits Program. Following is a summary/recap of JLMBC actions to date relative to the development and consideration of procurements for health, dental and vision care services: September 3, the JLMBC approved moving forward with developing Requests for Proposal (RFPs) for health and dental service providers in 2015/2016 for the 2017 Plan Year. October 8, the JLMBC reviewed and had discussion relative to a presentation from staff and the Plan s consultant with respect to design of the RFPs. November 12, the JLMBC adopted a member survey to obtain feedback and help inform development of the Health/Dental RFPs and evaluation of responses; the survey window was open November 30-December 21. January 21, the JLMBC reviewed and discussed the survey results as well as an initial draft of the Health Services RFP. February 4, the JLMBC approved the final Health Services and Dental Services RFPs. March 3, 2016 the JLMBC approved a final Vision Services RFP. May 12, 2016 the JLMBC considered recommendations from its rating panel relative to the Health Services RFP (Committee Report 16-15) May 19, 2016 the JLMBC conducted interviews with the three highest-scoring firms relative to the Health Services RFP May 26, 2016 the JLMBC considered recommendations from its rating panels relative to the Dental Services and Vision Services RFPs (Committee Reports and 16-18, respectively), approving the recommendation of Delta Dental as the selected provider and requesting pricing options for certain benefit level adjustments, and deferring action on the Vision Services recommendation pending certain informational report-backs. Relative to these procurements and additional information requested by the JLMBC, this report addresses: Kaiser renewal information for other agencies 2

3 Former Anthem member participation with Vivity providers prior to introduction of the Narrow Network Dental benefit adjustment pricing options Vision composite rates vs. tiered rates analysis Cost impact of including retinal exams as part of EyeMed s services; and Coordination of benefits for a stand-alone vision plan relative to other optical benefit programs. A. Provider Selections In Committee Report 16-15, presented at the JLMBC s May 12, 2016 meeting, the JLMBC was provided with a review panel recommendation that Anthem Blue Cross be selected as the combined provider of the Flex Program s PPO, HMO Full Network, and HMO Narrow Network options, as well as the provider of a new alternate regional network option ( Vivity ) for Flex members. As indicated in that report, the RFP for Health Services provided opportunities for health insurance companies to submit proposals for any of the current core menu of offerings presently offered to the City s Flex Benefits population: Core Menu National Provider Network Preferred Provider Organization (PPO) Statewide Provider Network Staff Model Health HMO Statewide Provider Network Full Network Model HMO Statewide Provider Network Narrow Network HMO In addition, the RFP also incorporated an option to consider proposals for alternative provider network and care models which could be offered as part of the core menu of offerings. Six firms proposed options for the Flex Program s core menu; three of these firms also included alternate network models. Kaiser was the only provider submitting a proposal for a Staff Model HMO. The proposals were reviewed by the JLMBC s consultants from Segal and Keenan, and by staff. 3

4 The following recaps the rating panel s combined averaged scoring for all six firms: Ranking Proposer Score PPO/Full & Narrow Network/Alternate Care 1 Anthem Aetna Blue Shield Health Net UHC 805 Ranking Proposer Score Staff Model 1 Kaiser 816 Subsequently, on May 19, 2016, the JLMBC conducted interviews with Anthem, Aetna and Blue Shield. On May 26, 2016, the JLMBC conducted an interview with Kaiser and also considered recommendations from the review panel with respect to the JLMBC s Dental and Vision services procurements. The JLMBC approved the recommendation of Delta Dental as the Flex Program service provider for the Flex Program s Dental PPO, HMO and Preventive service options. The JLMBC deferred any action relative to the Vision procurement. Following are the restated recommended provider selections for the Health and Vision procurements. (1) Provider Selection: Kaiser - Statewide Staff Model HMO Plan As stated previously in JLMBC Report 16-15, the recommendation of the Health Services RFP rating panel is that Kaiser Permanente ( Kaiser ) be selected as the provider of the Statewide Staff Model HMO plan for the City s Flex Benefits Program. Kaiser was the sole bidder for the Statewide Staff Model HMO. Kaiser is also the incumbent provider. Staff is recommending that the JLMBC recommend selection of Kaiser as the Statewide Staff Model provider for a three-year contract term. Kaiser s proposal did not include commitments with respect to Wellness and on-site member advocacy resources that were commensurate with the proposals received from the non-staff model bidders. As a result, staff recommends that the JLMBC request Personnel Department staff to, as part of contract development, negotiate further with Kaiser with respect to expanding its commitments in these areas. At the May 26, 2016 JLMBC meeting, staff was asked to report back on Kaiser rate renewals for comparable Southern California governmental agencies, including the Los Angeles Unified School District and County of Los Angeles. Neither agency was able to provide this information, as it is currently not public information. 4

