Loading...
Employee Benefit Trust Minutes - 05/11/2016 City of Wichita Falls Employee Benefits Trust Board Minutes May 11th, 2016 The meeting was held in the City Council Conference Room, 1300 Seventh Street, Wichita Falls, TX 76301. Present: Glenn Barham, Mayor Darron Leiker, City Manager Jim Dockery, Deputy City Manager Kinley Hegglund, City Attorney Christi Klyn, Human Resources Director Pat Halverson, Director of Finance Angela Bosma, Employee Benefits Specialist Brent Weegar, IPS Advisors, Principal Rebekah Ross, IPS Advisors, Sr. Account Executive Billy Henderson, retiree Bobby Whiteley, retiree Agenda Items: Meeting was called to order at 1:30 p.m. II. Minutes from previous meeting were approved. III. Financial report was presented and discussed. IV. IPS Mid-Year Briefing a. IPS briefed the following: historical plan cost analysis, utilization review, financial projections, benchmarking, 2016 Plan Designs and Contributions, 2017 Benefits Strategy Discussion and 2017 Preliminary Timeline. In an overview, IPS briefed: Financial Results "Wichita Falls ended plan year 2015 at a 27.7% increase to health and prescription per capita plan cost. This was primarily driven by a significant increase in large claims results compared to the prior plan year. Total spend for claimants exceeding $50,000 increased $3,028,062 or 114%. Incidents of claims over $50,000 increased from 17 to 28 claimants, a 65% increase at the end of the plan year. "For the 2016 Plan year to Date (through March 2016), the City's annualized per capita plan costs are sitting at no change from the prior plan year. However, first quarter results have shown improvement over the prior year's first quarter results and total costs have decreased $206,000. It is also important to note that the impact of plan design adjustments for 2016 are still pre-mature due to the natural lag between when a claim is incurred and when it is paid. Moving Forward "Wichita Falls made significant changes by adding consumer driven health plans to its health benefits package and making substantive contribution adjustments for employees and dependents. In this analysis, IPS has provided recommended strategic considerations for Wichita Falls. These strategies target key focus areas including health care delivery (Network/provider), subsidization, health risk management, pharmacy and member engagement. Renewal "The City of Wichita Falls will be required to RFP its Medical Administration, Pharmacy Benefits Management, Basic Life, Optional Life, Long Term Disability and EAP programs for the 1/1/17 renewal. Although an RFP was released last year for Stop Loss, Dental and Vision programs, it is recommended to include all programs with in the RFP to maximize negotiations of pricing proposals, rate guarantees, performance guarantees, and package discounts." 2017 Strategic Considerations IPS briefed: Health Plan "For the 2016 plan year, the City altered plan designs to better align its plans with benchmarks and encourage members to exercise consumerism when seeking health care services. A Health Savings Account Plan and Catastrophic plan were added as low cost plan alternatives and it is recommended to continue sponsorship of these plans into the 2017 plan year. "The Core and Enhanced PPO plan of benefits have conservative deductibles, copays and out of pockets amounts when compared to like entities. For the 2017 plan year, it is recommended for the City to evaluate termination of the buy up plan, narrow network alternatives, out of network reimbursement adjustments, referenced based pricing alternatives, telemedicine and concierge pricing transparency services. BOBS of Texas has indicated they can provide options/administration for all of these components with the exception for a narrow network at this time. Their narrow network is currently concentrated in Dallas, Austin, Houston and Antonio at this time. Prescription Plan "Due to projected trend increases as a result of new to market drugs and specialty drugs, it is recommended that the City consider adjustments to the prescription drug program including enhanced utilization management programs to include expanded step therapy, prior authorization and drug quantity management. Further, IPS will be conducting an analysis of prescription drug pricing and audit services for the RFP process with our strategic Partner Truveris. Employee Contributions "For the 2016 Plan year the City is funding 69.8% of the total cost of health care which is below public sector benchmarks of 83.0% but above private sector benchmarks of 77.2%. Moving forward, no significant adjustments are recommended to employee contributions for the Health Savings Account and Catastrophic plan options. It is also recommended for the City to evaluate additional funding toward the HAS plan to encourage enrollment and cost mitigation. "As an additional contribution/eligibility consideration for the City of Wichita Falls, we have seen increasing interest in our clients evaluation Working Spouse — surcharge programs as well as requiring new hires to enter into the HAS plan for a period of time before having access to higher cost plans. Retiree Plans "The City continued to allow access to the current plan designs including HSA And Catastrophic plan options to City retirees. Retiree contributions increased approximately 27% for retiree only coverage. Retirees pay the entire cost for dependent coverage which increased approximately 10%. Overall, the City is funding between 45% and 63% of the retiree only cost of health care. "The Public Employee Benefits Alliance will be rolling out Pre-65 Retiree on and off exchange alternatives 1/1/17. Due to the required decision deadlines (June 1st), complexity of the program and required communication it is recommended to consider this program as a potential alternative for the 1/1/18 plan year. Health Care Reform "The City of Wichita Falls is currently meeting all required components of the employer mandate including 30 hour eligibility, minimum value and affordability provisions. For 2016, the City has provided necessary 1094 and 1095 substantiation of coverage reports to employees. The deadline for providing reporting to the IRS has been extended to May 31st or June 309th is filing electronically. The City will also continue to pay the Transitional Reinsurance Fee and PCORI fee for the 2016 plan year. Last, it is important to note that the next major provision of health care reform, the "Cadillac Tax" has been delayed until 2020. Health and Wellness "For 2016 the City is discounting employee premiums $35 per month for completing an annual physical and an additional $35 for employees who choose not to use tobacco. As a next step, it is recommended to consider expanding the wellness incentive program to provide additional "extra credit" for those employees who meet preferred health outcomes. Those who did not meet health outcomes would have to be given an opportunity to participate in wellness initiatives to receive the reward. If the City moves this way we would recommend partnering with an administrator to assist with programming and incentive management. Health Clinic "Plan year end 2015 reports have been received and overall statistics show positive signs in terms of utilization and overall ROI. Estimated ROI for redirected care (Excludes absenteeism and UR/ER avoidance) was 1.33 to 1 for a projected total of$223,453 and was an $88,587 increase over 2014 results. Independent and internal survey reports continue to show overall satisfaction with clinic operations. Telemedicine — Teladoc "It is recommended for the City to consider implementing a telephonic medicine program. The service provides lower cost and more convenient care for common medical conditions. For a total visit cost between $30 and $50, employees would have 24/7/365 access to a physician specializing in acute conditions. The service is designed to treat conditions such as Cold, Flu, Bronchitis, Allergies, Respiratory Infections and much more. Medications may also be prescribed. Telemedicine is also allowed for Health Savings Account plans and is highly valuable to participants who are responsible for higher deductibles. Private Exchange "Although private exchange adoption is slow within the market, IPS and Liazon are providing our clients a private exchange alternative and may be a plan consideration for the City of Wichita Falls in the future. The exchange is built on a defined contribution approach to providing health and welfare benefits. What makes private exchanges unique is that employees are able to shop from a menu of health and welfare benefits and select a package that best suits their needs." This concluded the IPS briefing. V. Open Session: no business for open session. VI. Meeting was adjourned.