va 11 d 8 /. ~ s 1-as COMMISSIONERS' COURT AGENDA REOUEST PLEASE FURNISH ONE ORIGINAL AND TEN (10) COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT MADE BY: Eva Hyde / Jeannie Hargis MEETING DATE: February 11, 2008 OFFICE: Human Resources /County Auditor TIME PREFERRED: SUBJECT: Consider, discuss and take appropriate action on the "exploratory phase" of potentially combining City and County Health Benefits Platforms. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) Yes NAME OF PERSON ADDRESSING THE COURT: Eva Hyde / Jeannie Hargis ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays: THIS REQUEST RECEIVED BY: THIS RQUEST RECEIVED ON: 5:00 PM previous Tuesday @ .M. All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. rage i or i Jody Grinstead From: Eva Hyde [ehyde@co.kerr.tx.us] Sent: Thursday, March 20, 2008 10:45 AM To: ptinley@co.kerr.tx.us; 'Jody Grinstead' Cc: 'Eva Hyde' Subject: FW: C' ne i ooperative Meeting Minutes - Att nts: COK MEETING MINUTES 031208.pdf Judge, Do we need an agenda item to "report" back to the Court on the findings of the City's consultant or can this be done during the reports portion? Thanks, __._..... _.w_._ ....._..~_ __.~,...._ __.._._._.....___..._..~_... .._.~._ _.._m~ _ _._._. _..... From: Kim Meismer lmailto:kim.meismer@kerrvilletx.gov] Sent: Wednesday, March 19, 2008 1:17 PM To: Eva Hyde; ptinley@co.kerr.tx.us Subject: FW: City County Benefit Cooperative Meeting Minutes - 031208 Eva/Judge Tinley, Attached are the minutes from the City County Benefit Cooperative Meeting held on March 12, 2008. This will be presented to City Council along with otherjoint services on March 25, 200$. If you have any questions, please feel free to contact me. Thank you. Sincerely, Kimberly Meismer Director of Human Resources & Administration City of Kerrville 800 Junction Hwy. Kerrville, Texas 78028 Ph: 830-792-8340 Cell: 830-377-7691 Fax: 830-792-8346 03/20/2008 CCBS CITE-CC}tJ~VTY BEF+TEFITS SERVICES 245 Commerce Green Blvd., Suite 290 Phone: {800} 308-2896/Direct: (281) 295-31)00 Sugar Land, Texas 77478 Fax: {281) 295-3020/Bob.Treacy@c-cbs.org Meeting Minu#es -March 12, 2008 A meeting was held at the City of Kerrville City Hall on March 12, 2008 at 3:00 p.m. Attendees were: Kerr County City of Kerrville Honorable Judge Pat Tinley Kim Meismer, Director of Human Resources & Administration Eva Hyde -Human Resource Manager City-Count Benefits Services Robert Treacy -City of Kerrville Beneft Consultant The meeting was to discuss the results of a preliminary review of basic criteria established to measure the CitylCounty compatibility in forming a Chapter 791/271 Interlocal Purchasing Cooperative for the purpose of securing a group medical insurance plan. The objective would be to form one group in order to spread claim cost over a larger group, reduce retention and pooling charges, and stabilize costs aver the future. Three (3) criteria were established to measure compatibility prior to engaging a full comprehensive Request For Proposal (RFP} process which would result in staff hours and additional consulting fees. Those criteria were: • Benefits/contract terms • Demographic actuarial premium ratios • Per Employee Per Month {PEPM) Claim costs BENEFITSICONTRAGT TERMS A comparison was made of the two flagship plans (see Exhibit 1) offered to the plan members of the City and County. The City and County offer PPO plans. The City offers a dual choice Standard PPOI High Deductible PPO-HRA plan with 83% of City employees in the lower deductible Standard PPO plan. The County offers one (1) total replacement High Deductible PPO-HRA plan. The City and County offer extremely competitive products that provide a very high level of cost/benefit value to the plan members. In comparing the City/County plans, each entity has