5 Staff recommends that the JLMBC recommend to the General Manager Personnel Department that Kaiser Permanente be selected as the provider of the Staff Model HMO option for a three-year contract beginning January 1, 2017, through December 31, 2019, providing however that the Personnel Department further negotiate with Kaiser as part of contract development expanded commitments in the areas of Wellness and onsite member advocacy resources. (2) Provider Selection: Anthem Blue Cross - Statewide PPO/Full Network/Narrow Network & Alternate Network Plans As discussed previously in JLMBC Report 16-15, the recommendation of the Health Services RFP rating panel is that Anthem Blue Cross ( Anthem ) be selected as the combined provider of the Flex Program s PPO, HMO Full Network, and HMO Narrow Network, as well as of an alternate regional network ( Vivity ) to be added as an additional option for Flex members. Staff is recommending that the JLMBC recommend selection of Anthem as the provider for these four options for a three-year contract term. At the JLMBC s May 26, 2016 meeting, a request was made for data analysis with respect to those Flex members affected in 2012 when the City moved to a Narrow Network non-staff model HMO. A review/summary is provided in Attachment A to this report. The results of that analysis indicate that over 5,600 subscribers/dependents in the non-staff Model HMO option experienced provider disruption as a result of the change to the Narrow Network. 1 This number represented approximately 24% of the total number of subscribers/dependents in the non-staff Model HMO. Although it is not possible to identify how many of those members are still Flex members and/or would be interested in restoring their pre-narrow Network 2012 provider relationships, the analysis indicates that 3,279 of these individuals, if they were current members, would have access to providers through the Anthem Narrow Network HMO or Vivity regional networks. The restored providers include: Provider Group Members (Subscribers/Dependents) UCLA Medical Group 987 Cedars-Sinai 984 PIH Health 814 Memorial Care IPA 349 Greater Newport Physicians 145 However, it should be noted that the St. Joseph Hoag medical group, which recorded 617 members in 2012, would not be available under the Anthem Narrow Network HMO or Vivity networks. On a net basis, this indicates that through Anthem s proposal, over 2,600 Flex members and their dependents in the non-staff Model HMO would have access to certain providers at a lower cost relative to the Full Network, while over 600 would experience provider disruption. This does not include any projection of other Plan members 1 Data for subscribers only was not available. 5

6 (particularly PPO members) who might be attracted to Vivity because certain preferred providers would be available at a lower premium cost to the member. It should be noted that in the participant survey, a number of comments were focused on obtaining affordable access to specific health systems such as UCLA and Cedars-Sinai. Staff recommends that the JLMBC recommend to the General Manager Personnel Department that Anthem Blue Cross be selected as the provider of the Flex Program s PPO, HMO Full Network, and HMO Narrow Network plans, as well as of an alternate regional network plan ( Vivity ) to be added as an additional option for Flex members, for a three-year contract beginning January 1, 2017, through December 31, (3) Provider Selection: EyeMed Vision Care - Flex Benefits Vision Plan As discussed previously in JLMBC Report 16-18, the recommendation of the Vision Services RFP rating panel is that EyeMed Vision Care be selected as the provider of a new stand-alone vision plan for Flex members. As indicated in that report, the rating panel s and staff s finding is that the selection of EyeMed would allow the City to offer uniformity of benefit offering, an improved level of service, and an expanded benefit level at a premium cost consistent with the present model in which vision benefits are bundled with health plan services. At the JLMBC s May 26, 2016 meeting, a request was made for additional information regarding several items, which are addressed in the supplemental report provided by JLMBC s consultants at Keenan Associates (Attachment B). JLMBC members had asked for information regarding: (a) the use of composite rates vs. tiered rates; (b) the cost impact of including retinal exams as part of EyeMed s services; and (c) any potential issues related to the coordination of the City s vision benefits with other optical benefits that may have been negotiated with specific labor organizations. As indicated in Keenan s report, the use of a composite rate would not increase the total premium cost to the City as compared to the use of a tiered rate structure. With respect to integration of benefits with other optical plans, as indicated in the Keenan report, whether there would be limitations or offsets would be dependent upon the specific provider terms and conditions for those external optical plans. In general, however, this should not disadvantage members with dual benefits, as (a) any applicable limitations or offsets already exist within the current plan design and (b) benefit levels under EyeMed only increase relative to the current plan design. Finally, as indicated in the Keenan report, the addition of retinal exams as a service option for members would be provided as part of the member s $10 co-pay for the Standard Eye Exam. Staff recommends that the JLMBC recommend to the General Manager Personnel Department that EyeMed be selected as the provider for a stand-alone vision option for Flex members for a three-year contract beginning January 1, 2017, through December 31,

7 B. ANNUAL SERVICE PROVIDER RATE RENEWALS Annually the JLMBC reviews and makes recommendations on Flex benefit service provider rate renewals. Below is a list of the existing service providers that require renewals (exclusive of the Health, Dental and Vision service providers, previously addressed in this report): Provider d. The Standard (Life/Disability insurance) Rate Increase JLMBC Recommendations for 2017 Plan Year 0.0% Approval of rate renewal for Plan Year 2017 e. The Standard (AD&D) 0.0% Approval of rate renewal for Plan Year 2017 f. Wage Works Flexible Spending Accounts 0.0% Approval of rate renewal for Plan Year 2017 g. Managed Health Network 0.0% Approval of rate renewal for Plan Year The Standard (Life, Disability, and AD&D) The current Flex Benefits Life and Disability insurance provider is The Standard, which is in its sixth contract year. The Standard is proposing a 0% rate increase for 2017 for Life Insurance, Short-Term Disability, and Long-Term Disability. The Standard also provides an Accidental Death & Dismemberment (AD&D) insurance plan, and is in its fourth contract year doing so. Standard has agreed to continue the current AD&D premium rates for Plan Year Staff recommends that the JLMBC recommend to the General Manager Personnel Department renewal of the Standard Life, Disability and AD&D insurance plans for a 0% rate increase for Plan Year Wageworks (Tax-Advantaged Spending Accounts) The current provider for Tax-Advantaged Spending Accounts is Wageworks. These savings options include Dependent Care Reimbursement Accounts (DCRA), Healthcare Flexible Spending Accounts (HCFSA), Transit Spending Accounts (TSA) and Parking Spending Accounts (PSA). Wageworks is in its fourth contract year. WageWorks has agreed to continue the current DCRA, HCFSA, TSA and PSA rates for Plan Year Staff recommends the JLMBC recommend to the General Manager Personnel Department renewal of the Wageworks Tax-advantaged savings plans for a 0% rate increase for Plan Year

