sears retiree group benefits review · sears retiree group benefits review june 18, 2012. 2 agenda...
TRANSCRIPT
2
Agenda
• Welcome
• Committee Goals
• Communication
• Life Insurance Benefits
• Health & Dental Benefits
» Enrolment Statistics
» 2011 Financial Results
» Sun Life Customer Care Centre Statistics
» Prior Authorization
• Other New Business
» Next Meeting
3
Committee Goals
• Mandate– To research and recommend changes to the retiree extended health
and dental plans
• Cost reduction without benefit reduction
– Significant cost savings should, in part, be used for improvement of retiree benefits
• 2011 Overview • Cost containment measures in current plan
– Mandatory generic drug substitution, dispensing fee cap and dollar maximums on other coverages
• Risk, new biologic drugs very expensive and no generic equivalents
6
Provincial Distributionof the 5,463 Participating Retirees with Life Insurance Benefits Coverage
Source: PeopleSoft, Dec 2010
Ontario47%
British Columbia13%
Alberta8%
Prairies9%
Atlantic10%
Quebec13%
Retired associates receiving life insurance benefits are highly concentrated in Ontario (47%) …
7
Demographic Analysisof the 5,463 Participating Retirees with Life Insurance Benefits Coverage
Source: PeopleSoft, Dec 2010
0
1000
2000
3000
Age Ranges
Num
ber o
f Ret
ired
Asso
ciat
es
F 66 234 682 1,155 609 41
M 164 489 967 789 259 8
Grand Total 230 723 1,649 1,944 868 49
2010 to 2011 % -21% -4% -1% -5% 8% 17%
56-60 61-65 66-75 76-85 86-95 Over 95
Females represent 51% of retired associates have life benefit coverage, while males represent 49% …
8
Life Paid and Number of Claims
(6.0%)(14)235221Life # of Claims
6.9%$749$10,859$11,608Average claim amount
0.5%$13,390$2,551,940$2,565,330Life Paid Claims
2010CHANGE
$/# %2011
Life experienced an increase in cost over the previous year of 0.5% …
10
Coverage Breakdownof the 5,971 Participants
Couple57%
Family2%
Single41%
Source: PeopleSoft, Dec 2011
Of the 5,971 participants receiving health & dental benefits, 57% have couple coverage, 41% have single coverage and 2% have family coverage …
11
Participant Levels
Retiree Health and Dental
58505900595060006050610061506200
2007 2008 2009 2010 2011
Year
# of
par
ticip
ants
Source: PeopleSoft, Dec 2011
12
Provincial Distributionof the 5,971 Participants
Source: PeopleSoft, Dec 2011
Ontario49%
British Columbia13%
Alberta8%
Prairies8%
Atlantic10%
Quebec12%
Participants receiving health and dental benefits are highly concentrated in Ontario (49%) …
13
Demographic Analysisof the 5,971 Participants
Source: PeopleSoft, Dec 2011
0
1000
2000
3000
Age Ranges
Num
ber
of
Ret
ired
Ass
ocia
tes
Females 7 102 339 948 1,100 608 64
Males 0 201 548 1,048 744 243 19
Total 7 303 887 1,996 1,844 851 83
2009 to 2010 % -13% -22% -1% 1% -1% 9% 20%
55 or Under
56-60 61-65 66 - 75
76 - 85
86 - 95
Over 95
Females represent 53% of participants receiving health and dental benefits, while males represent 47% …
14
Cost Components
• Cost paid by Sears to Sun Life Financial through the Health and Welfare Trust (HWT):
– Health and Dental claims are adjudicated by Sun Life Financial
• Subject to fluctuations throughout the year
– Sun Life Financial’s 2011 expense charges:
• 3.83% of paid extended health claims
• 3.73% of paid dental claims
• Other Costs
– Administration and recordkeeping by Sears HR Service Centre
– Sears Canada financial accounting liability (accrued benefits obligation)
– Applicable taxes
15
Plan Expenses
ASO Fees and Taxes
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2011 2010 2009
HealthDentalTaxes
Sun Life Financial Administration fees and taxes totaled $552,175 in 2011 …
16
Extended Health Paid Claims
-$15,794$0$15,794Travel Assistance
(61.7%)($77,490)$125,637$48,147Out of Country
22.9%$102,116$445,042$547,158Services & Equipment
