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HomeMy WebLinkAbout08-29-11 Admin. Committee of Whole MinutesADMINISTRATIVE COMMITTEE OF THE WHOLE Monday, August 29, 2011 Minutes of Meeting Vice Mayor Salay, Administrative Committee Chair, called the meeting to order at 5:50 p.m. in Council Chambers. Present were: Vice Mayor Salay, Mrs. Boring, Ms. Chinnici - Zuercher, Mr. Gerber, Mr. Keenan, and Mr. Reiner. (Mayor Lecklider arrived late.) Staff present: Ms. Grigsby, Mr. Harding, Ms. Gee, Mr. Thurman, Ms. Kennedy. Mr. Harding provided a recap of the staff report. The City's health plan is doing well. In the first six months of the new consumer - driven health plan model, claims costs were reduced. Even considering the employer contribution to the employee Health Saving Accounts (HSAs), the City's overall costs are flat. This is a positive indicator, particularly in view of the fact that medical inflation is projected at 8% this year. City employees appear to be adapting to consumerism in their medical plan. Because the plan has been so successful, there is no need to request an increase in the employee benefits fund for 2012. PROPOSED 2012 PLAN DESIGN CHANGES HEALTHY BY CHOICE PLUS PROGRAM Adding an "aggregate gain- sharing" incentive The following changes are program enhancements to help employees make lifestyle changes to be able to reach the City's target factors and achieve the HSA incentive funding. The specific focus areas targeted for 2012 are body weight, tobacco use and stress. The annual health risk assessment indicates those as employee risk factors, particularly weight and tobacco use. Currently, 18% of City employees use tobacco. Research indicates healthy tobacco users cost the City an average of $3,000 /year. Mrs. Boring asked if a particular section of employees comprise that 18 %. Mr. Harding responded that he has aggregate data only. Mr. Harding stated that the most significant enhancement proposed for 2012 is the idea of an aggregate gain- sharing concept. Overall goals are established, and if the entire Healthy by Choice (HBC) employee population achieves those goals, then they all share the success. This should encourage a unified commitment to build a culture of health. The reward will be an additional financial incentive for each employee and spouse to be deposited in their HSA. This would be effective the beginning of 2013. Two goals are proposed: (1) ten percent reduction in the number of employees using tobacco, and (2) ten percent reduction in number of employees with a BMI above 27.5. Each employee and spouse would receive a $75 contribution for each goal achieved. This would be based upon the 2012 open enrollment data. City cost projections are $37,000 for each goal achieved, $73,000 if both goals are achieved. The anticipation is that those costs would be offset by a reduction in future claims. Administrative Committee of the Whole August 29, 2011 Page 2 Vice Mayor Salay asked if staff had considered basing this on individual employee goals, rather than the aggregate. It could be more effective to have individual incentives than a group incentive. Mr. Harding responded that they prefer to try an aggregate approach first and evaluate that outcome. Ms. Grigsby noted that this concept was discussed with the United Health Care plan administrator. Although the City program promotes healthy living, that is not evidenced in employee daily actions. Vice Mayor Salay asked if the intent is to achieve an overall cultural change. Mayor Chinnici - Zuercher asked if the City snack machine contents have been replaced with healthy snacks. Ms. Grigsby responded that has not yet occurred, but an effort to secure a vendor is in process. Mrs. Boring asked if the aggregate would be based upon the employees who choose to participate, not on those who do not want to participate, or who are in another health plan. Mr. Harding responded that for the first year, the strategy will be that if for some reason, an employee opts not to participate, they would achieve neither the individual nor the aggregate financial incentive. At the end of the year, that strategy will be evaluated and adapted further. Mrs. Boring noted that employees enrolled in Medicare would not benefit from participation. Ms. Grigsby stated that the goal is not only financial, but also to achieve healthier employees. Ms. Chinnici - Zuercher asked if these are the results of employee focus group discussions, or the result of management evaluations. Mr. Harding responded that they are not, although a survey did request employees to rate the program. Some positive responses were received. He believes employees understand their lifestyle choices impact the costs of their health care. However, these particular plan design proposals were