Early-Retiree Medical Insurance 2014 Open Enrollment November - PowerPoint PPT Presentation

Early-Retiree Medical Insurance 2014 Open Enrollment November 14/15, 2013

Agenda 2  County Risk Management Transition from RESCO to County • Medical Insurance Background • Financial Performance & Rates • Plan Selections • Enrollment and Eligibility •  Summary of Health Plan Networks and Services • Kaiser • Anthem Blue Cross • Stanislaus County Partners in Health  Health Exchanges • Alliant Employee Benefits  Individual Questions and Answers

Change from RESCO to County Administration 3  County is plan fiduciary and assumes all financial risk Any errors in plan administration (eligibility, etc.) are paid by County •  StanCERA transferred administrative responsibilities to RESCO  County worked with RESCO over last two plan years to understand administrative processes and potential liabilities  County and RESCO did not agree to administrative fee structure  RESCO relinquished administration of the program on October 28, 2013; change effective January 1, 2014  County Risk Management Responsibilities Open enrollment, eligibility, billing, service assistance for working with • participants and health plans

2013 Monthly Rate Comparison Anthem Blue Cross EPO – Subscriber Only Count unty RESC ESCO RESC ESCO Rates es Non on-Mem ember ber Membe ber Base Rate $662.72 $662.72 $662.72 Administration $13.25 $19.88 $19.88 Non-Member Fee $0.00 $10.00 $0.00 Wellness $0.00 $3.00 $3.00 Total al Mont nthl hly $675. 75.97 97 $695. 95.60 60 $685. 85.60 60 Annu nnual Fee ees Abov bove Bas ase Rat ate $159. 59.05 05 $394. 94.58 58 $274. 74.58 58

Change from RESCO to County Administration 5  No changes to the health plans offered in 2014 • Anthem Blue Cross, Kaiser and Stanislaus County Partners in Health • EPO and High Deductible Health Plan options for each plan  StanCERA retirees can still have premiums deducted from pension benefit  RESCO continues to provide medical plans for 65 or older participants, as well as non-medical benefits for pre-65 participants • Dental • Vision • Ancillary programs

Stanislaus County Medical Insurance Program 43 Special Average Participation District Totaled 3,463 Enrolled Employees Members in 2012 385 StanCERA 1% Retirees 11% 28 COBRA Employees 5,162 dependents 1% also covered Total lives = 8,625 3,007 Active County Employees 87%

Cumulative Annual Health Insurance Rate Inflation 2005 to 2013 100.0% Cumulative 77% increase 90.0% from 2005 through 2011 (average 11% per year) 80.0% 12% optional 9.9% increase to stay fully-insured 70.0% 6.4% $5.9 million 7.5% increase in total 60.0% premiums 14.1% 50.0% 13.8% 40.0% 30.0% 2.8% 22.8% 20.0% 10.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013

Based on EPO/HMO plan

2012 Strategic Initiatives 10  County staff worked with consultants to proceed with two specific strategies for implementation starting January 2012 Develop a new non-profit health plan alternative focused on 1. access to high quality care with greater long-term financial stability (Stanislaus County Partners in Health) Prepare a self-insurance model to combine risk pools and 2. long-term financial management for each of the County’s medical plans, and to eliminate advantages/disadvantages due to adverse selection

Medical Benefits Program Financial Performance 11 Significant savings in 2012 & 2013 compared to total 1. costs of remaining in fully-insured program Medical premium rates were set too low in 2012 & 2. 2013 and have generated a deficit in program funding

Annual Medical Insurance Program Cost Summary 2010-2012 $60,000,000 2012 Self-Insured Costs were $5.5 million lower than Fully-Insured option $50,000,000 $52,040,750 Rates were set too low and generated a $3.5 million deficit in 2012 $46,358,143 $46,515,814 $43,047,247 $42,434,955 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 2010 2011 2012 2012 2012 Fully Insured Self-Insured Actual Self-Insured Option Expenditures Revenues - Cost projection for 2012 Self-Insured program based on consultant report as of April 25, 2013 - Total program costs include all categories of plan participants (County employees, early retirees & special districts) - Cost projections for 2010, 2011 and 2012 Fully-Insured Option based on common enrollment census taken July 2011 adjusted downward by 3.6% to reflect total average enrollment in 2012 self-insured program

