SOUTHERN NEW JERSEY REGIONAL EMPLOYEE BENEFITS FUND OPEN MINUTES NOVEMBER 26, 2012 BROOKLAWN SENIOR CENTER 6:15 PM

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1 SOUTHERN NEW JERSEY REGIONAL EMPLOYEE BENEFITS FUND OPEN MINUTES NOVEMBER 26, 2012 BROOKLAWN SENIOR CENTER 6:15 PM Meeting of Executive Committee called to order by Michael Mevoli. Open Public Meetings notice read into record. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE ROLL CALL OF 2012 EXECUTIVE COMMITTEE: Michael Mevoli, Chairman Borough of Brooklawn Present M. Joseph Wolk, Secretary Borough of Mt. Ephraim Present Richard Michielli Borough of Magnolia Present Louis Di Angelo Borough of Bellmawr Present Anthony Beatrice Borough of Runnemede Present Terry Shannon Borough of Barrington Present Jennifer Johnson Paulsboro BOE Present EXECUTIVE COMMITTEE ALTERNATES: Jack Lipsett Gloucester City Present Neal Rochford Haddonfield Present Joseph Collins Delsea Regional Present Gene Mercoli Cumberland Co. Vo Tech Present APPOINTED PROFESSIONALS PRESENT: Executive Director/Adm. PERMA Risk Management Services Paul Laracy Emily Koval Program Manager Attorney Medical TPA Aetna Conner Strong & Buckelew Jason Miller Brandon Lodics J. Kenneth Harris, Esq. Kim Ward Medical TPA Amerihealth Lisa DiDio Dental TPA Delta Dental Prescription TPA Express Scripts (1) SOUTHERN NEW JERSEY REGIONAL

2 Treasurer Fund Coordinator (Coastal group) Joanne Diggs Rich Allen Rick Alessandrini PRESENT FUND COMMISSIONERS: William G. Dunn Sr., Mount Holly MUA Terry Osborne, Winslow Fire Department ALSO PRESENT Gregory Grimaldi, PERMA Chuck Hartsoe, PEGAS Chuck Grande, Integrity Consulting Steve Anuszewski, Anuszewski Finance Suzanne Pennell, Marsh and McLennon Agency Kim Porter, CHB Group John Cobb, J Cobb Insurance Group Joe Linker, PERMA Richard Schwab, Camden County JIF APPROVAL OF MINUTES: OCTOBER 22, 2012 MEETING OPEN MINUTES MOTION TO APPROVE OPEN MINUTES OF OCTOBER 22, 2012 : FINANCES PRO FORMA REPORTS The Fast Track Financial Report for Southern as of October 31, 2012; the Indices and Ratios Report for Southern as of October 31, 2012; the Budget Reconciliation November 2012; and Regulatory Compliance Checklist, as of November 19, 2012 were included in the agenda. Executive Director said that the October Financial Fast Track shows a loss of about $500,000. Although September was profitable, on average, the Fund had lost about $1.3 million per month SNJHIF AND COASTAL SUBGROUP BUDGET ADOPTION - The 2013 SNJHIF and the Coastal subgroup budgets and assessments were introduced at the October Executive Committee Meeting and are included in the agenda. These budgets reflect cost savings from the 4 medical management techniques that were discussed at the budget introduction. In addition, the budgets include prescription management programs that a member must choose to implement. If a member opts out of one or either of these Rx programs, they will see an increase effective March 2013 for Municipalities and July 2013 for School Board members. All of these items will be reviewed again in the Program Manager s report. (2) SOUTHERN NEW JERSEY REGIONAL