not subjected to a focus group discussion. A strategic steering team developed the goals. Mr. Keenan asked about employees' Medicare option. Mr. Harding responded that Medicare is secondary. At the age of eligibility, an individual can choose to take Medicare Part A or Part D and no longer participate in the City's health program. Employees can opt out of the City's health plan and take Medicare. Administrative Committee of the Whole August 29, 2011 Page 3 New program enhancement: "Access an Expert' This is different from the previous health coach option, which proved to be unsatisfactory. The coaches were not medical professionals; they did not have professional licensure to provide advice. This new concept will involve medical professionals trained in certain areas of expertise. If an employee or spouse does not meet one of the individual health factor target measures during open enrollment, they would be eligible to participate in one -on -one counseling with experts such as an exercise physiologist, dietician, nurse, stress management counselor or a pharmacist, who would work with them to meet the applicable health factor target measures. Staff projects the increased cost impact associated with this program enhancement to be approximately $11,300. Mr. Gerber asked if a company would be hired to provide this service. Mr. Harding responded that the company that handles the open enrollment screening, Health Strides, has professional staff that would provide the service. Mrs. Boring asked how this would be different from "Call a Nurse." Mr. Harding responded that the employee would initiate the contact. Some of the professionals could be R.N.s, but others would not. Mrs. Boring asked if the individual classes are effective and would be continued. Mr. Harding responded that some are more effective than others. They will be continued. The classes are well attended. Modification of the LDL cholesterol health factor target from 100 to 130 Mr. Harding stated that, currently, if an employee has a total cholesterol level of under 200 or total cholesterol of over 200 with an LDL under 100, they qualify for the incentive. The UHC medical director and Health Strides have recommended that this component be re- evaluated due to the fact that, typically, an individual with total cholesterol over 200 but an LDL under 130 is regarded as healthy, and no regimen of treatment is recommended. Therefore, those individuals should be eligible for the incentive. This will relax the standard from an LDL of 100 to 130. Vice Mayor Salay stated that she is pleased to see this standard re- evaluated, as last year she experienced a similar scenario -- her healthy HDL elevated her total cholesterol. Both Healthy Strides and her physician indicated her levels were healthy. Mrs. Boring asked if the ratios will be considered rather than the total numbers. Mr. Harding responded that the UHC medical director recommends considering the total cholesterol and LDL separately versus looking at ratios. . Voluntary diabetes screening during open enrollment This will be provided in coordination with the Diabetes Prevention and /or Control Program through United Healthcare. The cost of these screenings would be absorbed by United Healthcare. Administrative Committee of the Whole August 29, 2011 Page 4 Medical Coverage Adding acupuncture therapy and nutritional counseling as covered services. UHC has developed a group of providers. Although they are not credentialed, they are recommended in their field. These providers, who are out -of- network providers, have agreed to provide a 20% discount to City employees. This opens the City's plan design to alternative medical practice. UHC will adjudicate the claims subject to the out -of- network deductible. Vice Mayor Salay asked if an employee had met their deductible, would the health plan cover the services. Mr. Harding responded that it would cover the 20% reduced fee at the 85/15 level. Acupuncture: Vice Mayor Salay asked the usual acupuncture rate. Mr. Reiner responded that the first visit is typically $95; subsequent visits are $65. Visits are typically an hour. Mayor Chinnici - Zuercher stated that this treatment is limited to non - structural abnormalities. Mr. Harding responded that certain back issues are best treated with surgery. However, acupuncture can be effective with chronic back pain. Mrs. Boring asked if the employee can choose which treatment they prefer. Mr. Harding responded that it would be based on the medical code of the diagnosis. If it is a non - structural abnormality, it would qualify for acupuncture. Ms. Chinnici - Zuercher asked if chronic back pain is the only diagnosis that would be treated with acupuncture. Ms. Grigsby responded that other medical problems could also be