BHR Budget Presentation Joint Committee on Appropriations F e b - - PowerPoint PPT Presentation

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BHR Budget Presentation

Joint Committee on Appropriations

F e b rua ry 12, 2019 L a urie R. Gill, Co mmissio ne r

https:/ / bhr .sd.gov/

Work Together Goal

We will build a collaborative and communicative BHR culture.

• Enhance internal communication
• Lead by example

Provide

Communication

Goal

We will communicate in an effective, transparent, and timely manner to the people we serve.

• Sharpen external communication
• Diversify communication channels

Acquire Talent Goal

We will assist agencies to recruit and hire diverse, qualified, and talented employees.

• Recruit quality
• Hire wisely

Engage Employees Goal

We will create and retain an engaged, healthy, and motivated workforce.

• Administer quality benefits
• Engage Employees
• Collaborate with agencies

Our mission

is to build, develop, and support a high-performing and healthy workforce.

Our vision

South Dakota: An Employer of Choice.

Be a Better BHR

2019-2023 Strategic Plan Overview

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E lle n Ze lle r , Dir e c tor

Classification & Compensation Employee Benefits

T

• m Ste c ke l, Dir

e c tor He athe r Pe r r y, Dir e c tor Aar

• n Ar

nold, Dir e c tor

Legal & Human Resource Services Employee & Organizational Development

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4

BHR Workforce

F Y17

• Budg e te d F

T E : 73.5

• Ac tua l F

T E use d: 69.9

• Unutilize d F

T E : 3.6

• T

urno ve r: 9.7%

F Y18

• Budg e te d F

T E : 73.5

• Ac tua l F

T E use d: 68.0

• Unutilize d F

T E : 5.5

• T

urno ve r: 7.1%

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FY20 Governor’s Recommended Budget

F

• und o n pa g e 7 o f L

RC Budg e t Brie fing

Ge ne r al F e de r al Othe r T

• tal

Budge t Ite m F unds F unds F unds F unds F T E

T

• ta l

284,699

• 6,855,381 7,140,080 73.5

Cha ng e

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Employee Compensation

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Compensation Philosophy

Wha t the sta te pa ys fo r a nd why E sta b lishe s g uide line s fo r:

• F

le xib ility

• Co mpe tive ne ss
• L

a b o r ma rke t

• Ma inte na nc e
• Affo rda b ility

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Market Pricing

Co mpe nsa tio n study e ve ry fo ur ye a rs E xa mine c o mpe nsa tio n c o mpe titive ne ss:

• Pa y struc ture s
• Ba se pa y
• L

e a ve b e ne fits

• He a lth, de nta l, visio n, a nd life insura nc e
• Re tire me nt

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Market Comparison

2013 T

• tal Re mune r

ation Study

• 17.3% be low ma rke t 50th pe rc e ntile fo r c a sh

c o mpe nsa tio n

• 11.6% a ve ra g e be low ma rke t 50th pe rc e ntile

fo r to ta l re mune ra tio n

2017 T

• tal Re mune r

ation Study

• 10.9% be low ma rke t 50th pe rc e ntile fo r c a sh

c o mpe nsa tio n

• 8.2% a ve ra g e be low ma rke t 50th pe rc e ntile fo r

to ta l re mune ra tio n

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Market Pricing

Marke t Minimum

Mar ke t Value

Maximum

80 - 90% o f marke t value

50th Pe r c e ntile o f mar ke t data

110 - 125% o f marke t value

Illustr atio n o f a pay r ange

Artific ial Minimum

Curre ntly 69 - 78%

• f marke t value

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Location in Range

Marke t Minimum

Mar ke t Value

Maximum

E mplo ye e s unde r dir e c tio n o f Go ve r no r No e m (7,200 e mplo ye e s)

Artific ial Minimum

2.6% 48.7% 48.7%

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Retirement Eligible Employees

12.1%

e mplo ye e s unde r the dire c tio n o f Go ve rno r No e m e lig ib le to re tire a s o f Ja nua ry 1, 2019

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BHR Recruiting Efforts

• Ne w sta ff re c ruite r po sitio n
• Use o f spe c ia l pa y pla ns a nd

inc e ntive s fo r ha rd-to -fill jo b s

• E

nha nc e d use o f so c ia l me dia a nd te c hno lo g y to re a c h a pplic a nts

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FY20 Salary Policy

Go ve rno r No e m ha s re c o mme nde d a 2.5% ma rke t a djustme nt fo r sta te e mplo ye e s.

