COMMITTEE
OF THE WHOLE
May 11, 2009
** APPROVED
Members Present: Chairman C. Crandall, G.
Benson, D. Burdick, W. Dibble, D. Fanton, W. Hall, T. Hopkins, K. Kruger, M.
McCormick, D. Pullen, B. Reynolds, D. Russo, R. Truax, N. Ungermann; (Absent: T. O’Grady)
Guests: Manning and Napier Benefits (Denise Northrup);
NOVA Healthcare Administrators (David Harris)
Call to Order: The meeting was called to order at 2:50 p.m. by Chairman
Curtis W. Crandall for the purpose of presenting information on health insurance.
Health
Insurance Plan Update:
Legislator
David Pullen commented that it’s been about three years since the Board voted
to change the third party administrator that serves the County’s health plan,
which resulted in significant savings.
This presentation was scheduled to provide an update, review, and information
for possible changes in the structure of the health plan that will be available
to employees. Manning and Napier
Benefits Consultant Denise Northrup worked on new plan options, gathered other
input, and put together some recommendations.
Denise was introduced, along with David Harris, from NOVA Healthcare
Administrators, who worked collaboratively on the presentation. (Handouts attached to original minutes and
summarized below.)
Manning &
Napier Benefits (MNB) was asked to propose new plan options because:
·
·
Many changes to medical treatments and prescription drugs (i.e. hospice currently isn’t covered, but it
has become more of an issue than when the plan was written)
·
Still, some components of the current plan are solid
·
Merge the best parts of current plan with some updates (updates in deductibles, drug coverage, and
out-of-pocket maximums)
MNB worked
with NOVA on medical and prescription plan options:
·
Reviewed
·
Population
·
Network utilization
·
Routine services utilization
·
Prescription drug data
Routine
Services Utilization:
|
Service |
Members Using
Services |
Charge |
Paid |
|
Adult Physicals |
191 |
$27,334.66 |
$18,008.92 |
|
Colonoscopies |
63 |
$67,438.74 |
$41,568.30 |
|
Mammograms |
242 |
$55,001.43 |
$33,230.72 |
|
|
|
$149,774.83 |
$92,807.94 |
Employee
Census Analysis: 667 Females 583 Males
338
are over 50 295 are
over 50
441
are over 40 395 are
over 40
PPO Providers
vs Non-PPO Providers Utilization:
|
|
% $ |
$$ Paid |
% Providers |
# Providers |
|
PPO Providers |
92% |
$3,134,095 |
69% |
582 |
|
Non-PPO |
8% |
$287,883 |
31% |
260 |
|
Totals |
100% |
$3,421,978 |
100% |
842 |
Ms.
Northrup reported that their evaluation shows over half of the County’s health
plan adult members are over 50, so the population is aging, but there is not a
lot of utilization of adult physicals, colonoscopies, or mammograms. This is partially due to the fact that in the
current plan, not all preventive services are covered in full; some require meeting
a deductible or a copay. They are
looking at ways for people to realize the value of those preventive services
before health issues become a major claim and also to encourage a better
quality of life. Also new over the last
several years since moving to NOVA is the fact that we have a very strong
network now. Currently there is no
penalty for going out of network.
Participants can choose to go out of network, and there is no change for
them, although the County pays more.
Ninety-two percent of all expenses are in network, and probably the
remaining out-of-network utilization is by choice. Having that choice is fine, but since the network
is so much broader now, maybe there should be a copay for out-of-network
services.
Network
coverage was questioned. It extends from
northern
A
detailed chart was distributed that compared plan benefits in the current plan
against the current plan with optional prescription, the proposed plan with
optional prescription, and the high deductible option. Ms. Northrup pointed out that they weren’t
proposing taking away the current plan, but the prescription drug portion needs
to be updated. The current plan,
depending on the union, includes a couple of different prescription copay
scenarios, but not a third tier where more is paid for the more expensive drugs. Generic utilization is good, but not as good
as the benchmark, and there is currently no management and no limits on prescription
drugs. They are proposing a set of
controls, some are safety controls, and coverage that is three tiered with
copays of 3/20/40.
Recommendations:
·
Current plan with updated prescription drug rider
·
New medical “Option 1” with updated prescription drug rider
·
High deductible Health Plan with Health Reimbursement Account
David
Harris from Nova Healthcare Administrators explained the differences between
the current plan and the proposal. All
preventive services would be covered in full.
There would be a copay for physician visits and hospitalization. The annual maximum paid by meeting the deductible
and coinsurance would be $750. In-network
claims would be paid at 80 percent, and out-of-network claims at 60 percent,
which is a change from the existing plan.
Chiropractic care and hospice would be covered under the new proposal. Prescription copays would change, with a $3
copay for generics, which is cheaper than the current plan, and this is where
most of the utilization is. The high
deductible plan would be very similar to the proposed plan with the exception
that the deductible is significantly higher.
