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

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

Agenda

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 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

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 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

Count unty RESC ESCO RESC ESCO Rates es Non

• n-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

2013 Monthly Rate Comparison

Anthem Blue Cross EPO – Subscriber Only

Change from RESCO to County Administration

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 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

3,007 Active County Employees 87% 385 StanCERA Retirees 11% 43 Special District Employees 1% 28 COBRA Employees 1%

Average Participation Totaled 3,463 Enrolled Members in 2012 5,162 dependents also covered Total lives = 8,625

22.8% 2.8% 13.8% 14.1% 7.5% 6.4% 9.9%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013

Cumulative Annual Health Insurance Rate Inflation 2005 to 2013

Cumulative 77% increase from 2005 through 2011 (average 11% per year)

12% optional increase to stay fully-insured $5.9 million increase in total premiums

Based on EPO/HMO plan

2012 Strategic Initiatives

 County staff worked with consultants to proceed with

two specific strategies for implementation starting January 2012

1.

Develop a new non-profit health plan alternative focused on access to high quality care with greater long-term financial stability (Stanislaus County Partners in Health)

2.

Prepare a self-insurance model to combine risk pools and long-term financial management for each of the County’s medical plans, and to eliminate advantages/disadvantages due to adverse selection

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Medical Benefits Program Financial Performance

1.

Significant savings in 2012 & 2013 compared to total costs of remaining in fully-insured program

2.

Medical premium rates were set too low in 2012 & 2013 and have generated a deficit in program funding

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$42,434,955 $46,358,143 $52,040,750 $46,515,814 $43,047,247 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000

2010 2011 2012 Fully Insured Option 2012 Self-Insured Actual Expenditures 2012 Self-Insured Revenues

Annual Medical Insurance Program Cost Summary 2010-2012

• 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

2012 Self-Insured Costs were $5.5 million lower than Fully-Insured option Rates were set too low and generated a $3.5 million deficit in 2012

Stanislaus County 2013 Plan Year

 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

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Development of 2014 Rates

 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

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22.8% 2.8% 13.8% 14.1% 7.5% 6.4% 9.9% 0.0% 3.75% 27.6%

Fully Insured Trend Option

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Cumulative Annual Health Insurance Rate Inflation 2005 to 2014

Development of 2014 Rates

 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

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$57,500,000 $51,400,000 $65,100,000 $68,700,000

$40,000,000 $45,000,000 $50,000,000 $55,000,000 $60,000,000 $65,000,000 $70,000,000

Projected Baseline (current enrollment) 100% Enrollment SCPH 100% Enrollment Anthem Blue Cross 100% Enrollment Kaiser

2014 Medical Insurance Cost Projection Based on Plan Enrollment

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Step 1 – Select Your Health Plan

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Evaluate provider networks and services

Step 2 – Select Your Benefit Design

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 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

• Similar to a traditional HMO
• Higher monthly premiums

HDHP (High Deductible Health Plans)

 Annual deductible

$1,250/yr for subscriber

• nly 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

• After you pay

HDHP deductible, employee begins to pay for services on a co-pay schedule.

• Some co-pays

are the same, some are different between HDHP & EPO

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EPO HDHP Office visit $20 $20 Outpatient Specialist $20 $20 Urgent care $20 $20 Preventative $0 $0 30-day generic Rx $10 $10 Emergency room visit $50 $100 Hospitalization $0 $250 30-day brand name Rx $20 $30 Ambulance $0 $100

Subscriber

Stanislaus County Medical Benefit Enrollment

Step 1 Select Your Health Plan Step 2 Select Your Benefit Design Step 3 - Select Your Coverage Level* HDHP EPO

*monthly rates

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

• Account. Wells Fargo does offer individual HSA Accounts for a nominal fee.

HDHP EPO HDHP EPO

Subcriber+1

$1,228.55 $1,469.00 $1,571.07 $1,861.26 $1,658.46 $1,965.07 $1,983.15 $1,658.56 $2,512.69 $2,120.97 $2,652.84 $2,238.96 $614.28 $734.50 $930.36 $829.26 $982.53 $785.54

Subscriber+2 or more

Enrollment and Eligibility

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 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

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 Must have enrollment materials submitted to Risk

Management no later than 5:00 pm on Friday, November 22nd

 Must submit documentation to confirm dependent eligibility;

deadline extended to Friday, January 10th

 Enrollment form includes authorization to use automatic

deduction through retirement check from StanCERA

 Direct pay option is available, payment due by the 1st of each

month, insurance will terminate if not paid within 30-days of due date

Risk Management Team

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Jody Hayes Brenda Kiely Casi Persons Peggy Dominguez June Sharp-Scott

Phone (209) 525-5715 Email earlyretirees@stancounty.com Office 1010 10th Street Suite 5900 Modesto