2018 RETIREE PLAN DESIGN ANNUAL ENROLLMENT CHANGES FOR FY19 PLAN YEAR - - PowerPoint PPT Presentation

2018 RETIREE ANNUAL ENROLLMENT PERIOD 11/15/17 – 11/29/17

PLAN DESIGN CHANGES FOR FY19 PLAN YEAR (Effective 03/01/18)

RETIREE WELL‐BEING FAIR PRESENTATION November 15, 2017

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What was the total dollar amount that Harris Health spent last plan year to pay our Medical Claims, Pharmacy Claims and Administrative Fees? A. $67,480,000 B. $87,360,000 C. $120,000,000

TOTAL MEDICAL PLAN COST

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ANSWER: C. WHICH EQUALED $120,000,000

TOTAL MEDICAL PLAN COST

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What % did our Medical Plan cost increase from FY16 to FY17?

• A. 8.2%

B. 11.1% C. 5.4%

MEDICAL COST INCREASE

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ANSWER:

• C. 5.4%

FY17 MEDICAL PLAN COST

Remember – Our Harris Health group Medical Plan is funded from our own Harris Health bank account. As plan administrator Cigna does not fund the Plan, we do!

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HISTORICAL COST & TREND PER EMPLOYEE/RETIREE PER YEAR

Latest 12 month spend $120M: 72.8% Medical, 20.8% Rx, 6.4% Admin/Stop Loss

$8,906 $9,398 $10,064 $9,616 $10,246 $11,791 $12,259 $11,294 $11,798 $12,433 $5,000 $6,500 $8,000 $9,500 $11,000 $12,500 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Cost PEPY

7%

*

4.5%

**

*FY13 changed TPA to Cigna. **FY17 extended Deductible and Out‐of‐Pocket maximum by 2 months. Data Source: March 2017 FMR.

‐4%

6%

7% 15% 4% ‐8% 5.4%

Harris Health has remained below U.S. medical trend for 4 years based on the Aon Hewitt Global Medical Trend Rates Survey Report, with trend at 6% in 2016.

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FY19 MEDICAL PLAN DESIGN CHANGES

1. Individual Deductible is increasing to $750. 2. Family Deductible is increasing to $2,250 3. Individual Out‐of‐Pocket is increasing to $3,000. 4. Family Out‐of‐Pocket is increasing to $9,000.

Low Deductible Medical Plan Option ‐

IN‐NETWORK BENEFITS

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FY19 MEDICAL PLAN DESIGN CHANGES

(Continued)

Individual Out‐of‐Pocket is increasing to $3,750. Autism related Speech, Physical and Occupational Therapy & Applied Behavior Analysis (ABA) – these services are no longer subject to Annual Limits, but will be subject to Medical Necessity review (a/k/a Prior Authorization).

High Deductible Plan Option – All 3 Medical Plan Options ‐

IN‐NETWORK BENEFITS

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FY19 MEDICAL PLAN DESIGN CHANGES

(Continued)

Available to both our Pre‐65 and Post‐65 covered Retiree population.

The Telehealth Copay is being reduced to $10 across all 3 Medical Plan options.

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What % of our total Medical Plan spend last year was used to pay for our Pharmacy claims only? A. 33.6% B. 10.5%

• C. 20.8%

PHARMACY CLAIM COST

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FY 17 TOTAL PHARMACY COST

ANSWER:

• C. 20.8%

WHICH EQUALED $24,960,000

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HOW DID OUR PHARMACY COST COMPARE TO 32 OTHER HOSPITAL SYSTEMS?

(For Retail Pharmacy and Mail Order.)

Are our outpatient prescription drug costs

• A. HIGHER
• r
• B. LOWER?

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HOSPITAL PHARMACY BENCHMARK

METRICS HARRIS HEALTH SYSTEM 32 HOSPITAL SYSTEMS IN GULF REGION BENCHMARK VARIANCE Gross Cost PMPM $127.26 $113.76 ‐$13.50 Plan Cost PMPM $113.82 $94.10 ‐$19.72

PMPM = Per Member Per Month Rx = Prescriptions

ANSWER: A. HIGHER

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Why is Harris Health implementing a Brand Name Drug Deductible?