treated. Mr. Harding clarified that conditions that can be treated surgically would not qualify for acupuncture. Ms. Grigsby added that the intent is to offer an option other taking medications which mask the symptoms versus addressing the problem. Mr. Reiner stated that he is pleased that Dublin will be on the 'cutting edge' by offering this option to employees. He is on the Riverside Hospital advisory board. The hospital is adding an acupuncture room in the new cancer facility. Mrs. Boring asked if the Plan will identify the recommended providers for this service. Mr. Harding responded that UHC has vetted professionals, who are accredited practitioners, although not credentialed by UHC as in- network providers. Vice Mayor Salay noted that an acupuncturist must attend school for 2 -3 years. Mr. Reiner stated that the highest level of schooling from an accredited college for acupuncture is actually now six years. Although, currently, more abbreviated levels of training remain available, the education requirements for these professionals are evolving. Administrative Committee of the Whole August 29, 2011 Page 5 Mrs. Boring asked if pharmaceutical counseling would also be available. Mr. Harding responded that the City already provides this service. As a value -added service, a pharmacist provides in -house counseling at no cost to employees regarding their prescription options. Nutritional Counseling: Mr. Harding stated that with the focus on weight reduction, proper nutrition is a critical component. The employee can log on to MyUHC to contact an in- network dietician. This will be an in- network service, subject to the in- network deductible. Mr. Reiner stated this service is important, as nutrition and exercise are the key to health. DENTAL COVERAGE Addition of new feature - "Consumer MaxMultiplier" Mr. Harding stated that this feature will introduce consumer - driven health into the City's dental plan. It is specifically designed to complement a consumer - driven health plan. Currently, the maximum coverage an employee has under the dental plan is $1,750 /year. Although preventive care is covered at 100 %, it now goes toward the $1,750 benefit level. That would be changed, so that preventive care would not count toward the annual maximum benefit level. Consequently, the employee would have additional coverage. This program would require the use of in- network dentists, which is not currently required. It would also require annual preventive dental exams, which are not currently required. The key feature of this program will be the opportunity for the employee to build up credits during the year by not using the plan, so that they would have more than the $1,750 coverage in a future year. Using an in- network dental provider would be required. For example, if an employee used less than $750 in dental services in a year, they would receive an account bonus of $400. If an in- network dentist is used, they would earn an additional $100. Over three to four years, a maximum credit of $1,750 could be built up. Adding that to their annual $1,750 benefit would result in a total dental coverage of $3,500. Vice Mayor Salay asked if the 50 % -50% reimbursement would remain, so that the plan would pay only 50 %, but the annual out - pocket would not exceed $3,500. Mr. Harding responded that the 50% coverage maximum would remain in place, but the City's 50% benefit would be higher than it is currently. Mr. Keenan asked if the current dental plan will remain in place as well. Mr. Harding responded that it does; this is only an enhancement. Mr. Keenan stated that most of the employees' dentists will not be in- network. Mr. Harding responded that to earn the credit, the employee would be required to use an in- network dentist. A list of in- network dentists will be available. Administrative Committee of the Whole August 29, 2011 Page 6 Ms. Chinnici - Zuercher asked if the City would narrow the dentists accepted to those on a list. Mr. Harding responded that for the purpose of the maxmultiplier feature — yes. To receive this credit, an in- network dentist must be used. Mr. Keenan noted that, typically, people don't change dentists. Mrs. Boring asked when the maximum dental benefit was raised to $1,750 annually. Mr. Harding responded that a few years ago, the dental maximum annual benefit was raised from $1,500 to $1,750. Orthodontia coverage was increased to $2,000. Mrs. Boring stated that she has an issue with this proposed feature. This feature could encourage employees to delay needed work and let more serious issues develop. She is uncomfortable with structuring a health plan feature that rewards employees for not having the dental work done when it should be done. Mr. Harding responded that this feature is based on the