Rates & Benefits Committee Dental and Vision Plans

Transcription

1 December 9, 2010 Rates & Benefits Committee Dental and Vision Plans Rhys Evans, Donna Kinsman

2 Content Dental Plans Page 2 Insured rates and ASO fee Potential plan design changes Estimate of the Employee Composite Rate VSP Plan Page 7 Rates for status quo plan Potential plan design changes and an optional vision plan 1

3 Dental Plans

4 Dental Plans Update During the November 18 th Rates & Benefits meeting, Mercer presented the 2011/12 rates and administration fee for the active and retiree dental plans Mercer presented that all plans are under a rate guarantee except the Retiree Delta Dental PPO plan Subsequent to the Board meeting, Mercer requested Delta Dental revisit their two year rate guarantee on the retiree dental PPO plan, requesting 0% in year one and rate cap in year two Delta Dental has proposed a 6.3% rate cap for year two 3

5 Overview of Dental Renewals Summary of Delta Dental Retiree PPO Plan Renewal Options Below is a summary of the two renewal options proposed by Delta Dental for the Retiree Dental PPO plan Delta is offering a rate pass renewal for the 2011/12 plan year with a not to exceed rate increase of 6.3% for the 2012/13 plan year Alternatively, the Board can accept a 3.58% increase for the 2011/12 plan year and these rates would remain in effect through 6/30/2013 Delta Dental Retiree PPO Plan Per Employee Per Month Rates (PEPM) Single 7/1/2011 6/30/2012 Single + 1 Single + 2 or more Single 7/1/2012 6/30/2013 Single + 1 Single + 2 or more Rate pass in year 1, not to exceed 6.3% in year 2 $39.87 $79.80 $ $42.38 $84.83 $ % increase year 1, 0% in year 2 $41.18 $82.42 $ $41.18 $82.42 $

6 Dental Plans Potential Plan Design Changes With the mandated changes under the medical plans to comply with Health Care Reform, the Board may want to consider aligning the dental dependent eligibility provisions with medical to simplify administration Consideration to modify under all active and retiree dental plans Modify dependent eligibility to allow dependent coverage up to age 26, regardless of marital or student status No impact on rates for the plan year, may impact rates at next renewal As part of the annual Rates and Benefits process, HSS staff did a comparison of the active dental PPO plan to the retiree dental PPO plan, to reviewed the continued appropriateness and competitiveness of the benefit designs Below is a summary of the some of the plan design differences between the two plans Third cleaning for pregnant women Implant benefit subject to the $2,500 annual plan maximum 5

7 Dental Plans Estimate of 2011/12 employer contribution Claims through October 2010/11 Employer Contribution 2011/12 Expected Cost Application of 2009/10 Plan Year Shortfall (termed the Stabilization Amount ) Recommended 2011/12 City Contribution Relative to 2010/11 Rate $ $ $ 7.25 $ % PEPM PEPM PEPM PEPM Impact from introducing benefit changes: Third cleaning for pregnant women Implant benefit subject to $2,500 annual plan maximum Adjusted 2011/12 City Contribution Relative to 2010/11 Rate +0.4% +2.6% $ % PEPM 6

8 Vision Plan

9 Vision Plan Rate Summary Status Quo During the November 18 th Rates & Benefits meeting, Mercer presented VSP s renewal request for a 6.0% increase to the 2010/11 rates, with a three year rate guarantee ending 6/30/2014 Below is a summary of the rates Computer Glasses for certain union employees Active & Retirees Per Employee Per Month Rates (PEPM) All Tiers Single Single + 1 Single + 2 or more 2010/11 Rates $0.85 $3.57 $7.15 $ /12 Rates $0.85 $3.78 $7.58 $10.73 % increase 0.0% 6.0% 6.0% 6.0% $ increase $0.00 $0.21 $0.43 $0.61 8

10 Vision Plan Modification of Dependent Coverage As part of the plan design changes to comply with Health Care Reform, under the Medical plans, the eligibility language for dependents requires modification to cover dependents up to age 26 regardless of marital or student status With the application of the rate setting process, where the vision benefits are bundled with the medical benefits, to determine the employee and retiree contributions, it is recommended that HSS also modify the dependent eligibility provisions on the vision plan to align with medical VSP indicated no impact on rates at this time However, may impact rates at next renewal 9

11 Vision Plan Potential Plan Design Changes to Vision Plans Mercer presented two potential plan design changes to the vision plan at the prior Board meeting, indicating these have no impact on the rates Implement a $60 cap for contact lens fitting and evaluation charges to the member, applies only if member goes to a preferred VSP provider Upgrade reimbursement schedule for out-of-network claims from a non- VSP provider Increase exam from $40 to $50 Increase Frames from $55 to $70 10

12 Vision Plan Vision Plan Optional Buy-Up Plan Subsequent to the Board meeting, HSS requested Mercer receive an optional plan quote from VSP with more generous benefits of which the differential between the basic plan and the buy-up plan is 100% paid by the employee The monthly member contribution displayed below is the buy-up cost paid by the member (i.e. the difference between the premium rates for the buy-up vision and the basic vision plan) Summary of In-Network Benefits* Current/Basic Plan Buy-up Plan Option Exams, with $60 cap on fitting and evaluations for contact lenses Lenses (Single vision, lined bifocal and lined trifocal lenses. Scratch coating covered in full) Frames Contact Lenses Monthly Member Contribution (Single / Single + 1 / Single + 2 or more) Every 12 months with $10 copayment Every 24 months Every 24 months, up to $150 allowance and $25 copayment Every 24 months, up to $150 allowance Included in medical contributions Every 12 months with $5 copayment Every 12 months, $40 copayment on progressive lenses Every 12 months, up to $200 allowance and $15 copayment Every 12 months, up to $200 allowance $6.09 / $12.19 / $17.24 * Out-of-network benefits are the same across all plans, except under the buy-up plans frames and contact lens benefits are provided every 12-months vs. 24-months in a basic plan. All plans include the upgrade reimbursement schedule. 11

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