1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Friday, December 17, 2004 11 1:30 p.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: PAT TINLEY, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 DAVE NICHOLSON, Commissioner Pct. 4 2 1 I N D E X December 17, 2004 2 PAGE 3 1.1 Consider and discuss recently adopted employee health benefit plan 3 4 1.2 Consider and discuss applications for stop loss 5 and life insurance for employee health benefits program, requesting and authorizing payment for 6 binder(s) on same, and authorizing County Judge to execute applications 80 7 --- Adjourned 81 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Friday, December 17, 2004, at 1:30 p.m., a special 2 meeting of the Kerr County Commissioners Court was held in the 3 Commissioners' Courtroom, Kerr County Courthouse, Kerrville, 4 Texas, and the following proceedings were had in open court: 5 P R O C E E D I N G S 6 JUDGE TINLEY: Let me call to order, if I 7 may, the special Commissioners Court meeting posted for this 8 time and date, Friday, December 17th, 2004, at 1:30 p.m. 9 It's a few minutes past that now. The issues on the agenda 10 today are insurance issues, and our county consultant -- 11 health benefits consultant, Mr. Gary Looney with Catto and 12 Catto, I was informed, is en route from Fredericksburg. He 13 was in Austin this morning, and should be here in a few 14 minutes. The first item on the agenda is consider and 15 discuss recently adopted employee health benefit plan. 16 There have been some questions, concerns, dilemmas -- call 17 them what you like -- with regard to the recently adopted 18 employee health benefits plan. And what I'd like to do in 19 order to try and stay focused on the issues that we need to 20 consider today is to first find out what those questions, 21 issues, concerns are. First, identify them all, and try and 22 categorize them so that we can determine whether they're 23 plan issues or plan design issues, or whether they're 24 coverage issues, or whether they're strictly cost issues. 25 And then, once we get all the issues or concerns or 12-17-04 4 1 questions identified, depending upon the nature of the 2 question, concern, or issue, call upon our respective 3 consultants or -- or plan administrator, as the case may be, 4 to answer and resolve those questions or issues. So, as I 5 say, the first thing I'd like to do is to ascertain what the 6 issues or the questions are that we need to focus on here 7 today. So, if we could, could we start over here? Who's -- 8 who's got an issue? Question? Concern? If they'll 9 identify themselves. Yes, ma'am? 10 MS. LARA: I'm here on behalf of Family 11 Practice Associates. 12 JUDGE TINLEY: All right. 13 MS. LARA: Dr. John Davis, William O'Donnell. 14 We've had several of our patients call and inquire. They 15 were told there's an 18-month preexisting clause on any 16 health issues if they've been there less than 12 months. 17 We're talking diabetes, hypercholesterolemia, hypertension. 18 Can you fill me in on that, please? 19 JUDGE TINLEY: So, we have an issue as to 20 preexisting conditions? 21 MS. LARA: Right. Evidently, if the 22 employee's not been employed 12 months or more, if they have 23 a problem, they're going to have to wait 18 months. That 24 seems to be a pretty big issue. 25 JUDGE TINLEY: Okay, thank you. Any other 12-17-04 5 1 issues, questions, concerns over here on this side of the 2 room? Yes, ma'am? 3 AUDIENCE: I'd like to know, how dependable 4 are these people? They couldn't show up for the first 5 meeting at the Sheriff's Office. Now they didn't take out 6 the insurance money from our checks; they're going to double 7 up on the next check. They're going to have two payments 8 instead of one. Are we covered by insurance now? 9 JUDGE TINLEY: Well, the coverage in place 10 now is under the plan that expires December 31. 11 AUDIENCE: But they didn't take anything out 12 of our check. 13 JUDGE TINLEY: Okay. 14 COMMISSIONER BALDWIN: Mr. Lopez. 15 JUDGE TINLEY: Yes, sir? 16 MR. LOPEZ: My question is in regards to what 17 she said about the preexisting condition. 18 JUDGE TINLEY: Yes. 19 MR. LOPEZ: I've been employed with the 20 County for six months, and my wife's going to have a baby in 21 June, and I was told that since I haven't been employed 22 there for a year, that all of my expenses towards the birth 23 of my newborn is going to be all out-of-pocket. I want to 24 know how they consider that a preexisting condition, 'cause 25 that's what I was told, that's what it's considered. 12-17-04 6 1 JUDGE TINLEY: Okay. 2 MS. LARA: I can tell you why. It's not 3 cheap to have a baby any more. It's going to cost from 4 $5,000 to $6,000. 5 COMMISSIONER LETZ: Please. 6 MS. LARA: I'm just letting you know. 7 JUDGE TINLEY: Anybody else over here on this 8 side of the room? Yes, ma'am? 9 JUDGE WRIGHT: I'm Dawn Wright, and my 10 concern is the increase in the prescription costs. Right 11 now, my prescriptions are $350. When I have them filled, 12 this means it's going to be $700. This is just strictly for 13 blood pressure since I broke my leg, and I'm really 14 concerned about that, and I'm wondering how I'm going to 15 come up with $700 every three months. 16 JUDGE TINLEY: Anybody else on this side? 17 COMMISSIONER NICHOLSON: Just for 18 understanding, Judge. 19 JUDGE TINLEY: Yes? 20 COMMISSIONER NICHOLSON: What does that mean? 21 It means that the co-pay is going up? 22 JUDGE TINLEY: Yes. 23 COMMISSIONER WILLIAMS: Yes. 24 COMMISSIONER NICHOLSON: Thanks. 25 JUDGE TINLEY: Increase in prescription 12-17-04 7 1 co-pay is what I have it identified as. Yes, ma'am? 2 MS. HARRIS: I just need a clarification on 3 the prescriptions, if we're going to be able to get a 90-day 4 supply through the mail-order, and how it -- if that's so, 5 how that process is going to work exactly. I think there's 6 a difference in -- in comparison to the old insurance. And 7 the second thing is, on this preexisting conditions, if you 8 show an affidavit that you have had continuous coverage 9 through an insurance company medical for yourself and your 10 dependents for the past 12 months, if that will satisfy that 11 preexisting condition clause. 12 JUDGE TINLEY: Thank you. 13 COMMISSIONER WILLIAMS: Another one right 14 there, Judge. 15 JUDGE TINLEY: Yes, ma'am. 16 MS. HALL: What happens -- I've been in the 17 hospital for kidney stones, and I've got to go back to the 18 doctor in January. Well, who's going to cover what and 19 when? Is -- am I covered on December the 31st through then 20 for what I've had done to me? Which wasn't fun. And then I 21 have to go back. Well, then it's sort of a continuation -- 22 you see what I mean? -- of the treatment. Well, how does -- 23 how do I know what to tell my doctor who to bill? 24 JUDGE TINLEY: Okay. 25 MS. HALL: Other than me. 12-17-04 8 1 JUDGE TINLEY: Okay. Basically, a 2 continuation of course of treatment, and the plan changes in 3 the meantime. 4 MS. HALL: That's right, yes. 5 JUDGE TINLEY: Okay. 6 MS. HALL: You're getting something done, 7 and... 8 JUDGE TINLEY: Okay. Anybody else over here 9 on this side? Okay. Let's come over here to this side. 10 Yes, ma'am? 11 MS. MEEKER: Prescription co-pay is my 12 greatest concern. 13 JUDGE TINLEY: Okay. 14 MS. MEEKER: It's almost unreasonable. And I 15 did learn that you did have before you an option for our 16 co-pay on -- oh, you know, the deductible and co-pay to stay 17 the same. But the option you chose just kills us. The -- 18 on the co-pay, it just kills us. 19 JUDGE TINLEY: It's prescription -- 20 MS. MEEKER: Formulary, nonformulary. I 21 don't know where they made that up, but -- and you can't get 22 any answers. 23 JUDGE TINLEY: It's prescription co-pay and 24 categorization issue also? 25 MS. MEEKER: That's my main concern. 12-17-04 9 1 JUDGE TINLEY: Okay. 2 MS. MEEKER: Or has that already been 3 mentioned? It hurts when, you know, hey, you could have 4 chosen for us to stay the same on these out-of-pocket stuff, 5 but you chose to hit us with this. 6 JUDGE TINLEY: Do we have any more issues 7 over here on this side of the room? Yes, ma'am? 8 AUDIENCE: No, you go ahead. 9 AUDIENCE: I have something to say about 10 the -- 11 JUDGE TINLEY: I'm sorry, I cannot hear you. 12 AUDIENCE: -- about the meds. About the 13 co-pay. 14 JUDGE TINLEY: Okay. 15 AUDIENCE: They had been 20, and now they're 16 30. And the -- some of the meds are 35, co-pay. That makes 17 a difference. I was paying 180. Now it will be $315. 18 JUDGE TINLEY: So it's a co-pay issue on the 19 prescription. 20 AUDIENCE: Co-pay. 21 JUDGE TINLEY: Okay. 22 AUDIENCE: Co-pay on the prescriptions only, 23 yeah. 24 JUDGE TINLEY: Okay. 25 AUDIENCE: And also -- also, the -- the 12-17-04 10 1 doctor's office call, you know, have gone from 20 to 30. 2 JUDGE TINLEY: The -- the office visit 3 co-pay? 4 AUDIENCE: Yes, sir. 5 JUDGE TINLEY: Okay. 6 AUDIENCE: It was at 10. 7 MS. NEMEC: 10 to 30. 8 JUDGE TINLEY: Okay. Anybody else over here 9 on this side of the room? 10 MS. EVANS: I'm sorry, I came in late, so I'm 11 not sure if anyone's talked about the amount coming out of 12 our checks on the 30th. 13 JUDGE TINLEY: That issue's been raised. 14 MS. EVANS: Okay. I just wanted to make 15 sure, 'cause I've got three kids and it's Christmas, and all 16 my big bills are due on the 1st, and I really -- it's -- it 17 was already going to be hard for me to even pay the -- the 18 deductible for my children to be on it, but I have to have 19 insurance for them, 'cause they're, you know, kids. So, I 20 am very concerned about that. I'm concerned that I'm not 21 going to be able to make my house payment or my van payment 22 or one of those. 23 JUDGE TINLEY: Okay. Is that -- 24 MS. EVANS: That was my main concern, that I 25 wasn't for sure -- 12-17-04 11 1 JUDGE TINLEY: Okay. Yes, ma'am? 2 MS. GORDON: Me? 3 JUDGE TINLEY: Yes, ma'am. 4 MS. GORDON: My concern also is the co-pay on 5 the insurance. I -- for the medications. I have quite a 6 few, and it's just -- you know, it really knocks me down for 7 that much difference. And I found it very difficult to find 8 out anything, because the agent was so rude, and when he 9 found out that I would be retiring and mine would be a 10 supplemental policy, he spent more time arguing with me over 11 whether I was using the correct term, "supplemental" or 12 "secondary." And I couldn't get any answers at all from 13 him, and he merely handed me a piece of paper and said, 14 "Just sign this. You're just a retiree." And I was rather 15 offended by that. 16 JUDGE TINLEY: But your issue is the 17 prescription co-pay? 18 MS. GORDON: The main issue, sir, is the 19 prescription co-pay. 20 JUDGE TINLEY: Okay, thank you. Anyone else? 21 Yes, ma'am? 22 MS. NEMEC: I would say my main issue is the 23 amount of complaints that I have received from employees as 24 to exactly what Nell just said, as to how they were treated. 25 When we started this enrollment process, the first few 12-17-04 12 1 meetings that we had, I made it a real big point to be very 2 positive and open-minded about this enrollment, and I 3 thought it was going along okay, and then all of a sudden -- 4 I mean, there's no way this room could fill up with 5 employees -- the amount of employees that called me with 6 that complaint. 7 JUDGE TINLEY: Your issue is attitude? 8 MS. NEMEC: Yes. 9 JUDGE TINLEY: Okay. 10 MS. NEMEC: Employees -- a lot of employees' 11 issues were attitude. 