1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Wednesday, November 5, 2008 11 1:00 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 BRUCE OEHLER, Commissioner Pct. 4 2 1 I N D E X November 5, 2008 2 PAGE 3 1.1 Consider/discuss, take appropriate action regarding proposals received for Kerr County 4 Employee Benefits for 2009 4 5 1.2 Consider/discuss, take appropriate action to receive recommendations from Courthouse Windows 6 Committee and to award bid for courthouse windows and doors replacement and/or renovation 55 7 --- Adjourned 57 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Wednesday, November 5, 2008, at 1:00 p.m., a special 2 meeting of the Kerr County Commissioners Court was held in 3 the Commissioners' Courtroom, Kerr County Courthouse, 4 Kerrville, Texas, and the following proceedings were had in 5 open court: 6 P R O C E E D I N G S 7 JUDGE TINLEY: Okay. Let's come to order, if we 8 might, for this special Commissioners Court meeting posted 9 and scheduled for this date and time, Wednesday, November the 10 5th, 2008, at 1 p.m. It's a bit past that time at this 11 point. Because the agenda lists a visitor's input, I'm going 12 to ask if there's any member of the public that wishes to be 13 heard on any matter that is not a listed agenda item. Any 14 member of the public that wishes to be heard on any matter 15 not a listed agenda item? 16 COMMISSIONER BALDWIN: Want to talk about Tivy 17 coaches or anything? Now would be a good time. 18 JUDGE TINLEY: I see no one coming forward to speak 19 on any matter that's not a listed agenda item. We'll move 20 on. Any Commissioners' comments? Commissioner Baldwin? 21 COMMISSIONER BALDWIN: Judge, I do not. 22 COMMISSIONER WILLIAMS: Nothing. 23 JUDGE TINLEY: Commissioner Williams? Letz? 24 COMMISSIONER LETZ: Not today. 25 MR. OEHLER: No. 11-05-08 4 1 JUDGE TINLEY: Okay. Let's go to the first item on 2 the agenda here. Consider, discuss, and take appropriate 3 action regarding proposal received for the Kerr County 4 employee health benefits for 2009. Ms. Hyde and company. 5 MS. HYDE: Come on, pop. 6 MR. OEHLER: Pop. You got your phone turned off? 7 MR. LOONEY: Yes, sir, it's on vibrate. But I've 8 got it in my front pocket, so if I jump -- 9 COMMISSIONER BALDWIN: If you start smiling. 10 MR. LOONEY: If I start smiling, you'll know. 11 JUDGE TINLEY: No Looney tunes today? 12 MR. LOONEY: Not today. 13 MS. HYDE: Y'all got the letter from Gary from last 14 week at the front of your books. 15 (Low-voice discussion off the record.) 16 MR. LOONEY: It wasn't last week; it's today. 17 MS. HYDE: Oh, I lied. He didn't send it to you. 18 He just put it in the front. There's a couple of 19 spreadsheets, when we get to them, that are a little bit 20 confusing, so hopefully you can just bear with us on that. 21 If you go to the first section -- do you want to read the 22 letter or let them just read it? 23 MR. LOONEY: That's fine. I can go through it and 24 tell them. You can just introduce me, that's okay. 25 MS. HYDE: This is Gary, and I'm going to let him 11-05-08 5 1 start talking, 'cause y'all -- 2 COMMISSIONER WILLIAMS: We recognize him. 3 MR. LOONEY: Popovich in disguise. 4 MS. HYDE: That's right. 5 MR. LOONEY: Thank you, Ms. Hyde. Judge Tinley and 6 Commissioners, I'm Gary Looney. I appreciate you very much 7 taking the special session today and providing this time. I 8 would have been here a couple weeks ago except for some 9 family issues, and I appreciate you taking that into 10 consideration with a special program today -- or special 11 meeting today. Let me kind of hit the highlights real quick, 12 and then I'm going to go through with a much more in-depth 13 discussion on some of the issues that I've brought up in the 14 letter itself. But essentially, we went out to the market, 15 to the stop loss insurance. We got a -- a lot of information 16 into the market and very little information back out of the 17 market, because the stop loss market and the carriers today 18 simply said you guys are in such good shape where you are 19 today, we're really not competitive with your stop loss 20 quotes. So, we've got two or three quotes that were -- one 21 actually that was submitted late. The other two are not even 22 in the -- close to the market, so they weren't even worth 23 including on the spreadsheet. 