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Minutes 07-19-11 MINUTES OF THE BOYNTON BEACH INSURANCE COMMITTEE MEETING HELD ON JULY 19, 2010, AT 9:00 A.M. IN THE LIBRARY PROGRAM ROOM, BOYNTON BEACH, FLORIDA MEMBERS PRESENT: Pat Sholos, Benefits Administrator Human Resources Julie Oldbury, Director, Human Resources Human Resources Catherine Cherry, Recording Secretary City Clerk’s Office Danielle Crissinger Golf Course Tim Howard Assistant Finance Director Robert Kruse Fire Department Kalem Madh Utilities Chuck Magazine Risk Management Hanna Matras Planning and Development Lori Osborn SCRWTDB Marisela Sanchez Schoolhouse Children’s Museum Willis Representatives: Renee Schindler, Willis Pat Sholos , Benefits Administrator, opened the meeting at 9:08 a.m. Self-introductions were made. Renee Schindler , Willis representative, explained the City went to market for Dental renewal because Humana came in with a 10% increase. Willis tried negotiating with them to no avail. The City published an RFP for a dental carrier to provide identical benefits and cost saving alternates. Six carriers responded to the RFP and the top two were depicted on the handout because they were the most competitive. Humana responded to the RFP and offered an 8% renewal. They offered an alternate plan design for 2% under the current rate, but the in-network fees was the out-of-network reimbursement rate and this equated to the individual paying a lot of money out of pocket. When a carrier is willing to pay a non-provider in-network fees, all they are doing is paying a vendor who has no contract with them at all, the same fees they would pay to the in-network providers. In Ms. Schindler’s opinion, the City would not be happy with this plan. MetLife was a prior provider for the City. They proposed two different rate options. It was the identical contract to what they offered two years ago, which was significant because when Humana took over for MetLife, there were many services missing from the Humana contract that MetLife had in their contract. Willis had to fight individually with Humana to get them paid. 1 Meeting Minutes Insurance Committee Boynton Beach, FL July 19, 2011 MetLife has the most comprehensive dental coverage Ms. Schindler was aware of after 20 years in the industry. MetLife offered a 12-month and 24-month rate guarantee. Both proposals were still less than the current proposal with Humana. Delta Dental was competitively priced and they offered two different plans. One exactly matched the current plan and the other had a reduction in benefits and came in under 10% of the current plan. Both paid at the 90% rate. One item of significance was Delta Dental has three tiers of dentists: Delta, Premier, and the out of network. The Delta network was a much smaller network and was the only one paid as in network. The Premier network, although contracted, was contracted at a much higher rate, so there was no discount. The Premier and non-contracted providers are paid as out of network which is more out of pocket cost. Blue Cross responded with a similar plan design but their deductible was $25 and included cleanings three times per year instead of four. Their rates ran at 8% to 16% above the current rates and was not considered. Cigna provided quotes and was at the same rate as the current plan or 3% above on a 24-month rate guarantee. If one needed a crown, when using a carrier such as MetLife, the cost of the crown and the other needed services were bundled together. With Cigna, nothing was bundled so the individual pays separately for each step of the process. It was an ala carte process. Although the rates were competitive, Willis recommended not considering this option. Another carrier who provided quotes was United Concordia whose proposal came in at 11% above the current rate for the same plan design. Their network was not as strong. Willis recommended MetLife for several reasons: the City was happy with them in the past; they have the most comprehensive contract; and they had competitive rates. If going with Met Life, which proposed a 5% cap on year two, Ms. Schindler would try to negotiate the rate. There was agreement to review it at the end of the first year. Mr. Howard commented MetLife and Delta came in at -7% and he suggested Ms. Schindler make a note that the City checked the figures. He did not know how they could be the same when there was a $5,000 difference to the current rate. The figures may need to be rounded because there would be a question raised. Mr. Magazine recommended the Commission be made aware of the issues with Humana as they pertained to the specialists. Discussion followed most contracts were closed contracts. If a service was not specifically listed in the contract, it was not covered. MetLife has an open contract, which means if service was not listed, but the provider makes a good case, they will pay the claim. With Humana, the contract was to match identically, but the contract did not match because the contract was not filed with the State. 2 Meeting Minutes Insurance Committee Boynton Beach, FL July 19, 2011 It was suggested the Commission be made aware there were complaints with Humana, the City went to bid on the programs, responses were received, and these were the best three. The participants unanimously agreed to move the MetLife proposal forward with the 12- month rate guarantee. Cigna negotiated strongly to keep the City‘s health insurance business. Ms. Schindler reported there would be minor plan changes, but no change to the rates. Mr. Magazine noted there have been problems with Quest labs. Employees have been going to Quest labs and were charged a fee. Quest claimed they were not being paid, or were not paid in a timely fashion. It was thought not all the tests performed were necessary, although the physician ordered them. Ms. Schindler explained she was aware of the issue and was bringing the matter to a higher official at Cigna. Vision benefits were discussed and Ms. Schindler explained the City did not go out to RFP for vision because Humana had a 2% reduction in rates. The City would go out to bid next year as the contract was for two years. She noted the single-rate for vision was slightly reduced The City negotiated a 10% reduction for Life Insurance and 10% on the Supplemental Life and Supplemental Dependent Life insurance rates. Accordingly, the City would renew with Hartford. The portion the City pays was also reduced. Making the transition to MetLife was discussed. In the past, the data was transferred via spreadsheet to Humana but the information was corrupted. Ms. Schindler commented it may be necessary to provide hard copies of the information. Mr. Magazine inquired if there was any discussion about establishing a clinic for physicals. A clinic had been a service he had been interested in establishing for some time and he became aware Cigna established one for the Palm Beach County Sheriff’s Department. Ms. Schindler responded she would look into the matter, but it was very expensive. She acknowledged by being fully insured, there could be a savings in the carrier being willing to reduce rates and help the client reach a certain point of claims savings, but a clinic was only one component. Other components had to do with engaging the employees and incentives. A clinic could be established through another vendor while still using Cigna, but they would have to issue and RFP and explore it. It was noted the City had not set aside space or funds to establish one. The City currently utilizes the Delray Clinic. Mr. Magazine was aware there were a number of clinics established in Broward County and the feedback was very good. He contended there could be no impact on health care costs unless a clinic was used. Clinics have also become Wellness Centers and most were free and included pharmacy services. There was an incentive to the concept and it provided big savings for family plans. 3 Meeting Minutes Insurance Committee Boynton Beach, FL July 19, 2011 Mr. Magazine discussed health plan audits as it pertained to individuals who were not on the plan using the insurance. A dependent audit was conducted about two years ago and he questioned whether it would be done on any kind of a regular basis. He pointed out Palm Beach County just conducted one and would be prosecuting individuals. Ms. Schindler acknowledged ex-wives have been kept on the plans and those employees were repaying the City about $10,000. Divorce decrees would have to be provided. Whenever there is a life event, employees have to make a change to their benefits. Mr. Magazine suggested an audit be conducted every four or five years. Confidentiality was an issue. Ms. Schindler commented that if the Committee wanted to discuss the clinic and other options, they would facilitate the discussions. The meeting was closed at 10:00 a.m. /l. /'. . I L{l-lltt:~ f(J L!ivJLlr Catherine Cherry Recording Secretary 072011 4