HomeMy WebLinkAbout05-30-07 Insurance Workshop
MINUTES
CITY OF OCOEE
WORKSHOP ON HEALTH INSURANCE PLAN
May 30, 2007, at 6:00 P.M.
I A. CALL TO ORDER
Mayor Vandergrift called the workshop session to order at 6:00 p.m. in the Commission Chambers
of City Hall. City Clerk Eikenberry called roll and declared a quorum present.
Roll Call: Commissioner Hood (absent), Commissioner Anderson, Mayor Vandergrift,
Commissioner Keller, and Commissioner Johnson.
Also Present: City Attorney Rosenthal, City Manager Frank, City Clerk Eikenberry, Human
Resources Director Camicella; Mackie Branham and Ray Tomlinson from Crown Consulting;
and several interested employees.
I B. DISCUSSION REGARDING THE CITY'S HEALTH INSURANCE PLAN.
Human Resources Director Carnicella opened by updating on what has occurred since the last
Insurance Workshop. He said he was asked to work with Crown Consulting on a hybrid option
of the insurance plan. He said they also created a web site and email address for employees to
ask questions and approximately 15 employees responded. He noted that a letter had been sent
to the elected officials and the retirees from a prior HR person which was full of incorrect
information. He said he would like the Commission to allow them to come back in four to six
weeks, through the budget process, with hard quotes from the insurance companies on this new
option. He said that Crown has been having discussions with various insurance companies and it
looks very positive that the 18% increase that was originally proposed may be on its way down
to 12-13%. He said he and the City Manager still do not feel that is acceptable. The question
now is do we want to just go ahead and pay the best rate we can negotiate with insurance carriers
or do we want to try to tweak the plan similar to the three options presented here tonight? Are
we in a position to absorb a $300,000 - $500,000 increase for insurance, in conjunction with all
of the other increasing benefits, and with the possibility of lost revenue once state legislators
make their decisions?
Mr. Carnicella distributed and reviewed a table (attached) showing the current plan and three
options for the upcoming year as they would work under United Health Care. Some scenarios
were discussed in order to compare the difference under the various options.
Mayor Vandergrift confirmed with Human Resources Director Camicella and Crown
Consulting that these plans and costs are in conjunction with United Health Care and we are
going to allow other carriers to see this information and try to do better. Mr. Carnicella said we
are now challenging other carriers to compete for our business. Mr. Branham said to keep in
mind that other carriers do not have the same information on our claims as United and would
have to give us an immature quote as opposed to a mature quote. He said you would have to add
12-15 points to the numbers from other carriers to make it "apples to apples." He said a new
carrier may live with their lower quotes for a year, but next year at renewal time they will come
after their "pound of flesh." Human Resources Director Carnicella said we want to try to
figure out how to take the money out of the insurance carriers pocket and keep it in our pocket
and it can be done through funding mechanisms, etc.
Commissioner Anderson said that we left Blue Cross, in part, because of the problems with
Florida Hospital, which have now been resolved. It seems that they would see us as a friendly
customer because of our past long-term relationship. Crown Consulting advised that Blue Cross
is eager to have us back.
Commissioner Anderson asked if the clinic is really being funded by the $681,000. Mr.
Carnicella said we are going to have to ask you to budget for what we think you will spend. If
we recommend the clinic, we would have to fund whatever amount necessary to open the clinic
for 1 - 2 days per week, and then look at the numbers in a year.
Commissioner Anderson asked if the 13% savings shown under Option 3 could be used to fund
the clinic. Mr. Carnicella advised that could absolutely be done that way, but even if we left it
the way it is and funded $250,000 - $300,000 for a clinic it would be cheaper than the 18%
increase being proposed by United at this time to continue the same plan.
Commissioner Keller asked if we had the clinic would that be the "in network" fee schedule
and everything else would be "out of network." Mr. Carnicella said that the clinic would be
totally optional and would be a free service as opposed to going to a regular network or out of
network doctor. Employees may have reasons not to use the clinic but it would be free service
and free prescriptions if they did use it. He added that the quality of doctors that would be there
are certified occupational specialists and some of the best physicians going.
Commissioner Johnson said he would like to wait until July and get the increase down as low
as possible to keep the plan the way it is. We can keep talking about it but we have to look at the
budget this year and what we can do for the employees. Mr. Carnicella said we have been
trying to keep everyone informed and thinks the employees have had a difficult time
understanding because it is a lot of information. It comes down to the City Manager proposing a
balanced budget.