NEW BRAND NAME DRUG DEDUCTIBLE

ANSWER: Our Harris Health prescription drug cost is above Benchmark as evidenced by the slide we just reviewed.

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How much will the new Brand Name Drug Deductible cost me?

NEW BRAND NAME DRUG DEDUCTIBLE

ANSWER: $100 Per Member Per Year

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Are Generic medications cheaper than Brand name drugs? If so, why?

The Reasons:

• Brand name makers often invented the drug, a process that can cost

hundreds of millions of dollars. This is the rationale for drug patents.

• Patents give pharmaceutical companies a period of years when only

they can make money on a product. Their investment includes advertising, like TV commercials and billboards, that’s why you don’t generally see Generic ads.

ANSWER: YES. GENERIC VS BRAND NAME DRUG COSTS

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What is our generic dispense fill rate? A. 82.33% B. 85.11% C. 94.17%

GENERIC FILL RATE

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OUR GENERIC DISPENSE FILL RATE IS:

Hospital Pharmacy Benchmark Metrics Harris Health System 32 Hospital Systems in Gulf Region Hospital Benchmark Variance Generic Fill % 82.33% 85.11% 2.78%

ANSWER:

• A. 82.33%

NOTE: For every 1% that the Generic fill rate increases, the gross cost for Pharmacy will decrease by 3% or approximately $663,303.01.

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FY19 REFERENCE BASED PRICING ‐ ELIMINATED

• 1. The Mandatory Generic Drug Program

will now apply to all medications filled under the Plan (with certain exceptions tied to Diabetic medications/supplies).

• 2. All Drug Therapy Classes currently covered under
• ur Reference Based Pricing (RBP) program will now

fall under our Mandatory Generic Drug Program.

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FY19 MANDATORY GENERIC PENALTY

If you fill a Brand name medication under our Mandatory Generic Drug Program, you will pay the Brand Copay PLUS any amount over the Generic medication cost. The Medical Plan will NOT PAY this cost difference and this cost difference WILL NOT go toward your annual Out‐of‐Pocket maximum.

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What is the lowest cost way to fill your

• utpatient Maintenance Medications?
• A. RETAIL
• r
• B. MAIL ORDER

MAINTENANCE MEDICATION FILLS

Maintenance Medications are those drugs that you take for chronic or long‐term conditions, such as High Blood Pressure, Heart Disease, Asthma and Diabetes.

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ANSWER:

• B. MAIL ORDER

Why?

• Each time you purchase Maintenance Medication at an in‐network retail

pharmacy you are paying a regular Copay for your medication.

• With Mail Order you purchase a 3‐month supply of medication but you

pay 2.5 times your regular Copay. This means that you save 1 Copay every 6 months when you utilize Mail Order. In essence, you get a 1‐month supply of medication free in each 6‐month period or 2 months medication free each year.

MAINTENANCE MEDICATION FILLS

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Knowing that Mail Order is cheaper than retail, what do you think our Mail Order fill rate is for Maintenance Medications? A. 3.66% B. 5.13% C. 15.62%

MAIL ORDER FILL RATE

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MAIL ORDER FILL RATE

METRICS HARRIS HEALTH SYSTEM 32 HOSPITAL SYSTEMS IN GULF REGION BENCHMARK VARIANCE Mail % Rxs 3.66% 5.13% 1.48%

Rx = Prescriptions

ANSWER:

• A. 3.66%

Hospital Pharmacy Benchmark

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Diabetic members actively engaged* in the Livongo program

• ffered through Harris Health will receive their Generic

Diabetic medications and Insulin at no cost as long as they remain engaged in the program.

Eligibility = Pre‐65 Retirees and Spouses

(with Harris Health primary coverage) Why isn’t this same benefit being offered to Post‐65 Retirees?

