Fiscal Year 21 Department Budget Employee Total Compensation - PowerPoint PPT Presentation

Fiscal Year 21 Department Budget Employee Total Compensation Bureau of Human Resources February 18, 2020

BHR Partners to Achieve Other’s Goals • Organization Effectiveness D.Seeley Commissioner • Total Rewards E.Zeller OPEN M.Deyo-Amende T. Steckel M.Barnett Dir. HR Centers of Dir. Human Cood. Special Dir. Benefits Legal Counsel Excellence Resources Projects • Compliance 2

No Budget Change is Recommended FTE Utilization BHR Turnover 75 92.6% 93% 92.4% 70 92.2% 15.5% 92.0% Turnover 92% 2.8% 65 91.8% 91.6% 60 91.4% FY 2018 FY 2019 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Budgeted FTE Utilized FTE FY 2019 FY 2018 BHR Retirement Eligibility BHR Funding $295,389 50.0% 45.0% 44.4% 40.0% 35.0% 31.9% 30.0% 25.0% 20.0% 18.1% 15.0% $7,121,983 10.0% 5.0% 0.0% General Funds Federal Funds Other Funds Jan 2020 5 Years 10 Years 3

Executive Branch Employees 4

1/3 of Employees Have 15 or More Years of Service Age Years of Service 3% 6% 8% 23% 23% 24% 18 - 24 < 3 25% 25 - 34 3 - 6 35 - 44 7 - 14 45 - 54 15 - 29 55 - 64 30 + 65 + 21% 22% 22% 23% 5

Turnover Rises As Unemployment Drops 16.0% 14.6% 14.4% 14.3% 13.9% 13.5% 13.5% 13.5% 14.0% 13.3% 12.4% 12.2% 12.0% 12.0% 10.8% 10.5% 10.0% 8.0% 6.0% 5.0% 4.9% 4.4% 4.2% 4.1% 3.6% 3.4% 3.3% 4.0% 3.2% 3.0% 2.8% 2.8% 2.7% 2.0% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Statewide Turnover Unemployment 6

Pay Reported as Second Highest Reason for Leaving FY19 Internal Movement Percent Responding Reason for Exit 72 Primary Reason Retirement, Family 37% Obligations, etc. Pay 17% Job Location 7% Promotions 157 Transfers Lack of Advancement 6% Demotions Opportunities Work Environment 5% 382 8.4% of employees changed jobs within state 7

State Faces Significant Retirement Risk As of Jan 1, 2020 BOA, 58.90% 70.00% 60.00% BOA, 39.90% 50.00% 41.0% 40.00% DENR, 22.60% 27.9% 30.00% 20.00% 14.4% 10.00% 0.00% Today Five Years Ten Years Statewide Highest 8

Compensation 9

Governor’s Budget Recommends No Increase Governor Noem has recommended no salary policy increase for FY21 based upon revenue projections. 10

Many Factors Impact Attraction and Retention Personal and Professional Type of Work Development Work Career Environment Advancement Recruitment Culture of Compensation and State and Benefits Government Retention 11

Market Analysis and Pay Ranges Best Comparison Illustration of a pay range Artificial Market Minimum Minimum Maximum Market Value 50 th Percentile of 80 - 90% of market 110 - 125% of Currently value market data market value 69 - 78% of market value 12

97.8% of State Employees Paid Below Market Position In Range 1,800 1,610 1,590 1,600 1,508 1,400 1,200 1,000 855 830 800 600 493 400 200 123 95 92 17 14 4 1 1 0 35.3% 62.5% 2.2% 13

666 People in SDSEHP and Medicaid in FY19 Medicaid Recipients in SDSEHP 600 543 500 438 400 300 200 123 100 73 0 Adults Children Dec-19 FYI 2019 14

Medicaid Income Threshold Count of Employees below Medicaid Threshold $60,000 5,000 $50,000 4,500 4,000 $40,000 3,500 3,000 $30,000 2,500 $20,000 2,000 1,500 $10,000 1,000 500 $0 0 Single Parent One Pregnant Mother Family of four Single Parent One Child Pregnant Mother with Family of four Child with One Child One Child* Income Threshold Count of Employees below Threshold *female employees only 15

Benefits 16

Employer and Employee Share Benefits Package Cost Fully Employer Paid Employer and Employee Paid Fully Employee Paid • Life Insurance ($25,000) • Health Insurance • Dental Insurance (8,920) • Fee for Account Based Plans • Vision Insurance (8,379) • Health Plan Opt Out Payment • Accident Insurance (5,392) • HSA Seed Money • Hospital Indemnity Insurance (3,699) • Vacation, Sick, Holidays • Short-Term Disability (4,836) • Supplemental Life Insurance (5,626) • Dependent Life Insurance (2,902) Account Base Plans Available • Flexible Spending Accounts (1,097) • Health Reimbursement Arrangements (1,945) • Health Savings Accounts (9,236) 17

Managing SDSEHP Requires Complex Partnership Health Management BHR & Partners Governor’s DAKOTACARE Office Segal Group Staywell Dialog Direct CVS/Caremark Health Plan KEPRO Auditors 27,000 lives 18

SDSEHP Designed to Save Money and Control Costs Self-funded Plan • Avoids insurers built-in profit margin • Allows for greater flexibility in plan design • Employer assumes the risk Direct Contracts • Lower inflation risk • Recognizes geographically dispersed employee base • Requires higher levels of administrative effort 19