3 Over the course of developing the 2013 assessments, we determined that the Township of Riverside s loss experience was overstated. This member was included in the Band B, when their experience proved to be eligible for the lower, Band C group. We had received notification from Riverside to terminate prior to this change, but have recently sent notification that they will remain in the Fund. This change is reflected in the assessments to be adopted, and will not affect the other member s assessments. In addition, we are evaluating the loss experience for the Borough of Mount Ephraim which has improved significantly over the last period. We will update the Fund on the status of both of these groups. Executive Director said that the Fund Actuary approved a.1% increase for all members, Mt. Ephraim and Riverside can renew at 12%. He said that Mt. Ephraim is a charter member and feels it is important to keep their membership. agreed in the importance to keep these members by taking a very small increase since they were willing to take larger increases. Executive Director said the budget being adopted will not change, but the assessments will increase one-tenth of a point. The Coastal subgroup commissioners met and are proposing a variant of the banding approach. They are also proposing that the Fund Coordinator and Brokers for Coastal not take a 5% reduction in fees. Both the original budget and assessment table, and the revised proposals are attached. Commissioner Mercoli said that the Coastal group met on November 7 to discuss the banding approach and alternatives. He said there wouldn t have been many options for the higher members and they would have had to leave. He said the Commissioners were all in favor with proceeding with the banding. He said there are two members with higher increases that have not said they were leaving yet. He said he recommends approving the amended budget. The loss of one very large Coastal member will help the Fund as a whole. Executive Director said that that large member has made plans to pay their assessments in full. MOTION TO APPROVE MOUNT EPHRAIM AND TOWNSHIP OF RIVERSIDE RENEWAL AT LOWEST BAND OF 12% WITH AN INCREASE TO ALL MEMBERS OF.1%. MOTION TO OPEN THE PUBLIC HEARING ON THE 2013 BUDGET OF THE SOUTHERN NEW JERSEY EMPLOYEE BENEFITS FUND AND SOUTHERN COASTAL HEALTH INSURANCE FUND. MOTION TO CLOSE THE PUBLIC HEARING (3) SOUTHERN NEW JERSEY REGIONAL

4 MOTION TO APPROVE THE 2013 SOUTHERN NEW JERSEY EMPLOYEE BENEFITS FUND BUDGET IN THE AMOUNT OF $126,681,137 AND THE 2013 SOUTHERN COASTAL HEALTH INSURANCE FUND IN THE AMOUNT OF $50,358,144 AND CERTIFY THE 2013 ASSESSMENTS, AS AMENDED Commissioner DiAngelo 7 Ayes, 0 Nays 2012 SUPPLEMENTAL ASSESSMENT - At the October meeting, the Committee introduced the 2012 Supplemental Assessment in the amount of $6,000,000. The resolution to be adopted during public hearing is attached and includes appendix 1 which breaks out of the $6,000,000 by member that will begin to be made payable on July 1, Appendix 2 includes the estimated $18,000,000 terminal liability shares by member that must be paid if a member leaves the Fund at any time. The Annual Audit will provide a more accurate number of this deficit. A revised resolution was distributed changing the expedited to accelerated. MOTION TO OPEN THE PUBLIC HEARING ON THE SUPPLEMENTAL ASSESSMENTS RESOLUTION MOTION TO CLOSE THE PUBLIC HEARING Commissioner DiAngelo MOTION TO ADOPT RESOLUTION TO ESTABLISH SUPPLEMENTAL ASSESSMENTS FOR THE 2012 FUND YEAR. Commissioner DiAngelo 7 Ayes, 0 Nayes RETIREE COVERAGE FOR DEPARTING MEMBERS - We have worked with each departing entity and there is no longer a need for them to retain retiree coverage with the Fund. Each entity is able to have coverage provided either by the State Health Benefits Program or by the commercial market. JULY 2013 SCHOOL BOARD RENEWALS - PERMA has been in contact with the School Board members with have high loss ratios and that may receive a high renewal in July. To begin discussing and developing the best strategy for the school renewal on July 1, we would like to create a small School Board Assessments Committee that will be able to meet in prior to certification of school rates. Executive Director suggested Commissioners Johnson, Collins and possibly one more School Board member. He will reach out to these Commissioners in January. In response to Commissioner Johnson, Executive Director said (4) SOUTHERN NEW JERSEY REGIONAL

