board and employee insurance advisory committee meeting 2015 - 2016 july 14, 2015
TRANSCRIPT
Board and Employee
Insurance Advisory Committee Meeting
2015 - 2016
July 14, 2015
Health Plus Observations and Recommendations – Plan Cost 2016
Health Plus ObservationsLPSS Medical Trend Less than 3% for 2015LPSS RX Trend 20%+ for 2015LPSS Total Medical Trend including RX 8.95% for 2016Blue Cross administrative fee will remain the same for 2016
Health Plus RecommendationsAdditional 4.2% in Premium or Benefit Reductions
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LPSS Accrual Rate Development Through February 2015Current Year
Paid Claims $42,078,717
Annual Trend Assumption 8.95%
Specific Threshold $500,000
PPO and TPA fees $2,199,671
Stop-Loss-Premium $8.99/employee $575,431
PCORI Fee ($33 pmpy) $29,8881
PPACA Reinsurance Fee $226,063
Total Expenses $ 2,775,102
Less Estimated RDS Recovery $915,758.00
Less Estimated Rx Rebates $697,314.00
Net Total Annual Expenses $1,162,031
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LPSS Recommended 1-1-2016 Change in Medical Plan Accrual Rates
Prior Year Current Year Indicated
Meld of Indicated
Health Plus Recommended
OverallWeighting
+5.5% 25%
+3.7% 75%
+4.2% +4.2%
Enrollment Average for
2008
Current Rate
Recommended July 1, 2011
Rate
Current Annual
Premium
Recommended Annual
Premium
SingleFamilyTotalChange in PremiumPercentage Change
3,0442,2895,333
$568.58$1,049.93
$592.26$1,093.66
$49,608,241 $51,674,382 $2,066,140 +4.2%
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Health Plus Observations and Recommendations – Medical Plans
Health Plus Observations Enhanced Plan and Basic Plan lack sufficient premium spread of
15% to 20% No true low cost option for LPSS employees
Health Plus Recommendations Increase deductible by $250, out of pocket max by $600 and copays
for specialist by $10 on Enhanced Plan No premium increase on Enhanced Plan Eliminate the current Basic Plan and add a Basic Plan with a PCP
copay as the new Basic Plan with reduced premium. Increase deductible for employee/dependent for the High Deductible
Health Plan. No premium increase on High Deductible Health Plan.
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2016 Enhanced PPO Alternate Benefit Option
Enhanced PPO Current Alternate
Deductible
Individual
Family
In-Patient Hospital
$800
$2,400
Deductible + 20%
$1,050
$3,150
Deductible + 20%
Coinsurance
In-network
Out-of-Network
80%
60%
80%
60%
Physician Copay
Quality Blue Primary
Specialist Copay
$40
$25
$40
$40
$25
$50
Out-of-Pocket Max
(Medical & RX Combined)
Individual
Family
$3,400
$4,500
$4,000
$9,000
*Differential from Current Plan: 0.9780*$250 deductible credit for Wellness participation*Out of pocket maximum includes deductible 6
LPSS 2016 – Enhanced Plan Premium
Enhanced Plan
Current Effective January 1,
2016
BoardPortion of Increase
Employee Portion of Increase
Employee CurrentMonthly
Employee Total
January 1, 2016
Active $738.00 $738.00 $0.00 $0.00 $211.00 $211.00
Active + 1 $1198.00 $1198.00 $0.00 $0.00 $496.00 $496.00
Active + Family $1564.00 $1564.00 $0.00 $0.00 $724.00 $724.00
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2016 Basic Alternate Benefit Option
BASIC –
PCP Copay
Current
Basic
Alternate
PCP Copay Deductible
Individual
Family
In-Patient Hospital
$950
$2,850
Deductible + 20%
$3,500
$7,000
Deductible + 30%
Coinsurance
In-network
Out-of-Network
80%
60%
70%
50%
Physician Copay
Quality Blue Primary