their strengths and weaknesses measuring the top benefits that drive claim costs. The overall comparison would necessitate a willingness for both entities to offer dual choices to the group based upon the differing product platforms and benefit levels along with a need to be flexible in arriving at two plans that both entities could agree on. Those two products would be offered to all members of both entities. Z. There are additional issues complicating this study: a. The City has an anniversary date of October 1, 2008 (same as fiscal year) and the County; January 1, 2009. b. It is recommended that both entities terminate their participating contracts and move into the fully insured arena for a minimum of two years due to the complexities of forming a Chapter 172 Self >'unded Cooperative program. The County is currently contracted under a partially self funded contract which could jeopardize the reinsurance contract should they move their renewal date up to October 1, 2008 to coincide with the City. The City/County would need to measure whether going fully insured is in their best interest. c. The City has plan year deductible and out of pocket accumulators. The County has calendar year accumulators. These issues can be managed. but each entity would have to be prepared to give and take financially and structurally in order to overcome these obstacles. Mee#ing Minutes Page 2 MANUAL DEMOORAPHIC PREMIUM RATIOS This analysis could prove to be a major obs#acle for joining these two entities into a collective risk. (see Exhibit 2) Each group forwarded their census information broken out by active employees and active/retirees. The City does not cover retirees. The County does cover retirees. A manual premium calculation is developed using actuarial statistics including age, gender, dependents, standard benefit design, area cast factors, and activelretirees. Once that collective premium structure is developed blending the CitylCounty demographics, each group is then run through the same variable to develop their separate rate to see how it compares with the blended manual. A ratio less than 9.00 indicates the individual group has a premium that is less than the collective manual. A ratio higher than 9.00 indicates the group has a higher cost factor than the blended manuals and is responsible for increasing the blended composite premium rate. The employee (EE) and employee + spouse (ES) premium ratio for the City is well under 1.04 and all others are at 1.00. The County on the other hand has much higher cost adjustment for these two demographic facts, as much as 26-34% higher. The County active workforce is older than the City and the County retiree participation only corn pounds this differential. These two groups are not demographically similar enough to be a good match. PER EMPLOYEE PER MONTH (PEPM1 CLAIM COSTS The last analysis of the preliminary review is to compare a PEPM claim cost over the past two years of claims performance to see whether these two groups are running in a similar manner. Claim costs drive 80% of the cost of a group medical pion. The City information has been provided to the consultant. At this date in time, the County has not provided their information to the consultant. Indications are that the claim costs are going to re-direct the manual demographic data Hated above which will show that the County has a higher claim cost PEPM than the City. Actual claims data from the County is needed in order to complete this portion of the analysis. CONCLUSION Collective purchasing for the sake of collec#ive purchasing is not a good idea. The collective group needs to be fairly homogeneous and I do not see this so far in our analysis. This could change over time as the City moves towards mandated retiree coverage as they approach 25,OOt) citizens under local government code Chapter 175. The development of a collective RFP will be time consuming and there will be consulting fees involved. 