12 JUDGE TINLEY: Okay. Yes, ma'am? 13 MS. LAVENDER: I'm a part-time county 14 employee, but my husband is a full-time employee, and has 15 been for 17 years. And he and I, and about five other 16 people on the County's payroll, are beneficiaries of state 17 employment benefits already. We've retired from one job and 18 are on either state health care through the Department of 19 Public Safety, or teacher retirement. We were told that we 20 had to take one of these plans. We were not given a third 21 option. And when I checked, I discovered that you all were 22 under the impression that the third option was still in 23 place. I served 20 years on the school district's insurance 24 committee. I know and I understand self-funded or partially 25 self-funded insurance, and I -- I felt like I had been 12-17-04 13 1 insulted. They were very condescending to me when I tried 2 to talk to them about it. And they were -- I was told by 3 someone who talked to them that they told them that if we 4 did not take the county insurance, that our primary carrier 5 would cancel our insurance. And I called Aetna and I called 6 the Teacher Retirement System, and that's not true. 7 JUDGE TINLEY: Okay. So, your issue is a -- 8 MS. LAVENDER: Misrepresentation. Failure to 9 disclose perhaps would be an issue. 10 COMMISSIONER BALDWIN: Secondary insurance. 11 MS. LAVENDER: Secondary insurance issues. 12 COMMISSIONER WILLIAMS: For alternative 13 coverage. 14 JUDGE TINLEY: Okay. Employees with existing 15 outside coverage? 16 MS. LAVENDER: Correct, sir. 17 JUDGE TINLEY: Okay. And I think I heard 18 another issue about primary-slash-secondary coverage and 19 coordination of benefits? 20 MS. LAVENDER: Right. 21 JUDGE TINLEY: Okay. 22 MS. LAVENDER: The concern that those of us 23 that are on state retirement and state health benefits are 24 concerned is, if you cancel -- if we go in there and cancel 25 and make it our secondary insurance, there's no guarantee we 12-17-04 14 1 can get back as a state -- as a state employee or former 2 state employee to having that as our primary insurance, and 3 we're very concerned about that. And most of us have chosen 4 the third option under the old plan, and gone with the AFLAC 5 and the medical reimbursement policy for the past three 6 years that that was available. 7 JUDGE TINLEY: Okay. Okay. 8 Primary/secondary coverage issues and coordination of 9 benefits. Okay. Anyone else over here on this side? 10 Anyone else? 11 MS. McELHANNON: Yes, ma'am. Can I say 12 something? 13 JUDGE TINLEY: Yeah. 14 MS. McELHANNON: My concern is having to have 15 your blood test, X rays, whatever, done inside -- in the 16 doctor's office or the insurance won't cover it. 17 AUDIENCE: What? 18 MR. BARTON: That's on the physicals. 19 SHERIFF HIERHOLZER: No more labs. 20 MS. McELHANNON: Yeah, no more lab, no more 21 anything. Has to be done in the doctor's office. 22 JUDGE TINLEY: Okay. Is that it? 23 MS. McELHANNON: Yes, sir. Thank you. 24 JUDGE TINLEY: Okay. Anyone else? Okay. I 25 have broken these down into plan design issues, coverage 12-17-04 15 1 issues, and premium or cost issues. The plan design issues 2 I have are inability to opt out, mandatory inclusion, 3 employees with existing outside coverage -- and that's 4 really shades of the same question, and then secondary -- 5 primary/secondary coverage issues and coordination of 6 benefits. Under coverage issues, I have preexisting 7 conditions, and we've got some sub-questions under there. 8 Then -- then we have the lab work issue on the coverage 9 issue. The continuation, of course, of treatment in 10 midstream is -- that could be either a plan issue or a 11 cover -- a preexisting condition issue, but I've got it 12 under preexisting condition. And then premium and cost 13 issues are the premium deduction for this month, increase in 14 prescription co-pay, mail-order prescriptions, and I'm going 15 to put out there, "90-day." Categorization of 16 prescriptions. Formulary/nonformulary, generic and so 17 forth, and the office visit co-pay. The -- the premiums 18 this month, the Treasurer circulated a memo, I think, to all 19 department heads earlier this week that, because some of the 20 things had not been completely finalized, she was not able 21 to make the deductions, and therefore any deductions to 22 occur in December would have to occur, if at all, of course, 23 at -- at the final pay period. So, I think that's the 24 answer to that question. Am I incorrect in that, Ms. Nemec? 25 MS. NEMEC: Well, I would like to add that 12-17-04 16 1 the reason is -- is because I did not get the rates from the 2 insurance company. 3 JUDGE TINLEY: Okay. 4 MS. NEMEC: In order to deduct it. And I 5 still haven't gotten them. 6 JUDGE TINLEY: Okay. 7 MS. NEMEC: And I have given them a deadline 8 before the enrollment and told them when I needed it in 9 order for me to be able to deduct for the 15th payroll, and 10 that was not met. 11 JUDGE TINLEY: Okay. Okay. Let's start with 12 the plan design issues, if we might. 13 COMMISSIONER BALDWIN: Judge, I want to say 14 something before you get into the Q and A part of it. I 15 just wanted to say that I think that, personally, I have a 16 great amount of confidence in the insurance program. I 17 think in the long run, I think it's going to be a good thing 18 for me and my family, as well as all the employees, and I 19 think that, as grown people, that we can sit down and work 20 these issues out, dealing with co-pays and medications and 21 all those things. I think that the -- that all can be 22 worked out. However, this bad attitude and condensation 23 (sic) and rudeness, arrogance, et cetera, whatever all that 24 was, I don't think -- I, personally, and I don't think 25 anybody at this table right here will tolerate that toward 12-17-04 17 1 our employees. So, we want to -- if there is any of that, 2 I'd really like to see it laid down immediately so that we 3 can get on with government business here, and -- and get 4 that out of the way. We're not -- we're not going to allow 5 anybody to treat our employees in a -- in an ugly manner or 6 in an ugly way, so that's all I have to say about that. 7 JUDGE TINLEY: Thank you, Commissioner. I 8 appreciate that. 9 COMMISSIONER LETZ: Judge, I might add a 10 comment. And I think -- I mean, I was concerned to hear 11 about the attitude issues and the rudeness, especially after 12 a comment that I made when we selected the insurance company 13 and the benefits provider that that wouldn't be tolerated. 14 So, I am concerned that that did happen; at least there's a 15 perception that it happened. The other thing is that, you 16 know, I don't know that the -- maybe the employees do or 17 don't understand this, but we change our insurance every 18 year. We rebid it and change the -- you know, we did it a 19 lot different this year. We changed the administrator of 20 it. Every year we go out for new coverage, so a lot of the 21 questions, I think, that they are -- are questions that 22 would come up every year, and there are always slight 23 modifications to the plan. 24 This year, I think we probably did make some 25 more, and hopefully Mr. Looney will address this a little 12-17-04 18 1 bit more, but I think a lot of the changes that are in the 2 plan now are directions that the country is going, the whole 3 nation is going with their insurance. And we don't have a 4 whole lot of choice. We can't say we refuse to change in 5 Kerr County. I mean, it doesn't work that way. The 6 industry is changing; it changes continuously, and this was 7 a -- a year that we, you know, corrected course a little bit 8 with the insurance, as the whole nation is doing, because 9 the cost of health care is going up so rapidly. I think 10 what we did try to do is come up with a plan that was very 11 similar to last year's. It's -- there's some different ways 12 of calculating that are, in my opinion, confusing, but I 13 think once people understand it, a lot of the concerns that 14 I think that were addressed, you know, will be resolved; 15 partially, anyway, if not totally. But, hopefully 16 Mr. Looney can maybe -- rather than me try to explain a lot 17 of those issues, I'm going to leave it to an expert. 18 COMMISSIONER NICHOLSON: The -- what the 19 other two Commissioners said, I fully agree with both of 20 them. And I think for us, as leaders, and other elected 21 officials and supervisors as leaders, what we need to do is 22 focus on problem-solving and not being part of the problem. 23 Focus on solving, to the best extent we can, these issues 24 that have been raised. And I appreciate people being 25 willing to come in here and say what their concerns and -- 12-17-04 19 1 and issues are. We'll deal with them. 2 COMMISSIONER BALDWIN: I agree. 3 COMMISSIONER WILLIAMS: I appreciate the 4 comments of my colleagues. Judge, I'll reserve my comments 5 till after I've heard the answers to the problems. I'm 6 ready to get on with the answers. 7 JUDGE TINLEY: Okay. As Commissioner Letz 8 said, there's -- there's a concern among all employees of 9 the rising cost of health care and how that affects employee 10 benefits, and a part of our charge to our consultant in 11 designing a plan was to do what we can, recognizing that we 12 have traditionally in the past paid the full cost for 13 employees. There was no employee participation in the cost 14 of the coverage, and the country's kind of passed us by in 15 that respect. I think -- I think, if you'll look around, 16 you'll find that most employers have either adopted plans 17 which have materially reduced benefits, increased 18 deductibles, whatever, or have -- have tailored plans such 19 that their employees participate, some to a smaller extent 20 and some to a significantly larger extent in the costs of 21 the program and the premiums paid, depending on whether it's 22 fully insured or not. But part of the charge that we gave 23 to Mr. Looney, our consultant, with Catto and Catto was to 24 try and design a plan which kept up with what the tax laws 25 and -- and federal laws allowed in that respect, and also 12-17-04 20 1 attempted, to the degree possible, to minimize the effects 2 of this rapidly increasing health care costs in employee 3 benefit plans. So, that's what he started with, and he 4 brought us some plans, and we adopted a plan. And some of 5 the items that -- that you've raised are items that really 6 he should properly speak to, so I'm going to call on 7 Mr. Gary Looney with Catto and Catto, our insurance 8 consultant, and ask him -- I guess you've got down the -- 9 MR. LOONEY: I've taken some notes, Judge, 10 thank you. Commissioners, good to see you again, even -- 11 even in this circumstance, because I think we'll be able to 12 resolve questions and be able to resolve some of the 13 problems. There's one thing that -- that I can't control, 14 and that is when the presentations are being made by someone 15 other than myself, I can't really control the attitudes that 16 are taking place in the meetings themselves. But, as I told 17 you last time, as you said, you know, this is something that 18 we hold the companies and the agent accountable for. So, 19 there are going to be individuals in the organization that 20 are going to hear things from the presentations that they 21 don't want to hear, so we need to resolve those questions 22 and make sure they get resolved properly. 23 There's one thing I want to -- to address 24 initially, and then I do want to make note that, because of 25 certain HIPAA regulations, I will not be able to discuss 12-17-04 21 1 anybody's individual circumstance in a public forum. We 2 have no names or no reference to any one specific 3 individual. If, in fact, individuals would like to discuss 4 about your situation outside the courtroom, I'll be glad to 5 set up a situation where we can talk privately about it, but 6 because of the HIPAA regulations and such as that, we have 7 to be very careful about discussion in any open forum about 8 anyone's past medical history and otherwise. So -- 9 MS. HALL: Well, my medical history was just 10 kidney stones. I mean, it's a painful thing, but I don't 11 care if people know. 12 JUDGE TINLEY: Ms. Hall, we -- we can talk 13 about general situations, an ongoing course of treatment, 14 and -- and a change of plans in midstream. We can talk 15 about that, but we can't talk about your situation, okay? 16 MS. HALL: Okay. 17 MR. LOONEY: Unfortunately, I can't answer 18 your question specifically unless we leave the room and go 19 have a quiet talk, which we can do. And do you still have 20 your stones? Did they give them to you? 21 MS. HALL: No, they didn't give them to me. 22 MR. LOONEY: Okay. (Laughter.) 