8 3. Managed Health Network (Employee Assistance Program) The current Employee Assistance Program (EAP) provider is Managed Health Network which is in its fourth contract year. Managed Health Network has agreed to continue the current EAP rates for Plan Year Staff recommends the JLMBC recommend to the General Manager Personnel Department renewal of the Managed Health Network Employee Assistance Program for a 0% rate increase for Plan Year C. PLAN DESIGN CHANGES (1) Dental At its May 26, 2016 meeting, the JLMBC recommended the selection of Delta Dental as a result of the Dental Services RFP but asked for certain information regarding pricing options for various benefit level adjustments for the Dental PPO plan, which holds 67% of the Flex membership. Attachment C provides a summary of ten different pricing options for various combinations of benefit level enhancements, all within the context of a non-participating contract with the provider, which is less expensive than the participating contractual relationship established with the expiring contract. Per its response to the City s Dental Services RFP, Delta s initially proposed premiums would represent a 2.4% reduction relative to 2016 premiums. All of the alternative benefit level adjustment pricing options represent, to greater or lesser degrees, an increase of premium levels relative to current 2016 premiums. As a reminder, for the Dental PPO plan, members receive 85% of the employee-only premium as their maximum subsidy. Options explored with Delta Dental for enhancing the Dental PPO benefit levels include: Diagnostic & Preventive Waiver - Waiving the cost of diagnostic and preventive services as counting against a member s annual maximum benefit. Equalizing In/Out of Network Annual Maximum Equalizing the annual maximum benefit for members seeing in-network vs. out-of-network providers to $1,500. Increasing the Annual Maximum Increasing the annual maximum benefit up to $2,000 for both in-network and out-of-network providers. Annual Maximum Rollover Allowing members to carry forward, for one year, any unused portion of their annual maximum benefit to the subsequent year. Reasonable & Customary Percentile Increasing the reasonable and customary reimbursement level for out-of-network providers to either the 75 th or 90 th percentile. 2 2 Reasonable and customary means what an insurance company determines to be within a range of fees that most dentists in a given geographical area charge for a given procedure. The insurance company will reimburse a specified percentile of the reasonable and customary cost. For the City currently, that reimbursement level is set at the 51st percentile. Options include increasing to the 75th or 90th percentile. 8

9 For the Dental PPO plan, staff focused on benefit level adjustments that would provide greater flexibility for members to manage the cost of dental services at a reasonable cost relative to 2016 premiums. On a total premium basis, the cost of dental premiums is split roughly evenly between the City and Flex members (with the City subsidy representing 49% of total premium and employee contributions representing 51% of total premium). As a result, the cost of any increase in dental premiums must be borne by both the City and the membership. Staff is recommending the following combination of Dental PPO benefit level adjustments: Add Diagnostic & Preventive Waiver Equalize the In/Out of Network Annual Maximum Increase the out-of-network provider Reasonable & Customary Percentile for outof-network benefits from the 51 st to 90 th percentile. In staff s view, adding a Diagnostic and Preventive Waiver would both promote wellness-related preventive utilization as well as increase the effective value of the annual maximum. Delta Dental estimates the annual value of this enhancement to be between $300-$500 per member. Increasing the reasonable and customary reimbursement to the 90 th percentile, and equalizing the in/out of network annual maximum benefit at $1,500, provides greater utility and flexibility to those members seeing preferred dentists who are out of network. Together, this package of increases (identified as Option 5 in Attachment C) would increase premiums by a modest amount relative to 2016 premiums (approximately $247,000 in City subsidy, and $259,000 in employee contributions). This increase is, in staff s view, reasonable relative to the additional benefit levels provided to members. The table below summarizes the total premium impact for Option 5: Max $44.60 Sub-> Option 5 Employer Employee Total Premium $52.47 $3,563,322 $628,821 $4,192,143 $98.34 $1,367,421 $1,647,684 $3,015,104 $ $1,214,890 $1,562,772 $2,777,663 $ $2,570,002 $5,311,809 $7,881,811 Total--> $8,715,634 $9,151,087 $17,866,721 Increase over $247,719 $259,197 $506, Premiums--> 2.9% 2.9% 2.9% In addition, there was discussion at the JLMBC s May 26, 2016 meeting with respect to the prospect of adding a buy-up additional plan with richer benefits for those members who wished to enroll. Delta provided pricing for the buy-up plan (identified as Option 8 in Attachment C). The buy-up plan would increase the annual maximum to $2,000 and 9

10 also include a Diagnostic and Preventive Waiver. The cost of the buy-up option would represent a 19.6% premium increase relative to 2016 premiums. It would also increase premiums by 3.6% for those not participating in the Buy-Up plan. In staff s analysis, this option should be ruled out on the basis that it would both increase costs of the Dental plan for all employees as well as the City simply to include the additional option. The benefit level adjustments as included in Option 5 will provide general benefit relief to all members at a much more reasonable and equitably applied cost. (2) Vision As noted in Committee Report 16-18, considered at the JLMBC s May 26, 2016 meeting, staff s recommendation is to establish a stand-alone vision plan as a base benefit (similar to base life and disability). In this construction, the vision benefit would cover and apply equally to all represented and non-represented Flex members, irrespective of other vision benefits that may be available to certain members on a per- MOU basis, and without a separate member contribution structure (as is the case with health and dental benefits). Staff contacted the CAO as to whether a separate mechanism/authority is required in the City s various collective bargaining agreements in order to offer the benefit (as is the case with health and dental benefits) or whether it can be included as part of the overall Flex program design (as is the case for life, disability, and other Flex benefits). The CAO s preliminary analysis is that a separate agreement would not be required and that the vision benefit could be offered as a base benefit. As discussed previously, Eyemed has indicated that use of a composite rate (as opposed to a tiered rate) would not change the overall premium cost. Given that use of a composite rate would simplify the communication and administration of the benefit, staff recommends that the benefit be administered on a composite rate basis. Finally, staff is in receipt of a communication from Kaiser Permanente to the JLMBC Chairperson and Vice-Chairperson regarding the potential introduction of a stand-alone vision plan to the Flex Benefits program. That communication is provided as Attachment D. 10