Commissioner Anderson asked Crown Consulting what we see for the future as far as the
transitions from Health Insurance to HMO to Wellness. Can we create a five-year plan that
considers preparing us for the rising cost of health care? Mr. Branham said we can't continue
on plans like Option #1 where employees are totally insulated from participating in the exposure
of the claims experience. It also involves how the City wants to pay for that risk tolerance and
there are different types of funding mechanisms that you can enter into where you have more
control. The contract options that you enter into are paramount; with fully insured the carrier is
in control of the pooling level and their manuals to the blended rates. The clinic option is a
whole different paradigm shift in the medical community. We are giving free benefits and
control costs at the same time; rather charging more all the time and decreasing benefits. Mr.
Tomlinson said he is glad to hear you talking about a long term plan. You have to find
something that works. What is happening is the medical professionals are the experts in the
clinical side of health care and the insurance companies are experts in the financial side; but the
two are never meeting. A clinic allows the clinical side to be controlled more by the employer.
Weare replicating misery if we continue to do what we have been doing and that is why we are
proposing these options. Mr. Tomlinson said in this election year there is discussion about a
national health care plan and they are watching the trends, but those are not without flaws and
will not come to fruition in the near future.
Nancy Cox, employee, asked why the table shows a 10% savings between Option 1 and Option
2, yet her deductible would be higher. Mayor Vandergrift said the 10% savings shown on the
table is for the City, not the employee. She also asked how she will know how much she is
going to have to pay when she goes to the doctor because people on a budget need to know these
things. She thinks they should consider a co-pay within the HRA plan so that they will not be hit
with unexpected high bills. Mr. Branham said if we include co-pays in HRA the premium
break that we get from the carrier would not be as significant and the City would also have to
reimburse the co-pays inside the HRA component which would be $120,000 in co-pay
reimbursement which defeats the purpose of trying to control the costs. Mr. Carnicella said
Nancy's situation goes to the heart of the difference between the options in the HRA where those
who have a lot of usage will get closer to the out-of-pocket max. Mayor Vandergrift said that
is why he thinks we should look at a smorgasbord where she could choose Option #1 and other
employees could choose other options. Mr. Carnicella said we could come back with two HRA
plans, one with the deductibles and one without. Ms. Cox also asked what the $1,000 from the
City will cover and what it will not cover. Her doctor is allowed to charge $70, how much of
that is covered. Mr. Branham said, in office visit environment, the first $1,000 will be covered
by the City for to cover the maximum allowable fees previously negotiated with United Health
Care.
Betty Decker, employee, asked what if the employees who are not paying anything paid $10 per
month. Mr. Carnicella said that wouldn't make a dent in the increases being proposed. Mayor
Vandergrift said that is something that can be voted on, whether or not there should be an
employee contribution. She also asked about a plan previously shown at the Employee Meeting,
there was another option for $87,000. Mr. Carnicella said to throwaway those old copies
because they were illustrative and not intended to be relied upon.
Commissioner Anderson asked if we could get the questions on the web site arranged so that
everyone could have access to all of the questions and answers. Mr. Carnicella said he had
Frank revise the format so it was easier to find questions and answers and he will send out an
email telling all employees how to find the information.
Police Chief Reffett said at his staff meeting the non-union long-term employees said they came
to work here because the benefits made up for the lower salaries and they are now concerned
because health care costs are increasing so rapidly as well as fuel, cost of living, and other
financial factors.
Mayor Vandergrift closed by saying they are trying to deal with 12% - 18% increased health
insurance cost, as well as revenue cuts from the proposed laws on property taxes, etc. He said
the Commission is here to try to make the best decision for the employees and residents of the
City. At this time we are exploring all avenues available, we will be making a decision in July
during the budget process.
I C. ADJOURNMENT
The meeting was adjourned at 7:01 p.m.