23 MS. HALL: I didn't really want them. 24 MR. LOONEY: I didn't think you would. 25 Didn't want them in the first place, did you? I didn't 12-17-04 22 1 think so. But -- 2 (Cell phone rang.) 3 (Discussion off the record.) 4 MR. LOONEY: But when we designed the plan 5 and when we were working on the design of the plan, I had 6 information that said that there was a credit that was given 7 to the individuals who opted out of different plans and 8 opted into another plan. One of the things I was told was 9 that there was a differential between the high-cost plan and 10 the other two plans, and that differential was credited 11 forward. Well, apparently that was not the full extent of 12 the -- of the credit. Apparently, there was also a 13 potential -- or people were totally waiving out of the plan, 14 and then being given the full amount of the funded amount 15 for a credit to be used for the purchase of insurance, and 16 that is something that is totally against underwriting rules 17 and everything else that we look at, because the plan 18 document essentially says that the County will provide 19 health insurance for every employee, and that they will 20 provide that amount based on this funded amount. 21 So, when we did our calculations on rates, 22 participation, plan design issues and everything else, the 23 assumption was that every employee would be covered by the 24 County making contributions for every employee. That when 25 Option B was determined, then there was a credit given for 12-17-04 23 1 the employee-only portion of that, which was the difference 2 between the funding for the employee under A and B, and that 3 credit was approximately a little over $100 a month. Well, 4 that employee-only credit was what was then allowed to be 5 used for the outside purchase, because that blended into the 6 funding. If they waived out of the plan completely, then 7 the amount of dollars that we use to calculate that premium, 8 or the contribution is a funded amount. That's not pure 9 premium. Pure premium in a self-funded plan is based on 10 fixed costs plus claims cost. 11 So, what that number was is a funding amount 12 for the County to fund per-employee, so that amount was 13 five -- over $500 a month. And now I'm told that that 14 person that wants to waive out of the plan completely would 15 be given a $500 credit to be used to spend toward -- and 16 that is just -- I'm a consultant, and from a consulting side 17 of it, that's totally unacceptable as an underwriting 18 practice, because it's not a premium amount. It's a funding 19 level, and that funding level anticipates that that balance 20 of premium will be put into a fund to pay claims with. If 21 you yank those dollars out of that process, then you're 22 talking about a significant reduction in the claims fund 23 that's available to pay claims. Twenty people? That's over 24 $100,000 a year that you pull out of the plan that you've 25 funded from the -- from the standpoint of funding should be 12-17-04 24 1 in the plan you pay claims with. So, from that standpoint, 2 initially, opting out of the plan or waiving out of the plan 3 was not part of the funding requirements, not part of the 4 funding mechanism that we built in. 5 Now, as far as primary and secondary 6 coverages are concerned, the employee -- primary and 7 secondary quite often is determined by where they are 8 insured, if they have current insurance. And I talked to 9 T.R.S. and had a discussion with them and said that, you 10 know, they were -- if they -- I believe if you totally opted 11 -- if you canceled their plan -- notice, you had a 12 coordination of benefits process if, in fact, you are 13 covered by the County. So, as to coordination, they become 14 secondary, they become primary. So, the coverage doesn't 15 cease or terminate; it just changes the nature from primary 16 to secondary. According to T.R.S., if you then lose the 17 County plan, then you're back in their plan as primary. 18 MS. LAVENDER: That wasn't -- 19 MS. NEMEC: That wasn't her question. 20 MR. LOONEY: Well, that was -- I'm sorry. 21 What -- the question, then, was? 22 MS. NEMEC: She's on their plan as primary. 23 She chose to keep their plan, so, therefore -- or -- so, 24 therefore, the -- she's one of those that -- or her husband 25 is one of those that the whole insurance amount, the $505 in 12-17-04 25 1 this case, has been allocated to them to use for other 2 insurance. 3 MR. LOONEY: Okay. So, again, from -- from 4 an underwriting standpoint, you pull those dollars out of 5 the total fund balance that we -- that we had calculated 6 into the system as part of the fund balance to be used to 7 pay claims with. So, if -- if that's a change that the 8 County wants to make, then I've got to go back in and build 9 those dollars back into the funding for the balance of the 10 employees to pay the claims that are existing in that 11 circumstance, so that would change the whole nature of the 12 funding process. 13 COMMISSIONER LETZ: And what is that -- 14 what's that going to do? I mean, what's that -- if that was 15 done, if we -- 16 MR. LOONEY: It's going to increase the cost 17 to enter the plan itself, and either you absorb it as a 18 county, or you build it back into the premiums that the 19 other employees are paying for their coverage. 20 COMMISSIONER LETZ: It increases the costs if 21 you allow people out, okay. 22 MR. LOONEY: Right. Preexisting condition 23 circumstance. Your plan document initially, originally, 24 from the very beginning, has had a clause in it that the 25 County, at some point in the past, opted out of HIPAA. 12-17-04 26 1 "HIPAA" meaning, as -- as you asked about, you know, a 2 certificate of coverage. 3 MS. HARRIS: Yes. 4 MR. LOONEY: If you provided a certificate of 5 coverage as a new employee, did, in fact that cancel your 6 preexisting condition? That's a HIPAA law, the HIPAA 7 portability. You have opted out of that. And, as a county, 8 you opted out of that at some time in the past, and it was 9 assumed that that was going forward in the plan. That 10 protects a self-funded plan from employees coming in with 11 preexisting conditions, and it -- there's a six-month period 12 for which, if they had care and treatment prior, then they 13 have to go 12 full months without treatment under that 14 circumstance to receive benefits under the plan from the 15 self-funded basis. Now, if you opt out of HIPAA, then the 16 notifications are given to employees upon enrollment, or 17 should be given to them upon enrollment, notifying them of 18 the status of the fact that you have opted out of HIPAA. 19 HIPAA means that new employees coming in, if they have an 20 existing illness, a new employee, that they will have a 21 restriction on claims that they're being paid for something 22 that existed when they came to you as an employee. Now, a 23 pregnancy, if the pregnancy occurred after the date of 24 employment, then the pregnancy is covered as any other 25 illness. That is not preexisting. I don't know whether 12-17-04 27 1 that happened before or after. 2 MS. LARA: Mr. Ochoa answered that question. 3 Jaime Ochoa answered that question. 4 MS. NEMEC: Pregnancy was after employment. 5 MR. LOONEY: After employment, so that is not 6 -- that is not a preexisting exclusion. Any employee who's 7 been employed by the -- the County who has satisfied the 8 previous employer's definition of "preexisting" is a current 9 employee is covered -- is covered under the plan in the same 10 manner that they were covered under the previous plan. 11 There's no additional preexisting exclusions or limitations 12 placed on any employee who is a current active employee. 13 The status that they were in as an employee at the time the 14 plan changes is the status it moves forward. 15 COMMISSIONER LETZ: So, there's no change. 16 MR. LOONEY: There's no change in the 17 preexisting condition in the manner in which it was done in 18 the past. The manner in which it was in the past. 19 COMMISSIONER WILLIAMS: Does that apply to 20 prescription drugs? 'Cause I imagine everybody in here has 21 prescription drugs. I'm seeing a shake of the head back 22 there. 23 MR. MALEK: No, it's not going to apply to 24 prescription drugs. 25 COMMISSIONER WILLIAMS: Meaning that 12-17-04 28 1 everybody has to get precertification for the continuation 2 of prescription drugs? 3 MR. LOONEY: There's no preexisting condition 4 elimination on prescription drugs for an employee. There's 5 not any. 6 COMMISSIONER WILLIAMS: Okay. 7 MS. NEMEC: I'd like to ask for 8 clarification. If someone has been employed here for a 9 year, they have diabetes, that diabetes has been ongoing, is 10 that employee going to have to wait 18 months before the 11 diabetes medical part is covered? 'Cause that's what we 12 were told. 13 MR. LOONEY: Twelve months, I believe. 14 MR. MALEK: Well, yeah. Depends if it's an 15 employer -- it's 6/12/18. Six months for the condition 16 prior to the time, and then 12 months if it's an employee, 17 18 months if it was a dependent. 18 MR. LOONEY: That was the way the plan was -- 19 MS. NEMEC: That was my next question. I 20 checked with the plan prior, and that's not -- that was not 21 our plan. 22 MR. LOONEY: Whatever way the plan was prior 23 is the way it's going to go forward. So -- 24 MS. NEMEC: That's not what -- that's not 25 what was said to everyone, so we need clarification. 12-17-04 29 1 MR. LOONEY: Well, that's -- we'll get that 2 clarified in writing. 3 MS. NEMEC: And you said that we opted out of 4 HIPAA. Do you know where you got that info? 5 MR. LOONEY: It was in the plan document. 6 MS. NEMEC: It's in the plan document? 7 MR. LOONEY: It was. 8 MS. NEMEC: Okay. I'd like to see that. 9 COMMISSIONER WILLIAMS: You're under the 10 impression we did not opt out? 11 MR. ROTHWELL: To my acknowledge, they've 12 never opted out of HIPPA. Our plan is pretty clear on the 13 preexisting conditions also, the plan documents. 14 MR. LOONEY: Six, 12, and -- what is it in 15 the plan document currently right now? 16 MR. ROTHWELL: I don't remember specifically. 17 MR. LOONEY: Whatever that preexisting 18 condition -- 19 MR. ROTHWELL: It's a six-month look-back, I 20 know that. 21 MR. LOONEY: Six-month look-back. I think 22 it's -- I think it's 12 per employee, and then 18 for 23 dependents, what was in the contract. When did the HIPAA -- 24 were the HIPPA notification -- when was that done? 25 MR. ROTHWELL: There was never an opt-out of 12-17-04 30 1 HIPAA notification that I'm aware of. 2 MR. LOONEY: There's not any HIPAA 3 notification that Mr. Rothwell was aware of. Mr. Malek? 4 MR. MALEK: That's not what the plan document 5 has. It has a pre -- 6 (Court reporter interrupted, asked Mr. Malek to stand up so he could be heard.) 7 8 MR. MALEK: Sorry. The plan document that I 9 was given by someone has preexisting language in it. That's 10 what we used for the basis of -- 11 MR. LOONEY: So the assumption was that the 12 preexisting language in the plan document, then -- 13 MR. MALEK: That's correct. 14 MR. LOONEY: -- precipitated the HIPPA, so 15 it's not actually written into the plan document. So -- 16 MR. ROTHWELL: The preexisting language 17 that's in the document is there for someone that comes to 18 the County, often happening with no prior coverage. 19 MR. LOONEY: That's not -- 20 MR. ROTHWELL: It's a clarification of 21 what -- 22 COMMISSIONER WILLIAMS: We can't hear the 23 cross-dialogue here. 24 MR. LOONEY: Excuse me. We've got a -- we've 25 got a conflict, then, of -- of issue in the plan document 12-17-04 31 1 interpretation by Mutual of Omaha and the current carrier. 