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HomeMy WebLinkAboutHealth Benefits ChangesDeschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Work Session of 07/2512012 Please see directions for completing this document on the next page. DATE: 07123/1-2 FROM: Ronda Connor Personnel 385-3215 TITLE OF AGENDA ITEM: Consideration Board Approval ofEBAC recommended changes to the health benefits. PUBLIC HEARING ON THIS DATE? No BACKGROUND AND POLICY IMPLICATIONS: Each year, in advance of the plan renewal the health benefits Renewal Committee and EBAC meet to analyze our current benefit structure, state and federal requirements, benefits trends, and requests from employees. Our health plan insures approximately 3,000 people. We provide a comprehensive benefit package of Medical, Dental, Vision, Prescription and Alternative Care coverage. Below is a listing of the items that are recommended by EBAC. • Change stop loss carriers from Optum to HM. Increase specific deductible from $225,000 to $300,000. Remove aggregate stop loss coverage. The net savings with these two options is $27,226.00 over the current year's premiums. The rates are per option two on the HM proposal dated July 19,2012 (attached) • EBAC is also reviewing an option to change the way Deschutes County reimburses claims as the secondary payor. It may save the Plan a significant amount of money. EBAC reviewed this item and determined that more information is necessary to further discuss. FISCAL IMPLICATIONS: Net savings of $27,226.00 RECOMMENDATION & ACTION REOUESTED: Consideration of approval of EBAC recommendations, authorize County administrator signature of HM proposal dated 07/19/12. ATTENDANCE: Ronda Connor DISTRIBUTION OF DOCUMENTS: Deschutes County 2012 ______I---_.,~'I'II_U_L_c...;.l_=r...;.~....::..:..:_='L~IiThis spreadsheet represents the specific premiums and aggregate I These These figures may vary slightly from ALL CALCULATIONS BASED ON : Single $ 206 Family $ 816 contact EBMS for these premiums. ITotal $ 1,022 I Monthly Fixed Annual Stop Savings over Claim Basis Specific Aggregate Cost loss expense Variance % current year Current­ Optum 225000/100000 36/12 $26.59 $2.85 $30,087 .68 $ 361,052.16 factors on a composite basis for illustrative purposes only. composite figures presented herein are based on the enrollment figures shown at the left of this page. actual enrollment and therefore the composites also may vary slightly. These composite figures are based on the two tier premiums quoted by the ca Renewal­$ Optum **300000/100000 48/12 $29.25 $2.85 $32,806.20 $ 393,674.40 8.29% Med / Rx 300000/225000 48/12 $29.25 $2.85 $32,806.20 $ 393,674.40 8.29% Agg Med / Rx 500000/100000 24/12 $9 .70 $2.39 $12,355.98 $ 148,271 .76 -143.51% 225000/100,000 24/12 $41.56 $3.32 $45,867.36 $ 550,408.32 34.40% HM 1 300000/100,000 24/12 $27.22 $3.52 $31,416.28 $ 376,995.36 4.23% 300000/100,000 24/12 $27.22 $27,818.84 $ 333,826.08 -8.16% 27,226.08 400000/50,000 24/12 $20.36 $3.77 $24,660.86 $ 295,930.32 -22.01% Med / Rx 500000/50,000 24/12 $14.20 $3 .96 $18,559.52 $ 222 ,714 .24 -62.11% 225000/100,000 24/12 $42.97 $3.32 $47,308.38 $ 567,700.56 36.40% HM Q2 300000/100,000 24/12 $28.57 $3.52 $32,795.98 $ 393,551.76 8.26% 400000/50,000 24/12 $21.76 $3.77 $26,091.66 $ 313,099.92 -15.32% Med / Rx 500000/50,000 24/12 $15.60 $3.96 $19,990.32 $ 239,883.84 -50.51%­ Quote Contingencies: IISI-$4 million minus Spec deductible annual max; OMIP is included; **LASER**XXXXXX on 12112 basis ~ HM Q1 -$2 million minus Spec ded annual max; includes Advanced Spec Funding; OMIP is included; includes retirees up to 65 -FIRM HM Q2 -$4 million minus Spec ded annual max; includes Advanced Spec Funding; OMIP is included, includes retirees up to 65 -FIRM Optum -$2 million minus Spec ded annual max; includes IRO; **LASER** XXXXXX $475,000, spec ded-step down ded does not apply, OMIP not included because the County will pay OMIP directly to the state -carrier is not involved -FIRM -option to remove Rx on quote; Optum clarification -**300,000/100,000 has $475,000 LASER on XXXXX; 300,000/225,000 laser does not apply, spec step down deductible does not apply to XXXXXX for either Optum renewal quote SunLife -$2 million minus Spec ded annual max; includes IRO & separate charge for OMIP; **LASER**XXXXXX 12/12 basis $650,000; requesting $4 mil max & no OMIP EBMS Re -declined Zurich -declined HCC -declined Symetra -declined 7/25/2012 STOP LOSS PROPOSAL FOR Deschutes County Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 1 of 6 Specific: (Check one)Lives Option 1 Option 2 Option 3 Option 4 Specific Deductible (per Covered Individual)$225,000 $300,000 $400,000 $500,000 Policy Year Max with Unlimited Lifetime Max $1,775,000 $1,700,000 $1,600,000 $1,500,000 Covered Benefits Med, Rx Card Med, Rx Card Med, Rx Card Med, Rx Card Specific Premium Single Rate 206 $18.31 $11.46 $8.16 $5.42 Family Rate 816 $47.43 $31.20 $23.44 $16.42 Total Lives 1,022 Estimated Contract Specific Premium $509,697 $333,840 $249,696 $174,183 Contract Aggregating Specific Loss Fund $100,000 $100,000 $50,000 $50,000 Total Estimated Specific Liability $609,697 $433,840 $299,696 $224,183 Contract Basis 24/12 24/12 24/12 24/12 Commission 0.00%0.00%0.00%0.00% Aggregate: (Include?Yes No) Covered Benefits Med, Rx Card Med, Rx Card Med, Rx Card Med, Rx Card Policy Year Maximum $1,000,000 $1,000,000 $1,000,000 $1,000,000 Aggregate Factors Single Medical, Rx Factor 206 $687.07 $697.38 $704.93 $709.06 Family Medical, Rx Factor 816 $1,648.97 $1,673.70 $1,691.84 $1,701.74 Estimated Contract Attachment Point 1,022 $17,845,151 $18,112,794 $18,309,084 $18,416,234 Contract Minimum Attachment Point (100%)$17,845,151 $18,112,794 $18,309,084 $18,416,234 Aggregate Corridor 125%125%125%125% Contract Basis 24/12 24/12 24/12 24/12 Run-In Limitation $2,855,224 $2,898,047 $2,929,453 $2,946,598 Aggregate Premium Composite Rate 1,022 $3.32 $3.52 $3.77 $3.96 Estimated Contract Aggregate Premium 1,022 $40,716 $43,169 $46,235 $48,565 Commission 0.00%0.00%0.00%0.00% Total Combined Estimated Contract Premium $550,413 $377,009 $295,931 $222,748 Note:This proposal is not complete unless accompanied by the proposal notes, the basis of offer and the exclusions noted on the following pages. Individual Special Requirements: Sales Representative:Heidi Whoolery Effective Date:08/01/2012 Broker:EBMS Through Date:07/31/2013 TPA:EBMS Provider Network(s):First Choice Health Utilization Review Vendor(s):EBMS STOP LOSS PROPOSAL FOR Deschutes County Stop Loss coverage is underwritten by HM Life Insurance Company, Pittsburgh, PA, under policy form HL 601 (905) or similar; in certain states the requested coverage may not be available. As included herein, “HMIG” refers to the Stop Loss carrier. Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 2 of 6 PROPOSAL NOTES (For Option 1 - 4) The rates and factors in this proposal are firm. You have until 7/28/2012 to provide a signed proposal, binder check (if applicable) and signed application. The specific rates in this proposal are based on an aggregating specific arrangement. This proposal includes Advanced Specific Funding. The rates and factors in this proposal are based on the disclosure of all individuals considered a special enrollee due to having previously satisfied the plan's lifetime maximum. Written acceptance by HM must be acknowledged before terms of coverage for such individuals are included under HM's stop loss policy. PROPOSAL ACCEPTANCE Please acknowledge acceptance of the terms in this proposal by returning this proposal no later than 7/28/2012. Please also indicate which option is chosen and whether Aggregate is to be included, by checking the appropriate boxes on the previous page. Failure to remit the signed agreement within the same period will result in updated large claim disclosure (and claims) being required for our review. Signature: __________________________________________ Title: __________________________________________ Accepted on the _______________ day of ___________, 20__________ STOP LOSS PROPOSAL FOR Deschutes County Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 3 of 6 Specific: (Check one)Lives Option 5 Option 6 Option 7 Option 8 Specific Deductible (per Covered Individual)$225,000 $300,000 $400,000 $500,000 Policy Year Max with Unlimited Lifetime Max $3,775,000 $3,700,000 $3,600,000 $3,500,000 Covered Benefits Med, Rx Card Med, Rx Card Med, Rx Card Med, Rx Card Specific Premium Single Rate 206 $18.84 $11.96 $8.68 $5.95 Family Rate 816 $49.06 $32.76 $25.06 $18.04 Total Lives 1,022 Estimated Contract Specific Premium $526,968 $350,351 $266,844 $191,356 Contract Aggregating Specific Loss Fund $100,000 $100,000 $50,000 $50,000 Total Estimated Specific Liability $626,968 $450,351 $316,844 $241,356 Contract Basis 24/12 24/12 24/12 24/12 Commission 0.00%0.00%0.00%0.00% Aggregate: (Include?Yes No) Covered Benefits Med, Rx Card Med, Rx Card Med, Rx Card Med, Rx Card Policy Year Maximum $1,000,000 $1,000,000 $1,000,000 $1,000,000 Aggregate Factors Single Medical, Rx Factor 206 $687.07 $697.38 $704.93 $709.06 Family Medical, Rx Factor 816 $1,648.97 $1,673.70 $1,691.84 $1,701.74 Estimated Contract Attachment Point 1,022 $17,845,151 $18,112,794 $18,309,084 $18,416,234 Contract Minimum Attachment Point (100%)$17,845,151 $18,112,794 $18,309,084 $18,416,234 Aggregate Corridor 125%125%125%125% Contract Basis 24/12 24/12 24/12 24/12 Run-In Limitation $2,855,224 $2,898,047 $2,929,453 $2,946,598 Aggregate Premium Composite Rate 1,022 $3.32 $3.52 $3.77 $3.96 Estimated Contract Aggregate Premium 1,022 $40,716 $43,169 $46,235 $48,565 Commission 0.00%0.00%0.00%0.00% Total Combined Estimated Contract Premium $567,684 $393,520 $313,080 $239,922 Note:This proposal is not complete unless accompanied by the proposal notes, the basis of offer and the exclusions noted on the following pages. Individual Special Requirements: Sales Representative:Heidi Whoolery Effective Date:08/01/2012 Broker:EBMS Through Date:07/31/2013 TPA:EBMS Provider Network(s):First Choice Health Utilization Review Vendor(s):EBMS STOP LOSS PROPOSAL FOR Deschutes County Stop Loss coverage is underwritten by HM Life Insurance Company, Pittsburgh, PA, under policy form HL 601 (905) or similar; in certain states the requested coverage may not be available. As included herein, “HMIG” refers to the Stop Loss carrier. Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 4 of 6 PROPOSAL NOTES (For Option 5 - 8) The rates and factors in this proposal are firm. You have until 7/28/2012 to provide a signed proposal, binder check (if applicable) and signed application. The specific rates in this proposal are based on an aggregating specific arrangement. This proposal includes Advanced Specific Funding. The rates and factors in this proposal are based on the disclosure of all individuals considered a special enrollee due to having previously satisfied the plan's lifetime maximum. Written acceptance by HM must be acknowledged before terms of coverage for such individuals are included under HM's stop loss policy. PROPOSAL ACCEPTANCE Please acknowledge acceptance of the terms in this proposal by returning this proposal no later than 7/28/2012. Please also indicate which option is chosen and whether Aggregate is to be included, by checking the appropriate boxes on the previous page. Failure to remit the signed agreement within the same period will result in updated large claim disclosure (and claims) being required for our review. Signature: __________________________________________ Title: __________________________________________ Accepted on the _______________ day of ___________, 20__________ STOP LOSS PROPOSAL FOR Deschutes County Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 5 of 6 initials: _______ date: _________ BASIS OF OFFER Assumptions Aggregate coverage is only available when purchased with Specific coverage. This proposal is subject to revision if there is a change in effective or renewal dates, or a change in the plan of benefits. This proposal is based on the utilization of the Provider Network(s) and the Utilization Review Vendor(s) listed on this proposal. This proposal assumes a minimum participation level of 75% applies for all eligible enrollees under a contributory plan, and 100% under a non- contributory plan. This proposal assumes the plan of benefits includes a pre-certification, utilization review and large case management program with a benefit penalty for non-compliance. This proposal is based on a description of the employee benefit plan(s) provided and approved by HMIG, employee and dependent census data, plus any other information relevant to the underwriting risk. If any of the information was incorrect or changes the risk involved, the rates and factors will be modified, and the specific and aggregate claims will be adjusted accordingly. The bad debt and charity surcharge portion of the New York Reform Act will be applicable under the stop loss if services are rendered in New York State. Other surcharges, pool charges and/or covered lives assessments will not be covered under the stop loss. All standard Policy provisions apply. Certain exclusions, limitations and laws of the state where the Policy is issued may apply. See "Exclusions" for details. Only retirees under age 65 are included in the stop loss coverage. This proposal will expire 7/28/2012. Human Organ Transplant benefits are payable in accordance with the underlying plan and subject to the individual lifetime maximum. Lifetime Maximum Specific Benefit will follow the underlying plan up to the proposed maximums offered within this proposal. Expenses arising out of any treatment for mental or nervous disorders will follow the underlying plan. Expenses arising out of any treatment for drug or substance abuse or alcoholism will follow the underlying