5 that the final school board increases and assessments will be included at the February meeting. Earlier that month, we will discuss with the committee. The members that have higher loss ratio experience have already been contacted. AETNA CLAIMS AUDIT - Earlier this year, the MRHIF had approved a claims audit for the Top 100 claims through Aetna. In August, the Southern HIF approved an expanded audit to focus on the 2012 high claimants. The fieldwork was completed last week and we are expecting the report prior to the meeting. Executive Director said there were a few items regarding out of network reimbursements that Aetna has been asked to respond to. We should have their response at the next meeting. The Fund paid $12,500 for this audit. SOUTHERN COASTAL AGGREGATE CLAIM 2011 FUND YEAR - The Southern Coastal aggregate claim of $2.3 million has been filed to the reinsurer, Munich Re, with the help of the MRHIF claims administrator NIIS. We should expect a response by year end. ADMINISTRATION RULES AND CONTRACTS COMMITTEE - The Rules and Contracts Committee will be meeting prior to the Executive Committee meeting to review the 2013 Professional RFQ results. There were two responses for Fund Attorney and Fund Actuary. We expect the Committee to provide a report and recommendation at the meeting for these contracts, along with a few other agenda items. Ms. Koval said that the Contracts Committee reviewed the RFQ responses and are recommending that the Fund stay with Mr. Harris as Fund Attorney and Deloitte as Fund Actuary. In response to Commissioner Rochford, Commissioner DiAngelo said that the cost difference between the two Actuary RFQs is significant, but is hesitant to switch when so much work has already been done with this renewal by the incumbent Actuary. Executive Director said the two firms were subjectively measured, as per Play to Pay rules. He said he can send the RFQs and the Contracts Committee evaluations to the Executive Committee members. CHAPTER 78 REGULATION PROPOSAL - As discussed at prior meetings, the regulation to have entities have their savings certified to the State if health insurance is procured outside of the State Health Benefits Plan has been proposed this week. There is a 60 day comment period, of which the Chairs from each local HIF and the MRHIF will be issuing the attached letter to strongly oppose this proposal. Please feel free to contact PERMA should you have any additional comments to include. Chairman Mevoli said he recently attended the Camden County Mayors Association meeting and was surprised that this regulation proposal was not brought up and there were very few people who knew much about it. In light of this, he said the Fund needs to get its voice heard. Fund Attorney briefly reviewed the proposed regulation. He said that what the repercussion of not going with the State Health Benefit Plan has not been revealed. Executive Director said the members may be asked to pass resolutions opposing this statute. MEDICARE ADVANTAGE AND EMPLOYER GROUP WAIVER PLANS- Aetna offers fully insured Medicare Advantage plans that have the potential to reduce cost for covering Medicare eligible retirees. Both Express Scripts (ESI) and Aetna offer Employer Group Waiver Plans for Medicare age retirees for prescription coverage. We are currently working with both Aetna and ESI on determining whether these programs can be offered to reduce cost and to match coverage. We anticipate completing our analysis within the next month and will present findings at upcoming meetings. (5) SOUTHERN NEW JERSEY REGIONAL

6 2009 DEPARTMENT OF BANKING AND INSURANCE EXAMINATION - In 2010, the Department of Banking and Insurance performed an in house exam of the Health Insurance Funds as of 12/31/2009. We expect to receive the final report this week. If so, the report will be provided at the meeting. The Department has initiated another examination of the Fund. The letter initiating the examination and our the Fund response is included in the agenda. MEMBER TERMINATIONS - The Borough of Lawnside has submitted a notice of termination effective February 1, In addition, Woodbine BOE in the Coastal HIF has also submitted a letter to terminate the Fund. Both resolutions are included in the agenda. MEMBERSHIP RENEWALS - Members had received notification from our office that their membership documents had or will be expiring soon. The following is a list of those members. Indemnity and Trust Agreements are required to be filed by the State, so please return these documents to our office as soon as possible. Southern HIF: Coastal: BENEFITS MANAGEMENT PLAN CHANGES: Borough of Lawnside will be terminating coverage effective 1/1/2013. Woodbine BOE will be terming from SNJ Coastal effective 1/1/2013. MEDICAL MANAGEMENT - As presented in the renewal budget the following medical management will be implemented for all groups, effective January 1, 2013: (6) SOUTHERN NEW JERSEY REGIONAL

7 1) Chiropractic Care Management 2) Physical Therapy Care Management 3) Radiology Care Management 4) Out of Network Fee Schedule updated to 150% of Medicare for non-facility services and 175% of Medicare for facility services PRESCRIPTION MANAGEMENT - Communications which included a description of each program were mailed to all SNJREG Commissioners regarding two prescription cost management programs: 1) Step Therapy 2) Exclusive Home Deliver for Maintenance Prescriptions Mr. Miller reviewed these programs in greater depth. Commissioner Shannon said she is concerned with limiting the chiropractic visits because it may result in a much larger claim. Ms. Ward said the coverage will not change if the chiropractic visits are deemed necessary. The visits will not be limited to 10 if the review finds there is a need to continue. Using TRIAD as an independent review will hopefully limit abuse. She said that Coastal put the radiology management in place in August and have not had one complaint from the employees. These programs will be implemented on March 1, These programs are not mandatory for each entity. Entities may decide to opt out of one or both programs and must return the opt out election form to PERMA by Friday, November 30, Mr. Lodics said that all programs will start March 1, but rates for the School Boards will not be affected until July 1. Municipalities who chose to opt out will receive an increase in their prescription premiums on their March School Boards that elect to opt out of the cost management programs will receive their increase on the July 2013 invoice. The increases are: Step Therapy 1.56% increase Exclusive Home Delivery -.82% increase SUBROGATION - Ken Harris took the lead in providing AETNA with regulatory information and an opinion on the Fund s ability to subrogate claims. AETNA contracts with Rawlings to provide these services. Effective immediately, Rawlings will initiate subrogation communications/assertions on cases deemed appropriate. Fund Attorney said he hopes to see some recoveries for the Fund. OPEN ENROLLMENT STATUS - ID CARDS - Due to the advent of the storm coupled with the later Open Enrollment period that was held this year, all employees that are enrolling in a new plan effective 1/1/2013, may not receive their ID cards until a week or so into the start of the new plan year. TRAINING ON BENEFIT EXPRESS - Training on Benefit Express will be postponed until after the first of the year due to the system preparation of the plans for Benefit Express boasts member specific eligibility edits, the ability for each entity to have enrollment capabilities, and employee access to view information and make appropriate changes. We encourage each member to have at least one employee who is trained on the new (7) SOUTHERN NEW JERSEY REGIONAL

