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Employee Benefit Trust Minutes - 11/11/1999 City of Wichita Employee Benefits Trust Meeting November 11, 1999 Present: Jim Berzina, City Manager Greg Humbach, Chair Jim Dockery,Finance Director Jan Stricklin,Employee Benefits Trust Administrator Gail Gannon,Employee Benefits Coordinator This was a continuation of the Employee Benefits Trust meeting held Wednesday, November 3, 1999. Jan Stricklin again presented to the Board graphs showing where the spent for health cost for the 1998-99 year was spent. She also presented the claims comparison figures showing that each month from October 1998 through August 1999, the figures remained about the same of between$250,000.00 and$350,000.00 per month and that the expenditures rose to over$500,000.00 for the month of September with the in-hospital care accounting for over half of the money spent. She again outlined her proposed changes to premiums, out of pocket totals,the addition of Plan D and changes to the current prescription program . Mr. Berzina: Will Plan D really help alot? Jim Dockery: I can't see that it will as it is. I believe we need to add a deductible to Plan D. Jan Stricklin: I am proposing that we change the the current prescription program so that anything up to$500.00 would be as we have it now(50/50 or 80/20 at retail and current co-pay amounts for mail order)with anything over$500 going to a 20/80 split (20%City- 80%employee). Jim Dockery: Do you think as many as 50%of the people would go to Plan D. Mr. Berzina: More than 50%would. Greg Humbach: We can try Plan D and see what happens. Jan Stricklin: We will need to tell the employees of the problems and tell them that there will be additional increases for the next three years. Jim Berzina: Let's go over the prescription changes again.. Jan Stricklin: Anything up to$500.00 would be as we currently have it. That is: 50/50 or 80/20 over the counter,current co-pays for mail order; then anything over$500.00 (retail and mail order) would be 20/80. The City would pay 20%, the employee 80%. If you don't want Plan D,we could stay with A,B,&C as we now have it and raise premiums but that would only raise around $800,000.00. Also many would have to leave the plan altogether and Plan D was designed so that those people would still have some measure of coverage. Greg Humbach: We need a motion. Jan Stricklin: I make a motion to increase A,B,&C as outlined in Proposal 2, and change the prescription plan to anything over$500.00 be a 20/80 split. There was much discussion on the rising cost of prescriptions and leaving the prescription program as is and raising premiums only. Jim Dockery: Either way the City is going to have to increase by another$500-600 per employee. I feel we need to get formal proposals on going fully insured to compare and to show to the Council. Jan Stricklin: The time it would take to do this would prevent these proposed changes from being able to go into effect by January 1. We have gotten proposals in the past and they were not near as competitive as what we are doing now. Greg Humbach: Have we considered going to an HMO concept? Jan Stricklin: Yes,but it would prevent the employee from having any choice. Greg Humbach: Could we join a corporate HMO? Jan Stricklin: Only Harris and then we would have to go out of town for any hospital care. Go to the Dallas area. The PPO(Plan D) is one step from an HMO. Jim Dockery: It's possible we could get maybe 70%of the needed funds from the General Fund. Jan Stricklin: We did a quick study and 56%of the September expenses of over $500,000.00 went to in hospital care. I am going to meet with the hospital board to negotiate rates. We won't save money from going fully insured. We need to take steps to cut costs here. Jim Dockery: I still feel we need to look at other proposals. Jan Stricklin: We have had a broker(Cassie Stennett)take proposals in the past. Jim Berzina: Do we actually have those proposal figures? Jan Stricklin: Yes, we do. Also, I have met numerous times with local companies and the cost was just too much more than what we spend now. They can always give us a good"buy in" cost for the first year but it will be more from then on. Jim Berzina: Could we be the Administrator of a plan with someone like Blue Cross Blue Shield? Jan Stricklin: No they won't allow it because their administration cost is around $200,000.00 per year, plus$500 per year,per employee. Greg Humbach: Well,the Council is going to want proposal figures when we ask for more money. Jim Berzina: What about TML? Jan Stricklin: They gave us a proposal last year of$3,800 per employee from the City and I believe it was $168.00 from each employee. If you wish, I will get another proposal from TML. Jim Dockery: We need to do that,but it will take time. We need to act on something now. I can put this to the Council the first part of December. We may have enough in the General Fund to make up what we need for the overage from this past year. We can shift it from one department toanother. But,this will be money we have to spend that could have been a savings. Isn't there a motion? Greg Humbach: Yes,there is a motion but it has not been seconded. Jan Stricklin: If we intend to start January 1,there is a lot of work to be done. We need to get with RIMS to make the necessary changes to our adjudication system. We also have to have at least sixty-five meetings with the different departments to explain this to the employees. Then there are all the necessary payroll changes that will have to be done. Jim Berzina: Let's ask TML for an average rate. That will eliminate the need for other proposals. Greg Humbach: I think we should approve the premium increases,approve Plan D, and approve the prescription program changes now. If we get a better rate from TML, we can change again. Jim Dockery: Plan D needs to have a deductible. I can't see making it so attractive that everyone goes to Plan D. It might end up costing us more. That we don't know. Jan Stricklin: Alright. Plan D with a$200.00 deductible and no family deductible. $500.00 OBGYN deductible, $500.00 Emergency Room deductible, $500.00 deductible for children 6 and under. Prescription changes as discussed. Greg Humbach: We still need a second. Jim Dockery: Second. Greg Humbach: Motion carried Any further discussion. Meeting adjourned at 1:10 PM.