Employee Benefit Trust Minutes - 08/31/2017 City of Wichita Falls
Employee Benefits Trust Board Minutes
August 31st, 2017
The meeting was held in the City Council Conference Room, 1300 Seventh Street,
Wichita Falls, TX 76301.
Present: 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 II
Brent Weegar, IPS Advisors, Principal
Bennett Champagne, IPS Advisors, Benefit Analyst
Billy Henderson, retiree
Laura Drury, retiree
Eric Russell, retiree
Agenda Items:
Meeting was called to order at 10:04 am.
II. Minutes from previous meeting were approved.
III. Financial report was presented and discussed.
IV. IPS Advisors Recommendations and changes to Employee Benefit Plan and health
benefits and contribution levels.
a. Overview:
i. Historical Cost Analysis
ii. Budget Projection
iii. Plan and Contribution Alternatives
iv. Recommendations: (Items 1 — 9 are quoted directly from the IPS
provided "City of Wichita Falls 2018 Renewal Analysis meeting" which
was held on 8/31/17.)
1. Health Plan: "The City's health fund balance is on target through
July 2017 and IPS projects the fund balance to grow by $54k to
$144K total. The City has budgeted a 4% increase to City
contributions for 2017 — 2018, leaving a projected -$241k ending
fund balance for 2017-2018. IPS has provided feasible plan and
contribution options within this analysis to eliminate the projected
fund deficit.
"The City maintains plan with conservative deductibles, copays
and out of pocket amounts when compared to like entities. IPS
evaluated plan design alternatives, however no significant
adjustments to deductibles, copays or out of pocket maximums
are recommended to health plan for the upcoming plan year. For
the future, it is recommended for the City to consider a Reference
Based Pricing program for high cost imaging and Best Doctors for
Second Opinion services
2. 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 an enhanced utilization management program.
Recommended Adjustments would include additional prior
authorization and step therapy programs for additional classes of
high cost/loosely managed drugs dispensed in the 2018 plan year.
3. Employee Contributions: "For the 2017 plan year the City is
funding 71.3% of the total cost of health care which is below
public sector benchmarks of 80.3% but below private sector
benchmarks of 77.2%. Moving forward, it is recommended to
pass needed increases to the Core Plan and minimize increases
for the Health Savings Account and Catastrophic plan options.
"As an additional contribution/eligibility consideration, the City may
want to require new hires to enter into the HSA for a period of time
before having access to higher cost plans.
4. Retiree Plans: "The City's retiree population experienced a -
10.3% reduction in enrollment and -2.4% reduction in per capita
claims at year end 2016. Retiree per capita claims were 162% of
active employee per capita claims. As a best practice, the City
applies separate risk adjusted rates for the retiree health
programs which explicitly states the employer and employee
subside levels of retiree risk. Currently the City funds between
60% and 63% of the retiree only premium and 0% toward
dependent coverage. An actuarial premium rate study is currently
being conducted by GRS and IPS is in contact with them to
finalize results in the coming weeks.
"In 2017, new GASB 74/75 rules go into effect replacing GASB
45. IPS recently added Mark Guajardo (previously with Milliman)
to our team to provide GASB 74/75 valuation and premium rate
setting as part of our available services for our clients. Our
integrated approach and expertise will provide our clients with
seamless active and retiree benefits consulting.
5. Health and Wellness: "For 2017 the City is discounting employee
premiums $35 per month for completing an annual physical and
an additional $35 per month for employees who choose not to use
tobacco. As a future 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 preferred 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.
6. Health Clinic: "IPS has reviewed year end reports from the Quad
Med Health Clinic and overall performance of the clinics
operations are positive. Utilization, Total Visits, Cost per Clinic
Visit, Preventive Care Statistics and patient satisfaction exceed
results IPS has seen from peers who maintain health clinic
operations. It is recommended to evaluate strategies to minimize
no-show encounters including adding a cost for repeat offenders.
7. Best Doctors: "Evaluate implementation of Best Doctors second
opinion services to assist employees with expert review of their
medical issue and provide greater certainty regarding treatment
plans. Best Doctors experience is that over 39% of diagnosis and
72% of treatment plans are adjusted based upon expert review.
There are +800 clients of Best Doctors worldwide, 23% of which
are Fortune 500 companies. They maintain a 96% client retention
rate and 95% member satisfaction rate. Pricing ranges between
$3 and $4 PEPM with projected 1.5 to 1 ROI in the first year.
8. Health Care Reform: "In regard to current requirements of the
ACA, the City of Wichita Falls is following the employer mandate
which includes 30 hour eligibility, minimum value and affordability
provisions. The City is complying with necessary 1094 and 1095
employer mandate substantiation of coverage reports. In regard
to fees, the City will only be required to pay the PCORI fee for
2017 as the TRF fee is no longer applicable. Last, it is important
to note that the next major provision of health care reform, the
"Cadillac Tax" has been delayed until 2020.
9. Plan Audit: "For 2018, it is recommended for the City to consider
conducting a health and pharmacy plan Audit of the 2017 plan
year. Audits are typically conducted as a best practice for a self-
funded health plan every three years. Plans are audited to ensure
accurate and timely processing of claims, network contracts, stop
loss reimbursements, eligibility and more."
10.Based on the assessment provided by IPS, the EBT voted to:
a. Increase Active Employee Core (only) premiums by 4%
b. Implement Express Scripts "Unlimited Utilization
Management" program
v. Adjourned at 11:00
Prepared by:
Angela D. Bosma
Employee Benefits Specialist II