healthcare and employee benefits february 23, 2010
TRANSCRIPT
Healthcare and Employee Benefits
February 23, 2010
Healthcare
Employee Benefits
Summary
Presentation Outline
Healthcare
Presentation Outline
Background
Challenges and Trends
Strategies
Summary
Presentation Outline
Background
Challenges and Trends
Strategies
Summary
BCC Comptroller Tax Collector Supervisor of Elections Expressway Authority Housing Finance Authority OBT Development Board Metroplan Orlando Property Appraiser Lynx Clerk of Courts Research and Development I-Ride Trolley
Background
8,370Covered Employees
Total Plan Members:18,652
Background
$42M
Background
$42M
$96M
Background
2002 2004 2005 2006
2002: Live for Today, Plan for Tomorrow Benefits Newsletter launches, encouraging healthy lifestyles.
20031991
1991: Wellworks Central opened to employees and eligible dependents.
1993
1993: Began wellness education through classes, articles, e-mail tips, one-on-one wellness consultations.
1993: Began on-site Wellness Fairs, mobile mammography screenings and various mini-challenges to motivate employees toward better health.
2006: Incorporated a Wellness Nurse and Wellness challenge with a $5 bi-weekly incentive credit.
2003: Started the Wellness World Series engaging 1,200 participants to focus on their health.
2004: OC Wellness Games with 1,143 participants
2005: Implemented the Wellness for Life Program.
2005: Humana Medicare Advantage plan offered for the first time to Medicare eligible retirees.
Background
2009: HR In the Loop airs its first “webisode” communicating HR information to County employees each pay day.
2008: Implemented the County’s first online open enrollment.
2007: County plan goes self-funded saving $6.5 million in the first year.
2007: By 2007 a total of six fitness centers were available to employees.
2009: Implemented a Diabetes Management Pilot Program to employees as a result of the Wellness for Life Screenings.
2008: Began Wellness for Life Credit and Screenings increasing employee engagement in personal health.
2007 2008 2009
2009: Implemented the healthy pregnancy program to waive delivery co-pays.
2009: Implemented generic differential for prescriptions and carved out pharmacy with Express Scripts.
Background
2010: Began assessing a surcharge to tobacco users on the County’s medical plan.
2010: Orange County became a Tobacco-Free County, prohibiting tobacco use on County property.
2010
2010: Changed inpatient co-pays to $300 on day one, and $100 for days two – four.
2010: Increased hospital based outpatient surgery from $100 to $200.
2010: Implemented prescription step therapy and voluntary select home delivery.
2010: Began a Dependent Audit to remove ineligible dependents from the County’s medical plan.
Background
$96M
$229M
9% 9% 9% 9% 9% 9% 9% 9% 9% 9%
Background
0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
0% Trend
Background
FY2010 Health Plan Budget
$96 Million
Background
Orange County
87%Employer
13%
Employees
Premium Cost Share
Background
Florida Industry Norm
76%Employer
24%
Employees
Premium Cost Share
Presentation Outline
Background
Challenges and Trends
Strategies
Summary
Challenges and Trends
Overall cost of claims is trending at 9% and is expected to increase without major plan design changes
Unable to sustain funding for large increases year after year
Need to address total cost of plan and increase share of cost paid by employees
Challenges and Trends
Health expenses are expected to jump as high as 10% nationally
41% of employers are planning to shift a larger portion of healthcare expenses to the employee Plan design changes (Co-Pays, Co-
Insurance, Deductibles) Increased premiums Pharmacy plan changes
Challenges and Trends
Plan Design Changes Co-Pays
Fixed payment by plan member each time a medical service is accessed
Co-Insurance Percentage amount paid by
insured plan member each time a medical service is accessed
Challenges and Trends
MeasureAverage Total
CostEmployee Co-
PayAverage Plan
Cost% Spent Annually
Primary Care Visits $108 $15 $93 8%
Specialist Visits $210 $25 $185 23%
Ancillary MRI/CT $481 $25 $456 1%
Home Healthcare $482 $0 $482 1%
Outpatient Visits $1,159 $100 $1,059 17%
Inpatient Visits $13,413 $600 $12,813 25%
Challenges and Trends
Plan Design Changes Deductible
Amount paid by covered member before plan begins
Utilized with Health Savings or Reimbursement Account Plans
Separate amounts for employee only and family coverage
Challenges and Trends
Plan Design Changes Consumer Driven Health
Plans High-Deductible Health Plan Individual Health Account Preventive Care Offered by 44% of U.S.
