Employee Benefit Trust Minutes - 05/20/2005 1
CITY OF WICHITYA FALLS
EMPLOYEE BENEFITS TRUST MEETING
May 20,2005
Present: Bill Sullivan, Chair
Darron Leiker, Interim City Manager
Jim Dockery, Director of Finance
Gail Garmon, Employee Benefits Coordinator
Cassie Stennett, EBT Broker of Record
The meeting was called to order by Bill Sullivan at 2:30 PM..
Agenda Items:
Approval of Minutes:
Bill Sullivan made a motion to accept the minutes from the Board meetings of April 25,
April 28, and May 5, 2005. Darron Leiker seconded the motion. Motion carried.
Old Business:
There was no old business to discuss.
New Business:
Cassie Stennett, the Trust's broker of record was present to meet new Board member,
Darron Leiker and to discuss with the Board her role with the City of Wichita Falls
Employee Benefits Trust. She explained the she was instrumental in helping the City set
up the self-funded, self-administered concept as far back as 1986 and that she had been
the broker of record since that time bringing to the plan several programs such as the
prescription coverage benefit,the stop loss reinsurance and the outside PPO.
Bill Sullivan inquired as to whether or not Cassie was on contract. She stated that she is
not on contract; that she is paid through commissions from the prescription card
company, the stop loss reinsurance company and the outside PPO.
Cassie further stated that she had in the past provided prototypes for new plan documents.
She stressed the fact that the current plan document needs to be addressed and revised
since numerous changes have been made over the last couple of years and all of those
changes may not be addressed fully in the present document.
Cassie went on to explain what it might cost the City to switch from paying claims in
house to having them paid by a third party administrator. She estimated the cost to be
around $200,000.00 annually and using an actual carrier, such as Blue Cross, would be
around $400,000.00 annually. Jim Dockery expressed his concern that the Trust may not
be getting the maximum discount arrangement that it would get by utilizing third party
administration. Cassie explained that the City is getting as much in the way of discounts
under the current arrangement as it would get elsewhere, due to the fact that there is no
competition in the Wichita Falls market.
Bill Sullivan asked whether there was anything else that the Board could do or
recommendations that she could make for the Board to be able to improve the Plan both
from the employee and from the City's standpoint. She stated that since the hospital costs
are the highest component of costs to the plan, that the Board, in some way, needs to keep
trying to negotiate a better discount situation with the local hospital administrators.
Another area of significant cost to the Plan is the prescription coverage. Cassie stated
that one of her suggestions was to implement a deductible on the prescription coverage.
Jim Dockery pointed out that most of the savings realized in this way would actually be
shifting more of the cost to the employee, thereby saving the plan money, but this was an
avenue that the Board did not wish to take. There was then some discussion about the
possibility of using even lower copays for the use of generic drugs as well as higher
copays for brand drugs, which would see more of a savings to the employee and to the
plan. Cassie explained that there are also numerous other programs that the Board could
implement, particularly in the specialty drug market, to generate more savings on the
prescription coverage.
Cassie then went on to show the Board that the Plans claims are currently running at 70%
of what was expected, and budgeted, for the current plan year. This would mean that
there should be some money in reserve at the end of the budget year, if the plan stays on
this course.
Bill Sullivan expressed a need to know how this city compares, as far as City
contributions to the plan, to other cities of comparable size and tax base and how our plan
compares to those same cities. Also, how our plan compares to that of the County,
School District, etc. It was stated that Marvin Traywick would be the one to get this
information for us as he is local and would have access to this information.
Jim Dockery wondered if they, as a Board, were actually making changes that would
benefit the employees and give them a better benefit, or merely just passing the increased
costs on to the employees. He feels that for the last few years, the Board has been
perceived as doing just that, which he would like to see change. He cited the possible
implementation of a Flex Spending Account as being one of those things that would
benefit both the City and the employee.
Bill Sullivan discussed the fact that over the years, there had been so many changes and
adding of additional plans, that he wonders if it might not be out of proportion and in
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need of a complete revamping and the possible elimination of at least one or two of the
current plans.
There was then discussion of the Flex Spending Account program and how we might find
one that would fit our needs. Cassie explained the elements of a Flex Spending Account
and how they work. She said that she can and will get a representative to present a
proposal to the Board. Bill Sullivan felt that this kind of program would be a win-win
situation for the City and the employees.
The Board then discussed the need for education of the employees on their benefits and
what they themselves can do to get the most from their benefit package. Also discussed
was the need to be able to get more detailed and customized reports from our claims
adjudication system. It was decided that Cassie and Gail will schedule a conference call
with Trizetto, our software vendor, and work out which reports need to be customized.
These reports will give the Board a much clearer idea of just where the monies, by plan,
are being spent.
The Board discussed with Cassie the recent appeal of medical procedures being
administered to a covered dependent. It was decided that the Board would get a third and
final opinion on the case before making a definite decision.
It was decided that Cassie would meet again with the Board on June 17`h. At that time
she will present proposals for the prescription card coverage and for a Flex Spending
Account program.
The meeting was adjourned at 4:50 PM.
Respectfully submitted, •
Gail Garmon
Employee Benefits Coordinator