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City of Plano Open Enrollment

City of Plano Open Enrollment. Plan Year 2010. Health Plan Overview. Self –Insured Plan Benefit plans are governed by the City of Plano Welfare Benefits Plan through a Risk Pool with oversight by the City Manager and Risk Pool Trustees, Deputy City Managers

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City of Plano Open Enrollment

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  1. City of PlanoOpen Enrollment Plan Year 2010

  2. Health Plan Overview • Self –Insured Plan • Benefit plans are governed by the City of Plano Welfare Benefits Plan through a Risk Pool with oversight by the City Manager and Risk Pool Trustees, Deputy City Managers • Plan Design and funding recommendations presented to the Risk Pool Trustees and City Manager by cooperative effort of Human Resources benefits staff and Hay Group (benefits consultants) • Plan Year is calendar year and does not coincide with fiscal year – References are based on Plan Year and for Medical only

  3. Health Plan Overview • City absorbed most of the medical cost increases from 2004 - 2008 • 2006 - City along with Hay Group developed a strategic approach and organization philosophy to manage the health plan • The City of Plano desires a long term strategic plan for management of its benefit programs. This strategic plan will involve a philosophy and objectives to be put into place and maintained for the long term. • The philosophical position will establish a basis upon which future benefit plan designs will be developed. • “The City cares about its employees and will provide a competitive benefit program that offers; • Affordable choices • Consistent level of cost structures and • Encouragement for healthy living”

  4. Health Plan OverviewPlan Year 2008 • Moved Medicare eligible retirees to fully insured Medicare Supplement Plan to reduce claims exposure and GASB liability • September 2008 – funded GASB, reducing Health Claims Fund by $15.5 million • Modifications were made to rate structure, moving from 6 tiers to 4 tiers as basis for future implementation of Contribution Philosophy • 2008 Medical plan • Using a 10% annual trend factor (increase in marketplace) for medical and the projected paid claims, Health Claims budget was increased 12.5% over 2007 • Subsidy of 93% of cost for both employees and dependents • 2 plan options - $500 or $1000 deductible

  5. Contribution Philosophy • In 2007 & 2008, communicated Contribution Philosophy to share more cost with employees over time • Medical Rate Implementation Strategy • 2009 • 93% subsidy for Employees • 85% subsidy for Dependents • 2010 • 92% subsidy for Employees • 80% subsidy for Dependents • 2011 • 90% subsidy for Employees • 75% subsidy for Dependents

  6. Plan Year 2009 • Analysis of 2007 & 2008 claims resulted in one Core Plan offering for 2009 with $1000 deductible to create: • Stability • Predictability of costs, claims, revenue (premiums) • Sustainability of health plans now and in the future • Manage costs effectively and consistently for employees and the City • Began implementing the Contribution Philosophy (93%/85%)

  7. 2008 Actual Plan Experience • Claims incurred 1/1/08 – 12/31/08 • Large number of High Cost Claimants • 10 claimants reached Stop Loss of $150,000 compared to 4 in 2007 • $1.3 million in claims above $150,000 (based on 3/31/09 paid claims) • 56 claimants >= $50K compared to 32 in 2007 • 1.1% of membership drove 42% of medical cost • Total claims for medical and Rx rose 33% in 2008 • Additional 13% City contribution was added to medical rates beginning 3/19/2009 to cover the excess claims • Resulted in subsidy now being 94% for employees and 87% for dependents

  8. Comparison of Large Claims2007 & 2008Paid as of 1/31/09 • Approximately 2/3 of the $4.2 mil increase in claims in 2008 can be attributed to • claims in excess of $50,000.