Specialist Copay
Deductible + 20%
$25
Deductible + 20%
$40
$25
Deductible + 30%
Out-of-Pocket Max(Medical & RX Combined)
Individual
Family$4,000
$4,500
$6,500
$13,000
*Differential from Current Plan: 0.8449*$250 Deductible credit for Wellness participation*Out of pocket Maximum includes deductible
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LPSS 2016 – Basic PPO-PCP Copay Premium
Basic PPO-PCP Copay Plan
CurrentBasic Plan
Effective January 1,
2016
BoardPortion of Decrease
Employee Portion of Decrease
Employee CurrentMonthly
EmployeeTotal
January 1, 2016
Active $651.00 $553.00 -$47.00 -$51.00 $149.00 $98.00
Active + 1 $1087.00 $923.00 -$82.00 -$82.00 $409.00 $327.00
Active + Family $1425.00 $1211.00 -$107.00 -$107.00 $608.00 $501.00
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2016 Blue Saver (HDHP) Benefit Option
Blue Saver
High Deductible Current Alternate
Deductible
Individual
Family
In-Patient Hospital
$2,500
$5,050
Deductible + 20%
$3,000
$6,000
Deductible + 20%
Coinsurance
In-network
Out-of-Network
80%
60%
80%
60%
Physician Copay
Specialist Copay
Deductible + 20%
Deductible + 20%
Deductible + 20%
Deductible + 20%
Out-of-Pocket Max(Medical & RX Combined)
Individual
Family
$5,000
$10,050
$6,000
$12,000
*Differential from Current Plan: 0.980*$250 Deductible credit for Wellness participation*ACA requires Embedded deductible for 2016
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LPSS 2016 – High Deductible Premium
High Deductible
Health Plan
Current Effective January 1,
2016
BoardPortion of Increase
Employee Portion of Increase
Employee CurrentMonthly
EmployeeTotal
January 1, 2016
Active $353.00 $353.00 $0 $0 $9.00 $9.00
Active + 1 $590.00 $590.00 $0 $0 $124.00 $124.00
Active + Family
$722.00 $722.00 $0 $0 $213.00 $213.00
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Health Plus Observations and Recommendations - RX
Health Plus Observations RX Trending at 20% + for 2016 RX Specialty Trend 30%+ for 2016 RX Plan design lacks percentage of cost copay on specialty medications
– Tier 4 PBM repricing – CVS and ESI/BC repriced 94,558 claims resulting in a
savings with ESI/BC of $946,840 annually
Health Plus Recommendations Move PBM claims processing to ESI/BC effective January 1, 2016 Increase copay for Tier 2 and Tier 3 prescriptions Add percentage of cost copay for Tier 4 specialty medications All plans will have common out of pocket for medical and RX
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LPSS PBM Repricing
CVS and ESI/BC Repriced 94,558 LPSS RX claims from 7/1/2014 through 12/31/2014
CVS Proposed ESI Proposed
RX Count 94,517 94,558
Ingredient Cost $7,055,307 $6,724,664
Dispensing Fee $76,199 $108,344
Gross Cost $7,131,506 $6,833,008
Rebates $783,427 $958,349
Net Plan Cost $6,348,079 $5,874,659
Semi-Annual Difference $473,420
Annual Difference $946,840
**6 month RX claims data
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LPSS 2016 – RX Benefit ChangesEnhanced and Basic Plans
2015 Current RX Benefits 2016 Proposed RX Benefits
Tier 1 $10 Tier 1 $10
Tier 2 $25 Tier 2 $30
Tier 3 $50 Tier 3 $60
Tier 4 N/A Tier 4 10% Coinsurance
Out of Pocket RX Max
N/A Out of Pocket Max
Same as medical plan
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Health Plus Observations and Recommendations - Retirees
Medicare Eligible Individuals (MEIs) Health Plus Observations
LPSS current MEI total premium $367.01. Anticipated 2016 MEI total cost $524.28.