Stanislaus County 2013 Plan Year 13  2013 Deficit Projected to be Similar to 2012  $44,500,000 Projected Revenue  $48,000,000 Projected Expenditures  $3,500,000 Projected Deficit in 2013  Combined 2013 and 2014 deficit projected to reach $7-8 million by end of 2013 calendar plan year

Development of 2014 Rates 14  New actuarial consultant evaluated program performance and prepared 2014 insurance rates  Average 27.6% increase for all three plans combined • 22.7% increase for Stanislaus County Partners in Health • 36.2% increase for Kaiser • 37.7% increase for Anthem Blue Cross

Cumulative Annual Health Insurance Rate Inflation 2005 to 2014 Fully Insured 120.0% Trend Option 27.6% 100.0% 80.0% 9.9% 3.75% 0.0% 6.4% 7.5% 60.0% 14.1% 13.8% 40.0% 2.8% 22.8% 20.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Development of 2014 Rates 17  Rates established based on underlying cost structure of each individual health plan  Actuary sets rates assuming 100% of the population enrolls in each plan • Prevents adverse selection from providing an advantage or disadvantage to any one plan

2014 Medical Insurance Cost Projection Based on Plan Enrollment $70,000,000 $68,700,000 $65,000,000 $65,100,000 $60,000,000 $57,500,000 $55,000,000 $51,400,000 $50,000,000 $45,000,000 $40,000,000 Projected Baseline 100% Enrollment 100% Enrollment 100% Enrollment (current enrollment) SCPH Anthem Blue Cross Kaiser

19

Step 1 – Select Your Health Plan 20 Evaluate provider networks and services

Step 2 – Select Your Benefit Design 21  EPO or HDHP options available for all three plans  Benefit design is same for all three plans • Only exception is out-of-network option with Anthem HDHP EPO HDHP • Similar to a traditional HMO (High Deductible Health Plans) • Higher monthly premiums  Annual deductible $1,250/yr for subscriber only and $2,500/yr for Subscriber +1, 2 or more  Lower monthly premiums  Coordinate with Health Savings Account

Comparing EPO and HDHP Co-Pay Schedules EPO HDHP  After you pay HDHP Office visit $20 $20 deductible, Outpatient Specialist $20 $20 employee begins to pay Urgent care $20 $20 for services on a co-pay Preventative $0 $0 schedule. 30-day generic Rx $10 $10  Some co-pays Emergency room visit $50 $100 are the same, some are Hospitalization $0 $250 different 30-day brand name Rx $20 $30 between HDHP & EPO Ambulance $0 $100 22

Stanislaus County Medical Benefit Enrollment Step 1 Select Your Health Plan Step 2 Select Your EPO EPO EPO HDHP HDHP HDHP Benefit Design Step 3 - Select Your Coverage Level* $785.54 $829.26 $982.53 Subscriber $614.28 $734.50 $930.36 $1,658.46 $1,965.07 $1,228.55 $1,469.00 $1,571.07 $1,861.26 Subcriber+1 $1,658.56 $1,983.15 $2,120.97 $2,512.69 $2,238.96 $2,652.84 Subscriber+2 or more If you had a HSA Account through Wells Fargo as an active employee, that account is yours when you retire. If you are just enrolling in a HDHP, it is up to you to open your own HSA *monthly rates Account. Wells Fargo does offer individual HSA Accounts for a nominal fee.

Enrollment and Eligibility 24  County evaluating prior administrative policies for enrollment and eligibility from RESCO and StanCERA  Early-retiree participants may relinquish plan eligibility if you voluntarily leave the medical insurance program • Exceptions granted for qualified group-sponsored plans  Health Exchange (Covered California) is a new option that has not been previously addressed in any administrative policies • County to prepare updated administrative policy manual by February 2014; will include guidance on early-retirees who leave the County program for the health exchange and then request to return to the County program during open enrollment • Initial enrollment in Covered California is available up until March 31, 2014

Enrollment and Eligibility 25  Must have enrollment materials submitted to Risk Management no later than 5:00 pm on Friday, November 22 nd  Must submit documentation to confirm dependent eligibility; deadline extended to Friday, January 10 th  Enrollment form includes authorization to use automatic deduction through retirement check from StanCERA  Direct pay option is available, payment due by the 1 st of each month, insurance will terminate if not paid within 30-days of due date

Risk Management Team 26 Jody Hayes Brenda Kiely Office Casi Persons 1010 10 th Street Peggy Dominguez Suite 5900 Modesto June Sharp-Scott Phone Email earlyretirees@stancounty.com (209) 525-5715