same design as the consumer - driven health plan, which operates off the same premise. If the employee needs the dental work and has it performed, he /she will have the same coverage. However, for those employees that don't need dental work for a period of time, they can build up the amount available to them when they do need it. Ms. Chinnici - Zuercher stated that when a person needs such services quickly, they are in pain. They won't delay the work to earn rewards. Mrs. Boring responded that it is true, but her concern is that people will wait until the problems become more serious before seeking care. Mayor Lecklider stated that it seems that most employees will not see a change even if they stay with their dentist who is not in- network. This feature relates only to the incentive side -- it will incentive people to use a dentist in the network to gain the extra credit — if they choose to do so. Mr. Harding responded that is correct. Mayor Lecklider asked what is the motivation for a dentist to be in- network. By doing so, they are agreeing to accept a lesser fee. He would assume this would appeal to inexperienced dentists who are establishing a practice. A dentist who has built up a healthy practice is not going to be interested. Mr. Harding responded that he assumes it would be similar to the physician network for the medical plan. Physicians participate because it funnels much of the network business to them. Ms. Chinnici - Zuercher stated that it provides them guaranteed income. The issue is the providers' lack of a span of successful experience. Mr. Harding responded that there would be credentialing requirements. Ms. Chinnici - Zuercher asked who does the credentialing. Administrative Committee of the Whole August 29, 2011 Page 7 Mr. Keenan responded that it is UHC, who is interested in reducing their fees by 20 %. Ms. Grigsby responded that UHC also sets the in and out -of- network rate for everything else in the plan. Mr. Keenan stated that they are also raising the rates 10 -20% per year. Mr. Reiner responded that the City's benefit costs did not increase this year, however; they were flat. Mr. Harding responded that they were, but it's because the City's plan has a significant commitment to wellness, and has been able to avoid the medical inflation. Mr. Keenan asked if the money saved in the credits would be spendable with either an in or out -of- network dental provider. Mr. Harding responded that it would be restricted to in- network dental providers. Adding coverage for composite resin fillings (white fillings) Mr. Harding stated this change is consistent with most other dental plans that are now covering composite resin fillings. Adding coverage for implant services and /or crowns related to an implant procedure Mr. Harding stated this, also, seems to be the trend with most other dental plans. The City's plan benefits will be consistent with those. Mr. Reiner stated that he assumes this is due to the danger posed by the mercury in the amalgam, silver fillings. Mr. Harding responded that although amalgams are not restricted, the City's plan will now cover the latest preferred technology — the composite resin fillings. Mr. Keenan stated that he was not aware of any dentists who continue to do amalgam fillings. Mr. Reiner noted that it is actually advised to have the amalgams removed and replaced. Mrs. Boring asked the coverage level for implants. Mr. Harding responded that it will be the same as that for other dental coverage — 50 %. Employee Assistance Program Increase in the number of counseling visits an employee and /or dependent may receive in a calendar year through the Employee Assistance Program (EAP) from three to six. Mr. Harding stated that this has become the industry standard and also meshes with the City's focus on stress management. Annual Maximum Contributions to a Health Savings Account (HSA) Administrative Committee of the Whole August 29, 2011 Page 8 Each year, the IRS establishes maximum amounts or caps that can be contributed to an HSA in a tax year. The IRS has raised the annual HSA contribution limits for 2012. The contribution limit for individual coverage will be increased from $3,050 to $3,100 and for family coverage from $6,150 to $6,250. Mrs. Boring asked who sets the City's plan deductible. Mr. Harding responded that Council sets it. Mrs. Boring stated that it is her understanding that if the deductible were a little less, then the City drug plan would be creditable. Mr. Harding responded that they have conducted research on that and it isn't true. Because the City's plan is a high deductible plan, it cannot be a creditable program. His understanding of the regulations is that if it is an integrated plan, which means the prescription drug benefit is integrated