employers
Employee Medical Clinics In 2008, 25% of
employers offered onsite employee medical clinics
City of Apopka City of Ocoee City of Port St. Lucie City of Palm Bay Darden Restaurants Florida Hospital Harris Corporation Lockheed Martin Rosen Hotels & Resorts Siemens Power Generation Universal Studios Wheeled Coach
Challenges and Trends
Challenges and Trends
Employee Medical Clinics
Potential Benefits Improves Follow-up Care Lower County Cost for Care Coordinate Occupational Medical Care
Potential Savings Initial ROI 1:1, 3:1 after three years Lower Workers Compensation Costs Lower Occupational Medical Costs Higher Generic Fill Rate Lower Risk Factors
Presentation Outline
Background
Challenges and Trends
Strategies
Summary
Strategies
Decrease the overall cost of our health insurance plan
More evenly share the costs of health insurance premiums
Orange County
Employees
Premium Cost Share
87%Employer
Florida Industry Norm
76%Employer
24%
Employees
Premium Cost Share
13%
Strategies
Increase the premiums for all participants
Encourage more judicious use of health care services
Utilize models for cost control and cost sharing
Look at onsite employee medical clinics
Strengthen Wellness initiatives, requirements and incentives
Strategies Implement deductibles and
co-insurance
Create more of a financial partnership with employees
Establish health savings or reimbursement accounts
Out of pocket maximums
Continue to cover preventive care
Strategies
Typical employees will see:
Premium increases
Deductibles
Co-insurance and co-pays
Health Savings or Reimbursement Accounts
Maximum out-of-pocket expenses
Presentation Outline
Background
Challenges and Trends
Strategies
Summary
Healthcare Summary
Medical Plan Oversight Committee meetings bi-weekly
Discussions with Employee Benefits Committee
Follow-up BCC discussions and formal proposals in May
Final decision by June
Employee education campaign this summer
Open enrollment in October
Implementation in January 2011
Employee Benefits
Presentation Outline
Employee Benefits
Strategies
Summary
Presentation Outline
Employee Benefits
Strategies
Summary
Employee Benefits
Paid Leave
Retirement Contributions
Educational Assistance
Employee Benefits
Paid Leave
Personal Leave Used for vacations, illness,
medical appointments, personal or business, etc.
Leave accruals based on length of service
Employee Benefits
Length of Continuous Service
Hours Accrued Per Pay Period
Maximum Days Accrued Per Year
Maximum Accrual Hours
Under 5 Years 5.54 18 432
Over 5 Years 6.16 20 480
Over 6 Years 6.46 21 504
Over 7 Years 6.78 22 528
Over 8 Years 7.08 23 552
Over 9 Years 7.39 24 576
Over 10 Years 7.696 25 600
Over 15 Years 8.31 27 648
Personal Leave Based on an 8-hour day/40 hour week
Employee Benefits
Paid LeaveTerm Leave
40 or more consecutive hours absent due to illness or injury
Maximum of 48 hours (Six 8-hour days) accrued annually
May require medical documentation for approval
Employee Benefits
Florida Retirement System State Mandated
County paid contributions determined annually
Regular Risk: 9.85%
Special Risk: 20.92%
2009 Contributions:
Approx. $45M
Employee Benefits
Educational Assistance Program funding is determined
annually
Up to $1,500 per fiscal year for successful course completion
Employee Benefits
Educational Assistance Increases each year in
participation and cost Many Counties have reduced
or eliminated Educational Assistance
FY Employees Cost2007 462 $408,349 2008 550 $522,7462009 579 $554,933
Presentation Outline
Employee Benefits
Strategies
Summary
Strategies
Reevaluate Paid Leave
Explore Early Retirement Options
Review Educational Assistance
Strategies
Reevaluate Paid Leave
State and National Trends
For new employees with 1-5 years of service, 20 days is the average combined number of personal, vacation and sick days off
In 2004, 29% of employers offered Paid Time Off (PTO) Plans
By 2008, 42% offered PTO Plans
Strategies
Reevaluate Paid Leave
Effective October 1, 2010 for New Employees: Eliminate Term Leave Transition to a Paid Time Off
Plan
Strategies
1517
1820
22 22
26
18
Strategies
Explore Early Retirement Options Develop incentives to bridge gap between the
time an employee is FRS eligible to retire and eligible for Medicare
Review Educational Assistance Consider a temporary freeze on funding for
the educational assistance program effective October 1, 2010
Presentation Outline
Employee Benefits
Strategies
Summary
Employee Benefits Summary
Revise paid leave
Explore early retirement options
Suspend Educational Assistance
Summary
Summary
9% annual increase in healthcare cost is not sustainable
Fundamental changes to the health plan are needed
Benefits for new employees need to be adjusted
Suspension of benefit programs and early retirement options need to be evaluated
Summary
Follow-up BCC discussions and formal proposals in May
Final decision by June 2010
Implement benefit changes in October 2010
Implement health plan changes in January 2011
Healthcare and Employee Benefits
February 23, 2010