Ge ne r al F unds $9.6M

F e de ra l F unds $4.6M Othe r F unds $11.7M T

• ta l

$25.9M

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Employee Benefits

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He a lth Pla n

Audito rs

CVS/ Ca re ma rk Se g a l Gro up BHR & Go ve rno r’ s Offic e He a lth Ma na g e me nt Pa rtne rs DAK OT ACARE Sta ywe ll Dia lo g Dire c t

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Health Plan Overview

• Se lf-funde d pla n
• E

mplo ye r a ssume s the risk

• No pre miums pa id to a n insura nc e c o mpa ny
• Se lf-funding a vo ids b uilt-in pro fit ma rg in
• Allo ws fo r g re a te r fle xib ility in pla n de sig n

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Health Plan Challenges

• Co ntra c ting with ve ndo rs
• Cla ims vo la tility
• Risk mitig a tio n
• I

ntro o f ne w, ve ry e xpe nsive spe c ia lty drug s

• Me dic a l infla tio n mo re tha n 2x g re a te r tha n
• ve ra ll infla tio n

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Health Plan Design Changes

F Y18-I

nc re a se d a nnua l de duc tib le in L

• w De duc tib le

He a lth Pla n fro m $750 to $850; intro duc e d pre ve ntive fo rmula ry pre sc riptio n pla n

F Y19 -I

nc re a se d de duc tib le s fo r b o th pla ns: L

• w

De duc tib le He a lth Pla n fro m $850 to $1,000 a nd Hig h De duc tib le He a lth Pla n fro m $1,800 to $2,000

• I

nc re a se d Out-o f-Po c ke t Ma ximum fo r the Hig h De duc tib le He a lth Pla n b y $900 to $5,000

• I

nc re a se d the c o insura nc e fo r b ra nd na me drug s to 37.50% o n Hig h De duc tib le He a lth Pla n

Medical Cost Trends

• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0%

F Y15 F Y16 F Y17 F Y18

• 1.2%

1.1% 6.9% 1.2% 6.8% 7.1% 7.6% 7.7% Pe r c e nt c hange ove r pr e vious ye ar

SD Me dic a l Na tio na l Me dic a l 20

Prescription Cost Trends

0% 5% 10% 15% F Y15 F Y16 F Y17 F Y18 5.8% 4.7% 8.7% 14.0% 11.1% 8.1% 11.6% 10.3% National RX SD RX

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Health Plan Enrollment

Total covered employees, pre-65 retirees, spouses, dependents, and COBRA participants on January 1, 2019*

*As o f Ja nua ry 1, 2019, the re we re 415 o pt o uts. 12,923 4,247 9,810 26,980

5,000 10,000 15,000 20,000 25,000 30,000 E mplo ye e s Spo use s De pe nde nts T

• ta l Me mb e rs

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Health Plan Members by County

53 13 43 5 499 67 37 31 50 29 501 19 147 86 64 127 86 165 47 89 41

3,026

103 735 267

4,354

57 47 93 382 538 16 38 49 111 29 15 26 52 92

1,422

126 6 794

2,166

243 245 25 205

16

58 42 309 29 141 37 66 90

2,840

982 90

Cha rt inc lude s c o ve re d e mplo ye e s, pre -65 re tire e s, spo use s, de pe nde nts, a nd COBRA pa rtic ipa nts; the re a re 673 me mb e rs o f the he a lth pla n who live o utside So uth Da ko ta .