2 Because the current carrier's language has a restriction, 3 then, that it has a six-month waiting period for preexisting 4 conditions, and according to Mr. Rothwell, that's a -- a 5 notification to employees that had no previous coverage 6 coming to the county. That language normally is used in a 7 circumstance where HIPAA has been opted -- where you've not 8 been a participant in HIPAA. So, the HIPAA regulations say 9 that you -- if you do a certificate of continuous coverage, 10 then there is no preexisting condition applied. I will get 11 with these two gentlemen, make sure we get that clarified in 12 the plan document language. And if HIPAA -- if the County 13 has not opted out of HIPAA, then HIPAA will be applied and 14 you will not have any preexisting condition for an employee 15 that comes to work that shows their certificate of credible 16 coverage from their previous employer. We'll get that 17 resolved immediately. 18 MS. HARRIS: That certificate also covered 19 the dependents. 20 MR. LOONEY: Yes. 21 MR. BARTON: Excuse me. What about 22 medication, if you're on medication prior to employment, and 23 then you've been on it for, like -- 24 MR. LOONEY: If you were covered under a 25 previous employer where that was a covered element, and you 12-17-04 32 1 have a certificate of credible coverage from the previous 2 employer, then that will not be a preexisting condition. 3 MR. BARTON: And our last company has been 4 covering it. 5 MR. LOONEY: Then it's covered going forward. 6 MR. BARTON: Okay. 7 MS. HALL: What if the only health insurance 8 we've had has been through the County? 9 MR. LOONEY: I think we've been very lucky. 10 MS. HALL: We have been. And my husband has 11 paid for mine, so then mine wouldn't be a preexisting, would 12 it? He's been employed for -- since 1976 in law 13 enforcement. 14 MR. LOONEY: You'd better stay married to 15 him, ma'am. I think he's pretty valuable. 16 MS. HALL: Well, I've got used to him. 17 MR. LOONEY: I think that's a valuable asset 18 right there. 19 MS. MEEKER: Mr. Looney, you haven't answered 20 all the questions, and I apologize for interrupting, because 21 it kind of came to my mind, we had the same coverage for, 22 what, seven years? The same carrier. And we've all been so 23 happy with that carrier. That carrier. So -- but you 24 recommended that the -- that the Court move to this other 25 coverage; is that right? Is that how it came about? 12-17-04 33 1 MR. LOONEY: Mm-hmm. 2 MS. MEEKER: Well, would you tell us what it 3 was about this proposal and our old coverage that caused you 4 to recommend to them that you take up this plan which we are 5 all so unhappy with? What was it? 6 MR. LOONEY: About $370,000 in additional 7 costs. 8 MS. MEEKER: To whom, taxpayers? 9 MR. LOONEY: To the County. 10 MR. HALL: That's the cost to the employees 11 to make up for it. 12 COMMISSIONER LETZ: Before -- the plans that 13 were bid were identical. This -- this change would have 14 been in place either way. I mean, we bid -- Mr. Looney put 15 together a plan. That was what we bid on. 16 MR. LOONEY: Yeah. The plan design itself 17 is -- is -- you know, the administration of the plan design 18 is one aspect of it, one piece of it, but the plan design is 19 a major change in plan design. 20 MS. MEEKER: Why? 21 MR. LOONEY: I think -- well, one thing is 22 it's a modernization of that plan. You've been in the same 23 place for seven years. Once you see how the plan functions 24 and how its benefits are able to carry forward for you, once 25 you're able to see how you accumulate the benefits in the 12-17-04 34 1 plan, the plan design really is going to be more beneficial 2 to a majority of the employees that are here. And I'll be 3 glad to take another time and another -- another 4 circumstance when we've got more time, be glad to go over it 5 with you. 6 MS. MEEKER: If I could work the budget, 7 which I have for many years, I could fix it. In a 8 heartbeat. 9 MR. LOONEY: But you'd build fewer roads and 10 have fewer law enforcement officers. 11 MS. MEEKER: No, no, no, no, no. No, there 12 are other places I could get it. 13 MR. LOONEY: Oh. 14 COMMISSIONER NICHOLSON: I'd like to put 15 the -- 16 MS. NEMEC: I have a question. 17 MR. LOONEY: Y'all got a bucket of money 18 somewhere that we're not aware of. 19 COMMISSIONER NICHOLSON: I'd like to put the 20 preexisting conditions thing to bed. Do I understand that 21 benefits that are currently being paid under the current 22 plan for current employees will continue to be paid? 23 MR. LOONEY: That's right. 24 COMMISSIONER NICHOLSON: No restrictions on 25 preexisting conditions for current employees? 12-17-04 35 1 MR. LOONEY: That's correct. 2 MS. NEMEC: I have a question to follow that. 3 When -- when this plan was bid, did Mutual of Omaha bid on 4 excluding preexisting conditions to be covered, and did 5 E.B.A. bid that way also? Because if they didn't, then I 6 would think the amounts would be different at this time. 7 MR. LOONEY: I'll have to find out. 8 MS. NEMEC: If that's the case, I think the 9 only fair way is to rebid the two. It's nothing funny. 10 That is common sense. There's nothing to laugh about that 11 statement, Mr. Nicholson. 12 MR. LOONEY: I'll -- 13 COMMISSIONER NICHOLSON: Would be part of the 14 solution. 15 MR. LOONEY: I'll find out if there is -- if 16 there is a differential. 17 MS. NEMEC: I think that was a very good 18 question. 19 AUDIENCE: Yes, I do too. 20 MR. MALEK: I can solve that problem right 21 now. It's going to be the same; it's not going to change. 22 MS. NEMEC: That's not what you told me last 23 week. 24 MR. MALEK: I didn't have this conversation 25 with you. 12-17-04 36 1 MS. NEMEC: You didn't have a lot of 2 conversations with a lot of these employees, it seems like. 3 JUDGE TINLEY: Ms. Nemec? 4 MS. NEMEC: Yes, sir? 5 JUDGE TINLEY: If you've got any more 6 questions other than the preexisting, I think we've resolved 7 those. And do you have any other questions -- any other 8 comments, Mr. Looney? 9 MR. LOONEY: I need to -- 10 JUDGE TINLEY: With regard to the plan 11 design, or issues under -- 12 MR. LOONEY: One of the things I need to do a 13 little more investigation on is some of the questions that 14 have been asked about the differential in the prescription 15 drugs, and to find out what the -- what the differential -- 16 I need to find out more specific information so that I can 17 answer that question better. 18 MS. LARA: Mr. Looney? I'm coming from a 19 doctor's office, and I know we're talking about being out of 20 HIPAA right now. So, if I have a patient that presents to 21 me January 3rd, 4th, that used to have E.B.A., but hasn't 22 been employed 12 months, but has diabetes, is that still 23 going to be pending on what y'all decide if it's in HIPAA or 24 not on how to treat that patient? Are they going to have 25 coverage or no coverage? Does that mean we collect their 12-17-04 37 1 co-pay? We charge them the full office fee? What advice 2 would you give me? 3 MR. LOONEY: If -- if the Court -- if we 4 determine that HIPAA is in place, then that person is 5 covered fully. 6 MS. LARA: Okay. So, basically, we just need 7 to give you some time to determine whether -- 8 MR. LOONEY: And I'll know -- I'll know this 9 afternoon. 10 MS. LARA: And then we can get in touch with 11 Ms. Nemec to find out in the next week or so? 12 MR. LOONEY: You can hopefully be able to 13 find out later this afternoon. 14 AUDIENCE: What is HIPAA? 15 MR. LOONEY: It's this big fat animal that 16 chews a lot of grass. (Laughter.) 17 COMMISSIONER WILLIAMS: Drinks a lot of water 18 too. 19 MR. LOONEY: HIPAA is a federal regulation; 20 that is, the Health Insurance Portability Act, which allows 21 for employees to move between employers and not have the 22 preexisting condition. That's one -- that's the piece of it 23 that we're actually talking about. The law is considerably 24 more extensive than that, but that's the piece that we're 25 talking about. The certificate of credible coverages. 12-17-04 38 1 JUDGE WRIGHT: When will the discussion about 2 the pharmaceuticals take place? 3 MR. LOONEY: I need to get more information 4 on the specifics of the pharmaceuticals, about what you're 5 talking about. 6 MS. LARA: 'Cause that will affect the doctor 7 also, whether -- sometimes you can write a prescription for 8 a generic if the patient doesn't have coverage to help. 9 MR. LOONEY: We hope that the doctors are 10 writing prescriptions for generics on a regular basis. 11 MS. LARA: We hope so too, but if -- if we 12 can get them better medicine and they've got a great co-pay, 13 why not? 14 MR. LOONEY: Generic's not better medicine? 15 MS. LARA: I don't know. 16 AUDIENCE: Tylenol versus H.E.B. 17 MR. LOONEY: I'm not going to go there, 18 because we could spend the next two weeks in that discussion 19 about whether a generic is equivalent or not. 20 MS. MEEKER: Yeah. If it were equivalent, it 21 wouldn't be cheaper. 22 COMMISSIONER NICHOLSON: I think one issue -- 23 COMMISSIONER WILLIAMS: No, that's not true. 24 MS. MEEKER: You know, we don't check our 25 common sense at the door, either. 12-17-04 39 1 COMMISSIONER NICHOLSON: I think one issue's 2 been resolved, and that's the issue of the flexibility to 3 take the County contribution to the insurance costs and use 4 it for another product. 5 JUDGE TINLEY: I think Mr. Looney's spoken to 6 that, the opting out that you're speaking of. The plan is 7 designed so that no one opts out. 8 MR. LOONEY: Correct. 9 JUDGE TINLEY: Correct? 10 MR. LOONEY: Not opting out for full 11 reimbursement of the funded amount. An employee that opts 12 out and takes Plan B, the secondary plan, it shows a credit 13 of approximately, I think, $100 for -- 14 MS. NEMEC: In that circumstance. But there 15 is no opt-out in general. 16 MR. LOONEY: In general nature, no, not to 17 receive the full funding of the $500 a month to be used for 18 personal insurance. 19 JUDGE TINLEY: Based upon -- based upon the 20 plan as designed, the Treasurer said she didn't have the 21 premium rates; therefore, couldn't make the deductions. 22 Did -- did you not calculate those premium rates? 23 MR. LOONEY: I presented those. I sent that 24 to the Court. 25 MS. NEMEC: I did not have the enrollments to 12-17-04 40 1 know who had -- who chose what premiums. I have the rates. 2 I don't know who chose dependent coverage, who chose Plan A, 3 who chose Plan B. I don't have that information from Mutual 4 of Omaha. 5 JUDGE TINLEY: Okay. 6 MS. NEMEC: And they were given the deadline, 7 but we probably didn't have that conversation either. So -- 8 COMMISSIONER WILLIAMS: Sheriff? 9 JUDGE TINLEY: That's something you need from 10 the plan administrator relative to the enrollment, okay. 11 COMMISSIONER WILLIAMS: Sheriff has a hand 12 up. 13 SHERIFF HIERHOLZER: Just for clarification, 14 from some of the questions I'm getting on -- from other 15 employees, since there's not an opting out, the deductible 16 on this plan is $1,000 as they take pay. The deductible on 17 their retirement plan may only be $500. Now, if this plan 18 all of a sudden becomes their primary, and the one that they 19 had as their retirement is now their secondary, where do 20 they stand insurance-wise on having to meet deductibles? 21 Are they now having to meet the $1,000 instead of the $500 22 they've been used to, or where does that stand? 23 JUDGE TINLEY: That's probably a coverage 24 issue, and I'm going to -- probably ought to defer that 25 under the coverage issues, I think. 12-17-04 41 1 MR. LOONEY: That will be fine. The -- the 2 $600 credit that's provided under the plan can be used to 3 offset the expenses of that individual. 4 SHERIFF HIERHOLZER: But that's a credit. 