  9. Comparison of Claims Distribution Indicates higher than expected amount of large claims • The Normal Distribution is an estimate of claims by claim size based on a large • Database of claims experience used by Hay Group in their Benefits Pricing Model

  10. Clinical Cost Drivers - 2008 • Top 5 Diagnoses account for 52% of total medical cost

  11. Cost by Benefit Type • Inpatient Hospital Room & Board • 2007 - $1.3 M • 2008 - $3.3 M • Hospital Admits per 1000 members • 2007 - 58.3 (4817 members) • 2008 - 57.7 (4919 members) • Hospital Days per 1000 members • 2007 - 205.5 (4817 members) • 2008 - 312.3 (4919 members) • ER Events – increased 3.4% from 2007 • Primary Care Visits – increased 1.8% from 2007

  12. Recap of Plan Year 2008 and 2009 YTD • Large claims • 2008 had an unusually high number of high costs claimants • Continuing to pay claims in 2009 for claims incurred in 2008 • Ongoing claims for several of the high costs claimants in 2009 • Beginning with Plan Year 2009, moved our Stop Loss provider to UHC so that claims reaching $150K would be capped instead of City paying claims over $150K and waiting on reimbursements

  13. Recap of Plan Year 2008 and2009 YTD • Subsidy levels • Plan Year 2008 – 93% subsidy level for both employees and dependents • January 2009 – moved to 93% for employees / 85% for dependents • March 2009 – City contributions increased resulting in 94% subsidy for employees / 87% for dependents

  14. Opportunities • Continue to implement contribution philosophy and introduce benefit changes which share larger % of total cost with employees • Explore additional Medical plan offerings that provide real choices for employees in benefits provided and cost • Explore options to move non-medicare eligible retirees to fully insured product to further reduce claims exposure and GASB liability

  15. Plan Year 2010 Open Enrollment

  16. Health Claims Fund 09/10 * Other Post Employment Benefits

  17. Medical – Core Plan with UHC • No Plan Design Changes • Lifetime Maximum of $2,000,000 • 100% preventive coverage • Deductible of $1,000 • Out of Pocket Maximum of $3,000 • Coinsurance 80% • Office Visit Copay of $25

  18. Medical - Core Plan • Rate Strategy • 92% of costs for Employee paid by City • 80% of costs for Dependents paid by City

  19. Pharmacy – CVS/Caremark • Increase in cost is 17.1% attributed to member utilization, mix of drugs, drug price increases, marketing costs • Member cost share decreased from 2008 to 2009 from 26.1% to 18.5% - attributed to elimination of minimum co-pays • The net effect is an estimated 29% increase in the City’s annual drug cost

  20. Pharmacy – CVS / CaremarkPlan Design • Mandatory Mail Order for Maintenance Drugs – Maintenance Choice (CVS Retail at Mail Order prices) is still in effect • Tier 4 for Specialty Drugs at $120 Co-pay with limit of 30 days • $100 Family Deductible reinstated • Minimum Co-pays reinstated • Maximum Out of Pocket increased to $2500

  21. Pharmacy – CVS / Caremark

  22. Dental Plan - 2010 • NO CHANGES in the plan design • 60% Employee cost paid by City • 40% Dependent cost paid by City

  23. Vision - UHC • Plan Enhancements: • Current Plan Offerings • Plus • Polycarbonate lenses coverage • $150 contact lenses allowance for 6 boxes – in lieu of glasses • Monthly Rates: • Employee Only $ 9.68 • Employee + Spouse $15.48 • Employee + Children $15.84 • Family $25.48

  24. Long Term Disability – Buy Up • City provides LTD up to 40% of pre-disability income • Buy Up - additional 10% or 20% of pre-disability income • If you are increasing the amount of coverage, you are required to complete Standard’s Medical History Statement at: www.standard.com/mybenefits/mhsho.html • By 5:00 p.m. Wednesday, October 21, 2009

  25. Hospital Gap • Offered with no changes in plan design or premiums • See premiums listed in Open Enrollment materials

  26. Hospital GapPaper Enrollment Form • Requires Paper Enrollment Form in addition toOn-Line Enrollment • If making a CHANGE to current coverage • If NEW enrollment • Not making a change – NO FORM NEEDED COMPLETED FORMS DUE IN HR NO LATER THAN 5PM, WEDNESDAY, OCTOBER 21, 2009

  27. Flexible Spending AccountsPre-Tax Savings Options • You can help offset increases in your cost by participating in FSA • You can set aside money in Pre-Tax Dollars for: • Health Care Premiums – automatic • Health Care Reimbursement Plan • Eligible health care expenses • Dependent Care Reimbursement Plan • Eligible dependent day care expenses • Administered by United Healthcare

