Employee Benefit Trust Minutes - 08/30/2018 City of Wichita Falls
Employee Benefits Trust Board Minutes
August 30th, 2018
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/HUB Advisors, Senior Vice President
Brandon Wilson, IPS/HUB Advisors, Account Manager
Lauren Millender, IPS/HUB Advisors, Strategic Resources Mgr
Jon Spragins, Police Dept/CLEAT President
Retiree Billy Henderson
Agenda Items:
I. Meeting was called to order at 10:03 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. "Historical Cost Analysis:
i. Jan — Jul 2018 revealed catastrophic spending down 4.1%
ii. Large claimants for 2017 Plan Year
1. 22 claimants
2. $2,778,827 dollars in claims accounting for 28.7% of total claims
spend
iii. Large claimants for 2018 Plan Year(to date)
1. 14 claimants
2. $1,434,477 dollars in claims accounting for 27.2% of total claims
spend
iv. Enrollment by Plan
1. HSA — 30
2. Core — 844
3. CAT— 211 (growing)
v. Per Capita Medical Claims Paid
1. 2017 - $6,081
2. 2018 - $5,459
vi. Per Capita Prescription Claims Paid
1. 2017 - $2,717
2. 2018 - $2,874
vii. Per Capita Total Claims Paid
1. 2017 - $8,799
2. 2018 - $8,333
viii. Enrollment by Status
1. Active Employees— 980
2. Retired Employees— 105
ix. Per Capita Total Claims by Status
1. Active Employees - $8,003
2. Retired Employees - $11,428
b. "Updated Budget Projection
i. IPS/HUB projected revenue FY18 - $1,163,387
ii. IPS/HUB projected revenue FY19 - $379,426
c. "Plan and contribution options
i. 2019 Plan Design Alternatives
1. Reference Based Pricing
a. Introductory— 70% percentile reimbursement for MRl/CAT
scans
i. Projected savings of$9,000
ii. Member impact— not reported
b. Introductory— 50% percentile reimbursement for MRI/CT
scans
i. Projected Savings of$29,000
ii. Member impact— not reported
c. Not recommended at this time
2. PPO Network
a. Move from "Blue Choice"network to "Blue Essential"
network
i. Projected savings of$307,544
ii. Member impact— 74% provider match
b. Not recommended at this time
3. Prescription Deductible
a. $100/$200— Brand Only(approved)
i. Projected savings of$72,459
ii. Member impact— 186
b. $200/$400— Brand Only
i. Projected savings of$139,018
ii. Member impact— 186
4. Fraud, Waste and Abuse program
a. Implement(approved)
i. Projected savings of$848
ii. Member impact— 5
5. High performance formulary
a. Recommended
i. Projected savings of$118,778
ii. Member impact— 346
b. Not recommended at this time
6. Dental plan design
a. $1,500 Annual Maximum (approved)
i. Cost of$51,957
ii. Member impact— none
7. Plan Contribution Option
a. 4% increase to Employee/Retiree for all plans
i. Cost of$122,148
ii. Member impact— 1,070
b. 4% increase to Employee/Retiree for Core PPO only
(approved)
i. Cost of$101,767
ii. Member impact - 829
d. "Recommendations
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 for the
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 Savings Account Plan and Catastrophic plan are offered as low
cost plan alternatives and it is recommended to continue sponsorship of
these plans in to the 2019 plan year.
The Core PPO Plan of benefits have conservative deductibles, copays
and out of pocket amounts when compared to like entities. Although
pricing has been provided for narrow network alternatives and reference
based pricing the disruption and savings at this time is not large enough
to recommend a change.
The TPA renewal has been received from BCBSTX and administrative
fees have received 3.1% increase and is included within our budget
projections. IPS/HUB will be pursuing negotiations with BCBS to lower
this adjustment. The Stop Loss renewal will not be received until
September and IPS/HUB will provide an update once received.
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 implementation of a deductible for Brand name drugs and
implementation of Express Scripts Fraud, Waste and Abuse program
iv. Employee Contributions: For the 2018 plan year the City is funding
75.6% 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. If increases are warranted, it is recommended to apply them to
the Core PPO plan.
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 subside 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 issues experienced with the 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 counseling.
vi. Dental Plan: The initial dental renewal has been received and a 6%
increase to administration rates was issued and is guaranteed for 2
years. This has been included in budget projections. IPS/HUB will
pursue additional negotiations with Humana. IPS/HUB is recommending
the City consider implementation of a $1,500 annual maximum to align
with bench marking for like entities.
vii. Health and Wellness: For 2018 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.
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 issues 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. Vision: The City renewed its Vision programs with the incumbent carrier
Superior Vision. Rates renewed at no increase and are guaranteed until
1/1/21.
ix. Life and Disability: The City Life and Disability programs with Symetra
are in rate guarantees until 1/1/20. No changes to these plans are
recommended at this time.
x. Employee Assistance Program: The City renewed its Employee
Assistance Program with the incumbent carrier Deer Oaks. IPS/HUB
has received the renewal from Deer Oaks and it is a rate pass for 1 year.
xi. Total Rewards: IPS/HUB recommends that 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.
xii. 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 dedicated healthcare coaches with a cloud based platform to
guide them through the care continuum. The Cariloop pommel 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." (NOTE: All items recorded from 4a were taken directly from
IPS/HUB Advisors 8/30/18 meeting binder)
V. With no further business, the meeting was adjourned at 11:13 am.
Prepared by:
Angela D. Bosma, EBSII