5 What if they don't want to use this $600 credit when they 6 have primary insurance with only a $500 deductible to begin 7 with? 8 MR. LOONEY: They get to accumulate it, then. 9 It stays in their account; they can carry it forward. 10 SHERIFF HIERHOLZER: But can they -- will 11 they be under an actual $500 deductible that they can use 12 with their old plan, or is their old plan going to say no, 13 you got to meet that $1,000 deductible, because now they're 14 your primary? 15 MR. MALEK: You want me to address that? 16 MR. LOONEY: Be glad to -- I mean, it's still 17 available. 18 MR. MALEK: What he's talking about is 19 coordination of benefits, and the way that works is you 20 cannot get any worse than what the best plan pays. Now, one 21 may pay first and one may pay second, but in this scenario 22 that you just used, a $500 deductible is going to be your 23 worst-case scenario under the plan. Okay? So, if you have 24 two plans, they just have to coordinate with each other, and 25 so your worst-case scenario in that instance is a $500 12-17-04 42 1 deductible. 2 SHERIFF HIERHOLZER: Okay. 3 MR. MALEK: Okay? That's how it works. In 4 addition to that scenario, he now has a $600 credit, this -- 5 this individual, to use for expenses incurred under the 6 Mutual of Omaha plan. Not the other plan, the Mutual plan, 7 all right? Or the -- the HSA plan. And so expenses 8 incurred under that plan then can be offset. So, in that 9 case scenario, that person is going to be better off than 10 most employees who just have one plan, so that's very 11 positive for someone who has two coordinating plans, is that 12 they not only coordinate and have the best benefit that that 13 plan offers; it can be no worse or no better than that, but 14 then you have that $600 in the HRA account that then you can 15 spend on the plan that you have here that is primary. So, 16 let's say you use a drug card for Blue Cross, and it was a 17 different co-pay. You can't use that HRA to pay that 18 co-pay, but you can use it if you use the other plan. Okay? 19 But on the deductibles and the out-of-pockets, that can be 20 no worse, and in this scenario, again, that they said, than 21 $500. Hope that answers that question. 22 JUDGE TINLEY: Does that apply to all facets 23 of the plan? For example, you've got Blue Cross/Blue Shield 24 over here on this side, and it's got a $5 co-pay on drugs, 25 for example. 12-17-04 43 1 MR. MALEK: That's probably going to be an 2 exception. That's going to be probably the only exception, 3 because drugs are very difficult to coordinate, and 4 typically, once the card is used, it's going to be -- 5 whatever card you use is going to be the one that you're 6 going to pay on that. You know, we have a very difficult 7 time coordinating and collecting on those, so most plans do 8 not coordinate the drugs, but they coordinate everything 9 else. Does that answer that question? 10 AUDIENCE: No. 11 COMMISSIONER WILLIAMS: Let me direct a 12 question to you on a different topic. An employee who may 13 have an outpatient surgery scheduled in the new plan year, 14 your plan year; it was determined in the current plan year, 15 and the -- and it was scheduled, what is the procedure for 16 precertification review? Does that hold, or has he got to 17 go through the process all over again? 18 MR. MALEK: No, we honor the prior 19 precertification, and they just go on just like they never 20 changed carriers. That's the idea when you switch. It's 21 called a no loss, no gain. You can't lose a benefit by 22 changing carriers, so the idea is that we are going to say 23 okay to that if it's been precertified. Now, the new 24 benefits will take place in the new plan year, right? 25 Because you now have a different -- different basic schedule 12-17-04 44 1 of benefits than you had before. But if it's been approved 2 and they're going to have that outpatient surgery, then they 3 -- in the new year, then that applied -- then that 4 precertification will be honored. 5 COMMISSIONER WILLIAMS: Let's talk for a 6 moment about lab X rays, CAT scans, et cetera, that may be 7 ordered by a physician for a particular employee or a -- or 8 coverage. What's required then? A doctor says, "I want you 9 to go to the hospital and get a CAT scan or whatever the 10 purpose. 11 MR. MALEK: I don't think -- 12 COMMISSIONER WILLIAMS: Does the patient or 13 the employee have to go through the precertification for 14 that? 15 MR. MALEK: No. The only precertification 16 that you'll have is for a hospital stay, some outpatient 17 stays. We don't require them on every one of them, but 18 those are the only times a precertification comes into play. 19 In terms of the -- for the -- for going to the hospital, 20 really, is what we're talking about. 21 COMMISSIONER WILLIAMS: Outside of emergency 22 room treatment? 23 MR. MALEK: Yeah, emergency room treatment is 24 totally separate than everything. If it's an emergency, 25 it's an emergency. There's nothing you can change about 12-17-04 45 1 that. 2 MS. MEEKER: What about pre-cert? What does 3 that mean? What, does it call the doctor? The hospital? 4 MR. MALEK: Typically, the doctor's calls, 5 since we have an office -- an office staff person here, 6 she'll tell you, 99 percent of the time they're going to 7 make the call. The result -- however, you are responsible 8 for that call. They're going to make it, because they know 9 that if they don't make that call, then they don't get their 10 money, or get it delayed, so they're going to make that call 11 for you in almost every circumstance. So -- but you do know 12 that you have a responsibility for that. 13 MS. MEEKER: And what does precertification 14 mean? Just advising that this is going to happen? Or does 15 that give the insurance company the option to say, "We're 16 not going to cover that"? 17 MR. MALEK: It doesn't give you the option to 18 say that you're not going to cover it. It -- they are -- it 19 has to do with the necessity of the surgery. If it's 20 necessary -- and I don't think I know of too many 21 situations, and she may be able to confirm this -- 22 MS. MEEKER: Cosmetic. 23 MR. MALEK: Yeah, that would be one. 24 MS. MEEKER: Yeah, we understand that. 25 MR. MALEK: I guess that's the general idea, 12-17-04 46 1 is they're -- they're trying to say that if you're going to 2 go to the hospital, it's necessary, and that's all they're 3 checking on. And they're trying to prevent unnecessary 4 surgeries or length of stay. 5 MS. MEEKER: Whoa. Length of time? 6 MR. MALEK: That's another thing. 7 MS. MEEKER: I hate that. You know doctors 8 are going to say -- 9 COMMISSIONER LETZ: Before you sit down, a 10 question here about lab work in the doctor's office. 11 MR. MALEK: I think there's some confusion 12 about how that benefit actually works. The pre-cert -- 13 under the preventive benefits, that's all covered at 100 14 percent. It's not -- there's no deductible, there's no 15 co-pay involved. That was part of what we are -- what may 16 be a little different. Maybe it's not. But lab work, if it 17 is done in the physician's office, it is covered under the 18 co-pay. If you have a doctor who does his lab work and 19 bills it in his office, then it is covered under the co-pay. 20 If that lab work is sent outside -- let's say it's sent to 21 the hospital for them to do it. Then a deductible comes 22 into play -- or, actually, it goes straight into the 23 percentage, the co-insurance. That's the difference. And I 24 believe it was administered that way prior to this time. 25 AUDIENCE: No. 12-17-04 47 1 MS. McELHANNON: It sure was not. 2 SHERIFF HIERHOLZER: CPL lab's right next 3 door to, like, Family Practice. If you went over to their 4 labs and did their lab work, then it was all -- there was no 5 charge at all for the lab work. Okay? 6 MR. MALEK: Is that part of the same 7 doctor's -- 8 MS. LARA: It's like my doctor would say, 9 "Now, Rusty, let's go next door and let's do a CBC," but the 10 plan covered it with the lab with CPL. CPL would then bill 11 it out to E.B.A. 12 MR. MALEK: What's the relationship with CPL 13 and -- 14 SHERIFF HIERHOLZER: Just happened to be next 15 door to their -- 16 MR. MALEK: Same tax ID number? Is their 17 billing separate? 18 MS. LARA: There's no physician that 19 currently can have -- because of Medicare rules back in 20 1980, that can own their own lab any more. 21 SHERIFF HIERHOLZER: There's no office with 22 an inside lab. 23 COMMISSIONER WILLIAMS: They all send them 24 out. 25 MR. MALEK: I'm just administering it off of 12-17-04 48 1 the way I read the plan document, so I'm trying to keep it 2 the same. 3 MS. LARA: According to E.B.A. in the past, 4 Employee Benefits Administrators, we could send our patients 5 next door -- it's really nice for them -- to Clinical 6 Pathology Lab, and they could have their blood work. C.P.A. 7 would bill it out to E.B.A., and it would be get paid 8 because it was part of their plan. The $20 co-pay would 9 apply as an encounter fee instead. 10 MR. MALEK: Our intent was to try to keep 11 that the same. It's not in that plan document that I have, 12 unless there's something I'm missing, which could be. I 13 don't have -- I don't have a plan document that says that. 14 And if they're administering it differently, I -- I don't -- 15 I don't know. 16 MR. LOONEY: Part of the claims experience 17 relationship. I should be able to resolve that. 18 MR. MALEK: It's something that we can 19 accommodate. It's not reflected in the plan document, is 20 all I'm telling you. 21 SHERIFF HIERHOLZER: I hear a lot of "should" 22 and things like that. What I'm wondering for my 94 23 employees, because a lot of them use it and I use it all the 24 time on lab work, is due to certain things, are we going to 25 have the same coverage through Clinical Pathology Labs that 12-17-04 49 1 we've had in the past? Yes or no? 2 MR. LOONEY: I'll get that answer to you. 3 SHERIFF HIERHOLZER: Thank you. 4 MS. HALL: What about, though, if you use a 5 doctor at Guy Griggs and he sends you downstairs to the lab 6 in the hospital? 'Cause that's the only one you can go to. 7 You know what I'm saying? 8 AUDIENCE: Should be the same. 9 MR. MALEK: Under the cost -- 10 COMMISSIONER BALDWIN: Let me say something. 11 Let me say something. We have a court reporter in this 12 room, and she can only take one voice at a time. And she 13 can't take it if it's real quiet. So, just play along with 14 our game of government here. 15 MR. BARTON: Do you need Ms. Hall to repeat 16 her question? 17 MR. HALL: Do you need me to repeat my 18 question? 19 COURT REPORTER: No, ma'am. 20 JUDGE TINLEY: Mr. Looney, there's one 21 remaining issue that I'm not sure that we've gotten 22 resolved. The premium on retiree coverage. Have you done 23 any calculation on that? 24 MR. LOONEY: No. 25 JUDGE TINLEY: Okay. Well, we really need to 12-17-04 50 1 get that resolved, I think. 2 MR. LOONEY: I can have that to you early 3 next week. 4 JUDGE TINLEY: Okay. 5 MR. LOONEY: I need to look at some numbers. 6 JUDGE TINLEY: Okay. 'Cause I know that was 7 one question that was outstanding, wasn't it, on retiree 8 premium? Okay. 9 MR. MALEK: We weren't -- we weren't able to 10 answer that question for people who had asked us, 'cause we 11 didn't know what that was. 12 JUDGE TINLEY: Okay. Okay. We had the other 13 numbers, but we didn't have that. Okay. 14 MR. LOONEY: If it tracks in the same manner 15 that the other one tracks, it'll be an increase of 5 percent 16 over and above what it was previously. 17 JUDGE TINLEY: So, for benchmarking purposes, 18 we could approximate 5 percent? 19 MR. LOONEY: Approximately 5 percent greater 20 than what it was previously. 21 JUDGE TINLEY: Okay. Okay. 22 COMMISSIONER LETZ: I guess while you're 23 looking through your notes, Judge, I have a question on -- 24 there's several things that you're going to look back at the 25 plan document between Mutual of Omaha and the current plan. 12-17-04 51 1 How is that information going to be distributed back to the 2 Court and to the employees? I mean -- 3 MR. LOONEY: What's your best means of 4 communication? 