Health Plan Review City of Hapeville 2016-2017 Plan Year Presented By: MSI Benefits Group, Inc. January 24, 2017
2016 Renewal Recap - Renewal July 1, 2016 (changed from October of every year) - medical renewal came in at a 20% increase ($209K annual net increase) above current - RFP s sent to Aetna, BCBSGA, Cigna, GMA and Humana with no competitive options presented - Changed plans with to lower increase down to 8.81% ($82k annual net increase) - Changes included: HMO: POS: Increased Deductible from $1,000 to $2,000 Increased Deductible from $1,000 to $2,000 Changed Coinsurance from 90% to 80% Changed Coinsurance from 90%/80% to 80%/70% PCP copay from $20 to $25 PCP copay from $20/$30 to $30/$40 Specialist copay from $30 to $40 Specialist copay from $30/$40 to $40/$50 ER copay from $200 to $250 Urgent Care copay from $40/$60 to $60/$80 Urgent Care copay from $40 to $50 Out-of-Pocket Max from $2,500/$4,000 to $4,500/$6,000 Out-of-Pocket Max from $2,500 to $4,500 Rx copays from $15/$30/$45 to $20/$40/$60 PHCS Rx copays from $20/$50/$75 to $30/$60/$85 - No change in any other benefits - Changed FSA administrator from Flores & Associates to MedCom (Kept HRA with Flores) 2
Claims History 5/2013 6/2016 Medical Loss Ratio portions of premium dollars health insurers may spend is limited to an 80% loss ratio under ACA (carrier target is 80%-85%) Month Period Members Monthly Billed Total Medical Total Total Paid Loss Rate of Premium Claims Rx Claims Claims Ratio Carrier Change 2014 Renewal Period 5/13-4/14 3,261 $1,332,021 $821,396 $157,723 $979,120 73.51% Aetna 2.00% 2015 Renewal Period 5/14-4/15 3,020 $1,277,277 $1,031,523 $286,127 $1,317,650 103.16% Aetna -2.33% May 2015 237 $102,612 $115,809 $14,268 $130,077 126.77% Aetna June 2015 230 $99,618 $110,777 $13,201 $123,978 124.45% Aetna July 2015 226 $98,094 $67,491 $21,831 $89,322 91.06% Aetna August 2015 229 $98,201 $93,008 $19,689 $112,697 114.76% Aetna September 2015 234 $101,062 $132,580 $19,447 $152,027 150.43% Aetna Not Factored 5/15-9/15 1,156 $499,587 $519,665 $88,436 $608,101 121.72% Aetna N/A October 2015 227 $100,806 $56,902 $6,740 $63,642 63.13% November 2015 228 $100,709 $90,984 $8,394 $99,378 98.68% December 2015 222 $97,370 $98,673 $10,217 $108,890 111.83% January 2016 222 $96,789 $90,753 $11,368 $102,121 105.51% 2016 Renewal Period 10/15-1/16 899 $395,674 $337,312 $36,719 $374,031 94.53% 8.81% February 2016 220 $95,541 $103,660 $8,310 $111,970 117.20% March 2016 216 $93,282 $528,491 $11,818 $540,309 579.22% April 2016 216 $93,627 $77,323 $7,204 $84,527 90.28% May 2016 216 $93,766 $92,500 $4,749 $97,249 103.71% June 2016 222 $95,316 $70,537 $7,525 $78,062 81.90% July 2016 August 2016 September 2016 October 2016 November 2016 December 2017 January 2017 2017 Renewal Period 2/16-1/17 1,090 $471,532 $872,511 $39,606 $912,117 193.44%? Totals 5/13-6/16 9,426 $3,976,091 $3,582,407 $608,611 $4,191,019 105.41% 2.83% 3
How do we control Health Care costs? The City s goal is to offer active and retired employees with a competitive health plan at an affordable cost sustainable moving forward. A quality, comprehensive health plan is a critical component in retaining skilled and seasoned employees as well as recruiting new talent. Budget constraints, tax payers monies and employee salaries are all factors that have to be considered. What can the City do to help maintain these goals? Dependent Eligibility Audit Working Spouse Rule Tobacco Cessation Program Employee Health & Wellness Program Retiree Health Program The following slides go into detail about each bullet point above 4
Dependent Eligibility Audit A dependent eligibility audit is currently underway with a deadline of April 1, 2017 By conducting this audit we ensure that all dependents covered under the City s plan are indeed eligible (i.e. legally married, legal children, adopted, etc.) - Why Audit? Identifies dependents that should no longer be covered under the City s plan which translates into healthcare cost savings - What documentation does an employee have to provide? Examples include; marriage certificate, tax status form, medical documentation of disability, birth certificate, adoption papers, legal documents that establish custody, guardianship or foster care - 59 employees have at least one dependent on a plan through the City with a total of 131 dependents covered - More information regarding the audit will be provided during the benefits renewal period in April 2017 5
Working Spouse Rule Why implement this rule? The City s offers a generous benefits package in both design and cost to employees and their spouses More employers are offering financial incentives to their employees to enroll in coverage elsewhere Paid claims on dependent spouses are 18.5% higher than claims on employees Who would be affected? Employees who cover a spouse that is employed AND has coverage available to them where they work Who would NOT be affected? Employees who cover a spouse that is NOT employed or whose spouse does NOT have coverage available to them where they work On average employers that have a working spouse rule in place charge a monthly surcharge of $50-$100 The City has 31 employees that cover a spouse 6