11 (3) Disability Disability Benefit Cap - The Flex program has been providing civilian employees with basic disability insurance since The basic disability insurance coverage generally provides eligible employees with replacement income up to 50% of employee s salary, or a specified dollar amount, whichever is less, for up to 24 months. Each year the JLMBC reviews and adopts a maximum monthly benefit for the new Plan Year. The 2016 maximum benefit level is $3,129 per month. Since this benefit was first offered, the basic disability benefit cap has been adjusted upward annually at a rate equivalent to civilian Plan Year Disability Cap 2005 $ 2, $ 3,166 (est) $ 27 (est) 1.20% employee cost of living salary adjustments. Per the office of the City Administrative Office (CAO) the average salary increase for 2016 is 1.2%, which equates to a $3,166 maximum benefit. As a result, staff recommends that the disability earnings cap be adjusted for 2017 based on the average salary increase for 2016 of 1.2% to $3,166 per month. D. FLEX PLAN PROJECTED EXPENDITURES FY DISABILITY CAP Dollar Increase Over Prior Year Percent Increase Over Prior Year 2006 $ 2,656 $ % 2007 $ 2,709 $ % 2008 $ 2,763 $ % 2009 $ 2,807 $ % 2010 $ 2, % 2011 $ 2,998 $ % 2012 $ 3,014 $ % 2013 $ 3,014 Freeze 0.00% 2014 $ 3,059 $ % 2015 $ 3,102 $ % 2016 $ 3,129 $ % Once the Flex Benefits vendor selection and plan design decisions are finalized, staff will generate a revised projection of Plan costs on a total premium as well as net General Fund basis. That information will be presented to the JLMBC at its next meeting. Submitted by: Steven Montagna 11

12 Attachment A Effective 1/1/2013, the City of Los Angeles introduced Anthem s Select HMO (Narrow Network) as a total replacement to the Full Network HMO. Historical data provided by Anthem from February 2012 indicates over 5,600 employees and their covered dependents or 24.0% of all HMO members experienced a disruption in provider relationships. Top provider groups lost during the 2013 transition to Anthem s Select HMO Network, as well as an indication of whether they would now be available in the Blue Shield, Aetna, and Anthem Narrow Networks, are noted in the following table. Medical Group UCLA Medical Group (Santa Monica Bay Physicians and Santa Monica combined) Cedars-Sinai (Health Associates and Medical Group combined) PIH Health (Bright Medical Associates and Presbyterian Health Physicians combined ) Torrance Hospital IPA Medical Group St. Joseph Hoag Health (St. Jude Heritage Medical Group, St. Joseph Hospital Affiliated Physicians, St. Jude Affiliated Physicians, and St. Joseph Heritage Medical Group combined) Memorial Care IPA ProMed Health Network of Pomona Valley Prospect Health Source Medical Group Greater Newport Physicians 2012 Anthem HMO Members 2012 Anthem HMO Membership % 2016 BSC Narrow Network HMO Provider 2016 Aetna Narrow Network HMO Provider 2016 Anthem Narrow Network HMO or Vivity Provider % No No Yes % No No Yes % No Yes Yes % Yes No Yes % Yes No No % No Yes Yes % Yes Yes No % No Yes No % No Yes Yes

13 Attachment B Vision Benefits RFP Analysis Supplemental Report CITY OF LOS ANGELES June 9, 2016 Presented By Laurie LoFranco, Vice President Steve Gedestad, Municipality Practice Leader Steve Balentine, Vice President, Labor Relations Jovita (JJ) Juanillo, Senior Vice President Keenan Benefits Underwriting & Actuarial Department Keenan & Associates License No Innovative Solutions. Enduring Principles.

14 RFP ANALYSIS SUPPLEMENTAL REPORT CITY OF LOS ANGELES Vision Benefits RFP Analysis Report June 9, 2016 Presented By: Laurie LoFranco, Vice President Steve Gedestad, Municipality Practice Leader Steve Balentine, Vice President, Labor Relations Jovita (JJ) Juanillo, Senior Vice President Keenan Benefits Underwriting & Actuarial Department i License No Innovative Solutions. Enduring Principles.

15 TABLE OF CONTENTS ACKNOWLEDGEMENTS... 1 EXECUTIVE SUMMARY... 2 RECOMMENDATION OF VISION SERVICES PLAN DESIGN AND PROVIDER... 3 VISION RATES... 4 COMPOSITE RATES... 5 BENEFIT DESIGN COMPARISON... 6 RETINAL SCREENINGS... 7 COORDINATION OF BENEFITS... 8 ii License No Innovative Solutions. Enduring Principles.

16 ACKNOWLEDGEMENTS Keenan & Associates would like to thank the JLMBC Members for their thoughtful questions and feedback on the Vision RFP Analysis. This report is designed to bring clarification to any issues brought forth by the committee at the May 26, 2016 meeting. 1

17 EXECUTIVE SUMMARY The JLMBC met on May 26, 2016, to discuss the results and recommendations relative to the Vision Services RFP responses submitted to the City of Los Angeles. The recommendations of the City of Los Angeles, Segal and Keenan were as follows: (a) Approve the selection of EyeMed as the provider of a stand-alone vision option for Flex members; and (b) Approve staff s recommended enrollment and benefit design for stand-alone Vision Services, including that vision enrollment tiers automatically correspond to the same tier enrollment used for medical benefits, and that the Vision benefit program be implemented as a base benefit applying equally to all represented and non-represented Flex members. Discussion from Members of the JLMBC brought forth additional items for the City of and Keenan to research and report on: The impact of including retinal screening in the standard Eye Examination benefit. Analysis of the use of a Composite Rate vs. Four Tiered Vision rates. Analysis of coordination of benefits between Vision carriers and plan designs that may be offered through union plans. Analysis of the impact on Kaiser members of moving to a stand-alone Vision plan. This report will review the prior recommendations and provide analysis relative to the additional review items noted above. 2