Medicare is your primary payer. Harris Health, not Medicare, selected Livongo as our preferred Diabetic program and is rewarding our Pre‐65 Plan participants for being actively engaged in their Diabetic care.

FY19 LIVONGO ENGAGEMENT – DIABETIC MEDICATION COST WAIVER

*Engagement is determined by the vendor.

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FY19 PREVENTATIVE STATINS ‐ $0 COPAY

If you meet all of these criteria:

• 1. Lovastatin will now be covered at a $0 copay

OR

• 2. With Prior Authorization you may be able to fill Simvastatin
• r Atorvastatin at this $0 copay.

The United States Prevention Services Task Force has recommended that adults without a history of Cardiovascular Disease use a low to moderate dose Statin for the prevention of Cardiovascular Disease events and mortality when all of the following criteria are met:

(1) you are aged 40 to 75 years; (2) you have 1 or more Cardiovascular Disease risk factors (i.e., Dyslipidemia, Diabetes, Hypertension, or Smoking); and (3) you have a calculated 10‐year risk of a cardiovascular event of 10% or greater.

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The financial incentive program for using Harvoni to treat Hepatitis C was previously discontinued by the manufacturer and is therefore no longer available under our Harris Health sponsored medical plan.

FY19 HARVONI HEPATITIS C PROGRAM

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FY19 OPIOID – EARLY FILL WINDOW

• A tighter Early Fill Window for Opioid medications will take

effect 03/01/18.

• The patient must utilize 90% of their prescription before it can

be refilled.

So why are we tightening our Early Fill Window?

We have 261 Harris Health members receiving Opioids that are NOT in compliance with CDC Opioid guidelines and 7.4% of our Opioid utilizers (144 members) have significant clinical risks, taking doses above the recommended dose and/or duration period. OPIOID USE IS AN EPIDEMIC IN THE U.S. TODAY

Harris Health : In the U.S.

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Drug Copay Generic Brand Name Formulary Brand Name Non‐Formulary

Retail $10.00* 20% / Max $60.00 30% / Max $120.00 Mail $25.00* 20% / Max $150.00 30% / Max $300.00 Specialty $120.00 $120.00 $120.00 Compound $50.00 $50.00 $50.00

FY19 PHARMACY COPAY CHANGES

Definitions: 1) Brand name formulary drugs are Brand name drugs included on the

plan’s Formulary. 2) A Formulary is a list of preferred prescription drugs, both Generic and Brand name, covered by your Medical Plan that offer the greatest overall value.

*If the cost of your prescription is less than the copay amount, you will pay the lower amount.

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KelseyCare is running 81% below the Low Deductible option with inpatient costs 69% below the Low Deductible inpatient costs. High Deductible Low Deductible KelseyCare

Claim Cost (Inner Ring)

Claims PMPM $714 15% 48% 37% $380 $394

% Enrollment (Outer Ring)

KelseyCare = 4,654 Low Deductible = 3,813 High Deductible = 1,476 9,943

FY17 MEDICAL PLAN ENROLLMENT VS PMPM COST

Participant Enrollment Counts by Medical Plan Option

PMPM = Per Member Per Month

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• A. The Employee/Pre‐65 Retiree

OR

• B. The Spouse

WHO COSTS THE PLAN THE MOST?

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EMPLOYEE/PRE‐65 RETIREE VS SPOUSE COST

ANSWER: B. SPOUSE COSTS ARE 27.6% GREATER THAN EMPLOYEE/ PRE‐65 RETIREE COSTS.

$292 $219 $511 $274 $378 $652

$0 $100 $200 $300 $400 $500 $600 $700

Core Claims High Cost Claims Total Employee PMPM Spouse PMPM

Cost Per Member Per Month (PMPM)

Data Source: IDAP, incurred March 2016 – February 2017, paid through March 2017. Excludes Post‐65 Retirees. Costs include Medical and Pharmacy.