Tobacco Cessation Program Why implement a Tobacco Cessation Program? The Center for Disease Control and Prevention Facts: Cigarette smoking is the leading cause of preventable disease and death in the United States, accounting for more than 480,000 deaths every year, or 1 of every 5 deaths. Estimates show that each employee who smokes cost their employer $3,391 per year with $1,760 in lost productivity and $1,623 in excess medical expenses It is a lifestyle choice that many employers feel impacts health care cost What can the City do to encourage employees to stop using tobacco? Charge tobacco users up to 50% higher premiums than non-tobacco users on individual coverage (recommend $50-$100 per month SHBP charges $80) Could create negative environment if employees feel they are being treated unfairly Administrative HR issues (testing, tracking, monitoring, payroll deductions) Educate employees on programs that are available Smoking cessation programs offered at no cost to members by Insurance covers smoking cessation (Physician visits, prescriptions and OTC aids) at 100% 7
Employee Health & Wellness Program Wellness and health improvement programs can become an integral part of the work place. Educating employees can make them more aware which will help them when making benefit and health related decisions. Current Health Status of the U.S. - 66.3% of adults over the age of 20 are overweight or obese - 40% of the population tends to spend too much time seated or is not active - 32% of the adult population has high blood pressure What can we do to help? - Onsite Biometric Screenings - Online Health Risk Assessment - Lunch & Learns - Employee Contests - Gift Cards - $5,000 Wellness Fund - Payroll Deduction Incentives 8
Retiree Coverage Retirees and spouses that are Medicare eligible receive a Health Reimbursement Arrangement (HRA) to help cover the cost of their own personal Medicare plan. Retiree - $265.00 per month ($3,180 annually) Spouse - $132.50 per month ($1,590 annually) If the Retiree or eligible Spouse is not Medicare eligible then coverage continues under the City s fully insured health plan at the same cost an active employee pays until the Retiree and Spouse (if both covered) become Medicare eligible. Retirees receive Dental and Basic Life Insurance at the same cost as active employees HRA Dental Basic Life Total Covered Retirees 21 26 48 51 146 City Monthly Cost $15,972.52 $7,685.00 $2,248.04 $166.26 $26,071.82 City Annual Cost $191,670.24 $92,220.00 $26,976.48 $1,995.12 $312,861.84-4 Retirees covered under that are not Medicare eligible - 1 Retiree that is covered under due to spouse not being Medicare eligible - 3 Retirees that will become Medicare eligible by the end of 2017-6 Retirees receive HRA funds for themselves and their spouse 9
Medicare Advantage Plan Medicare Eligible Retirees/Spouses Proposed Alabama Rate 1 302.76 Georgia Rate 31 257.82 Monthly Total 32 8,295.18 Annual Total 99,542.16 BENEFITS 259.22 In-Network Deductible $0 Accidental Injury 100% Hospital Services 100% Physicians Services 100% PCP Copay $10 Specialist Copay $20 Preventive Care 100% Urgent Care Copay $35 Emergency Room Copay $50 Outpatient Surgery 100% Inpatient Surgery 100% Pregnancy 100% Out-of-pocket $6,700 Rx Copays Generic - Tier 1 $10 Preferred Brand - Tier 2 $20 Non-Formulary - Tier 3 $50 Mail Order (90 Day Supply) Generic - Tier 1 $20 Preferred Brand - Tier 2 $40 Non-Formulary - Tier 3 $100 Out-of-Network Deductible $0 Coinsurance 100% Out-of-pocket $6,700 - Plan eliminates need for HRA - Retirees and their spouses would be enrolled separately - Allows for spilt coverage when the retiree or spouse is not Medicare eligible - Group Medicare Plan - Members would have access to any physician that accepts Medicare - Rating is different by state - Rates shown were for a 2/1/17 effective date and will change Retiree Cost Monthly Retiree Only 26 0.00 Retiree + Spouse 6 120.95 Monthly City Cost 7,569.49 Annual City Cost 90,833.85 10
Benchmark Report State Health Benefit Plan BCBSGA UHC City of Hapeville Average Effective Date 1/1/2017 1/1/2017 7/1/2016 Total Employees in the Group 600,000 600,000 115 234 Monthly Premium Employee 625.94 661.93 526.85 $573 Employee + Spouse 1,314.48 1,390.06 1,053.70 $1,198 Employee + Child(ren) 1,064.10 1,125.28 948.33 $1,146 Employee + Family 1,752.65 1,853.40 1,580.55 $1,644 - Average includes 37 other local government entities in Georgia Employee Deductions (Monthly) Employee 130.96 166.23 0.00 $47 Employee + Spouse 335.69 409.78 263.42 $320 Employee + Child(ren) 241.94 301.91 210.74 $287 Employee + Family 446.67 545.45 526.86 $503 % Paid by County/City Employee 79.08% 74.89% 100.00% 92% Employee + Spouse 70.27% 66.55% 50.00% 54% Employee + Child(ren) 74.67% 70.72% 50.00% 55% Employee + Family 71.98% 68.17% 50.00% 56% Benefit Design Deductible $1,300 $1,300 $2,000 $2,621 Coinsurance 80% 80% 80% 86% Out of Pocket $4,000 $4,000 $4,500 $5,263 PCP Copay $35 $35 $25 $26 Specialist Copay $45 $45 $40 $48 Rx Deductible No No No Yes- 60% Generic Copay $20 $20 $15 $14 Brand Copay $50 $50 $30 $45 11