18 RECOMMENDATION OF VISION SERVICES PLAN DESIGN AND PROVIDER UTIVE SUMARY It is the recommendation of City staff and the JLMBC s consultants, Segal and Keenan, that the City move to a stand-alone benefit design for vision services, and that EyeMed be selected as the vision services provider. Several Advantages of carving out the Vision Services are: 1) Provides improved Vision Services for all Flex members. 2) Provides uniform Vision Services for all Flex members. As previously indicated, EyeMed s was the highest ranked proposal for Vision Services. EyeMed s proposal would, on an effectively cost-neutral basis, provide a substantial benefit level improvement relative to the current vision benefits as wrapped within the Medical provider services/benefits (see comparison table, Benefit Designs, on page 6). In addition, EyeMed s service design simplifies the communication and administration of vision benefits for Flex members, promotes member engagement, increases administrative efficiency, enhances wellness-related services, and provides additional network discounts and savings to subscribers. As one notable example, EyeMed has proposed the installation of pop-up vision clinics at City Hall or other locations. These pop-up vision clinics can be set up in conjunction with local doctors/providers. The convenience of on-site vision examinations and materials will promote the ideals of the City s wellness objectives by encouraging more employees to receive eye examinations. Flex members (whether with Kaiser or Blue Shield) will require additional communication in order to familiarize themselves with the new benefit levels and service options. For Kaiser members, medical subscribers will still have the ability to receive their Eye Examination at Kaiser as part of their medical plan. Materials may be purchased at the Out-of-Network benefit level at a Kaiser facility, or these members may shop for materials at private optometry locations such as LensCrafters, Sunglass Hut, Pearle Vision, Sears Optical, Target Optical, and online stores: and Review of the 2015 Utilization Report for Blue Shield revealed that out of 23,105 covered members (subscribers and dependents), 5,162, or 22%, received eye examinations (Kaiser did not provide similar data). It is our expectation that improving the benefit levels, accessibility and convenience of the vision benefit will increase the number of members receiving eye examinations which can increase detection of treatable vision and related medical conditions that are discoverable through a comprehensive eye examination. Finally, EyeMed would provide members with the deepest provider network discounts and broadest provider base (including international coverage). 3

19 VISION RATES Vision rates and calculated total cost with current enrollment population are shown below. Replacement of current Kaiser and Blue Shield Vision plans with EyeMed Model B are effectively cost neutral on a total premium basis. EyeMed Model B Rate Comparison Current Vision Coverage Renewal EyeMed Blue Shield (MES) Renewal $ 961,447 $ 1,072,323 Kaiser Renewal $ 1,620,467 $ 1,510,673 $ 2,581,914 $ 2,582,996 Difference $ $ 1,082 Difference % 0.04% BlueShield (MES) Renewal EyeMed Tier Lives Total Total S 3,987 $ 4.49 $ 5.01 T 1,318 $ 8.12 $ 9.06 C 1,262 $ 8.75 $ 9.76 F 3,167 $ $ Monthly 9,734 $ 80,121 $ 89,360 Annually $ 961,447 $ 1,072,323 Kaiser Renewal EyeMed Tier Lives Total Total S 4,928 $ 5.43 $ 5.01 T 2,053 $ $ 9.06 C 1,598 $ $ 9.76 F 4,702 $ $ Monthly 13,281 $ 135,039 $ 125,889 Annually $ 1,620,467 $ 1,510, Estimated Total $ 2,581,914 $ 2,582, Estimated Total $ 2,581,914 $ 2,582, Estimated Total $ 2,581,914 $ 2,582,996 3 Year Total $ 7,745,741 $ 7,748,987 Difference $ 3,247 Difference % 0.04% 4

20 COMPOSITE RATES Data regarding the use of a composite rate versus four-tier rates was requested at the meeting on May 26, City staff had recommended assigning a tiered rate to each employee that corresponds with their current medical tier, since this is how their vision coverage is currently allocated. Eyemed indicates that a composite rate can be provided for the same total premium amount that would be collected using a four tier structure. This approach may simplify the benefit structure and communication of the benefits to Flex members. The composite rate would be $9.35 per member per month. EyeMed Model B Composite Rate Comparison Current Vision Coverage Renewal EyeMed Blue Shield (MES) Renewal $ 961,447 $ 1,092,155 Kaiser Renewal $ 1,620,467 $ 1,490,128 $ 2,581,914 $ 2,582,283 Difference $ $ 369 Difference % 0.01% BlueShield (MES) Renewal EyeMed Tier Lives Total Total S 3,987 $ 4.49 $ 9.35 T 1,318 $ 8.12 $ 9.35 C 1,262 $ 8.75 $ 9.35 F 3,167 $ $ 9.35 Monthly 9,734 $ 80,121 $ 91,013 Annually $ 961,447 $ 1,092,155 Kaiser Renewal EyeMed Tier Lives Total Total S 4,928 $ 5.43 $ 9.35 T 2,053 $ $ 9.35 C 1,598 $ $ 9.35 F 4,702 $ $ 9.35 Monthly 13,281 $ 135,039 $ 124,177 Annually $ 1,620,467 $ 1,490, Estimated Total $ 2,581,914 $ 2,582, Estimated Total $ 2,581,914 $ 2,582, Estimated Total $ 2,581,914 $ 2,582,283 3 Year Total $ 7,745,741 $ 7,746,849 Difference $ 1,108 Difference % 0.01% 5

