BENEFITS PROGRAM Plan Year 2020 Rates March 28, 2019 Executive - - PowerPoint PPT Presentation

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PUBLIC EMPLOYEES BENEFITS PROGRAM Plan Year 2020 Rates March 28, 2019 Executive Summary PEBP continues to see low inflation on medical and dental costs but recently experienced very high pharmacy costs on the CDHP. This has led to an

SLIDE 1

PUBLIC EMPLOYEES’ BENEFITS PROGRAM

Plan Year 2020 Rates March 28, 2019

SLIDE 2

Executive Summary

PEBP continues to see low inflation on medical and dental costs but recently experienced very high pharmacy costs on the CDHP. This has led to an overall rate increase on that plan. The EPO plan is running better than projected and their overall rates have decreased. HPN provided PEBP with two rate renewal options to meet budgetary needs. The Board has a decision to make today on what level of employer contributions produce the desired employee/retiree premiums for Plan Year 2020. Option 1: Return to 2016 Contribution Levels

93% employee / 64% retiree and premiums increase for all employees on all plans and an increase for retirees
n the CDHP and a decrease on the HMO/EPO

Option 2: Small Increase to 2018 Contribution Levels

95.1% employee / 66.4% retiree and premiums for employees and retirees stay flat on the CDHP and decrease
n the HMO/EPO

Option 3: Larger Employee Increase to 2018 Contribution Levels

96.3% employee / 66.4% retiree and premiums decrease for employees on all plans and stay flat for retirees on

the CDHP while decreasing on the HMO/EPO.

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SLIDE 3

AGENDA

➢Rate Development

➢Methodology ➢Inputs ➢Experience ➢Plan Tiers of Coverage ➢Projected Population ➢Optional Contribution Percentages

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SLIDE 4

AGENDA (cont.)

March 28, 2019 4

➢Overall Rates ➢Optional State Employee Rates ➢Optional State & Non-State Pre- Medicare Retiree Rates ➢Board Approval

SLIDE 5

Rate Development

Methodology

1. Experience + Projected Trend = Base Rates 2. Base Rates + Administrative Costs = Overall Rates 3. Overall Rates – Employer Contributions (Subsidy) = Member Share (Premiums)

March 28, 2019 5

SLIDE 6

Rate Development

Inputs

➢Legislatively Requested Employer Contribution (FY 2020)

➢ Employees:

➢ Agency Request: $772 ➢ Governor’s Recommended: $757.83 ➢ Today’s Rate Approval: $732.75 (Option 1), $747.75 (Option 2), $757.83 (Option 3)

➢ Pre-Medicare Retirees:

➢ Agency Request: $472 ➢ Governor’s Recommended: $522.68 ➢ Today’s Rate Approval: $529.68 (Option 1), $546.70 (Option 2 & 3)

➢Updated Population (Point-in-Time Projected Forward) ➢Experience (Through January, 2019) ➢Plan Design (Approved at the November 29, 2018 Board Meeting)

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SLIDE 7

Rate Development

Experience

➢Aon provides PEBP with Base Rate Cards projecting claims experience and HPN provides PEBP with Medical/RX rate renewals:

State Employees and Retirees CDHP EPO HPN

Medical: 1.63% Medical: -2.18% Medical/Rx: 0%/3.7% Rx: 16.91% Rx: 5.34% Dental: 0.13% Dental: 0.13% Dental: 0.13% Overall: 0.01%/3.47% Overall: 4.35% Overall: -0.29%

Non-State Employees and Retirees

CDHP EPO HPN Medical: 8.83% Medical: 26.72% Medical/Rx: 0%/3.7% Rx: 28.14% Rx: 7.46% Dental: 0.62% Dental: 0.62% Dental: 0.62% Overall: 0.04%/3.52 Overall: 12.66% Overall: 17.74%

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SLIDE 8

Rate Development

Plan Tiers of Coverage Established in July 2011 (PY 2012) Participant Only = $X Participant + Spouse = $2X Participant + Child(ren) = $X+$Y Participant + Family = $2X+$Y $X = Average Cost of an Adult $Y = Average Composite Cost of Children

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SLIDE 9

Rate Development

Projected Population

Average enrollment based on past 48 month plus any known changes. Projected Population is taken from plan experience on all plans

ffered by PEBP for Plan Year 2019

(as of March 2019). There is an overall projected population increase of approximately 2.08% for PY20.