5 COMMISSIONER BALDWIN: Pigeons. (Laughter.) 6 COMMISSIONER WILLIAMS: No, the best means of 7 communication is something that's understandable through the 8 Personnel office, distributed to all the employees so they 9 understand it and they see it in writing. 10 MR. LOONEY: Okay. 11 COMMISSIONER WILLIAMS: To me, that's the 12 best form of communication, in writing. 13 MR. LOONEY: Okay. 14 COMMISSIONER LETZ: But, you know, clear, 15 simple, plain. If it's -- not a book. Not a handbook. I 16 mean -- 17 MR. LOONEY: Try and -- 18 MR. MALEK: If I can address that, maybe -- I 19 don't know. That booklet, if that is okay, we will make 20 those changes in there of some of the things that I've heard 21 that are different, and we can redistribute those books. 22 But, at some point in time, everyone will get a new coverage 23 document booklet, and that will come shortly; January, 24 February, that time when they're printed. That -- everybody 25 gets a new booklet, and all that information is disseminated 12-17-04 52 1 at that time. But until that time, we can send out some 2 clarifications on some of these issues that we're having 3 right here so that they can be sent out to employees, either 4 through written memo or through e-mail, however it works 5 best for the County. 6 COMMISSIONER LETZ: I think the main issue, 7 as I say -- I mean, I think every employee needs to get a 8 booklet, but I also think that, you know, when you start 9 reading these books, it's very confusing. So, I mean, I 10 think what needs to -- you know, basically, the concern that 11 I hear the most is that -- besides the co-pay on 12 prescriptions, is that if someone is currently covered under 13 the current plan, is that coverage going to continue on with 14 no changes, no worries, nothing like that? That's the issue 15 that I'm hearing from -- you know, other than the co-pay. 16 MR. LOONEY: There's going to potentially be 17 some change in the manner in which it's paid. 18 COMMISSIONER LETZ: Well, the manner -- 19 MR. LOONEY: But as far as it being eligible 20 -- eligible to be paid, yes, it'll be eligible to be paid. 21 Now, the manner in which it's paid may change, based on the 22 plan changes that we've made and the plan design. 23 COMMISSIONER LETZ: Sure, I understand that. 24 But I think it's -- I mean, it's -- that coverage is the key 25 issue that I'm hearing from -- especially people on this 12-17-04 53 1 side of the room. They want to know that if they have a -- 2 a situation, whether it's pregnancy, whether it's diabetes, 3 whatever, they have -- you know, they're current employees; 4 they're currently being covered for that illness. Is that 5 being -- you know, going to be covered January 1st? 6 MR. LOONEY: I think that it might be 7 beneficial to the employees to set up times where 8 representatives are available here, and -- on this site or 9 their site or wherever it is, set up times where they can 10 come and meet with Mr. Wallace or Mr. Malek and his 11 associates. And anything that's printed to be sent to the 12 Treasurer, I will review going forward. Won't be anything 13 that goes out that I haven't had a chance to review. I want 14 to make sure that that is done properly. 15 MS. EVANS: There was one issue, though, that 16 this young lady had asked about the lab at the hospital, 17 whether that was going to be the same as going to the lab by 18 Family Practice. Because my doctor for my children is based 19 at Guy Griggs, and when she sends me to the lab, it's to the 20 hospital, 'cause that's the only lab close to their 21 facility. So, I'm also very curious about that also, 'cause 22 when -- when your child gets sick and they want to do blood 23 work, that's where they're going to send you; they're going 24 to send you down to the hospital laboratory. And I think 25 that was an issue that she was also wondering about, 'cause 12-17-04 54 1 her doctor is at Guy Griggs. 2 MR. HALL: Yeah, one of them's there and one 3 of them's in Family Practice. 4 MS. EVANS: I mean Family Practice. That 5 was -- was real easy, 'cause it was always taken care of 6 really easy, but that was an issue that I would like maybe 7 something -- 8 COMMISSIONER WILLIAMS: I think the issue is, 9 we need to know the answer. Is the lab work covered? Yes 10 or no. 11 MS. EVANS: Right. 12 COMMISSIONER LETZ: And how is it -- to what 13 amount? What percentage? 14 JUDGE TINLEY: What deductibles/co-pays apply 15 or don't apply? 16 COMMISSIONER WILLIAMS: Am I hearing an 17 answer? I'm seeing a head nod. 18 MR. MALEK: Lab work is covered. How it's 19 covered, that seems to be yet to be determined, based on the 20 way I'm hearing -- I'm hearing something different from what 21 has been presented to the employees in their booklet. 22 MR. LOONEY: Right. How was it paid before? 23 How was it paid before? 24 MR. ROTHWELL: I think our plan document 25 is -- schedule of benefits is pretty clear on it. We have a 12-17-04 55 1 direct contract with CPL at 80 percent of Medicare-approved. 2 MR. LOONEY: And the contract with the 3 hospital, is it also -- 4 MR. ROTHWELL: No, it also deals with CPL or 5 Lab One in another location. 6 MR. LOONEY: Lab One? 7 MR. ROTHWELL: But CPL doesn't accept that. 8 COMMISSIONER WILLIAMS: Well, then, can the 9 employees expect that to continue? A working arrangement 10 with CPL? 11 MR. LOONEY: CPL working arrangement will 12 continue, yes. 13 COMMISSIONER LETZ: But what you just -- what 14 Mr. Rothwell just said, if you went to the lab at the 15 hospital, it's -- it's covered, but it's covered at a -- 16 MR. LOONEY: At a different -- 17 COMMISSIONER LETZ: -- at a deductible. 18 MR. ROTHWELL: Deductible coinsurance, much 19 like their lab is. 20 COMMISSIONER LETZ: Right. 21 MR. ROTHWELL: If you go anywhere other than 22 CPL. 23 COMMISSIONER LETZ: So, no change in the 24 current policy. 25 JUDGE TINLEY: Yes, ma'am? 12-17-04 56 1 AUDIENCE: You can always ask your doctor if 2 you can go to CPL if they want you to go to the hospital. 3 You have a choice. 4 JUDGE TINLEY: Good point. The patient can 5 request that -- 6 AUDIENCE: Yes. 7 JUDGE TINLEY: -- service provider. Good 8 point, thank you. 9 COMMISSIONER WILLIAMS: There is one issue 10 that I don't think has been totally resolved, Judge. It was 11 raised by this lady right here with respect to how the 12 County's going to deduct their portion of their insurance, 13 and here we are coming up on the last pay period of the 14 month, Barbara. Correct? 15 MS. NEMEC: Christmas, at that. 16 COMMISSIONER WILLIAMS: And insurance 17 typically is paid for in advance, I believe; is that right? 18 Coverages? 19 MS. NEMEC: Right. 20 COMMISSIONER WILLIAMS: So, how's that issue 21 going to be addressed? Everybody needs to know that. 22 MS. NEMEC: Well, if -- if I get the 23 enrollments and -- before the next payroll, then I'm going 24 to have to double-deduct. I'm going to have to double up on 25 everybody's deductions in order to have the funds to pay 12-17-04 57 1 when the January invoice comes in. 2 COMMISSIONER BALDWIN: Well -- 3 COMMISSIONER NICHOLSON: That doesn't mean 4 that people are going to pay twice as much this month as 5 they should have. Just means it's going to come out of one 6 check instead of two; is that right? 7 MS. NEMEC: Right. 8 COMMISSIONER WILLIAMS: Yes. 9 COMMISSIONER BALDWIN: Yeah, but that's a 10 damaging -- 11 MS. EVANS: It's a big chunk out of one 12 check. House payment, van payment, all your big bills are 13 due. You can't call them and say, "I'm sorry, our insurance 14 company didn't get any information to my employer and it's 15 all coming out of one check, and can you hold my bill?" 16 MR. LOONEY: Has there been one deduction 17 made? 18 MS. EVANS: No, sir. 19 COMMISSIONER WILLIAMS: No, sir. 20 COMMISSIONER BALDWIN: At no fault to the 21 county employees. 22 COMMISSIONER LETZ: But their check -- the 23 check was higher -- should have showed more -- more this 24 last month. 25 MS. EVANS: No, sir, I've never had my 12-17-04 58 1 children on my -- so I've never paid a deductible. This is 2 going to be the first time. That's why I said it's already 3 going to hurt me as it is. 4 COMMISSIONER LETZ: I see. 5 MS. EVANS: It's going to be tight. 6 MR. LOONEY: First-time enrollment. 7 MS. EVANS: You know, so it's going to be 8 even harder, 'cause it's a double whammy in one paycheck. 9 JUDGE TINLEY: Okay. Is that all the issues 10 we got with you, Mr. Looney? 11 MR. LOONEY: I think so. 12 JUDGE TINLEY: I think so. Okay. If we 13 could -- yes? 14 MR. MALEK: We're still missing 40 enrollment 15 forms. Forty people haven't turned their forms in. And 16 I've been getting -- over the last week, I've gotten in 17 about 60 -- you know, a little bit at a time from -- you 18 know, we're not getting them in all -- all at one time. 19 There are a lot of people, because of the hostile situation, 20 are not wanting to -- they didn't enroll. We've still got a 21 lot of people who are refusing to enroll, and it's made it 22 very difficult for us to get the information to Barbara so 23 they can deduct those from her pay -- I mean, she -- she 24 doesn't know, honestly, because she hasn't gotten the 25 enrollment, because we don't have it. And I can't give 12-17-04 59 1 her -- I'll give her an incomplete enrollment at this point 2 in time, but there will be 40 people who don't -- haven't 3 done anything. 4 JUDGE TINLEY: Well, of course, all you can 5 give her is what you got. And she can -- she can contact 6 the -- 7 MR. MALEK: I'll give you the list. 8 JUDGE TINLEY: -- elected officials and 9 department heads and ask them to be certain that anybody in 10 their department who's not completed their enrollment get it 11 in A.S.A.P., and probably give them a pretty short deadline, 12 I would hope. 13 COMMISSIONER WILLIAMS: This raises another 14 potential question. Is our enrollment open all the time, or 15 is there a window here that's going to close on those 40? 16 MR. LOONEY: Normally, Commissioner, in a 17 situation where the employer pays 100 percent of the 18 employee cost and has designated a particular plan to fund, 19 that employee is defaulted into that plan. 20 COMMISSIONER WILLIAMS: They can enroll at 21 any time? 22 MR. LOONEY: No, sir. 23 COMMISSIONER LETZ: Automatically enrolled. 24 COMMISSIONER WILLIAMS: Automatically 25 enrolled. 12-17-04 60 1 MR. LOONEY: Automatically enrolled in. 2 MR. MALEK: Each year you have a window of 30 3 days that you're allowed to make changes. 4 COMMISSIONER WILLIAMS: So, your problem is 5 not the 40, but the dependents' coverage. 6 MR. LOONEY: Correct. 7 COMMISSIONER WILLIAMS: Whatever it may be 8 for some of the 40. 9 MR. MALEK: That's right. If they've decided 10 not to enroll, for whatever reason -- you know, some people 11 are not here, and that's one reason. 12 COMMISSIONER WILLIAMS: So, employee's 13 covered. And if, for whatever their reasons, they're 14 holding back in terms of enrollment of their -- of their 15 family members or whatever, spouse or whatever, is there a 16 window that's closing on them? 17 MR. MALEK: Yes, there is. 18 COMMISSIONER WILLIAMS: What is the window? 19 MR. MALEK: Well, technically, by the end of 20 this month, which then creates a deduction issue again, 21 because you're deducting one month ahead of time, and so 22 then that person would actually get double deducted twice. 23 COMMISSIONER WILLIAMS: Well, which then 24 leads to me to suggest to those elected officials and 25 department heads in the audience that if you have employees, 12-17-04 61 1 for whatever their reason, misunderstanding or whatever, who 2 haven't done their enrollments, they better get on with it. 3 MS. EVANS: My thing is, why should someone 4 like me be penalized because they didn't get the information 5 to Barbara so that she could take it out of my check when it 6 should have come out? Why should I or the County be 7 penalized for that? 8 COMMISSIONER NICHOLSON: You're not being 9 penalized. You may be inconvenienced. 