plan. The Agent is properly licensed and appointed by HMIG. The initial rates are guaranteed for the proposed policy period unless otherwise noted. There are not more than 5% COBRA participants. Qualifications Completed Disclosure Form, Application, first month's premium check, final census, and any other required information as stated under the Assumptions or Individual Special Requirements, must be received within 30 days prior to, but no later than 15 days following the proposed effective date. Information contained on the Disclosure Form should be current up to the date of signature, and be completed in its entirety. Failure to do so will result in approval being denied or delayed until a later effective date. Should the number of employees, either in total and/or by single/family mix, change by 10% or more, the premium rates are subject to change. A signed and dated Plan Document is required within 60 days of the proposed effective date. If the descriptions of the benefits or plan provisions differ from what was initially utilized to underwrite the risk, the premium rates and aggregate retention factors may be subject to re-rating, retro- active to the effective date. HIPAA Privacy rules permit the release of Protected Health Information (PHI) for the purpose of evaluating and accepting risk associated with the Plan Sponsor as part of "Health care operations". HMIG will use this information solely for the purpose of evaluating and accepting the risk and will not disclose any PHI collected except to perform this risk evaluation. STOP LOSS PROPOSAL FOR Deschutes County Underwriter: MAC (July 19, 2012) 10168328267-2012-209287-3-3 Page 6 of 6 initials: _______ date: _________ EXCLUSIONS Any amount incurred / paid: (1) when the underlying medical plan is not in effect; by a person who is not a plan participant; (2) not specifically covered by the underlying medical plan; or (3) by any plan that has not been identified as included; or (4) that the policyholder is not required to pay in accordance with the terms of the underlying medical plan. Caused or contributed to by war or an act of war unless a person is required to be in a location where a war or act of war has or may occur as a condition of employment. For any injury or illness which is eligible for coverage under a workers' compensation or occupational disease policy or agreement, whether or not such policy or agreement is actually in force and whether or not such benefits are received (subject to applicable laws). Caused or contributed to by a person committing or attempting to commit an assault or felony, participating in an illegal occupation, or actively participating in a violent disorder or riot (does not include being at the scene of a violent disorder or riot while performing his or her official duties). Treatment received in person, by mail or otherwise outside the U.S. if the purpose of such travel or communication is to obtain treatment. Expense incurred prior to the initial incurred date, or the date another affiliate / class of employees is acquired or established. Any known medical conditions not accurately Disclosed prior to the effective date, the date another affiliate is acquired, another class of employees established, the date of renewal, or upon request the date a person becomes eligible for benefits through the underlying medical plan. For drugs, procedures, services, supplies or treatments which are considered experimental or investigational, or which are not medically necessary and appropriate. For any expenses for benefits payable by another medical plan, which when combined with the benefits payable through the underlying medical plan would cause the total benefits payable to exceed 100% of the person's actual expenses. Amounts paid for administrative costs, including but not limited to, administrative costs for claim payments, networks, case management fees, in excess of the usual and customary charge, PPO access fees and Prescription Drug administration fees. For a person's out-of-pocket expense(s), or any amount incurred by a person for the cost of drugs, procedures, services, supplies or treatment in excess of any reimbursement negotiated with, scheduled to be paid or due a provider or facility. Amounts over fee, reimbursement percentage or other form of payment negotiated with a provider or facility as total reimbursement to the provider or facility. Excluded claim expenses. Capitation fees. For the expense of litigation, extra contractual damages, compensatory damages, or punitive damages. Lost provider discounts due to untimely payment of claims.