  28. FSA – Health Care Reimbursement Plan • You can set aside up to $5,000 ($2,500 for Part Time employees), Minimum $12.50 per pay period, before taxes from your salary per year in an account to reimburse for eligible health care expenses that the medical, dental, vision or Rx plan doesn’t cover: • Deductibles • Coinsurance • Copays • Over the counter medications • More information on the cityweb under FSA • Assistance in calculating a contribution that works for you • List of eligible items that can be claimed under FSA

  29. FSA – Health Care Reimbursement Plan • If expenses are for a medical or dental copay or deductible you do not need to submit a claim – FSA claim processing is automatic • Claim reimbursement to you is faster if you set up Direct Deposit using www.myuhc.com • Reimbursement Claim Forms can be found at www.myuhc.com or on the city intranet and are REQUIRED for: • Pharmacy coinsurance reimbursements • Over the Counter medications with copies of receipts

  30. FSA Health Care Reimbursement Plan • Some examples of covered expenses are: • Lasik for vision • Eyeglasses, including exam fee • Medical deductibles • Dental expenses not covered by insurance • Medical, dental and drug coinsurance amounts • Medical, dental and drug copays • Eligible Over-the-Counter medications • Expenses from all immediate family members (living in the household) are eligible

  31. FSA – Dependent Care Reimbursement Plan • Contribute up to $5,000 per year ($2,500 if married and filing separately or Part Time) • Obtain reimbursement for eligible dependent day care expenses • Proof of expense and Tax ID of care provider required on claim form • Eligible care includes expenses subject to taxation for: • Day care for children or adults • Care in or out of your home • Nursery or pre-school fees

  32. FSA – Dependent Care Reimbursement Plan • Expenses to allow both spouses to work • Eligible dependents include: • Children under age 13 • Spouse, parent or child over age 13 who live with you and cannot care for self • Reimbursement Claim Forms can be found at www.myuhc.com or on the city intranet

  33. Consumerism • Rx – use generics when possible • This may require that you talk to your doctor about alternative drugs and take the drug list with you to your visit • Medical – use in-network providers • Ask the provider to ensure they are in-network or call UHC to verify or check myuhc.com • Taking card doesn’t mean they are in-network, it only means they will file the claim • Use Premium rated (****) doctors and facilities when selecting – these provide proven high quality (better outcomes) at reasonable costs • Dental – ask for pre-determinations so you will know your financial responsibility up front • Flexible Spending Accounts – enroll • You are the purchaser of your own health care – Purchase health care just like you would any other product.

  34. Dependent Eligibility DocumentationOn – Line ALERT Message • Appears only if documentation has not been received • Adding new dependent • During the Enrollment process in PeopleSoft: Alert: Human Resources Department still needs documentation from you concerning this dependent. Dependent eligibility documentation for the dependent (i.e. Marriage license, birth certificate, etc) must be submitted to the Human Resources Department no later than October 21, 2009. Failure to provide the requested information by the deadline will result in NO COVERAGE for this dependent for the Plan Year 2010.

  35. Dependent Eligibility Documentation • Refer to page 86 in your SPD: Definition of Dependent • Typical Documents: • Marriage license • Birth certificate • Court Order

  36. New Question at Enrollment • “Does your spouse have access to health insurance through their employer?” • Will not be able to proceed with enrollment until question is answered • Question only – NO surcharge being applied and NO spouse will be taken off plan

  37. Important Dates • Enrollment opens October 1, 2009 • Enrollment closes October 21, 2009 • Enroll through PeopleSoft • All the instructions are in the WORKBOOK • Websites are listed Vendor Brochures and Hospital Gap Paper Enrollment Form Available online

  38. Confirmation Statements • Confirmation Statements will be sent out mid-November • CORRECTIONS Only – send to HR • Check on-line through PeopleSoft at Employee Self Service to review your elections at any time

  39. When are Changes Effective? • Payroll deductions begin 12/01/2009 • Coverage begins 01/01/2010 • You MUST enroll to have coverage • NO DEFAULTS

  40. Open Enrollment • Online enrollment is mandatory for all full time employees • Please enroll even if you are selecting “waive” October 1 – October 21, 5:00 pm

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