with the other benefits, and the annual deductible is more than $250, it cannot qualify as a creditable plan. For the City to keep its high deductible plan, it cannot meet the conditions to be a creditable plan under Medicare. Mrs. Boring asked if there are some HSA plans that are eligible. Mr. Harding responded that if the entity's deductible is not over $250 annually, it could qualify. However, by definition, high deductible HSAs must have a high deductible. Mrs. Boring stated that it seems that the agency providing this information should have been aware of this. Mr. Keenan stated that it is the same agency pushing for HSAs. That was the intent — to move everyone to higher deductible, wellness focused plans. However, with the City's plan, if a family has a serious health issue, they could have $8,000 out of pocket costs. Mayor Lecklider stated that the impact is relative to someone's household income. He requested clarification of that impact. Mr. Keenan responded that the City plan has a $5,000 deductible for a family. Then expenses are paid at 85/15 on the next $20,000 — resulting in responsibility for an additional $3,000. So before a family's medical expenses are paid at 100% for a serious event or medical emergency, the family would have $8,000 out of pocket expense. For single coverage, the total would be $4,000. If the event occurs in January, only the first quarter of the City's contribution is in the employee's HSA. Ms. Grigsby noted that in the first year of a high deductible, HSA program, that is more likely to occur than in subsequent years. However, this year, most of the employees have not used all the funds that are in their HSA. In fact, about 78% did not spend more than $500 of their HSA. Mr. Keenan stated that may be the case. But it is likely employees are not getting things done they should because they are attempting not to spend the money. Mayor Lecklider clarified that the $8,000 potential cost to a family would be mitigated by the $2,000 - $3,000 City contribution. So the family's actual impact would be $5,000 - $6,000. Ms. Grigsby noted that in the first year of the HSA, if the employee spent everything in their account in the first quarter, the City "fronted" some additional funds to their account. Administrative Committee of the Whole August 29, 2011 Page 9 That policy will be evaluated on an annual basis. Most of the employees will be able to accumulate an account balance. Mrs. Boring stated that the City had a policy in place that emergency room visits that do not result in an admission to the hospital have a fee charged to the employee. Because of that, one City employee who was suffering an appendicitis attack would not go to the emergency room unless admitted over night. Is this valid consumerism? There should be a difference. She is concerned that people are not taking all of their medications and using health care services they need due to the costs of this program. Vice Mayor Salay asked if it would be possible to obtain feedback from the employees. Has the City conducted any surveys that ask questions such as, "have you delayed medical care ?" or "what sort of decisions have you made due to the high deductible plan ?" She would never hesitate to take her children to the emergency room, if they needed it, and she assumes if an employee had to make a choice to spend more money due to a health situation, they would do so. The City pays employees a living wage. Mrs. Boring responded that this new plan costs employees more. They essentially took a pay cut. Vice Mayor Salay stated that it did not cost them more. It seems that 78% of the employees are not even spending $500 on medical care. Ms. Grigsby stated that there are some employees paying more, but the City is paying more for their costs, as well. There is no perfect solution to address everyone's circumstances. The goal is to create a program that is sustainable long -term for the City so that all employees, now and in the future, can continue to have good health care coverage. Mr. Keenan stated that in his opinion, the high deductible plan combined with the 85/15 co -pay is excessive. Normally, when a plan is designed into a new HSA program, there may be a high deductible, but it has a cap of $4,000 45,000 out of pocket for a family. On top of that, the City has included an 85/15 co -pay. He would like to review the impacts of not including an 85/15 co -pay, if not this year, then at least next year. It certainly would make it easier financially for families. Then, whenever they reached that $4,000 - $5,000 out of pocket, their costs would be covered at 100 %. That amount is still a large deductible, even by today's standards. He would like to at least weigh the costs of not making everyone have an 85/15 sharing after