Employee Benefit Trust Minutes - 06/27/2018 City of Wichita Falls
Employee Benefits Trust Board Minutes
June 27th, 2018
The meeting was held in the City Council Conference Room, 1300 Seventh Street,
Wichita Falls, TX 76301.
Present: Stephen Santellana, 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 II
Audrey James, Employee Benefits Specialist I
Brent Weegar, IPS Advisors, Principal
Bennett Champagne, IPS Advisors, Benefit Analyst
Retiree Billy and spouse Penny Henderson
Agenda Items:
Meeting was called to order at 8:38 am.
II. Minutes from previous meeting were approved.
III. Financial report was presented and discussed.
IV. IPS/HUB mid-year financial analysis, projections and strategic recommendations
for Employee Benefit Plan.
a. "Overview: The purpose of this meeting is to provide an update on the first
quarter plan year financial and utilization results, budget projections and
discuss plan strategy as we prepared for the January 1, 2019 renewal process.
i. "Financial results: At plan year end 2017, per capita health plan costs
(less individual stop loss) increased by +3.7%. Through May 2018, the
City's annualized health plan costs are -3.2% below 2018 year end
results. Per capita claims are down -9.3% and per capita pharmacy
claims are up +6.9%. The City has 6 claimant over$50k year to date
and make up 20.6% of year to date claims.
ii. "Moving Forward: The Core PPO plan of benefits has conservative
deductibles, copays and out of pocket amounts when compared to like
entities. For the 2019 Plan Year, it is recommended for the City to
continue to evaluate available narrow network alternatives, referenced
based pricing, non-preferred brand cost sharing strategies and high
performance drug formularies.
N. "Renewal: The City of Wichita Falls released an RFP for all lines of
coverage for the 2017 plan year. The City currently has 1 renewal option
before the next RFP is released. Only the Medical Stop Loss renews for
the 2019 plan year as all other coverage's have rate caps (Medical TPD
services) and are in rate guarantee periods to 2019.
b. "Historical Cost Analysis
c. "Utilization Review
d. "Budget Projections
e. "Benchmarking
f. "Strategic Considerations:
i. "Request for proposal: The City of Wichita Falls released an RFP for all
lines of coverage for the 1/1/17 plan year and maintains one additional
year renewal option period for 2019. The City will renew its Stop Loss,
Medical/Dental Administration and Employee Assistance Program fort eh
1/1/19 plan year. All other lines have rate caps and/or rate guarantees in
place at this time.
ii. "Health Plan: Over time, the City has altered plan designs to encourage
members to exercise consumerism when seeking health care services.
A Health Saving Account Plan and Catastrophic plan are offered as low
cost plan alternatives and it is recommended to continue sponsorship of
these plans into the 2019 plan year. The Core PPO plan of benefits has
conservative deductibles, copays and out of pocket amounts when
compared to like entities. For the 2019 Plan Year, it is recommended for
the City to continue to evaluate available narrow network alternatives,
reference based pricing and potential future enhancement of the prior
authorization process (Best Doctors).
N. "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 include high
performance formulary and non-preferred brand cost sharing alternatives
(deductibles) for the Low/Catastrophic plans.
iv. "Employee Contributions: For the 2018 plan year, the City is funding
75.3% of the total cost of health care compared to public sector
benchmarks of 83.9% and private sector benchmarks of 78.8%. 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 HSA 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
requiring new hires to enter into the HSA plan for a period of time before
having access to higher cost plans.
v. "Retiree plans: As a best practice, the City applies separate risk
adjusted rates for the retiree health programs which explicitly states the
employer and employee subsidy levels of retiree risk. Currently the city
funds between 62.5% and 63.3% of the retiree only premium and 0%
toward dependent coverage. Due to the issues experienced with GRS
calculations for the 2018 plan year, it is recommended for the City to
consider contracting with IPS/HUB to conduct the Retiree Rate Study
and GASB 74/75 calculations. Our integrated approach and expertise
will provide the City with seamless active and retiree benefits consulting.
vi. "Health Care Reform: In regard to the 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 2018 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 2022.
vii. "Health and Wellness: For 2018 the City is discounting employee
premiums $35 per month for completing an annual physical and
additional $35 per month for employees who choose not to use tobacco.
It is important to note that recent court rulings have questioned the
legality of premium differentials for annual health exams. Specifically
HIPAA and ACA allow for premium differentials at this time but courts
have ruled this strategy violates EEOC non-discrimination rules and
employers should vacate by January 1st. It is expected that the EEOC
will issue guidance closer to year end and at this time we are
recommending for employers to continue as is until further guidance is
released from the EEOC.
viii. "Health Clinic: IPS/HUB has reviewed year end reports from the
QuadMed Health clinic and overall performance of the clinics operations
are positive. Utilization (76%), Total visits (+6% over 2017), Cost per
Clinic Visit ($120), and patient satisfaction (92%) are at or better than
normative data from other IPS/HUB clients with clinic operations. Last
year we noted a spike in no show counters of 15% which has also
reduced below 10%.
ix. "Best doctors: IPS/HUB and the City discussed implementation of Best
Doctors second opinion services to assist employees with expert review
of their medical issue and provide greater certainty regarding treatment
plans. It was determined to obtain experience from other cities before
implementation was considered. Initial results and feedback have been
positive but we are only one quarter into implementation. IPS/HUB will
provide feedback as we approach renewal. Pricing for their service is $3
PEPM with a minimum projected ROI of 1:1.
x. "Total Rewards: IPS/HUB recommends that the City of Wichita Falls
consider other employer paid/optional benefits as part of a total rewards
strategy. Trending benefits include Student Loan Reimbursement and
Legal Services. IPS/HUB has a preferred contract with Legal Shield at a
cost of$16.50 PEPM. Additional details are included in the appendices
of this report
xi. "Cariloop: Cariloop is a program targeting employees and family
members who act in the capacity of caregivers for aging loved ones.
Traditional EAPs provide an insufficient level of care coordination and
Cariloop has built their program to fill in those gaps. Caregivers are
assigned dedicate Healthcare coaches with a cloud based platform to
guide them through the care continuum. The Cariloop model is designed
to alleviate emotional, financial and work/life stress which will enhance
productivity of your workforce. The cost of this service is $2.00 PEPM.
g. "The 2018 Preliminary Timeline includes:
i. August: Release Stop Loss RFP, Accomplish Renewal Analysis (finalize
rates and plan designs), and begin implementation
ii. September: Stop Loss RFP due, presentation of preliminary renewal
results, and update enrollment communications.
N. October: Finalize and bind stop loss rates and begin open enrollment
iv. November: Continue vendor implementations and complete open
enrollment
v. December: Release ID cards, finalize vendor implementation, and
system testing." (extracted directly from IPS/HUB presentation binder)
II. With no further business, the meeting was adjourned at 9:48 am
Prepared by:
Angela D. Bosma
Employee Benefits Specialist II