Covered Employee and Dependent Count Nearly Equal Coverage by Type Health Plan Enrollment 30,000 26,867 25,000 20,000 30% 15,000 12,781 70% 9,814 10,000 4,272 5,000 0 Employees Spouses Dependents Total High Plan Low Plan Members Total al covered e employees, p pre-65 r 5 retirees, s spouses, d dependents, and C an COBRA p par articipants o on J Jan anuary 1, 1, 202 2020* *As of January 1, 2020, there were 425 opt outs. 20

Dispersed Workforce Complicates and Raises Costs 26 15 6 52 13 1,422 92 57 111 53 126 66 43 29 38 382 5 538 205 37 49 16 93 90 794 501 3,026 4,354 499 47 267 141 67 0 37 2,166 16 90 29 735 64 86 2,840 29 89 58 243 41 103 31 165 982 47 42 86 25 147 245 19 50 127 309 Chart includes covered employees, pre-65 retirees, spouses, dependents, and COBRA participants; there are 673 members of the health plan who live outside South Dakota. 21

The Plan Spent $718 Per to Cover 86% of Members Health Plan Cost Distribution $45.M Millions $40.M $35.M $30.M Employer Cost $25.M $20.M $15.M $10.M $5.M $0.M $0-$499.99 $500-$4.9K $5K-$19.9K $20K-$49.9K $50K-$99.9K $100K-$999.9K $1M-$1.99M $2M or > 14,093 8045 2,472 631 289 199 < 5 < 5 Number of Members w/Claims within Employer Cost Range 22

Less than 1% of Covered Drive 34% of Medical Cost High Cost Claimant Spending by Fiscal Year Number of High Cost Claimants by Fiscal Year In Millions $43.3 FY2019 FY2019 26,985 $84.4 206 FY2018 $35.0 27,311 FY2018 $84.6 171 FY2017 27,005 $30.3 FY2017 $82.6 139 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% HCC ALL OTHERS HCC Count All Others 23

Top 5 Diagnosis Categories Account for 68% of HCC Spend Cancer 9 $3.2M Diseases of the circulatory system 14 57 $4.6M $11.4M Diseases of the nervous system and sense organs 24 Diseases of the musculoskeletal system $4.9M and connective tissue 26 $5.4M Infectious and parasitic diseases 24

FY19 High Cost Claimant Spending Analysis SDSEHP FY19 Top Contributors to Rx Trend Contribution to Net Overall drug class Net Cost Trend CVS BoB Analgesics -Anti-inflammatory $6,641,429 3.90% 1.20% Anti-cancer $3,071,236 2.90% 0.80% Antidiabetics $4,787,412 2.20% 1.50% Specialty Drugs Top Contributors to Rx Trend Oncology $3,552,396 4.10% 0.90% Rheumatoid Arthritis $6,152,789 3.20% 1.00% Psoriasis $2,001,535 2.70% 1.30% 25

Specialty Drug Users and Costs Higher than Peers SDSEHP Key Rx Metrics FY19 FY19 SDSEHP FY19 Peer Total Prescriptions 225,994 Generic Dispensing Rate (GDR) 87.00% 86.80% Average Monthly Utilizers as % of Members 31.50% 41.70% Specialty Utilizers as % of Members 1.20% 0.90% Specialty % of Total Net Cost 55.10% 45.40% Specialty % of Total Prescriptions 1.30% 1.00% % Specialty Member Cost Share 3.40% 2.40% 26

10 Drugs Account for 64% of Specialty Costs % of Specialty BoB Rank State Rank Drug Name Specialty Class Total Net Cost Cost Total Utilizers Total Rxs Net Cost per Rx 1 1 Humira Rheumatoid Arthritis $4,424,928 24.14% 84 763 $5,799.38 10 2 Copaxone Multiple Sclerosis $1,186,619 6.47% 22 204 $5,816.76 2 3 Enbrel Rheumatoid Arthritis $1,052,924 5.74% 30 227 $4,638.43 3 4 Stelara Psoriasis $1,002,155 5.47% 16 57 $17,581.66 7 5 Gilenya Multiple Sclerosis $965,501 5.27% 12 122 $7,913.95 4 6 Tecfidera Multiple Sclerosis $865,711 4.72% 13 114 $7,593.96 30 7 Rebif Multiple Sclerosis $802,323 4.38% 10 108 $7,428.92 5 8 Revlimid Oncology $547,889 2.99% 4 36 $15,219.13 8 9 Cosentyx Psoriasis $529,432 2.89% 10 73 $7,252.49 236 10 Rydapt Oncology $415,282 2.27% 2 15 $27,685.49 Total $11,792,764 64.34% 203 1719 27

Wellness Participation Remains Strong 70% 63% 60% 58% 60% Percent Completion 50% 45% 40% 30% 20% 10% 0% SD FY17 SD FY18 SD FY19 Staywell Book of Business 28

Risk Factors Decrease for Many 100% 76% 80% 75% At risk (moderate & high) 57% 60% 51% 45% 44% 40% 20% 0% Weight Cholesteral Blood Pressure Risk Factor Past Current 29

Numbers with Multiple Risks Falling 100% 80% 60% 54% 50% 44% 41% 40% 20% 6% 5% 0% Low risk (0-2 risks) Moderate risk (3-5 risks) High risk (6+ risks) Past Current 30