CUPE EWBT Update February 24, 2020 1
Today’s agenda ▪ Trust update ▪ Benefit plan review ▪ OTIP update ▪ Canada Life update ▪ Questions? 2
Trust update Overview of recent developments 3
Impact of negotiations Memorandum of Settlement of Central Terms, 2019-2022 ▪ Benefits plan costs held to one per cent increase in each of the three years of the agreement: ▪ September 1, 2019: 1% (5,544.01 per FTE) ▪ September 1, 2020: 1% ($5,599.45 per FTE) ▪ September 1, 2021: 1% ($5,655.45 per FTE) 4
2019 CUPE EWBT benefit survey results ▪ In June 2019, Trustees contacted members for opinions on the CUPE EWBT benefits plan and potential areas of improvement ▪ More than 11,000 members responded ▪ 71.4% of members who responded agree the CUPE EWBT plan met their needs and the needs of their family ▪ 70.9% believe that benefits in the plan were current and up-to-date ▪ 78.3% are satisfied with the plan’s prescription drug coverage ▪ 77.5% are satisfied with the plan’s basic dental coverage 5
2019 CUPE EWBT benefit survey results ▪ Survey question: Which benefit should be improved, should there be an opportunity to do so? ▪ CUPE EWBT members identified the following priorities. ▪ Paramedical services → 26.6% ▪ Vision care → 18.0% ▪ Major dental → 17.0% ▪ Orthodontics → 9.6% ▪ Prescription drugs → 8.7% ▪ When determining plan design changes we also considered the following: ▪ Providing greater access to benefits for our members ▪ Comparison of CUPE EWBT plan to other plans in the sector ▪ Plan member usage to see where members were consistently spending over the plan limits for particular expenses 6
Benefit improvements coming March 1, 2020 CATEGORY Before March 1, 2020 As of March 1, 2020 Minimum hour requirement for 17.5 hours regularly 15 hours regularly scheduled 4% member premium share scheduled work hours work hours (Health & Dental) Major Dental 60% coverage 70% coverage Dentures 60% coverage 70% coverage Hearing Aids $1,000 / 60 rolling months $2,500 / 24 rolling months Audiologist / Speech Therapist $500 / benefit year $1,000 / benefit year Physiotherapist / Occupational $1,500 / benefit year $1,750 / benefit year Therapist / Athletic Therapist Osteopath $500 / benefit year $750 / benefit year Psychologist / Registered Marriage $750 / benefit year $1,500 / benefit year or Family Therapist / Registered Social Worker / Registered Psychotherapist Chiropractor $500 / benefit year $750 / benefit year CPAP Machines Coverage up to Reasonable & Up to $2,500 / benefit year Customary (R&C) limit beyond the Assistive Devices Program reimbursement Scoliosis Braces Coverage up to R&C limit Remove R&C limit Eye Exam $120 / 2 benefit years 1 exam / 2 benefit years; no maximum 7
Retiree benefits update ▪ In 2015, CUPE, the Ontario government and the Council of Trustees’ Associations agreed to adopt a province-wide benefits plan for eligible CUPE members in the education sector, including retirees ▪ To be eligible, retiree must have been (and continue to be) a member of a Board retiree benefits plan as of February 28, 2018 ▪ Initial 2018 start date was postponed due to implementation/contract issues ▪ CUPE/OSBCU and Crown Trustees Associations are negotiating the terms of the Retirees Participation Agreement 8
Funding for Life and AD&D during unpaid medical leave ▪ Prior to September 1, 2019, CUPE EWBT members on unpaid medical leave, pending Long-term Disability (LTD) and pending WSIB, paid 100% of their Basic Life and Accidental Death and Dismemberment (AD&D) premiums after the 60-day grace period ▪ Effective September 1, 2019, the CUPE-EWBT funds Basic Life and AD&D insurance for up to 24 months for members on unpaid medical leave (pending LTD and pending WSIB) ▪ The Trust now funds coverage for up to 24 months – from when paid sick leave ends 9
Funding during pregnancy and/or parental leave ▪ To align with recent changes to Ontario’s Employment Standards Act, members can maintain benefits coverage while on pregnancy and/or parental leave of up to 18 months (formerly 12 months) ▪ The usual cost share (4%, 50% or 100%, depending on regularly scheduled work hours) still applies 10