1 am ~r6~onfident that this exercise will be worth the cost. Sincerely, Boi, Tr cy, LNIC Partner EXHIBIT 1 BENEFITS CITY COUNTY Lifetime Maximum $1,000,000 $2,000,000 Annual Year Deductible Famil $5DD 3x) Ian r 1011 $1,000 3x calendar r 4th Quarter Roll Over es es Cv-Insurance 20% 10% Annual Out of Pocket Famil $3,000 {3x $2,000 3x) Deductible Included Out of Pocket na es IPh sician Office Visit Ca a s • Primar $25 $30/10% • Specialty $35 $3D/10°!0 Routine Lab/Radiolo Out Patient • Independent no charge $30110% • Physician no charge $30110% -Hospital no charge Deductible / 10% Preventive Annual Benefit $500 $504 Wellness Pro rams (a a 43 Preventive Colonosca ies no char a Deductible / 10% Aller • Testing $35 capay $30 copay/10% • Serum no charge $30 copay/10% Hos ital ER Treatment Deductible 120% $50 co a 1 Ded /10% RX Plan $10/$30/$50 $10/$25/$35 / DAW2 Mail Order (2x co a s Mail Order - In redient Cast In Patient Rehabilitation Services unlimited 60 da s in Patient Mental Nervous 45 da s calendar 30 da s calendar/60da s lifetime Out Patient Mental Nervous $35 co a /60 visits 50%; Max Allowable $70 Out Patient Ph sical Thera 60 visits 60 visits Spinal Mani ulation Included in Ph sical Thera 30 visits Vision Care Benefit n/a no charge; Max .Allowable $6D Kerr Gty.COK.Benetrts Comparison 2008 ~~H1BIT 2 KerrvillelKerr County Manual Risk Analysis Active Unto Kerrville Kerr Co. EE 0.92 1.07 EE + Sp 0.88 1.16 EE + Ch 1 1.01 EE + Fm 1.02 0.94 >55 20.7% 26.75% Active 8~ Retiree Kerrville Kerr Co. EE 0.85 1.11 EE + 5p 0.85 1.19 EE + Ch 1.00 1.01 EE + Fm 1.02 0.94 %y55 20.93% 32.75% EXHIBIT 2 Entity: City of Kemrille Active # of # of # of # of # of AGE Male EES Comp Dep Sp Only Ch Only Fm Only <35 35 33 7 13 13 36 - 45 14 46 2 21 23 46 - 50 7 32 1 17 14 5i-55 15 8 4 1 3 56 - 60 11 9 6 0 3 67-65 5 2 2 0 0 66 - 70 0 1 0 0 1 >71 0 0 0 0 0 Tota! Male 87 131 22 52 57 # of # of # of # of # of AGE Female EES Comp Dep Sp Only Ch Only Fm Only <35 15 10 1 8 1 36-45 10 10 1 6 3 46-50 3 4 1 2 1 51 - 55 2 2 1 1 0 56 - 60 6 4 4 0 0 69 - 65 3 2 1 1 0 66 - 70 1 1 1 0 0 >7i 0 fl 0 0 0 Tota! Female 40 33 10 18 5 Total All 127 164 32 70 62 Note - # of Male and Female EES is Sum of EE, EE+Sp, EE+Ch & EE+Fm Note - Do Not enter in to Comp Dep Column COK.PY08-08.WORKING ~lLE.ELIGIBLITYCENSUS 2008 EXHiB1T 2 Entity: Kerr County Active # of # of # of # of # of AGE Male EES Comp Dep Sp Only Ch Only Fm Only X35 19 10 1 5 4 36 - 45 16 14 2 7 5 46 - 50 13 5 1 2 2 5i-55 12 8 3 3 2 56 - 60 9 2 1 1 0 61 - 65 5 2 2 0 0 66 - 70 0 1 1 0 0 >71 1 1 1 0 0 Total Male 75 43 12 18 13 # of # of # of # of # of AGE Female EES Comp Dep Sp Oniy Ch Only Fm Only <35 1fi 7 0 5 2 36 - 45 20 12 0 8 4 4S - 50 13 6 1 3 2 51 - 55 6 7 4 2 1 56 - 60 15 3 3 0 0 69-65 7 2 2 0 0 66 - 70 4 1 1 0 0 >71 1 1 1 0 0 Total Female 82 39 12 18 9 Total All 157 82 24 38 22 Note - # of Male and Female EES is Sum of EE, EE+Sp, EE+Ch & EE+Fm Note - Do Not enter in to Camp Dep Column Kerr Cty.PY08-09.Working Etigibiilty 2008 EXHIBIT 2 Entity: Kerr County Retirees # of # of # of # of # of AGE Male EES Comp Dep Sp Only Ch Only Fm Only <35 0 0 0 0 0 36 - 45 0 0 0 0 0 46 - 50 0 0 0 0 0 51-55 0 0 0 0 0 56 - 60 0 0 0 0 0 61-65 0 0 0 0 0 66 - 70 2 0 0 0 0 >71 4 0 0 0 0 Toiat Ma-e 6 0 0 0 0 # of # of # of # of # of AGE Female EE5 Comp Dep Sp Only Ch Only Fm Only <35 0 0 0 0 0 36 - 45 D D 0 0 0 46 - 50 0 0 0 0 0 51-55 0 D 0 0 0 56 - 60 2 0 0 0 0 fit - 65 0 0 0 0 0 66 - 70 2 0 0 0 0 >71 6 1 1 0 0 Total Female 10 1 1 0 0 Total AI! 16 1 1 0 0 Note - # of Male and Female EES is Sum of EE, EE+Sp, EE+Ch & EE+Fm Note - Do Not enter in to Comp Dep Column Kerr Cty. PY08-09. Working Eligibilty 2008