$9,781,820
$8,127,868
$354,880
$586,982
$141,411
2010CHANGE
TYPE OF EXPENSE
($20,092)
($132,117)
$42,812
$20,744
$8,049
$
(0.2%)$9,761,728TOTAL
(1.6%)$7,995,751Prescription Drugs
12.1%$397,692Paramedical
3.5%$607,726Hospital
5.7%$149,460Vision
%2011
Prescription drugs, the largest expense, decreased by 1.6%; services & equipment expenses increased by 22.9% …
17
Extended Health Number of Claims
-202Travel Assistance
(38.3%)(62)162100Out of Country
7.1%1692,3842,553Services & Equipment
270,489
260,601
5,379
517
1,446
2010CHANGE
TYPE OF EXPENSE
3.1%8,313278,802TOTAL
2.5%6,469267,070Prescription Drugs
30.5%1,6417,020Paramedical
1.5%8525Hospital
5.9%861,532Vision
%#2011
Prescription Drugs have seen an increase in utilization of 2.5%, while paramedical utilization has seen the largest increase of 30.5% …
18
Extended HealthAverage Cost Per Claim
(37.9%)($294.06)$775.54$481.47Out of Country
(14.1%)($9.33)$65.98$56.65Paramedical
$36.16
$31.19
$186.68
$1,135.36
$97.79
2010CHANGE
TYPE OF EXPENSE
(3.2%)($1.15)$35.01TOTAL
(4.0%)($1.25)$29.94Prescription Drugs
14.8%$27.64$214.32Services & Equipment
2.0%$22.21$1,157.57Hospital
(0.2%)($0.23)$97.56Vision
%$2011
Out of country experienced the largest decrease in average cost per claim by 37.9%, while Services & Equipment experienced an increase in average cost per claim by 14.8% …
19
Breakdown of Paid Health Claims
2010
Prescription Drugs83%
Travel Assistance0%
Paramedical4%
Vision1%
Hospital6%
Services & Equipment5%
Out of Country1%
2011
Travel Assistance0%
Prescription Drugs82%
Paramedical4%
Out of Country0%
Vision2%
Hospital6%
Services & Equipment
6%
20
2011 Services & Equipment Claims Paid
-5540554-101Dental
154%9,6466,28415,93019%42125Prosthesis
$ Paid# of CLAIMS
78%23,70130,32954,030(5%)(10)186176Other
(6%)(3,053)53,37050,3173%5189194Orthotics, Orthopedic26%11,96846,55658,52418%77419496Ambulance(6%)(2,877)44,74541,868(9%)(55)615560Laboratory
%#
2,553
277
136
688
2011
2,384
202
130
622
2010
169
75
6
66
CHANGE
7%
37%
5%
11%
445,042
23,615
59,046
181,097
2010CHANGESERVICE & EQUIPMENT
TYPE OF EXPENSES
102,116
(7,018)
4,650
64,545
$
23%547,158TOTAL
(30%)16,597Nursing
8%63,696Hearing Aids
36%245,642Durable Equipment%
2011
21
2011 Service & Equipment Claims
Equipment47%
Laboratory8%
Orthotics, Orthopaedic9%
Other7%
Nursing3% Ambulance
11%
Prosthesis3%
Dental0%
Hearing Aids12%
22
2011 Paramedical Practitioner Claims Paid
(14%)(663)4,6864,023(14%)(7)5144Psychologist
$ Paid# of CLAIMS
9%4,27448,28552,55913%1311,0251,156Podiatrist/Chiropodist
61%3,1375,1028,23969%4464108Osteopath
21%9.95247,81657,76830%205676881Massage Therapist15%1,89012,69614,58647%77163240Naturopath9%5,69563,12368,8183%25896921Optometrist
%#
7,020
1
1,471
1,996
202
2011
5,379
0
1,063
1,285
156
2010
1,641
1
408
711
46
CHANGE
31%
-
38%
55%
29%
354,880
0
80,736
79,354
13,082
2010CHANGE
PARAMEDICAL PRACTITIONERS TYPE
OF EXPENSES
42,813
80
5,446
12,500
502
$
12%397,693TOTAL-80Other Practitioners
7%86,182Physiotherapist
16%91,854Chiropractor4%13,584Acupuncturist%
2011
23
2011 Paramedical Practitioner Claims
Chiropractor23%
Massage Therapist15%
Naturopath4%Optometrist
17%
Osteopath2%
Physiotherapist22%
Podiatrist13%
Other Practitioners0%
Acupuncturist3%
Psychologist1%
24
Extended HealthPrescription Drug Utilization 2011
The following top 5 Classifications of prescriptions drugs represent 72% of claims and 68% of paid claims …
68%5,446,27072%193,933Top 5 Total
8%624,3016%17,251Gastrointestinal Drugs5
100%7,995,751100%267,070Grand Total
9%696,59310%27,384Hormones & Synthetic Substitutes4
12%987,0796%15,062Unclassified Therapeutic Agents314%1,122,32518%48,282Central Nervous System225%2,015,97232%85,954Cardiovascular1
%Claims Paid ($)%# of ClaimsDrug ClassificationRank
25
Extended HealthDrug Utilization in 2011– Top 10 DIN List