10 MS. EVANS: Well, no, sir, I'm not being 11 inconvenienced. I'm looking at not being able to make my 12 house payment. We work three jobs. 13 COMMISSIONER NICHOLSON: Yeah, but you're not 14 going to pay any more money this month for insurance than 15 you would have. 16 MS. EVANS: Well, yeah, but it's going to 17 have to come out of one check. 18 COMMISSIONER NICHOLSON: I understand. 19 MS. EVANS: So I am kind of being penalized, 20 since it's right at Christmas. 21 COMMISSIONER NICHOLSON: That's a -- 22 MS. EVANS: You know. I mean, it's going to 23 be hard. I don't know how I'm going to make -- 24 COMMISSIONER NICHOLSON: That's a reality. 25 There's nothing we can do about that. You've already gotten 12-17-04 62 1 your paycheck. 2 MS. EVANS: Well, yeah. But if they would 3 have turned it in like they should have -- I turn my stuff 4 in on time. 5 JUDGE TINLEY: Okay, is that it? Time to 6 work on -- 7 MS. McELHANNON: Did we settle the deductible 8 -- I mean the co-insurance on the medication? Did I miss 9 that? 10 JUDGE TINLEY: The co-pay? 11 MR. LOONEY: Co-pay. 12 JUDGE TINLEY: That's the plan. 13 MR. LOONEY: That's the plan. 14 MS. McELHANNON: Okay. So, is it just 15 because it's -- we've changed plans and we've modernized 16 that the co-pay has gone up? 17 MR. LOONEY: Right, gone up. 18 COMMISSIONER LETZ: But not the credit to 19 offset some of that. So, could you explain that? 20 MS. McELHANNON: I understand that. 21 MR. LOONEY: The debit card can be used for 22 the prescription drug purposes. 23 MS. McELHANNON: That's good for one month. 24 AUDIENCE: Yeah. 25 MS. MEEKER: It will help a little bit. 12-17-04 63 1 MR. LOONEY: Good for $600. 2 COMMISSIONER WILLIAMS: Good for as long as 3 your money holds out. 4 MR. LOONEY: Good for $600. 5 MS. McELHANNON: That's what I need to know. 6 Thank you. 7 COMMISSIONER NICHOLSON: Actually, this is a 8 pretty understandable document. I just read it for the 9 first time today, and it answered a lot of my questions. 10 COMMISSIONER BALDWIN: That's easy for you to 11 say. 12 COMMISSIONER NICHOLSON: Unlike some 13 insurance documents, I can understand this one. 14 COMMISSIONER LETZ: One -- let's go back to 15 your issue. I think if you'd get with either Mr. Looney or 16 Mr. Malek or Wallace today, they can tell you pretty close 17 what the deduction is going to be in your situation. 18 MS. EVANS: I know what it's going to be. 19 It's going to be close to $200 out of one check. 20 COMMISSIONER LETZ: Okay. Well, then -- 21 MS. EVANS: I mean, and that's -- to be quite 22 frank, that's a lot. I mean, I was already trying to figure 23 out how I was going to deal with the 80-something coming out 24 of every check. And then, of course, now, like I said, we 25 just had Christmas. I've got three kids. Do I just take 12-17-04 64 1 all my Christmas back and say, "I'm sorry, baby, but I got 2 to have at least 200 extra dollars 'cause I got bills to 3 pay, and it's all coming out of one check"? Like I said, 4 why should -- you know, if it would have been turned in 5 properly, I wouldn't have been hit all at one time. I can 6 -- I'm not griping about the paying it. I understand that. 7 I have no problem paying my bills. I'm just worried about 8 it all coming out of one check; my house, insurance -- you 9 know, they're not going to take, "I'm sorry. Can we wait?" 10 MS. MEEKER: May I just make one final 11 statement? 12 JUDGE TINLEY: You have a question? 13 MS. MEEKER: You are choosing this plan and 14 we're going to save taxpayer money, 300-something thousand 15 dollars of taxpayer money. At the end of the year, we can 16 see if we really did save that money. So, taxpayers are 17 doing okay. The employees, there's not a single one of them 18 that has not been hurt badly by this choice. 19 COMMISSIONER WILLIAMS: Let me make a comment 20 about that. 21 MS. MEEKER: Anyway, -- 22 COMMISSIONER WILLIAMS: Let me make -- 23 MS. MEEKER: -- financially. 24 COMMISSIONER WILLIAMS: -- make a comment 25 about that, Ms. Meeker, and others who had that same 12-17-04 65 1 concern. I've done six budgets, and every one of those 2 budgets since I've been on the Court, the insurance costs 3 have risen anywhere from 10 to 25 percent annually for the 4 employee group. There comes a time when the County can no 5 longer afford to take 20 or 25 percent increases in the 6 total amount of coverage for 240 employees. And you take 7 the necessary steps you can to stabilize the amount of 8 dollars you're going to spend. This happens to be the year 9 we're stabilizing. 10 MS. MEEKER: I understand. 11 COMMISSIONER LETZ: I think the other thing, 12 there are clearly going to be some employees that are not as 13 -- maybe as good off, maybe, as they were in the other plan. 14 There are many other employees that are better. I mean, it 15 depends on the -- 16 COMMISSIONER NICHOLSON: I'm one of them. 17 I've got $600 to spend before -- 18 COMMISSIONER LETZ: It depends a lot on the 19 situation, but it's not that it's bad for all employees. 20 So, please, you know, if you're using -- you know, have a 21 prescription drug under a certain type that, you know, it is 22 possible that you are going to pay more. That's true. 23 MS. EVANS: Like I say, I'm not upset about 24 having to pay a premium. I'm okay with that. I'm just 25 upset that it's all going to come out -- 12-17-04 66 1 JUDGE TINLEY: We understand your issue, 2 ma'am. We understand it. 3 COMMISSIONER WILLIAMS: Not much we can do 4 about it, but we understand. 5 MS. McELHANNON: Can you explain right quick 6 what the difference between nonformulary and formulary is? 7 JUDGE TINLEY: That's an issue for the other 8 gentleman. I'm going to get to that. 9 MS. McELHANNON: I'm sorry, excuse me. 10 MR. LOONEY: Formulary is a medication that's 11 been identified by the prescription drug management company 12 as being a medication that is favored to be used on an 13 either price basis, or a -- the diagnosis for that 14 particular medication has been proven to be very positive. 15 Other nonformulary medications may be medications that have 16 a common generic or another formulary medication that is 17 potentially being able to be used, but the difference in 18 cost is significant, and so it becomes a nonformulary. Or 19 it might -- may not be totally approved by -- the medication 20 may not have been totally proven as being efficient or 21 sufficient, or -- I don't know. Our lady left that was back 22 here with the physician's office. But the formulary 23 medications quite often have to do with their ability to 24 perform as a medication and the cost of that medication, and 25 that is looked at consistently and constantly by the 12-17-04 67 1 prescription drug management company. 2 MS. McELHANNON: Thank you. 3 JUDGE TINLEY: Okay. 4 MS. NEMEC: Judge, I'd like to address the 5 Court, please. We've been here for almost an hour and a 6 half talking about the problems, benefits, and the attitude 7 and everything, and not once have we heard "I'm sorry if 8 your employees misunderstood us," or "I'm sorry or whatever 9 if we did come across..." Instead, I'm sitting back here, 10 and we're discussing all these problems, and she's 11 discussing having to -- us having to double-take on her 12 paycheck, and I hear a comment from back here saying, "Well, 13 blame the 40 employees who did not turn in their 14 applications." That is not her fault. And that's the kind 15 of attitude that these employees have been dealing with, and 16 that's the kind of attitude that we're talking about here 17 today. And, so, if it's not fixed and that's been coming 18 out of this courtroom, I'm really scared of what's going to 19 happen in the next year. 20 JUDGE TINLEY: Well, I would only respond by 21 mentioning what Mr. Nicholson said, that let's try and be 22 part of the solution. 23 MS. NEMEC: We need -- 24 JUDGE TINLEY: I would urge your 25 cooperation -- 12-17-04 68 1 MS. NEMEC: We need both people's -- 2 JUDGE TINLEY: -- to work with these people 3 in order to make this thing work. 4 MS. NEMEC: Judge, everyone -- 5 JUDGE TINLEY: I hope that you would. Thank 6 you. 7 MS. NEMEC: Judge, I have said that I would. 8 Everyone in this courtroom knows that I do. 9 JUDGE TINLEY: Good. 10 MS. NEMEC: But when you have comments like 11 this, they do not seem to be working with us. Let's -- 12 let's be open-minded about this. 13 JUDGE TINLEY: I am. Mr. Wallace -- no, 14 Mr. -- where's Mr. Malek? He's probably talking one-on-one 15 to somebody. We've got -- we handled the 16 formulary/nonformulary generic thing, I think, just a minute 17 ago. The mail-order, 90-day. That's obtainable under this 18 plan, is it not? 19 MR. MALEK: Yes, that is correct. Ninety 20 days. 21 JUDGE TINLEY: Okay. Okay. 22 MR. MALEK: Is it Express Scripts? 23 MS. HARRIS: What? 24 MR. MALEK: It's two times -- the 25 deductibles, again, are different. They're -- I don't have 12-17-04 69 1 the plan in front of me, but it's two times the normal 2 retail deductible -- or co-pay, excuse me. Co-pay is the 3 word. 4 MS. HARRIS: I'm sorry, can you explain that? 5 I didn't understand that. 6 MR. MALEK: It's different. Okay, you 7 have -- your current program has different co-pays for each 8 different -- for the -- that we just have three different 9 co-pays for retail, meaning if you go to your regular 10 pharmacy. And then if you use the mail-order, it's two 11 times that co-pay. That means if it was a $10 co-pay and 12 you go to mail-order, it's $20 for a 90-day -- 13 MS. HARRIS: For a 90-day supply. 14 MS. UECKER: You get three for the price of 15 two. 16 MR. MALEK: What she asked is what company do 17 we use. It's Express Scripts. They're the company that we 18 sub with, or -- related to Mutual of Omaha, basically. 19 MS. HARRIS: Every time we want to do a 20 mail-order for a 30-day supply, do we have to go to our 21 physician to get a new scrip for that, or is it an automatic 22 refill? 23 MR. MALEK: It depends on what your physician 24 writes. Typically, they're going to give you -- on a 25 mail-order, you typically get 90 days. 12-17-04 70 1 MS. HARRIS: Mm-hmm, right. 2 MR. MALEK: And what they'll give them is 3 typically a prescription for a year. It just depends on 4 your physician. Sometimes he'll say three refills, which 5 is -- 6 MS. HARRIS: Got you. 7 MR. MALEK: -- nine months worth of supply. 8 MS. HARRIS: Okay. 9 MR. MALEK: So it just depends, but you do 10 have to do it -- the feds require that you file a 11 prescription once during that year. 12 MS. HARRIS: Mm-hmm. 13 MR. MALEK: And the next year, when it comes 14 back around, you're going to have to do it again. 15 MS. HARRIS: Right. 16 MR. MALEK: Okay? 17 SHERIFF HIERHOLZER: In reality, this co-pay 18 on the prescriptions is actually a little bit lower than 19 what we are currently paying, isn't it? 20 MR. MALEK: Just depends on what plan you 21 were on, but in most cases, no. Some cases, yes. It just 22 depends on which plan you were on. What -- you know, what 23 -- you know, there's three different options that you had, 24 and now we only have just one option -- or now two plan 25 options. And so, yes, there are differences. 12-17-04 71 1 AUDIENCE: Mine's doubled. 2 MR. MALEK: It just depends on, again, which 3 plan you're on. 4 COMMISSIONER WILLIAMS: Judge Brown. 5 JUDGE TINLEY: Judge Brown? 6 JUDGE BROWN: That deal that I signed the 7 other day, is it in effect right now? 8 JUDGE TINLEY: January 1. 9 JUDGE BROWN: So, my deductible is for this 10 year. If I used it all up, I could get a major operation 11 and it wouldn't cost me nothing, right? 12 AUDIENCE: Jump in there, Judge. 