08-06-2014 Budget Workshop_Health Care Reform Recap & Renewal ReviewVILLAGE OF NORTH PALM BEACH
Health Care Reform Recap &
Renewal Review
Presented by:
Shawn Fleming, Senior Benefits Consultant
Kurt Gehring, CEO
GEHRING A GROUP
I N S U R A N C E B R O K E R SAA & C 0 N 5 U LTA N T 5
Items for Discussion
• Healthcare Reform Recap
— Industry Fees
• Insurance Renewals
— Claims Experience
— Medical Insurance
— Dental Insurance
— Future Cost Cutting Strategies
2 GEHRING _!GROUP
INSURANCE BROKERS/ - - & COK S ETAN IS
3
Industry Related Fees - 2015
• PCORI Fee
• NPB's cost: $329 year 1; $658 year 2
• Transitional Reinsurance Program
• NPB's Cost $15,545
• Health Insurance Industry Fee
• Fee on Fully Insured Plans adding 2.5% - 4% on top of
annual premium
• NPB's current plan is not subject to the insurer fee, saving
over $50,,000 per year.
GEHRING _!GROUP
INSURANCE BROKERS/ - - & COK S ETAN IS
al
Claims and Insurance Projection
• Claims per employee per month are 39%
higher in 2013/14 plan year vs. 2012/13
• Claims per employee per month have
increased 13% per year versus average
premium increases of 5.3% per since the
2007/08 plan year
GEHRING ,A GROUP
I NS V RA N CE BROKERS/ & CONSULTANTS
Claims and Insurance Projection
• Medical inflation is ranging between 5% - 15%
depending on geographic area across U.S.
— Florida inflation is higher than other areas of the country
largely due to demographics
• 84% loss ratio over last 12 months (74 °o at last
year's renewal)
• 15% increase projected inclusive of fees for
Affordable Care Act
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GEHRING ,A GROUP
I NS V RA N CE BROKERS/ & CONSULTANTS
Claims Per Employee Per Month
$1,250
$1,000
$oso
$eii
$sia
$soo
$zso
$o
2007/08 2008/09
$833
$661
_ --- j
$925
$714
$997
2009/10 2010/11 2011/12 2012/13 2013/14
GEHRING AGROUP
IN5VRANCE BROKERS & C0NSVLT AN TS
Claims and Insurance Projection
• 7 large claimants have incurred $ in
the last 12 months, with 5 expected to be
ongoing
• If claims are lower than expected at end of
plan year the Village is eligible for a credit in
the next plan year
GEHRING AGROUP
I NS V RA N CE BROKERS/ & CONSULTANTS
11-11
Medical Insurance Renewal
• Initial renewal provided at 20.5% ($388,022)
increase with ACA enhancements
• Renewal negotiated to 4.8% ($90,288) with
ACA enhancements and no other changes
— Includes considerations for Wellness Program
• Alternate renewal at 3% ($56,973)
— Added advanced imaging copay of $150
— Higher copays for Tier 2 & 3 Pharmacy ($50 / $80)
• Dental renewal negotiated to no increase
GEHRING _!GROUP
INSURANCE BROKERS/ - - & COK S ETAN IS
Schedule of Benefits — Current Plan
Schedule of
Benefits
Primary Visit
Specialist Visit
Inpatient
Hospital
Outpatient
Adv. Imagining
E. R.
Rx
Deductible
Out of Pocket
Max
9
Current
$15 per visit
$30 per visit
$250 per visit
$200 per visit
$0
$150 per visit
$10/$30/$50
No deductible
None
Renewal
$15 per visit
$30 per visit
$250 per visit
$200 per visit
$0
$150 per visit
$10 / $30 / $50
No deductible
$4,000 / $8,000
Recommended
Renewal
$15 per visit
$30 per visit
$250 per visit
$200 per visit
$150
$150 per visit
$10/$50/$80
No deductible
$4,000 / $8,000
GEHRING _!GROUP
INSURANCE BROKERS/ -- & CONSU LIANTS
Additional Cost Cutting Strategies
• Eliminate $0 cost option and require employees contribute to
cost of coverage (ACA guidelines)
• Base and buy -up plan strategy
• Reduction of employer contribution to dependent portion of
benefits premiums
The majority of public sector entities contribute over 50°o to
the dependent cost of insurance.
• Increase Employee Cost Share (higher copays /deductibles)
• Impose surcharge for tobacco use
• Impose a contingency on employees that mandates the
completion of a health risk assessment
10 GEH RING -jGR)UF
PHDF_SSJONAL S €RVI ES
Discussion Quest*ions
GEHRING _!GROUP
INSURANCE BROKERS/ - - & COK S ETAN IS