Attest:
APPROVED:
City of Ocoee
City of Ocoee
2005, 2006 and Projected 2007 Rates
Estimated Renewal 2007
Choice Plan
Mod NRH (MOD 1 DC INS)
Choice Plus
NLI (9C+INS)
In Network
In Network
Out of Network
Deductlbles
Individual N/A $500 $1,500
Family N/A $1,000 $3,000
Coinsurance 100% 90%/10% 70~3~_ _ ___-
P.ut.~fJ~~~etMai~-:- _ _ :-=--~----- =-=: .-_-=-=_ _ _ __ _ _
Individual N/A $2,500 $5,000
Family NlA $5,000 $10,000
Lifetime Max Unlimited Unlimited _ .!12~OOJ~p. . _ _ _._
t;,o.p!y.!.q,l!I~u!llnc;_ :-=- ~ -.: - ---=- ..:::..:-- -=--_ _ ___ - - - __
Physician Office VISits $15 Copay $15 Copay Oed + 30% Coins
Specialist Office Visit $15 Copay $15 Copay Oed + 30% Coins
Emergency Room VISit $50 per visit $100 per visit $100 per visit
Urgent Ca~_ _ _ ____ _ _~ ~i!!!.. _ _ _ "....!5p_per vis,! _ -ped:~"!.. . ..__
Hosp.~!ll,!~o.tya_ _ _ _ _ _ ~ ~ _ ___ - - - -- ----
Inpatient Hosp. $150 per day (5-day max) Oed + 10% Coins Oed + 30% Coins
Outpatient $200 ~ + 10% Coins _~_ +_~O% Coins _ __ ___
PrescrlP.llonQ~':'-:- _ - _ --=- -=-__ _-:-:- - _- __ _ _ _ _ __ _ _ _
Retail $10/$25/$40 $10/$25/$40 $10/$25/$40
~~(~YL_.._ _ ___ 2.5x 2.5x 2.5x
- ,---- -- ..----.....---:~p;:Ojected
_ ...1.Q.O~ ~ _?9.0~~_ _ _ _2,QO]
$308.03 $369.64 $436.18
$893.93 $1,072.72 $1,265.81
20.00% 18.00%
$175,245 1 $210,295 $248,148
$2,102,9431 $2,523,540 $2,977,777
NlA
N/A
N1A
N/A
_. _200.5_)J}'Q& _ _ f!.oje~cJ.jQ,Q.7
$308.03 $369.64 $436.18
$893.93 $1,072.72 $1.265.81
20.000/0 18.00%
$175,245 1 $210,295 $248,148
$2,102,9431 $2,523,540 $2,977,777
N/A
N/A
NlA
N/A
!~I Premium. _ _ _
Employee (119)
Family (155)
Renewal Increase
Monthly Premium
Annual Premium
HRA Maximum Funding
Total Funding
Est. HRA Reimbursements
Total Projected Cost
Employee Pr8m1um Rate:
Family Premium Rate:
$0.00
$210.92
.wi
$68.54
$404.01
.wi
$68.54
$404.01
.. For mustratlve Purposes Only ..
ChOice Plus
00 AAF (MOD 101 C+INS)
Choice Plus
MOD EW-L (85C+INS)
Employer HRA $1000 ee I $2000 f
In Network Out of Network
In Network
Out of Network
In Network
Out of Network
$250 $1,000 $500
$500 $2,000 $1,000
90% 110"1._ ----Z9~!..30%_ n .80% 120%
$1,000
$2,000
60% 140%
$1500 ($500 ee)
$3000 ($1000 f)
90% 110%
$3,000
$6,000
70% 130%
.. - -- ------ ----
--- - -- ---- - --- --- -----
$2,000
$4,000
Unnmited
~ ----.---.- - - -
$4,000 $2,000
$8,000 $4,000
~1,OOO,O.QO.ep. . __ ~2
$4,000 $3,000 $8,000
$8,000 $6.000 $16,000
$~OOO,OOO I!L _--Y~lmlt~_ _$.!,PPO,OOO PI!.
$20 Copay
$50 Copay
$100 per visit
15.Q pe!~sit
- - --------- -- -- - ---- - -. ..
Oed + 30% Coins $20 Copay Oed + 40% Coins Oed + 10% Coins Oed + 30% Coins
Oed + 30% Coins $50 Copay Oed + 40% Coins Oed + 10% Coins Oed + 30% Coins
$100 per visit $100 per visit Oed + 40% Coins Oed + 10% Coins Oed + 30% Coins
_ __I?ed + 30% Coins ~ ~isL-!2~ '!.O~~oins Oed +~ C~~d + 30% Coins
--... - -~ - - -- - . - - - - - --" - - - -- - - - - - - - - -
Oed + 10% Coins Oed + 30% Coins Oed + 20% Coins Oed + 40% Coins Oed + 10% Coins Oed + 30% Coins
~d. ~ t.0~ Coins ~_ + 30% Coins Oed ~~.!...... Oe,g ~~~~ns Oed + 10% Coins _!?ed~ 3.2.~
$101$301$50 $101$301$50
2.5x 2.5x
---- ---
--------- - - - --- -
$101$30/$50 $101$301$50 $101$301$50 $101$301$50
2.5x 2.5x 2.5x 2.5x
--- -- ---- - -- ----- ---
_ _ _ .....fr.o.jected.2.QQt_ -..
$407.23
$1,181.84
10%
$231,646
$2,779,747
N/A
N/A
N/A
N1A
_ ..P.rgj2.l<.t@.d 2007_ ___._
$398.16
$1,155.63
8%
$226,503.69
$2,718,044.28
NlA
N/A
NlA
NlA
. ~j!tc.ted 2007
$321.59
$993.27
-13.00%
$173,034
$2,076,406
$681,000
$2,502,726
681,000 - 243,657 = $437,343
18'1. is the "worse case .enerio- be..d on the current loss ratio.
We ere negatieUng in hopes of receiving a below trend Increase at renewal
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