21 BENEFIT DESIGN COMPARISON The following table provides a side-by-side comparison of current benefit levels relative to the proposed benefit level under EyeMed. Moving the Vision Benefits to EyeMed increase both the frequency of benefits and the dollar amount of benefits. BENEFITS BLUE SHIELD KAISER EYEMED Benefit Frequency In Network Out of Network In Network Only In Network Out of Network One Exam every 12 months $10 Copay Up to $49 $0 copay $10 copay 12 Months Lenses 24 Months 24 Months 24 Months 12 Months 12 Months Single Vision $10 Copay $35 Every 24 months $200 eyewear $10 Copay $35 Bifocal $10 Copay $49 allowance toward $10 Copay $50 Trifocal $10 Copay $74 the purchase of lenses, frames or $10 Copay $65 Progessive $10 Copay + $65 $49 elective contact $10 Copay + $65 $70 Frame Allowance $65 $130 $50 lenses. $150 $104 Frame Frequency 24 Months 24 Months 24 Months 12 Months 12 Months Contacts (instead of frame and lens 24 Months 24 Months 24 Months 12 Months 12 Months benefit) Non-elective 100% $250 Same as lenses 100% $250 Elective $130 $92 Same as lenses $150 $120 6

22 RETINAL SCREENINGS N CONSISTENCY A Retinal Screening uses a laser to scan the eyes and then produces digital images of the retinas. The images can be studied to check for abnormalities and saved in one s medical record to compare the condition of retinas from year to year. Although laser retina scans can detect some retinal abnormalities, the scans have limitations. For example, laser retina scans might not detect problems on the outside edges of the retinas, where serious problems can occur. During discussions at the May 26, 2016 JLMBC meeting, the question was raised as to whether Retinal Screening were included in the Standard Eye Examination that includes a $10 Copay. EyeMed responded at the meeting that a Retinal Screening typically required an additional $39 Copay. Subsequent to the meeting, EyeMed agreed to include the Retinal Screening at no additional cost as part of the $10 Copay for the Standard Eye Exam. 7

23 COORDINATION OF BENEFITS Several years ago, EyeMed removed Coordination of Benefits from their offering in order to provide maximum benefit to their members. Because of this, they were able to simplify the administrative process for their network providers and offer faster turnaround time on their claims processing for members. EyeMed believes this is the most effective practice, which is now reflected in both their provider contracts and Department of Insurance filings. With no coordination of benefits, any additional vision coverage a City employee had in place would operate as a separate plan with its own benefit coverage. This language is unique to EyeMed as each carrier establishes its own parameters for coordination of benefits when another carrier s Vision plan is available alongside EyeMed. 8

24 END OF REPORT 9

25 Innovative Solutions. Enduring Principles. Corporate Headquarters 2355 Crenshaw Blvd., Suite 200 Torrance, CA Keenan & Associates License No

26 Attachment C City of Los Angeles Flex Benefits Program Analysis of Alternative Dental Plans Delta Dental Non-Participating Annual Premiums* R&C Percentile 2016 Rates 51st (Current) Employee Premium $8,892,000 Change from 2016 % Change from 2016 Employer Premium $8,468,000 Change from 2016 % Change from 2016 Total Premium $17,360,000 Change from 2016 % Change from th Employee Premium Change from 2016 % Change from 2016 Employer Premium Change from 2016 % Change from 2016 Total Premium Change from 2016 % Change from th Employee Premium Change from 2016 % Change from 2016 Employer Premium Change from 2016 % Change from 2016 Total Premium Change from 2016 % Change from 2016 Current Benefits Option A Option D Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 $8,675,000 $8,769,000 $9,514,000 $8,909,000 $8,988,000 $9,437,000 $9,004,000 $9,057,000 $9,511,000 $9,645,000 $9,669,000 ($217,000) ($123,000) $622,000 $17,000 $96,000 $545,000 $112,000 $165,000 $619,000 $753,000 $777, % -1.4% 7.0% 0.2% 1.1% 6.1% 1.3% 1.9% 7.0% 8.5% 8.7% $8,261,000 $8,351,000 $9,061,000 $8,485,000 $8,559,000 $8,987,000 $8,574,000 $8,628,000 $9,059,000 $9,187,000 $9,209,000 ($207,000) ($117,000) $593,000 $17,000 $91,000 $519,000 $106,000 $160,000 $591,000 $719,000 $741, % -1.4% 7.0% 0.2% 1.1% 6.1% 1.3% 1.9% 7.0% 8.5% 8.8% $16,936,000 $17,120,000 $18,575,000 $17,394,000 $17,547,000 $18,424,000 $17,578,000 $17,685,000 $18,570,000 $18,832,000 $18,878,000 ($424,000) ($240,000) $1,215,000 $34,000 $187,000 $1,064,000 $218,000 $325,000 $1,210,000 $1,472,000 $1,518, % -1.4% 7.0% 0.2% 1.1% 6.1% 1.3% 1.9% 7.0% 8.5% 8.7% $8,773,000 $8,869,000 $9,621,000 $9,010,000 $9,090,000 $9,544,000 $9,106,000 $9,161,000 $9,619,000 $9,756,000 $9,779,000 ($119,000) ($23,000) $729,000 $118,000 $198,000 $652,000 $214,000 $269,000 $727,000 $864,000 $887, % -0.3% 8.2% 1.3% 2.2% 7.3% 2.4% 3.0% 8.2% 9.7% 10.0% $8,356,000 $8,446,000 $9,164,000 $8,583,000 $8,658,000 $9,091,000 $8,673,000 $8,726,000 $9,162,000 $9,290,000 $9,314,000 ($112,000) ($22,000) $696,000 $115,000 $190,000 $623,000 $205,000 $258,000 $694,000 $822,000 $846, % -0.3% 8.2% 1.4% 2.2% 7.4% 2.4% 3.0% 8.2% 9.7% 10.0% $17,129,000 $17,315,000 $18,785,000 $17,593,000 $17,748,000 $18,635,000 $17,779,000 $17,887,000 $18,781,000 $19,046,000 $19,093,000 ($231,000) ($45,000) $1,425,000 $233,000 $388,000 $1,275,000 $419,000 $527,000 $1,421,000 $1,686,000 $1,733, % -0.3% 8.2% 1.3% 2.2% 7.3% 2.4% 3.0% 8.2% 9.7% 10.0% $8,784,000 $8,880,000 $9,634,000 $9,022,000 $9,102,000 $9,556,000 $9,118,000 $9,174,000 $9,632,000 $9,767,000 $9,793,000 ($108,000) ($12,000) $742,000 $130,000 $210,000 $664,000 $226,000 $282,000 $740,000 $875,000 $901, % -0.1% 8.3% 1.5% 2.4% 7.5% 2.5% 3.2% 8.3% 9.8% 10.1% $8,366,000 $8,458,000 $9,176,000 $8,593,000 $8,669,000 $9,103,000 $8,684,000 $8,736,000 $9,173,000 $9,304,000 $9,325,000 ($102,000) ($10,000) $708,000 $125,000 $201,000 $635,000 $216,000 $268,000 $705,000 $836,000 $857, % -0.1% 8.4% 1.5% 2.4% 7.5% 2.6% 3.2% 8.3% 9.9% 10.1% $17,150,000 $17,338,000 $18,810,000 $17,615,000 $17,771,000 $18,659,000 $17,802,000 $17,910,000 $18,805,000 $19,071,000 $19,118,000 ($210,000) ($22,000) $1,450,000 $255,000 $411,000 $1,299,000 $442,000 $550,000 $1,445,000 $1,711,000 $1,758, % -0.1% 8.4% 1.5% 2.4% 7.5% 2.5% 3.2% 8.3% 9.9% 10.1% Service Current Option A Option D Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT Diagnostic & Preventive 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% Basic Services 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Crowns 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% Other Major Services 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Orthodontia 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Annual Maximum $1,500 $1,250 $1,500 $1,500 $2,000 $2,000 $1,500 $1,250 $1,500 $1,250 $1,500 $1,250 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $2,000 $2,000 $2,000 $2,000 Lifetime Orthodontia Maximum $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 D&P Waiver NA NA NA Y N Y Y NA Y N Y Y NA Y N Y Y Maximum Roll-over NA NA NA NA NA Y Y NA NA Y Y NA NA *Premium calculations based on enrollment from the February 2016 census. Segal _3.xlsx Summary 1