they have spent $5,000 out of pocket. That $5,000 is what their HSA would go toward. Typically, if a co -pay is required, the deductible is not as high. In his experience, you should not have a high, $5,000 deductible plus an 85/15 co -pay. Mrs. Boring asked about the $2,500 per individual. Mr. Keenan stated that is the non - embedded deductible. Administrative Committee of the Whole August 29, 2011 Page 10 Mr. Harding responded that staff did not advocate for not including the 85/15 co -pay for sustainability of the plan reasons. That would result in much higher costs for the health plan. Mr. Keenan stated that he would agree. But to do both — to have a non - embedded deductible plus include a co -pay portion, is too much. In retrospect, this new plan for employees is a significant, double hit. Vice Mayor Salay stated that if an employee knows their maximum out of pocket in a given year is $5,000 and have $3,000 saved in their HSA, they could make the conscious decision to save another $2,000 for emergency medical expenses. Mr. Keenan responded that is part of the plan, and most people are depositing a little more of their own money into the HSA. It is basically what the 125 (Flexible Spending Account) was previously. The money in the HSA can be used for all the things the 125 was previously used for — eye care, etc. However, the rules prohibit having both the 125 and an HSA. Therefore, the employees' HSA account does not just take care of their deductible and co -pays, it is used for other expenses. Mr. Harding stated that in regard to having a 100% coverage after reaching the deductible, most other cities charge a health insurance premium for the employee to be eligible for the program. Dublin does not. Mr. Keenan stated that, eventually -- perhaps with Senate Bill 5 -- there will be a requirement that public entities and others participate in their health care costs. He believes that the way to mitigate the employees' required share would be eliminate the co -pay. Mr. Harding responded that the method they used was -- instead of the City funding employees HSAs at the 80 or 90% level -- funding their HSAs at a lower level, but not charging employees a premium. Mr. Keenan stated that the City is funding the HSAs at approximately $3,000 /year. Vice Mayor Salay stated that, in addition to that, employees' preventive care is covered at 100% on January 1 of each year. Mr. Keenan responded that is occurring because that is the law. Vice Mayor Salay asked about the $2.50 PowerCo monthly statement fee. Mr. Harding responded that employees have the option to select electronic monthly statements rather than mailed statements. Mrs. Boring stated that she objects to the regular PowerCo solicitation. Ms. Grigsby responded that she could call their office and ask to opt out. Mr. Keenan stated that is PowerCo's model. They extend to the City a relatively inexpensive HSA program. In return, they receive access to the employees to offer loans and other options. Administrative Committee of the Whole August 29, 2011 Page 11 Mr. Harding stated that at this time, staff requests approval to proceed with the recommended plan design modifications for 2012. Mr. Reiner stated that he would like to review the budget numbers. Mr. Keenan stated that he has no objection to most of the changes except the dental portion. There are not many dentists that participate in an aggregate piece. There actually aren't many dentists in networks at this time. Vice Mayor Salay requested data on the dental portion, including information regarding who participates in a network and reasons a dentist might opt into a network. Mr. Keenan requested that it also include comparison with Dublin's plan provisions. Ms. Grigsby noted that the dental portion would not eliminate anything. It is an enhancement, which the employee can opt to use. Mr. Keenan stated that one difference is that, today, most physicians are in networks; dentists are not. Ms. Grigsby stated that if this option is offered by a few entities, many may offer it in the future. Committee Recommendation Vice Mayor Salay moved to approve the proposed employee health plan design modifications for 2012. Mr. Reiner seconded the motion. Vote on the motion: Mr. Keenan, no; Mr. Reiner, yes; Ms. Chinnici - Zuercher, yes; Mr. Gerber, yes; Mrs. Boring, no; Vice Mayor Salay, yes; Mayor Lecklider, yes. Mayor Lecklider asked about the base amount of the City's HSA contribution to an employee's accounts. Mr. Harding stated that for a single HBC plan, it is $1,125. For a family plan, it is $2,250. If the four incentives are achieved, the City contributes a total of $1,725 for single, and $3,450 for family. Mr. Keenan noted that amount is also tax free. The meeting was adjourned at 6:55 p.m. Clerk of Council