office of group benefits tommy d. teague chief executive officer today’s smart choices......
TRANSCRIPT
Office of Group BenefitsTommy D. Teague
Chief Executive Officer
TODAY’S SMART CHOICES...
TOMORROW’S HEALTHY SAVINGS
EligibilityEligibility
Full-time employees and retirees of… state agencies state colleges and universities participating school boards
…and legal dependents: Legal spouse Never-married child from birth to age 21 Never-married child age 21-24 (if full time student)
Effective date of coverage is first day of month after enrollment plus 30 days
OGB Plan Member PremiumsOGB Plan Member Premiums
Plan member pays 25% of premium for self
Plan member pays 50% of premium for any dependents
Aggregate contribution level is 29% by plan member
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Retiree Health CoverageRetiree Health Coverage
OGB Health PlansOGB Health Plans
4 plans -- for all plan members
PPO (self-insured & administered by OGB)
HMO (self-insured; administered by Humana)
EPO (self-insured; administered by UnitedHealthcare)
Medical Home HMO (fully-insured & administered by Vantage)
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OGB Medicare Advantage OGB Medicare Advantage Health PlansHealth Plans
5 plans – only for retired plan members with Medicare Part A & Part B
3 Medicare Advantage HMO plans Humana HMO (only in certain areas of LA) Peoples Health (only in certain areas of LA) Vantage/POS Option (statewide)
2 Private Fee-for-Service (PFFS) plans Humana PFFS (nationwide) SecureHorizons Medicare Direct (nationwide)
Total Enrollment 132,305***
Active employees 86,253 65%
Retired employees 46,052 35%
*** figures don’t include LSU plans
OGB Health Plan EnrollmentOGB Health Plan EnrollmentOGB Health Plan EnrollmentOGB Health Plan Enrollment
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OGB Budget
FY 2010
$1.264 billion
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Fiscal Year 2009-10Fiscal Year 2009-10
Fund Balance as of August 14, 2009
$484,176,551
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OGB Administrative CostsOGB Administrative Costs
MEDICAL BENEFITS
DRUGS
ADMINISTRATIVE
MENTAL HEALTH
Administrative costs are 3% of total costs
MEDICAL BENEFITSMEDICAL BENEFITS
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OGB Organization
332 employees
5 divisionsBenefit Services
Customer Services
Information Services
Quality Assurance & Administration
Legal & HIPAA
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OGB Organization
Chief Executive OfficerTommy Teague
Benefit ServicesHubert Lincecum
Customer ServicesMalcolm Veazie
Administration &Quality Assurance
Brenda St. Romain
Information ServicesCharles Jumonville
Legal & HIPAA ComplianceTommy Benoit
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CHIEF EXECUTIVE OFFICERTommy Teague
(3 positions)
BENEFITS SERVICESHubert Lincecum(152 positions)
INFORMATION SERVICESCharles Jumonville
(53 positions)
ADMINISTRATIONBrenda St. Romain
(36 positions)
CUSTOMER SERVICESMalcolm Veazie(76 positions)
LEGAL/HIPAATommy Benoit(10 positions)
ELIGIBILITY
CLAIMS PROCESSING
FISCAL
FLEXIBLE BENEFITS & IMAGING SERVICES
SYSTEMS
APPLICATIONS
PLAN ADMINISTRATION
QUALITY ASSURANCE
HUMAN RESOURCES
COMMUNICATIONS
PROCUREMENT
DEVELOPMENT
SUPPORT SERVICES
PROVIDER SERVICES
AGENCY SERVICES
PLAN MEMBER SERVICES
LEGAL
HIPAA
FRAUD & ABUSE
INTERNAL AUDIT(4 positions)
OGB Organization
Retired Employees 46,573
With Medicare 27,854
(Medicare is primary) 59%
Without Medicare 18,719
(OGB is primary) 41%
EnrollmentEnrollmentEnrollmentEnrollment
Life InsuranceLife Insurance
Group term life plan
Prudential
State pays 50% of premium for employees and retirees
Employee pays premium for dependent life
Reduced coverage and premiums, on July 1 after reaching age 65 and age 70
Basic Plan
Option I Option II
Employee $5,000 $5,000
Spouse $1,000 $2,000
Each Child $ 500 $1,000
Life InsuranceLife Insurance
Basic Plus Supplemental Plan
Option I Option II
Employee:
Based on schedule to
maximum of $50,000
Based on employee’s
annual salary
Based on employee’s
annual salary
Spouse $2,000 $4,000
Each child $1,000 $2,000
Life InsuranceLife Insurance
GASB 45 / OPEB LiabilityGASB 45 / OPEB Liability
Historically, governments accounted for retiree health care benefits on pay-as-you-go (PAYGO) basis.
– Cost of covering active employees was only a function of current year costs
– Did not reflect total cost of employee health coverage …only included current year
– Without projected future costs, governmental entities’ financial statements did not fully disclose all costs
– GASB requires disclosure of future costs associated with current services
– Those future costs are classified as OPEB
GASB 45 / OPEB LiabilityGASB 45 / OPEB Liability
OPEB (other post-employment benefits) – a compilation of all non-pension benefits an employee receives after retirement
Examples include:Health benefitsDental, vision and hearing coveragePrescription drug coverageLife insuranceLong-term care commitmentsLong-term disability
GASB 45 / OPEB LiabilityGASB 45 / OPEB LiabilityLiability calculation assumptions:
Benefit composition
Medical inflation
Turnover rate
Mortality assumption
– Will employee live to reach retirement?
– How long will retiree live in retirement?
Discount rate
Other factors that affect number of dependents
GASB 45 / OPEB LiabilityGASB 45 / OPEB Liability GASB 45 does not require funding of the calculated liability
Decision to fund or not is significant:– Funded plans have lower liabilities– Unfunded plans have larger liabilities– Rating agencies may consider funding
Funding requirements are strict; funds must be held in irrevocable trust
Depending on funding or not:
State’s liability now stands at
$13.7 billion over 30 years….and growing