CUPE EWBT Appeals ▪ 56 Appeals were submitted from Jan 1, 2019 to Dec 31, 2019 ▪ Types of Appeals include: ▪ 14 Appeals – Benefit eligibility (member missed enrolment deadline, member did not elect coverage when enrolling, member was declined health coverage under “late applicant” process) ▪ 10 Appeals – Dental appeals (above benefit year maximum, uncovered dental expenses, benefits pre-approved by prior carrier) ▪ 6 Appeals – Reasonable and customary charges for medical devices/items and paramedical practitioners ▪ 4 Appeals – Drugs (highly specialized drugs, drugs not covered and over-the- counter medication) ▪ 4 Appeals – Coverage above benefit year maximum ▪ 2 Appeals – Laser eye surgery (ongoing payment of laser eye surgery performed prior to establishment of CUPE EWBT) 11
Administrative process: CUPE EWBT communications with CUPE Locals representing members 1. Member with a benefit claim or administration issue should first contact Canada Life, Chubb or OTIP, individually or with a CUPE Local representative. 2. Member, or CUPE Local representative on member’s behalf, who has difficulty resolving an issue after contacting Canada Life, Chubb or OTIP may then contact the CUPE EWBT. 3. CUPE EWBT Benefits Manager or designate will investigate and respond. 4. Authorization to Release Benefits Information – Member must sign; Local submits to CUPE EWBT 12
Benefits plan review Plan experience and other metrics 13
Membership at Dec 31, 2019 ▪ 64 school boards ▪ 52,386 members; 46,579 have elected benefits coverage Benefits Coverage No Benefits Coverage Total Work Status 4% 50% 100% 4% 50% 100% 42,754 403 239 27 626 3,810 47,859 91% Active LTD - Approved 1,113 5 168 164 5 100 1,555 3% Other 1,734 25 138 598 46 431 2,972 6% Total 45,601 433 545 789 677 4,341 52,386 100% 14
Funding ▪ Trust receives $5,489 per FTE (FTE count established semi-annually) up to September 1, 2019 ▪ 1.0% increase effective September 1, 2019 (i.e., $5,544 per FTE) ▪ Total funding received from January to December 2019 ▪ Plan is in good financial situation, however, Trustees are aware of how fast benefit costs are increasing relative to funding Funding ($ in millions) FTE Funding $247.2 Member Contributions 12.3 Investment Income 2.5 Total Funding 262.0 15
Funding and expenses (January 1 to December 31, 2019) Assets Funding $262.0 Unallocated Reserves Expenses 11% Taxes Trust Health and Dental Claims (Canada Life) $186.4 8% Expenses Life Insurance Premiums (Canada Life) $9.9 2% Global Assistance (Canada Life) $0.2 Other Charges and Premium Taxes (Canada Life) $10.7 Claims and Premiums AD&D Premiums (Chubb) $0.7 79% Other Trust Expenses $1.4 OTIP Fees $4.2 Taxes $19.4 Operating Surplus $29.1 Unallocated Reserves (beginning) $11.0 Unallocated Reserves (end) $40.1 16
Required trust reserve ▪ The terms of the Trust require a minimum reserve of 8.3% of total costs ▪ Anything lower, and the Trustees are required to cut plan costs or increase member funding ▪ The recent collective agreement requires a minimum reserve of 25.0% of total costs until the end of the contract (August 31, 2022) ▪ If it gets too high, the government may try to reduce the FTE amount or not increase it 17
Monthly cost and funding Total Monthly Costs and Funding January 2019 - December 2019 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec All Health Dental Basic Life and AD&D Premium Expense and Premium Tax Pooling Charges Total Benefits Funding 18
Benefits – Health and Dental Amou ount Paid id vs s El Elig igib ible le by by Benefit it For the period Jan 2019 - Dec 2019 $90 Millions $83.1 $80 17.3% $70 $66.2 0.0% $68.7 $66.2 $60 $50 $41.4 4.1% $40 $39.7 $30 $20 $12.3 4.2% $10 $11.8 $0 Dental Drug EHC Vision 19
Benefits – Health and Dental Top op 10 10 Dr Drugs by Am Amount Paid aid $2.0 Millions 2.9% 2.9% $1.5 $1.0 1.4% 1.4% 1.1% 1.1% 1.0% 1.0% 1.0% 1.0% $0.5 $0.0 The percentages labeled represent the percentage of total drug claims paid. Remicade Humira Stelara Janumet Revlimid Jardiance Ozempic Enbrel Saxenda Symbicort 20
Benefits – Life and AD&D Life and AD&D Volume of Coverage (in millions) Basic $4,081.4 Supplementary $467.9 Member Optional $319.8 Spousal Optional $180.7 Child Optional $79.8 21
Administration processes Eligibility change, New hire process, Beneficiary designation, Late applicant, Leave status, Life conversion and T4A slips 22
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