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Minutes 05-18-11 MINUTES OF THE BOYNTON BEACH INSURANCE COMMITTEE MEETING HELD ON MAY 18, 2010, AT 9:30 A.M. IN THE LIBRARY PROGRAM ROOM, BOYNTON BEACH, FLORIDA MEMBERS PRESENT: Pat Sholos, Benefits Administrator Sharyn Goebelt, Director, Human Resources Hanna Matras, Economic Research Analyst Don Roberts, Blue Collar Representative Skip Lewis, White Collar Representative Kalem Madh, Blue Collar Representative Catherine Cherry, Recording Secretary Tim Howard, Assistant Finance Director Human Resources Human Resources Planning and Development Cemetery Code Compliance Utilities City Clerk's Office Finance Willis Representatives: Renee Schindler, Willis Sharyn Goebelt, Human Resources Director, thanked all for coming and opened the meeting at 9:36 a.m. Self-introductions were made. It was noted Police and Fire were not represented at the meeting; however, Ms. Goebelt explained they were invited. Renee Schindler, Willis Representative, explained the medical claims were coming in extremely high and the Committee needed to discuss options for next year. In previous meetings, the City's claims experience had not been good. April 2011 had a 97% loss ratio and that had to do with paid claims. It did not include administration costs or other aspects of the plan. It was projected that claims would increase into the mid-30s next year. Cigna wanted to continue to partner with the City but the 30% increase would affect what the City paid and the dependent coverage costs The dependent coverage increase would be passed on to the employee and the City still has a $5 million deficit. A 30% increase was not acceptable to the City or the employees who have not received a raise in several years. Cigna provided a generous proposal which was to keep rates at the current level with minor benefit changes. The changes were outlined as follows: ~ The Single In Network Hospital Deductible was raised from zero to $100. ~ The Family (three or four members) In Network Hospital Deductible increased from zero to $300 Meeting Minutes Insurance Committee Boynton Beach, FL May 18, 2011 ~ The co-pay for physician services increased from $15 to $20. ~ The CCN specialists In Network co-pay increased from $20 to $30. ~ The non-CCN specialist co-pay increased from $30 to $35. Discussion followed about doctors in the Cigna network. Several employees reported they were misled. When asked if they were in the CCN network, physician offices often respond they were; however, many doctors are contracted with Cigna but not in the approved specialist CCN network. This was costly to employees. ~ The co-pay for emergency room visits increased from $100 to $125. Deductibles do not apply to Emergency Room visits, only the co-pay. If in the ER, and then admitted, the employee does not pay the $125 co-pay. It is applied towards the 20% after the deductible for hospital services. Hospital services are still covered 100% after the 20% deductible. ~ The urgent care center co-pay increased from $50 to $75. Deductibles do not apply. ~ Current Hospital Outpatient services have a $100 co-pay plus 20% of the contracted amount. The new plan proposed the same $100 co-pay plus 20% after the deductible. If the employee had not met the deductible before the service, the employee is responsible for the first $100. ~ Diagnostic tests at a hospital have a 20% co-pay and now have a $100 deductible plus the 20%. Ms. Schindler discouraged employees from having diagnostic tests, whenever possible, at a hospital facility. It was much less expensive to use a freestanding facility for basic x-ray and laboratory services. Ultrasounds would be no charge at freestanding facilities. The out of pocket limits remained the same. Prescription drugs had no changes except for those that were non-formulary drugs which would have a $10 increase. Each insurance company has a list of formulary drugs and they are the ones that fall in the first two tiers. It should be a good fit for most prescriptions. If doctors write a prescription for a drug that is not on Cigna's preferred drug list, the employee will pay a $50 co-pay. Ms. Schindler suggested employees provide their doctors with the list to keep in the file. The listing was available from the Cigna website. Patients can also ask for samples when starting a new drug treatment. The worst that could happen is the physician says no. Different scenarios were provided by Ms. Schindler as contained on her handout. The City had an RFP ready to go, but Cigna indicated they would not guarantee the price if the RFP was issued. 2 Meeting Minutes Insurance Committee Boynton Beach, FL May 18, 2011 Insurance companies have Investment Accounts to use when they want to partner with an entity and they use those accounts and apply them to the plan so there was no increase. There are rules regarding how insurance carriers can use the investment funds. If an RFP was issued and Cigna responded, there would probably be a 20% or 30% increase in the premium and there would still be changes with any carrier. The City's claims experience over the last two years should result in an increase in the current rate. The likelihood of a carrier matching Cigna's rates was slim. Another provider would charge the City more money. Ms. Schindler reiterated the claims are running high with Cigna. Last year Blue Cross lost $1 million in claims on the City. Willis was a large firm with good liaisons, which helped keep the costs down. Ms. Schindler explained it is expensive to set up the plans and most businesses do not want to do business for one year. If the Committee was receptive to the proposal, they could make a recommendation to renew the insurance. Then the City has to meet with all the Unions because each Collective Bargaining Agreement has provisions for insurance. The IAFF has a MOU for the Insurance and Wages articles and if they agree to it, it has to be approved in the budget and presented to the Commission for approval. Ms. Goebelt noted IAFF requested their claims experience be tracked separately. It revealed theirs was the same as everyone else's. It was noted employees would have preferred not to see changes in the prescription coverage because it affects employees and families. There is no contract with out of network providers and the bulk of the cost is paid for by the employee using the services. Life and vision claims decreased. Dental had claims and had competition but Metlife wants the business back. Accordingly, an RFP for dental insurance will be issued. Discussion followed about a prior suggestion to check with the Palm Beach County Consortium and investigate the feasibility of joining in their program, and it was suggested that be an option to review next year. Additionally, the City's pool of employees was being reduced and it was unknown what effect the Voluntary Separation Plan had on the claims experience. It was noted Cigna's plan had two one-year renewal options. There are many factors which affect costs. The general trend was a 12% increase each year. Ms. Schindler commented as the benefit committee meets in the future, they should make a bigger effort to address wellness. The City would receive another $35,000 in wellness funds from Cigna, and initiatives were needed. 3 Meeting Minutes Insurance Committee Boynton Beach, FL May 18, 2011 When asked for a recommendation on the proposal, the Insurance Committee recommended pursuing the proposal. Ms. Goebelt thanked all for attending the meeting. The Union representatives will be notified and the committee will meet again to address wellness. The meeting ended at 10:22 a.m. &tJwd G/wJf Catherine Cherry Recording Secretary 051811 4