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Total Health Plan Enrollment

members as of January 1, 2019

64% 36%

Hig h De duc tib le He a lth Pla n ($2,000 de duc tib le ) L

• w De duc tib le

He a lth Pla n ($1,000 de duc tib le )

Wellness Incentives

• Qua lify fo r L
• w

De duc tib le He a lth Pla n

• r
• E

a rn ma ximum c o ntrib utio n into He a lth Sa ving s Ac c o unt (HSA) o n Hig h De duc tib le He a lth Pla n

He a lth Sc re e ning

Wellness Qualifications

Online He a lth Asse ssme nt We llne ss Points

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Wellness Qualification Completions

60% 63% 45%

0% 10% 20% 30% 40% 50% 60% 70%

SD F Y17 SD F Y18 Staywe ll Book of Busine ss

Pe rc e nt Comple tion

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Recommended FY20 Plan Changes

L

• w De duc tible He alth Plan:
• I

nc re a se pre sc riptio n de duc tib le b y $25 to $125

• I

nc re a se pre sc riptio n o ut-o f-po c ke t ma x b y $250 to $1,250

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Recommended FY20 Plan Changes

Pr e sc r iption c o- pays for both he alth plans:

• I

nc re a se e a c h tie r b y $5 (30-da y supply), e xc luding g e ne ric s

• I

nc re a se c o pa y fo r b ra nd pre fe rre d drug s b y $12.50 to $125 (60-da y supply)

• I

nc re a se c o pa y fo r b ra nd no n-pre fe rre d drug s b y $12.50 to $175 (60-da y supply)

ONE-TIME INCREASE OF $863.50 NO PLAN CHANGES RECOMMENDED PLAN CHANGES AND RATE INCREASE

$8,470+$863.50

$1,601

Employer Rate $9,333.50 $8,470 $8,470 $10,071 Actual Estimated Estimated Estimated FY 2018 FY 2019 FY 2020 FY 2020 Revenue Contributions to Plan Employer Paid $122,198,558 $110,624,112 $110,617,678 $129,784,795 COBRA and Employee Paid for Dependents $9,807,644 $9,590,969 $9,574,944 $9,574,944 Interest Revenue $376,651 $300,000 $300,000 $300,000 Refund of Prior Years Expenses* $4,848,037 $4,500,000 $4,500,000 $4,500,000 Total Revenue $137,230,890 $125,015,081 $124,992,622 $144,159,739 Expenses Claims $115,630,759 $118,664,421 $126,042,733 $125,721,733 Employer Life Claims $7,500 $3,750 $3,750 $3,750 Administration $17,823,957 $18,132,357 $18,424,694 $18,424,694 Total Expenses $133,462,216 $136,800,528 $144,471,177 $144,150,177 Current Year Over/(Underrecovery) $3,768,674 ($11,785,447) ($19,478,555) $9,562 Prior Year Over/(Underrecovery) $12,059,698 $15,828,372 $4,042,925 $4,042,925 Cumulative Over/(Underrecovery)**/Reserve Level $15,828,372 $4,042,925 ($15,435,630) $4,052,487 IBNP/Allowable Reserve Level $12,239,800 $16,441,700 $17,315,900 $17,315,900

(Incurred But Not Paid included in claims amount) *Includes subrogation, adjustment of prior year claims and pharmacy rebates. **Cumulative Over/(Underrecovery) is the analysis of the revenues and expenses since the beginning of the program.

When this line is zero we have collected enough to pay all liabilities for this program that would be paid out in the next fiscal year. Any amount above zero is considered reserve.

State Employee Health Plan Full Accrual Financial Statement

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FY20 Health Plan Recommendation

Go ve rno r No e m’ s re c o mme nda tio n to struc tura lly b a la nc e the he a lth pla n b udg e t:

Ge ne r al F unds $8.60M

F e de ra l F unds $4.03M Othe r F unds $9.23M T

• ta l

$21.86M

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