Employee Benefit Trust Minutes - 01/24/2005RECEIVED III ��____._. --_
CITY CLERK'S OFFICE
Date
By Time
CITY OF WICHITYA FALLS
EMPLOYEE BENEFITS TRUST MEETING
January 24, 2005
Present: Bill Sullivan, Chair
James Berzina, City Manager
Jim Dockery, Director of Finance
Jan Stricklin, Director of Administrative Services
Gail Garmon, Employee Benefits Coordinator
The meeting was called to order by Bill Sullivan, at 3:10 PM.
Jim Dockery made a motion to accept the minutes of the last meeting as written. Jim
Berzina seconded the motion. Motion carried.
Agenda Items:
Financial Statement
Jim Dockery reported that the plan is starting to see some benefit from the changes that
have been put into effect over the last two years. He reported that paid claims were 21-
22% lower at the end of December '04 ($936,659.) than at the end of December '03
($1,231,376.) and they were almost identical to the paid claims figure at the end of
December '02 ($948,928.). He noted that the plan could end the current year the same as
last year, between six million, three hundred thousand and seven million in paid claims.
He also noted that these figures did not mean that cost have gone down, merely that with
the changes, there had been some cost shifting to the employees and that the next three
months should show more savings with regard to the new deductibles that went into
effect January 1, 2005.
Discussion on Healthcare Advertisements
Jan Stricklin reported that by fax and by mail, she has received several brochures
regarding advertised healthcare at extremely low rates. She said that several employees
had asked her about these advertisements. After checking, it is evident that this is not
health insurance. These companies merely provide members with a card that they can
present to healthcare providers who may or may not give them a discount for cash pay.
There are no claims filed and a member would have to pay the entire cost of the
healthcare at the time of service.
Mr. Berzina noted that it might be beneficial to put this information, along with a list of
questions that one should ask when contacting these companies, in the next Wellness
Letter. That way the employees could decide for themselves just what is or is not being
offered through these advertisements.
Discussion of Provider Discounts
Bill Sullivan asked about the existing discount contract with United Regional Healthcare
System and how the Trust might leverage some additional discount with both hospitals,
United Regional and Kell West. Jan Stricklin explained that she and Marvin Traywick
have a meeting scheduled with the United Regional administrators in early February to
discuss a new discount arrangement. She noted that she believes the discount
arrangement between United Regional and Blue Cross Blue Shield to be 38% as
compared to our present 25 %. Our discount contract with Kell West Regional is 20% but
Kell West is limited in the services that they are able to provide. Another aspect to using
Kell West over United Regional is that the doctor affiliation is not equal. She further
stated that getting an increased discount with United Regional might be difficult since the
trend appears to be moving away from the discounted situations. Jan explained that the
City has had an arrangement with HealthSmart Preferred Care (a group that provides
discounts for companies across the nation through their vast network) for about 6 -8 years.
If she and Mr. Traywick are unable to negotiate successfully with United Regional, she
will ask HealthSmart to enter into the negotiations on the Trusts behalf.
Bill Sullivan asked where the City ranks with United Regional in comparison to their
other customers (the Trust paid United Regional $1,803,224.42 in 2004.) Jan explained
that PPG and Cryovac are larger customers. Bill Sullivan then noted that before the
merger of Bethania and General Hospital, the City was an owner /partner with the General
Hospital and should that not come into play where our negotiations are concerned. Jan
Stricklin explained that it may not have any bearing on the outcome. She further
explained that she would hope to have them look at the City the same as hospital
employees since it technically is still a City /County hospital.
Bill Sullivan inquired as to our discount arrangement with Clinics of North Texas. Jan
told him that the discount amount is 15% (the Trust paid Clinics of North Texas
$763,189.99 in 2004) and that BCBS discount with them is 18 %.
Regarding our prescription drug coverage, Jim Dockery asked if Eckerd Health Services
(our current vendor) was the best we could find. Jan explained that so far, yes. She then
explained that the only place to get better prices on prescription drugs is through Canada
and the current laws prohibit us from getting them from Canada.
Bill Sullivan noted that by the April, 2005 Board meeting, there should be definite
information concerning the United Regional discount contract. Jim Dockery expressed
his feelings that if BCBS can get a 38% discount from United Regional and we cannot,
then the City and the City employees are paying United Regional 13% more than those
covered by BCBS. Bill Sullivan expressed concerns that with United Regional's recent
announcement of a 10 -12% increase, even if we could negotiate an equivalent discount, it
would be eroded by the increased hospital costs.
Old Business
Jan Stricklin reported that a notice had gone out to the Mayor and Council regarding their
ability to participate in the City's health plan and after reading the notice, Mayor Altman
felt that the wording probably needed some clarification. After discussion, it was decided
that for clarification purposes, the word "serving" should be replaced with "completing"
to make clear the Board's intentions as to when the coverage would end for those wishing
to sign up.
Jim Dockery made a motion to amend the wording of the memo. Jan Stricklin seconded
the motion. Motion passed.
Jim Dockery then presented the information that had been forwarded to him from ICMA
regarding the new medical savings program discussed in the January 7, 2005 Board
meeting. He noted that the program would be voluntary, non - mandatory and that the City
will not participate. If adopted it will be open to all employees. Jan Stricklin said that
the program will be of particular interest to fire and police Civil Service employees to be
able to put a portion of their lump sum vacation and sick pay into the program a the end
of their employment. Jim Dockery again stressed that this program will not interfere with
Texas Municipal Retirement System contributions. Jim further explained that the City
could limit how the program is administered with regard to the vacation and sick leave.
In other words, it should apply only to those funds available at the time of separation of
employment.
Rules for the program would be:
1. Open enrollment at the end of each year with contributions to begin January 1 of
the following year.
2. New employees would have 60 days to enroll. After 60 days, they would be
required to wait until the next enrollment period.
3. Once electing to enter the program, the amount and the enrollment would be
irrevocable.
4. Lump sums would only be allowed at the end of employment.
Jan Stricklin stressed the need to be certain that all employees fully understand that
enrollment is irrevocable.
New Business
Jim Dockery asked that the Board also explore the possibility of adopting a flex spending
plan that employees could use for medical expenses while still employed. He asked that
the City consider using an outside company to administer the program rather than the
City doing its own administration. The Board asked Jan Stricklin to look into companies
administering flex spending accounts and have a representative(s) meet with the Board at
a later date.
The meeting was adjourned at 4:45 PM.
Respectfully submitted,
A- J, AxeIyaat�
Gail Garmon
Employee Benefits Coordinator