Legislator
Truax expressed concern about the increased cost for retirees. Ms. Northrup explained that the main
objective in proposing a change in the health plan is not to have participants pay
more out-of-pocket, but the plan needs to be updated. Deductibles are low and haven’t moved up with
costs. The new proposal is more in step
with today’s world. Participants are
going to pay more for some services, so we need to shift benefits to encourage
preventive care before problems become large claims. Mr. Truax questioned the high copay for the
third prescription tier. Ms. Northrup
noted that only three percent of all drugs fall under the third tier, and many
do have a generic. Mr. Truax stated that
most of them don’t have a generic equivalent, and $40 is a lot of money for
retirees. Ms. Northrup pointed out that
the Medicare Advantage plans have the tiered system, and retirees also have the
same plan. They’ve begun meeting with
retirees to present the choice of the Medicare Advantage plans, which the County
pays for. The County saves and the
retirees come out of the self-funded pool.
They have alternatives, and all drugs are $5. People who have agreed to take it are happy
with it. It is not a supplement, but it
takes over for Medicare Parts A and B. They
also get vision and dental reimbursement up to $300 per year. Legislator Pullen noted that there is a
retiree meeting on Tuesday, May 19, at Crossroads to get feedback from
participants.
Ms.
Northrup pointed out that premium equivalents are included in the plan review,
and they were arrived at by estimating plan costs using a blending of all
unions. Proposals are estimates. NOVA looked at the population and weighed
services utilized in the current plan.
How the New
Plan Will Work:
Scenario #1 -
|
|
Current Plan |
Proposed Plan |
||||
|
Charge |
Plan Benefit |
Plan Pays |
Member
Responsibility |
Plan Benefit |
Plan Pays |
Member
Responsibility* |
|
Hospital – $10,000 |
100% |
$10,000 |
$0 |
80% after
deductible |
$9,250 |
$750 |
*
$250 deductible; 20% coinsurance up to $500 out-of-pocket maximum
Scenario #2 -
Routine Services – Adult:
|
|
Current Plan |
Proposed Plan |
||||
|
Charge |
Plan Benefit |
Plan Pays |
Member
Responsibility |
Plan Benefit |
Plan Pays |
Member
Responsibility |
|
Office Visit (Annual
Physical) $130 |
100% |
$130 |
$0 |
100% |
$130 |
$0 |
|
Labs - $150 |
$100 @ 100%;
remainder @ 80% after deductible |
$100 |
$50 |
100% |
$150 |
$0 |
|
Mammogram – $140 |
100% |
$140 |
$0 |
100% |
$140 |
$0 |
|
Tetanus Shot – $35 |
Not covered |
$0 |
$35 |
100% |
$35 |
$0 |
|
Flu/Pneumonia
Vaccine - $45 |
Not covered |
$0 |
$45 |
100% |
$45 |
$0 |
|
|
|
Total $370 |
Total $130 |
|
Total $500 |
Total $0 |
Scenario #3 -
Sick Visits:
|
|
Current Plan |
Proposed Plan |
||||
|
Charge |
Plan Benefit |
Plan Pays |
Member
Responsibility |
Plan Benefit |
Plan Pays |
Member
Responsibility |
|
Office Visit -
$40 |
80% after
deductible |
$0 |
$40 |
$20 copay |
$20 |
$20 |
|
Labs - $110 |
$100 @ 100%;
remainder @ 80% after deductible |
$100 |
$10 |
100% |
$110 |
$0 |
|
EKG - $100 |
100% |
$100 |
$0 |
80% after
deductible |
$100 |
$0 (with
deductible met on inpatient hospital charges) |
|
|
|
Total $200 |
Total $50 |
|
Total $230 |
Total $20 |
Employees
will pay more for some services (i.e. inpatient hospitalizations), but less for
others (i.e. preventive services).
Cost of Proposed
New Plan:
A
premium comparison between the current and proposed plans was done, and it
showed cost savings just from changing the prescription drug part. It was noted that the proposal will have to
go through union negotiations. Using a
blended premium for comparison purposes for an average total of 604
participants (233 singles and 371 families), the estimated annual premium for
the current plan is $6,425,764.20; for the current plan with new prescription
coverage it’s $6,091,667.52; and for the proposed medical option 1 with new
prescription coverage it’s $5,720,882.40.
The prepared chart also shows the estimated annual premium for non-unit
personnel only at a total of 59 participants (11 singles and 48 families): for the current plan it’s $739,651.08; for
the current plan with new prescription coverage it’s $692,650.68; and for the
proposed medical option 1 with new prescription coverage it’s $649,703.04. People will have a choice of plans, but the
chart assumes all will move to one or another.
Proposed Contribution
Strategy and Plan Offerings:
Current
Employees:
·
Current plan with new prescription – 25 percent of premium equivalent
·
Proposed Option 1 with new prescription – No contribution
·
Proposed High Deductible Health Plan with HRA – No contribution and
County contributes 50 percent of deductible to HRA
New Hires:
·
Proposed Option 1 with new prescription – 10 percent of premium
equivalent
·
Current plan will not be available
·
Proposed High Deductible Health Plan with HRA – No contribution and
County contributes 50 percent of deductible to HRA
Pre-65 New
Retirees:
·
Proposed Option 1 with new prescription – only option
Post-65 New
Retirees:
·
Medicare Advantage Plan – only option
A
motion was made by Legislator Truax, seconded by Legislator Pullen and carried
to refer the health insurance information to the Personnel Committee for
further action.
Referred to Personnel Committee
Adjournment: The
meeting was adjourned at 3:40 p.m. following a motion made by Legislator Truax,
seconded by Legislator Kruger and carried.
Respectfully submitted,
Adele Finnemore, Journal Clerk