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FY19 PREMIUM RATES FOR CURRENT RETIREES AND RETIREES UNDER GRANDFATHER STATUS

High Deductible Low Deductible KelseyCare

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The real question is ‐‐‐

WHICH OPTION IS RIGHT FOR YOU?

IN‐NETWORK BENEFITS COST COMPARISONS

MEDICAL PLAN OPTIONS

Notes: 1. Your Out‐of‐Pocket (OOP) limits equal the accumulation of your Deductibles, Copays and Coinsurance. 2. Premiums noted above are based off our FY19 Premium Rate Tables for Current Retirees and Future Retirees under Grandfather status. 3. Maximum Affordable Care Act (ACA) annual Out‐of‐Pocket limits for FY19 are $7,350 per Individual and $14,700 for Family.

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FY19 DENTAL PPO PLAN CHANGES

1. Composite Fillings will be covered on back teeth. 2. Missing tooth will be covered. 3. Periodontal Maintenance will be covered 4 times per year. 4. Implants will be covered at the same frequency as Crowns. 5. Surgical Extractions and General Anesthesia will be covered under Major Services. 6. Out‐of‐Network reimbursement will be covered at the 80th percentile. 7. Full mouth X‐Rays will move to 1 in 60 months. 8. Crowns/Inlays/Onlays/Bridges/Dentures/Implants will move to 1 in 84 months.

PPO = Preferred Provider Organization

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WHY ARE WE MAKING DPPO CHANGES?

• These Dental PPO (DPPO) Plan design changes are

being made based on:

– Dental Survey results, – Standard of Care guidelines, – Acceptable practices, – Current literature, – Benchmark comparisons, and – Better alignment to covered services offered under our DHMO Plan.

• This fully insured Plan continues to be

administered by MetLife.

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FY19 DENTAL HMO (DHMO) PLAN

• 1. There are no Plan design changes for the coming

plan year.

• 2. This fully insured Plan continues to be

administered by MetLife.

Remember – All DHMO dentist changes must be submitted to MetLife by the 25th

• f each month for services as of the first of the following month.

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FY19 VISION PLAN

• 1. This fully insured Plan continues to be

administered by Davis Vision.

• 2. There are no Plan design changes for FY19.

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PENSION PLAN – VALUATION DATA

• Audited once a year.
• The 2016 plan (calendar) year was audited by BPS&M.
• Our 01/01/17 audit report reflects:

Actuarial Liability = $833,499,031 Market Value Adjustment (MVA)/ Actuarial Liability = 71.4% Funded Annual Required Contribution (ARC) = $29,432,523

Total Active = 2,617 Deferred Vested = 1,366 Receiving Benefits = 2,942 TOTAL = 6,925

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• 1. Now that you’ve heard our presentation, we have

Employee Benefits staff here today to assist you with your 2018 Annual Enrollment elections.

• 2. Cigna, MetLife and Davis Vision are also all here

today to assist you with claims processing and coordination of benefit questions.

PERSONAL ASSISTANCE – We’re here for you!

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IMPORTANT DATES TO KNOW:

FY19 HARRIS HEALTH RETIREE ANNUAL ENROLLMENT PERIOD IS: 11/15/17 – 11/29/17

Approved benefit election changes will be effective 03/01/18.

2018 MEDICARE ENROLLMENT WINDOW: 10/15/17 – 12/07/17 2018 AFFORDABLE CARE ACT (ACA)/HEALTH INSURANCE MARKETPLACE ENROLLMENT WINDOW: 11/07/17 – 12/15/17

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• 1. No hard copies of this presentation will be

distributed today!

• We are going “green”, saving trees and money!
• 2. However, you can visually review and print your
• wn hard copy, if you so choose. To do so:
• Go to the Internet,
• Type www.harrishealth.org,
• Click on Employees,
• Click on Retiree/COBRA Resources
• Then click on FY19 Retiree Plan Design Changes.

FINAL NOTES

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THANK YOU!

HR SR VP & EMPLOYEE BENEFITS PERSONNEL