27 Attachment C City of Los Angeles Flex Benefits Program Analysis of Alternative Dental Plans Delta Dental Non-Participating Buy-Up Option 2016 Rates 2017 Current Benefits % Change from Option A % Change from Option A (Buy-Up) % Change from Option 8 (Buy-Up) % Change from 2016 Employee Monthly Contribution Employee $7.63 $ % $ % $ % $ % Employee + Spouse $52.09 $ % $ % $ % $ % EE + child(ren) $55.61 $ % $ % $ % $ % Family $89.35 $ % $ % $ % $ % Employer Monthly Contribution All Tiers $43.23 $ % $ % $ % $ % Total Premium (51st) Employee $50.86 $ % $ % $ % $ % Employee + Spouse $95.32 $ % $ % $ % $ % EE + child(ren) $98.84 $ % $ % $ % $ % Family $ $ % $ % $ % $ % Annual Premiums* Employee Contribution $8,892,000 $8,675, % $8,769, % $9,207, % Employer Contribution $8,468,000 $8,261, % $8,351, % $8,769, % N/A N/A Total Premium $17,360,000 $16,936, % $17,120, % $17,976, % Service Current Option A Option A (Buy-Up) Option 8 (Buy-Up) IN OUT IN OUT IN OUT IN OUT Diagnostic & Preventive 100% 80% 100% 80% 100% 80% 100% 80% Basic Services 80% 80% 80% 80% 80% 80% 80% 80% Crowns 80% 50% 80% 50% 80% 50% 80% 50% Other Major Services 50% 50% 50% 50% 50% 50% 50% 50% Orthodontia 50% 50% 50% 50% 50% 50% 50% 50% Annual Maximum $1,500 $1,250 $1,500 $1,500 $1,500 $1,500 $2,000 $2,000 Lifetime Orthodontia Maximum $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 D&P Waiver NA NA NA Y Y Maximum Roll-over NA NA NA NA *Premium calculations based on enrollment from the February 2016 census. Segal _3.xlsx Summary (Buy-Up) 2