LPSS subsidizes each BC MEI $237.44 per person compared to the current Humana Medicare Advantage Plan
Current Blue Cross ASO Plan coordinates with MEIs to $0 copay, $0 deductible and $0 out of pocket maximum. RX copays apply
Health Plus Recommendations Increase Premium on Blue Cross ASO plan for MEIs Blue Cross ASO plan – keep current coordination at $0 copay and $0
deductible Humana Advantage plan (Passive PPO) – $0 physician copay and $0 hospital
inpatient copay Add third offering to all MEIs - Humana Advantage HMO with $0 Physician
copay and $0 hospital inpatient copay. 15
LPSS 2014-2016 MEI Medical and RX Cost Analysis
2014 Avg. MEI Monthly Cost
2015 Estimated MEI Cost Monthly Cost
2016 Estimated MEI Monthly Cost
Administration $33.05 $33.05 $33.05 Stop Loss $8.99 $9.71 $10.49 Medical Claims $193.43 $201.17 $209.21 Rx Claims $228.04 $262.25 $301.59 PCORI and PPACA Reinsurance Fees $4.83 $4.83 $4.83 Total Cost $468.34 $511.01 $559.17 Less RDS $34.89 $34.89 $34.89 Net Total Cost $433.45 $476.12 $524.28 Humana MA Premium $285.84 $286.84 $286.84 Net Monthly Savings PMPM $147.61 $189.28 $237.44 Net Annual Savings PMPM $1,771.38 $2,271.34 $2,849.27
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LPSS – 2016 MEI RX Savings Estimate
Avg. # of MEI in 2014 – 1638 Savings per MEI - $237.44
% Migrating to HMA Total Annual Savings LPSS Annual SavingsMembers Annual
Savings 20% 328 $933,421 $728,069 $205,353
30% 491 $1,400,132 $1,092,103 $308,029
40% 655 $1,866,843 $1,456,137 $410,705
50% 819 $2,333,553 $1,820,172 $513,382
60% 983 $2,800,264 $2,184,206 $616,058
70% 1147 $3,266,975 $2,548,240 $718,734
80% 1310 $3,733,685 $2,912,274 $821,411
90% 1474 $4,200,396 $3,276,309 $924,087
100% 1638 $4,667,107 $3,640,343 $1,026,763
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2016 MEI Retiree Benefit OptionBlue Cross ASO – MEIs
Deductible – Individual $0
Maximum Out of Pocket $2,500 combined
Physician Services
PCP $0 copayment
Specialist $0 copayment
Hospital Services
Inpatient Acute Hospital $0 per admission
Emergency Room $0 copayment
Urgent Care $0 copayment
Ambulance Service $0 copayment
Other Services
DME 0%
Pharmacy $10/$30/$60/10% 18
2016 MEI Retiree Benefit OptionHumana Advantage – Passive PPO
In-Network Out of Network
Deductible – Individual $0 $0
Maximum Out of Pocket $1,000 combined $1,000 combined
Physician Services
PCP $0 copayment $0 copayment
Specialist $0 copayment $0 copayment
Hospital Services
Inpatient Acute Hospital $0 per admission $0 per admission
Emergency Room $0 copayment $0 copayment
Urgent Care $0 copayment $0 copayment
Ambulance Service $0 copayment $0 copayment
Other Services
DME 0% 0%
Pharmacy $10/$20/$40/$50 from $0 to catastrophic,
5% with max of $50 in catastrophic
$10/$20/$40/$50from $0 to catastrophic,
5% with max of $50 in catastrophic
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2016 MEI Retiree Benefit OptionHumana Advantage – HMO In-Network
Deductible – Individual $0
Maximum Out of Pocket $1,000 combined
Physician Services
PCP $0 copayment
Specialist $0 copayment
Hospital Services
Inpatient Acute Hospital $0 per admission
Emergency Room $0 copayment
Urgent Care $0 copayment
Ambulance Service $0 copayment
Other Services
DME 0%
Pharmacy $10/$20/$40/$50 from $0 to catastrophic,
5% with max of $50 in catastrophic 20
LPSS 2016 – MEI Retiree Premium
Current
Effective January 1,
2016
Board Portion of Increase
Retiree Portion of Increase
Retiree CurrentMonthly
EmployeeTotal
January 1, 2016
BC ASO Basic
$367.00 $524.28 $78.00 $78.00 $87.00 $165.00
*HumanaPPO Passive
$268.00 $268.00 $0 $49.00 $0 $49.00
*Humana HMO N/A $219.00 $0 $0 $0 $0
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*Expected renewal for 2016