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FY 2018 (Actual) FY 2019 FY 2020 State Actives 26,078 26,678 27,265 Early Retirees 4,034 4,072 4,117 Medicare Retirees 6,739 7,232 7,624 36,852 37,982 39,006 Non-State Actives 8 8 8 Early Retirees 1,481 1,163 1,000 Medicare Retirees 5,221 5,284 5,367 6,710 6,455 6,375 Total 43,562 44,437 45,381 Percent Change 1.97% 2.08%

SLIDE 10

Optional Employer Subsidy

Contribution Percentages

➢Board Policy Establishes:

➢ Standardized differential for plans and dependents ➢ Single blended “statewide” HMO/EPO rate

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Plan Employees Retirees Option 1 Option 2 Option 3 Option 1 Option 2 & 3 Primary CDHP 93% 95.1% 96.3% 64% 66.4% HMO/EPO 81% 82.6% 83.8% 52% 53.9% Dependent CDHP 73% 75.1% 76.3% 44% 46.4% HMO/EPO 61% 62.6% 63.8% 32% 33.9%

SLIDE 11

Overall Rates

Before Contributions and Premiums

March 28, 2019 11

State Employees Tier CDHP HMO/EPO Employee Only 607.31 789.13 Employee + Spouse 1,123.53 1,533.34 Employee + Child(ren) 815.37 1,156.86 Employee + Family 1,331.61 1,901.07 State Retirees Tier CDHP HMO/EPO Retiree Only 586.28 768.26 Retiree + Spouse 1,102.50 1,512.47 Retiree + Child(ren) 794.34 1,135.99 Retiree + Family 1,310.58 1,880.20 Non-State Retirees Tier CDHP HMO/EPO Retiree Only 1,219.91 773.66 Retiree + Spouse 2,369.78 1,523.27 Retiree + Child(ren) 1,980.91 1,179.25 Retiree + Family 3,130.78 1,928.86

SLIDE 12

State Active Employees Statewide PPO Statewide HMO/EPO Consumer Driven Health Plan PEBP Premier Plan and HPN Plan Tier PY19 Option 1 Option 2 Option 3 PY19 Option 1 Option 2 Option3 Employee Only 31.73 42.45 31.73 22.71 142.43 151.52 137.31 128.15 Employee + Spouse 156.04 181.82 156.04 145.25 429.62 445.21 415.64 397.84 Employee + Child(ren) 82.41 98.62 82.41 72.10 284.89 297.41 274.84 261.41 Employee + Family 206.72 238.01 206.72 194.65 572.08 591.10 553.17 531.10

March 28, 2019 12

State Employee Premiums

SLIDE 13

State / Non-State Retirees Statewide PPO Statewide HMO/EPO Consumer Driven Health Plan PEBP Premier Plan and HPN Plan Tier PY19 Option 1 Option 2 & 3 PY19 Option 1 Option 2 & 3 Retiree Only 199.56 210.72 199.56 379.06 372.74 354.17 Retiree + Spouse 470.33 499.80 470.33 896.26 884.81 846.09 Retiree + Child(ren) 309.96 327.23 309.96 635.63 627.11 597.24 Retiree + Family 580.72 616.33 580.72 1,152.83 1,139.19 1,089.16

March 28, 2019 13

State/Non-State Retiree Premiums

Rates above reflect 15 years of service.

SLIDE 14

Board Approval

March 28, 2019 14

PEBP Recommends the following:

1. Approve Plan Year 2020 CDHP and HMO/EPO Rates as

presented.

2. Select and approve the contribution levels and

employee/retiree premiums

3. Allow staff to make technical adjustments as needed.