13 JUDGE TINLEY: I sharpened my pocketknife 14 earlier today, if you'd like to come on in. 15 JUDGE BROWN: I didn't know. But, in other 16 words -- 17 COMMISSIONER WILLIAMS: What did you have in 18 mind, Judge? 19 JUDGE BROWN: If you mentioned deductible 20 already, then it still counts for this year? 21 COMMISSIONER LETZ: Right. 22 SHERIFF HIERHOLZER: For the rest of this 23 month. 24 JUDGE BROWN: I feel a big attack coming on. 25 (Laughter.) Just kidding, I'm sorry. I just wanted to -- 12-17-04 72 1 MS. McELHANNON: What about the prescriptions 2 that are due in January to be refilled? 3 MR. MALEK: Are you asking -- say that again, 4 please? 5 MS. McELHANNON: If your prescriptions are 6 going to be refilled January the 1st, what do we do? Where 7 do -- 8 MR. MALEK: Are you talking about for the 9 mail-order program? 10 MS. McELHANNON: Yes, sir. 11 MR. MALEK: Or talking about retail? 12 MS. McELHANNON: Yes, the mail-order. 13 MR. MALEK: In mail-order, you're going to 14 be, again, required to send one prescription every year, 15 okay? We're startling all over in the year, so it's a new 16 plan; you would have to send a new prescription in. 17 MS. McELHANNON: Right. 18 MR. MALEK: So, you are going to have to get 19 a scrip from your doctor. 20 MS. McELHANNON: Right. 21 MR. MALEK: And then there is a form in the 22 back of that book that you have right there, and you send it 23 in with that. Okay, once that's done, you don't have to 24 register back again, but you may have to send another 25 prescription in from the physician if you change it; if, you 12-17-04 73 1 know, he says you have to do that. And then you give them 2 either a credit card -- you can do it online, however you 3 decide you want to do it on the renewal side of it. Let's 4 say you're going to do it for 90 days. Come March, you've 5 got to get another prescription filled. Then you can go 6 online and say, "Here's my credit card number, and it's 7 automatically filled and mailed back to you. 8 MS. McELHANNON: About how long does it take? 9 MR. MALEK: Probably similar to what you are 10 doing now. I'm -- 11 MS. McELHANNON: About how long does it take 12 for them to get your shipment to you? 13 MR. MALEK: All depends on which kind of drug 14 you get. When the drugs are available, a few days. 15 Sometimes five days. I think that's fairly common. Most of 16 them are all about the same. 17 MS. McELHANNON: Thank you. 18 MS. UECKER: I just have one question, Judge. 19 And I think I understand this correct from what you 20 previously said, but take me, for instance. Last week I got 21 three prescriptions -- three 3-month prescriptions from my 22 doctor, so that's not going to take me over to the three 23 months. Okay. Is my doctor going to be very happy about 24 writing another three-month prescription when he just gave 25 me one four weeks ago, or three weeks ago? 12-17-04 74 1 AUDIENCE: Is she going to have to redo it on 2 the first of the year, is what she's asking. 3 MR. MALEK: The answer to that question is, 4 you're going to have to do it one time every year. 5 AUDIENCE: She just got it several weeks ago. 6 MR. MALEK: This is a different plan. Your 7 -- your plan year goes from January to January. And, 8 unfortunately for you, in December, that's just when it 9 happened. But in the new plan year, you would have had to 10 do it again anyway. 11 MS. UECKER: Well, I just have to explain it 12 to the doctor. 13 MR. MALEK: You do it once a year. And 14 they're used to it. That's -- docs are used to doing it and 15 they're -- and they understand how it works. 16 MS. UECKER: Sure. 17 MR. MALEK: And they're really pretty good. 18 I haven't run into a lot of problems with docs not wanting 19 to give another prescription out. 20 MS. UECKER: Okay. 21 MS. LARA: You know, if they know that you're 22 going from one plan to another, by all means -- 23 AUDIENCE: She just got her prescriptions. 24 Wouldn't she have to wait another three months before she 25 got it refilled? 12-17-04 75 1 MR. MALEK: Yeah, that's correct. She's 2 going to wait another -- she'll be in the new plan year, and 3 so -- 4 AUDIENCE: Three months. 5 MR. MALEK: After three months -- it was in 6 March, she'd just have to start that process all over again. 7 JUDGE TINLEY: Whoa. 8 JUDGE BROWN: This is not for the insurance 9 people; this is for the Commissioners Court. I understand 10 that -- from the grapevine that some of the coverage that we 11 currently have is not carried over into the new policy. 12 JUDGE TINLEY: We resolved those issues 13 earlier today. 14 JUDGE BROWN: I understand you resolved it, 15 but if they say it's going to cost more money, why don't we 16 rebid it? 17 JUDGE TINLEY: We resolved those issues 18 earlier today, I think. Those are preexisting issues -- 19 condition issues, I think is what you're speaking of. 20 JUDGE BROWN: Yeah. 21 JUDGE TINLEY: Yeah. I think we've resolved 22 those issues. 23 JUDGE BROWN: Well, you get my point, though. 24 If it's going to cost us more money, then it wasn't the low 25 bid. 12-17-04 76 1 COMMISSIONER LETZ: If it's still -- if it 2 comes in $400,000 or $500,000 higher, I'll rebid it. 3 JUDGE BROWN: Just wanted to make sure you 4 didn't miss that. 5 JUDGE TINLEY: Okay. I think we've 6 identified all the issues and -- and concerns that were 7 mentioned here earlier today. Any member of the Court have 8 any additional ones that we didn't touch on and get 9 addressed here today? 10 COMMISSIONER WILLIAMS: No. 11 COMMISSIONER BALDWIN: I just have a 12 question. Mr. Lopez, are you happy? 13 MS. LARA: Are you in HIPAA or not? 14 MR. MALEK: We don't know yet. 15 MS. LARA: If he's in HIPAA, he's going to be 16 happy. 17 COMMISSIONER BALDWIN: Mrs. Lavender, are you 18 happy? 19 MS. LAVENDER: No. 20 COMMISSIONER BALDWIN: Well, I have two 21 constituents; one's not sure and one's not happy, so I don't 22 know that we've arrived at the answer yet. 23 MS. LAVENDER: You know, if you're not going 24 to reinstitute that third option, there's no way to make any 25 solution to it. 12-17-04 77 1 COMMISSIONER BALDWIN: And you can't do that 2 without charging it to the rest of the employees. 3 MS. LAVENDER: Well, that's what they're 4 telling you, yeah. 5 COMMISSIONER BALDWIN: Well, if that's not 6 true, I want to know about it today, while we're in this 7 room. 8 MS. LAVENDER: I mean I can't see how four 9 people or five people are going to make a major difference 10 in that. 11 COMMISSIONER WILLIAMS: How many people opted 12 for other coverages, Barbara? 13 MS. NEMEC: In the past year? 14 COMMISSIONER WILLIAMS: Currently, right now. 15 MS. NEMEC: I want to say there's around 16 five. 17 COMMISSIONER WILLIAMS: Four or five. 18 COMMISSIONER NICHOLSON: I think Judge 19 Tinley's one of them. 20 JUDGE TINLEY: Yeah, I'm one of them. 21 Obviously, it would be in my best personal interests to have 22 a total opt-out, but that's not the way the plan was 23 designed, and that's not what I see to be in the best 24 interests of the County, and/or, more particularly, the 25 taxpayers of this county and the overall composition of the 12-17-04 78 1 plan. 2 MS. LAVENDER: There's one other option. You 3 could at least, for those five people, offer something if 4 they don't want to take the health insurance. 5 JUDGE TINLEY: Well, we -- we'd create an 6 entirely different class under the plan, and we get 7 discriminatory issues, we get into all sorts of things. And 8 I don't see that as a viable alternative. Do you, 9 Mr. Looney? 10 MR. LOONEY: No. 11 JUDGE TINLEY: Okay. 12 COMMISSIONER WILLIAMS: There's a question. 13 JUDGE TINLEY: Mr. Malek? 14 MR. MALEK: Judge, I think we can address the 15 issue of the HIPAA. They have not -- you have not opted out 16 of HIPAA, to the best of our knowledge. And -- 17 MR. LOONEY: Not opted out. 18 MR. MALEK: -- if that is the case, and a 19 person has credible coverage from a prior employer, then -- 20 and, you know, I don't want to get into specifics. I hope 21 I'm dancing around this -- if that person had coverage, 22 continuous coverage from a prior employer, then that person, 23 if they're -- let's just use an example of somebody being 24 pregnant, and they're -- before they came to work, and they 25 had continuous coverage, then they would be covered for that 12-17-04 79 1 pregnancy in the policy that we are going to put into place. 2 Okay? So, I hope that answers the question, Commissioner. 3 MS. LARA: Now he's happy. 4 MR. LOPEZ: Now I'm happy. 5 MS. LARA: Everybody's happy. 6 MR. MALEK: I hope I didn't use anybody's 7 HIPAA privacy information in my example. 8 MS. LARA: For what it's worth, working in a 9 doctor's office, Mutual of Omaha is pretty good at paying 10 their claims pretty quick. So, for whatever it's worth, 11 you've chosen a good plan. 12 COMMISSIONER WILLIAMS: That's good news. 13 JUDGE TINLEY: We got all the issues covered. 14 COMMISSIONER NICHOLSON: Yeah, all my issues 15 are covered. I'd just say to Mutual of Omaha, do the best 16 you can at communicating with people and -- and treating 17 them respectfully and trying to resolve our concerns. It's 18 like any -- any of us; when we're faced with change, we 19 sometimes resist -- resist change. So, I'm confident you'll 20 work with us on that. 21 COMMISSIONER WILLIAMS: I want to just add on 22 to what you just said, Commissioner. Our employee group is 23 used to a level of service which was enhanced by the agent 24 being two blocks down the street, and that creates for you 25 fellows somewhat of a disadvantage, because you're 60 miles 12-17-04 80 1 down the street, or more. Ninety, maybe. And that means 2 you've got to work a little harder. I just want to make you 3 understand our level of expectation. 4 JUDGE TINLEY: Okay. We'll go to the next 5 item on the agenda, consider and discuss the application for 6 stop loss and life insurance for employee health benefits 7 program, requesting and authorizing payment for the binders 8 on the same, and authorizing Judge to execute the 9 applications. This was on our agenda this past Monday. We 10 have the applications for -- for those coverages, and the 11 binders, and my recollection is -- I don't have it in front 12 of me -- it's something just under $22,000, I believe, is 13 the payment that's got to be remitted. Is that essentially 14 correct, Mr. Wallace? 15 MR. WALLACE: I couldn't hear. 16 JUDGE TINLEY: Just under 22,000, if I 17 recall? 18 MR. WALLACE: Yes. 19 JUDGE TINLEY: It's 21,000 and change. 20 MR. WALLACE: 456 or something like that. 21 JUDGE TINLEY: Okay. 22 COMMISSIONER WILLIAMS: All the things that 23 we discussed here today, Judge, are they -- do they in any 24 way affect our premium? 25 JUDGE TINLEY: I don't think so. 12-17-04 81 1 MR. MALEK: No. 2 COMMISSIONER WILLIAMS: I move adoption of 3 the -- of the plan, authorize the payment for binder, and 4 authorize the County Judge to execute the application. 5 COMMISSIONER NICHOLSON: Second. 6 JUDGE TINLEY: Motion made and seconded to 7 adopt the plan and the agenda item. Any further question or 8 discussion? All in favor of that motion, signify by raising 9 your right hand. 10 (The motion carried by unanimous vote.) 11 JUDGE TINLEY: All opposed, same sign. 12 (No response.) 13 JUDGE TINLEY: That motion does carry. 14 Gentlemen, that's the only agenda items that I have, and 15 that being the case, there being no further business, I'll 16 declare the meeting adjourned. Thank you. 17 (Commissioners Court adjourned at 3:15 p.m.) 18 - - - - - - - - - - 19 20 21 22 23 24 25 12-17-04 82 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 The above and foregoing is a true and complete 4 transcription of my stenotype notes taken in my capacity as 5 County Clerk of the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 22nd day of December, 8 2004. 9 10 11 JANNETT PIEPER, Kerr County Clerk 12 BY: _________________________________ Kathy Banik, Deputy County Clerk 13 Certified Shorthand Reporter 14 15 16 17 18 19 20 21 22 23 24 25 12-17-04