2.32185,7611.002,726Blood FormationPLAVIX 75MG 2
0.9273,1950.511,380Central Nervous System Drug
CELBREX 200MG* 10
0.9475,1100.19503Central Nervous System Drug
LYRICA 75MG CAPSULE9
1.0886,1970.0138Blood FormationNEULASTA 10MG/ML8
1.1289,5470.681,849CardiovascularEZETROL 10MG7
1.1793,8520.0375UnclassifiedHUMIRA 40MG*6
1.83146,1900.05125UnclassifiedENBREL 50MG*5
2.00159,8581.624,408CardiovascularCRESTOR 10MG4
2.10167,5420.641,740GastrointestinalNEXIUM 40MG*3
2.68214,2960.0257UnclassifiedREMICADE INJECTION*1
%Claims Paid ($)%# of
ClaimsDrug ClassificationDrug NameRank
* Prior Authorization Drug
Remicade ranks number one in terms of annual costs, while Crestor is the number one dispensed drug based on number of claims …
26
DentalPaid Claims
CHANGETYPE OF EXPENSE
$69,248
$32,285
$21,294
$15,489
$180
$
3%$2,821,632$2,890,880TOTAL
4%$861,240$893,525Surgical, Restorative
2%$997,722$1,019,016Periodontics, Endodontics
5%$310,966$326,455Major Restorative
0%$651,704$651,884Diagnostic, Preventive
%20102011
Dental paid claims experienced increases across all categories except Diagnostic, Preventative, which remained relatively unchanged …
27
DentalNumber of Claims
39,165
6,222
12,267
908
19,768
2010CHANGE
TYPE OF EXPENSE
(0.3%)(101)39,064TOTAL
1.1%676,289Surgical, Restorative
1.0%11712,384Periodontics, Endodontics
4.2%38946Major Restorative
(1.6%)(323)19,445Diagnostic, Preventive
%#2011
Utilization within the plan in 2011 remained consistent …
28
DentalAverage Cost Per Claim
$72.04
$138.42
$81.33
$342.47
$32.97
2010CHANGE
TYPE OF EXPENSE
$1.96$74.00TOTAL
3%$3.66$142.08Surgical, Restorative
1%$0.95$82.28Periodontics, Endodontics
1%$2.62$345.09Major Restorative
2%$0.55$33.52Diagnostic, Preventive
%$2011
All dental categories experienced an increase in average cost per claim…
29
2011 Breakdown of Dental Claims
Surgical, Restorative31%
Periodontics, Endodontics
35%
Major Restorative11%
Diagnostic, Preventative23%
30
Retiree Group Benefit Costs
0.5%$13,390$2,551,940$2,565,330Life Claims
0.5%$2,596$519,579$522,175ASO fees & Taxes
(1.9%)($2,419)$129,670$127,251Life fees
$15,804,641
$2,821,632
$9,781,820
2010CHANGE
BENEFIT
0.4%$62,723$15,867,364TOTAL
2.5%$69,248$2,890,880Dental
(0.2%)($20,092)$9,761,728Extended Health
%$2011
The group benefit costs combined in 2011 amounted to $15,867,364which has increased by 0.4% …
*unaudited 2011 Life Fees
31
Extended Health & Dental Paid Claims Combined
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Paid
Cla
ims
2010/2011 comparison
2010 9,781,820 2,821,632 519,579 13,123,0312011 9,761,728 2,890,880 522,175 13,174,783
Extended Health Dental ASO Expenses & Taxes Total
Average per capita costs are $2,206.46 per participating retired associate, health representing 74%, dental representing 22% and ASO expenses and taxes representing 4% …
33
Sun Life Financial Call Centre Statistics
• For the January 1 to December 31, 2011 period, 12,330 inquiries were made by retired associates with health and dental coverage
• This represents a 34% increase over the 9,225 calls made in last year (2010)• The inquiries are broken down for the January 1 to December 31, 2011 period
as follows:– Types of Inquiries
• 4,624 claim inquiries• 3,715 coverage inquiries• 382 internet support inquiries• 1,661 member info inquiries
– Source of Inquiry• 68% retired associate• 13% spouse• 7% dental provider• 12% other
34
Sun Life Member Services Website
591
645
1,185
1,459
1,782
December 2010
26%744Total Number of E-claims
31%845Members with Direct Deposit
10%1,302Valid Email
12%1,630Authenticated Members
12%1,992Registered Members
CHANGEDecember 2011
35
Prior Authorization
• Focuses on cost containment
• Continue to see relatively low increase in drug claims costs
• Biologics are being used, but not impacting overall claims experience