28 Attachment C City of Los Angeles Flex Benefits Program Analysis of Alternative Dental Plans Full-Time Employee Costs Per Pay Period* for Non-Participating R&C Percentile 2016 Current Benefits Option A Option D Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 Option A Option 8 (Buy-Up) (Buy-Up) 51st (Current) Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Employee $3.81 $3.72 ($0.09) $3.76 ($0.05) $4.08 $0.27 $3.82 $0.01 $3.86 $0.05 $4.05 $0.24 $3.86 $0.05 $3.89 $0.08 $4.08 $0.27 $4.14 $0.33 $4.15 $0.34 $3.95 $0.14 $8.04 $4.23 Employee + Spouse $26.04 $25.41 ($0.63) $25.68 ($0.36) $27.87 $1.83 $26.10 $0.06 $26.33 $0.29 $27.64 $1.60 $26.37 $0.33 $26.53 $0.49 $27.86 $1.82 $28.25 $2.21 $28.32 $2.28 $26.97 $0.93 $34.63 $8.59 EE + child(ren) $27.80 $27.12 ($0.68) $27.42 ($0.38) $29.75 $1.95 $27.86 $0.06 $28.10 $0.30 $29.51 $1.71 $28.15 $0.35 $28.32 $0.52 $29.74 $1.94 $30.15 $2.35 $30.23 $2.43 $28.79 $0.99 $36.73 $8.93 Family $44.67 $43.58 ($1.09) $44.06 ($0.61) $47.80 $3.13 $44.77 $0.10 $45.16 $0.49 $47.41 $2.74 $45.24 $0.57 $45.51 $0.84 $47.78 $3.11 $48.46 $3.79 $48.58 $3.91 $46.26 $1.59 $56.92 $ th Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Employee $3.76 ($0.05) $3.80 ($0.01) $4.13 $0.32 $3.87 $0.06 $3.90 $0.09 $4.10 $0.29 $3.91 $0.10 $3.93 $0.12 $4.13 $0.32 $4.19 $0.38 $4.20 $0.39 $3.99 $0.18 $8.13 $4.32 Employee + Spouse $25.69 ($0.35) $25.97 ($0.07) $28.18 $2.14 $26.39 $0.35 $26.63 $0.59 $27.96 $1.92 $26.67 $0.63 $26.83 $0.79 $28.17 $2.13 $28.58 $2.54 $28.65 $2.61 $27.27 $1.23 $35.02 $8.98 EE + child(ren) $27.43 ($0.37) $27.73 ($0.07) $30.08 $2.28 $28.17 $0.37 $28.42 $0.62 $29.84 $2.04 $28.47 $0.67 $28.64 $0.84 $30.07 $2.27 $30.51 $2.71 $30.58 $2.78 $29.12 $1.32 $37.15 $9.35 Family $44.07 ($0.60) $44.56 ($0.11) $48.34 $3.67 $45.27 $0.60 $45.67 $1.00 $47.95 $3.28 $45.75 $1.08 $46.03 $1.36 $48.33 $3.66 $49.02 $4.35 $49.14 $4.47 $46.79 $2.12 $57.56 $ th Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Rate Change Employee $3.77 ($0.04) $3.81 $0.00 $4.13 $0.32 $3.87 $0.06 $3.91 $0.10 $4.10 $0.29 $3.91 $0.10 $3.94 $0.13 $4.13 $0.32 $4.19 $0.38 $4.20 $0.39 $4.00 $0.19 $8.14 $4.33 Employee + Spouse $25.73 ($0.31) $26.01 ($0.03) $28.22 $2.18 $26.43 $0.39 $26.66 $0.62 $27.99 $1.95 $26.71 $0.67 $26.87 $0.83 $28.21 $2.17 $28.61 $2.57 $28.68 $2.64 $27.31 $1.27 $35.06 $9.02 EE + child(ren) $27.46 ($0.34) $27.77 ($0.03) $30.12 $2.32 $28.21 $0.41 $28.46 $0.66 $29.88 $2.08 $28.51 $0.71 $28.69 $0.89 $30.12 $2.32 $30.54 $2.74 $30.62 $2.82 $29.15 $1.35 $37.19 $9.39 Family $44.13 ($0.54) $44.62 ($0.05) $48.40 $3.73 $45.33 $0.66 $45.73 $1.06 $48.02 $3.35 $45.81 $1.14 $46.09 $1.42 $48.39 $3.72 $49.08 $4.41 $49.20 $4.53 $46.85 $2.18 $57.64 $12.97 Option A Option 8 Current Option A Option D Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8 Service (Buy-Up) (Buy-Up) IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT IN OUT Diagnostic & Preventive 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% 100% 80% Basic Services 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Crowns 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% 80% 50% Other Major Services 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Orthodontia 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% Annual Maximum $1,500 $1,250 $1,500 $1,500 $2,000 $2,000 $1,500 $1,250 $1,500 $1,250 $1,500 $1,250 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $2,000 $2,000 $2,000 $2,000 $1,500 $1,500 $2,000 $2,000 Lifetime Orthodontia Maximum $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 D&P Waiver NA NA NA Y N Y Y NA Y N Y Y NA Y N Y Y NA Y Y Maximum Roll-over NA NA NA NA NA Y Y NA NA Y Y NA NA NA NA *Employee contributions are based on the current formula, in which the City contributes 85% of the single employee premium and the employee contributes the remaining balance. Segal _3.xlsx EE Cost 3

29 Attachment D Strategic Accounts 3100 Thornton Ave. Burbank, CA Tel: (818) Fax: (818) ken.m.reiff@kp.org Ms. Wendy Macy May 31, 2016 Ms. Cheryl Parisi Re: 2017 Vision Benefits Dear Ms. Macy and Ms. Parisi: When we presented in front of the JLMBC last week we noted the importance of the fully integrated medical care program offered by Kaiser Permanente. Part of our presentation centered on the many successes that Kaiser Permanente has been part of, both from a medical standpoint (i.e., NCQA, LEAPFROG, etc.) as well as from a customer satisfaction view point (e.g., JD POWER). Our Vision Care program is a critical part of this integration. I am writing to you now in order to point out the importance of continuing the integrated Vision Care model that is so critical for the employees and their dependents of the City of Los Angeles. Over the last few weeks, while I listened to the discussion (including our own) at the JLMBC from those plans either determined to continue their relationship with the City or striving to be added to the City s offering; one thing was always present; they all noted the importance of integration as well as continuity of care. Requiring over 32,000 City of Los Angeles members of Kaiser Permanente to stop using Vision Services that they have known and trusted for over 40 years doesn t appear to foster the goals of both medical integration and customer satisfaction. In fact on the side of member satisfaction I d like to point out that the most recent member survey results within our Vision program show the following: Member s Rating on Service Satisfaction: 3.8 (out of a 4.0 scale) Member s Rating on Product Satisfaction: 3.7 (out of a 4.0 scale) Member s Rating on Product Quality: 3.8 (out of a 4.0 scale) Right now, any Kaiser Permanente member can access vision care services using their Kaiser Permanente ID card or via their KP app, no additional cards or services are needed. Many of the same offices where members currently receive medical care offer vision care services as well. There is no need to get back on the highway, look for parking or get the kids back into the car. Convenience that is also the right choice.