8 enrollment system. If you would like to be included in the next webinar, please contact Karen Kidd at or call her at ENROLLMENTS - ll enrollment and billing questions should be directed to our dedicated enrollment team. The SNJ enrollment team may be contacted via at southernnj_enrollments@permainc.com or by facsimile at The SAIF enrollment team may be contacted via at saif_enrollments@permainc.com or by facsimile at HEALTH CARE REFORM ROLLS OUT RX PREVENTIVE SERVICES OFFERED WITH NO COPAY We will be implementing eight new prevention-related services required by Health Care Reform for both Municipalities, , and School Boards, Listed below are the eight new prevention-related services: Well-woman visits Gestational diabetes screening that helps protect pregnant women from one of the most serious pregnancy-related diseases Domestic and interpersonal violence screening and counseling. FDA-approved contraceptive methods, and contraceptive counseling and education Breastfeeding support, supplied, and counseling HPV DNA testing, for women 30 or older Sexually transmitted infections counseling for sexually-active women HIV screening and counseling for sexually active women (8) SOUTHERN NEW JERSEY REGIONAL

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10 FLU SHOTS - Beginning January 1, the Fund will implement the Express Scripts flu shot program and municipality members may begin to receive flu shots at the Pharmacy. School board members will be able to do the same July 1. MONTHLY REPORTS Client Activity Reports as of 10/31/2012 (page 37) Complaint Report none Claim Appeals none Plan Documents Status report as of 11/1//2012 (page 39) Executive Director's Report and Program Manager s report Made Part of November 26, 2012 Minutes. TREASURER'S REPORT Fund Treasurer reviewed the November Bills List, Resolution Resolution 28-12: Payment of November 2012 Bills November Resolution TOTAL 2012 $2,728, TOTAL $2,728, MOTION TO APPROVE RESOLUTIONS OCTOBER BILLS LIST FOR THE SOUTHERN NEW JERSEY REGIONAL EMPLOYEE BENEFITS FUND AND APPROVE THE CASH RECONCILIATION REPORT AND CASH TRANSACTION REPORT. Motion: Commissioner DiAngelo 6 Ayes, 0 Nays Treasurer's Report Made Part of November 26, 2012 minutes. AETNA: Ms. Ward reviewed the claim payments and high dollar claimant reports through September. She said the average pepm was the lowest since January at $ There were 13 claims over $50,000. She said claims are reviewed for their possible continuance and a case manager is assigned to keep high claim costs down. AMERIHEALTH Ms. DiDio reviewed the Amerihealth Administrators and the Amerihealth NJ claim reports. Amerihealth Administrators increased in August to $1024 pepm while Amerihealth NJ decreased to $ pepm. There were 11 high claimants over $50,000. (10) SOUTHERN NEW JERSEY REGIONAL

11 DELTA DENTAL No report. FUND ATTORNEY: Fund Attorney said if a member filed more than 250 W2s in 2012, paid health benefits cost must be reported. OLD BUSINESS: none NEW BUSINESS: Chairman Mevoli said he did not see a need for the December meeting. MOTION TO CANCEL THE SCHEDULED DECEMBER MEETING AND ALLOW THE TREASURER TO PAY THE FUND BILLS. Motion: Commissioner Michelli Commissioner DiAngelo 5 Ayes, 1 Nays (Nay - Commissioner Johnson) Mr. Cobb said that the public entity unions will be meeting to work against the Chapter 78 legislation proposal. He has read that there will be a financial charge if members are not certified for a contract outside of the SHBP. PUBLIC COMMENT: None MOTION TO ADJOURN: Commissioner Michielli MEETING ADJOURNED: 7:45 PM NEXT MEETING: January 28, 2013 Berlin Borough Senior Center Emily Koval, Assisting Secretary for JOSEPH WOLK, SECRETARY (11) SOUTHERN NEW JERSEY REGIONAL