24 So, we have our renewals from Monumental Life. 25 Monumental Life has offered us two options. One is the 11-05-08 6 1 option where we are currently, and if you'll look under Tab 2 1, it's the big spreadsheet which unfolds, got all the small 3 numbers on it and all that. Based on our experience under 4 the last two years under the plan, the -- the request for the 5 increase in the premium rate is justified based on our 6 previous experience. If you'll look at the far left column, 7 that is the current status, the current rates, and then the 8 offerings for Option 1 and Option 2. Option 1 and Option 2, 9 the only difference is that we currently have a stop loss -- 10 individual stop loss insurance for an individual that exceeds 11 $50,000 on a plan year basis, we cover everything at 100 12 percent in excess of that. Option 1 is renewal as-is, with 13 the $50,000 stop loss. Option 2 is increasing that to 14 $60,000. $60,000 means that any individual employee or 15 dependent that exceeds $60,000 in any given plan year, that 16 the insurance company will pay losses in excess of that up to 17 the full amount of the policy itself, which is, in our case, 18 $2 million. So, they have expenses potentially up to one 19 million, nine hundred, and either fifty or sixty thousand 20 dollars. 21 COMMISSIONER LETZ: Question. Where does it show 22 $50,000 and $60,000? What line? 23 COMMISSIONER BALDWIN: I don't see 60. 24 COMMISSIONER LETZ: I don't see 60 either. I see, 25 under specific deductible, it says 50 and 50. 11-05-08 7 1 MS. HYDE: On all three of them, Gary, it says 50. 2 COMMISSIONER LETZ: I just wanted to make sure I 3 was looking at the right spot. 4 MR. LOONEY: Let me put my glasses on here, 5 Commissioner. The one on the far right is 60. You need 6 to -- 7 COMMISSIONER BALDWIN: Oh, that's a 60? 8 MR. LOONEY: That's 60. 9 COMMISSIONER BALDWIN: See, he's from San Antonio. 10 MR. LOONEY: That's 60. You might -- you can 11 correct that on the -- 12 COMMISSIONER WILLIAMS: It's supposed to be 60? 13 MR. LOONEY: It is supposed to be 60. 14 COMMISSIONER LETZ: But it says 50. 15 MR. LOONEY: It says 50. 16 JUDGE TINLEY: So, it's 50, 50, 60, then. 17 MR. LOONEY: It's 50, 50, 60. 18 JUDGE TINLEY: Okay. 19 COMMISSIONER BALDWIN: Obama numbers. 20 COMMISSIONER WILLIAMS: Yeah. 21 MR. LOONEY: My dripping down economics, I guess, 22 or whatever. So that is -- and that's the difference between 23 the two, actually. That's the primary difference between the 24 two. What that means is we accept an additional $10,000 on 25 any one given risk. The premium differential for that is 11-05-08 8 1 approximately a little over $30,000. Premium differential is 2 savings in premium, which means that we would have to have 3 three employees and/or dependents exceed that $50,000 number 4 before we would endanger the savings that we made. So, from 5 a risk-reward standpoint, the fixed dollar savings versus the 6 potential exposure at this point makes sense for us to make 7 that change. 8 COMMISSIONER LETZ: How many claims have we had 9 over 60,000? 10 MR. LOONEY: Over 60, or over 50? 11 JUDGE TINLEY: Fifty. 12 COMMISSIONER LETZ: Over 50. 13 MR. LOONEY: Over 50,000? We've had three claims 14 this last year over 50,000. 15 COMMISSIONER LETZ: And pretty much, if they go 16 over 50, they'll probably go over 60, wouldn't they? 17 MR. LOONEY: It varies, but right now we've got 18 three that are over -- over the -- over the $60,000 mark. 19 So -- 20 JUDGE TINLEY: Are those claims waning? 21 MR. LOONEY: Some of the -- one of the claims is 22 pretty much off the books now. It was early in the year, and 23 it's pretty much off the books. One of them -- or two of 24 them are ongoing, but one of them -- one of them has to do 25 with treatments that were very expensive in the beginning, 11-05-08 9 1 and now are more into the maintenance medication type 2 circumstance. The insuring company has asked us to give 3 additional information on that one patient that's got that 4 ongoing for -- they potentially have talked about the 5 possibility of adding a laser to that one person, but we 6 won't know that until we get the managed care reports. 7 There's some visitations taking place next week that are -- 8 the individual is going through some additional care and 9 treatment next week. 10 COMMISSIONER LETZ: Explain "laser." 11 MR. LOONEY: Laser means that the $60,000 amount 12 may be increased. 13 COMMISSIONER LETZ: Just, like, 80,000 or some 14 number? 15 MR. LOONEY: 80,000, 90,000, possibly. We've had 16 lasers in the past, and this last year was the first year in 17 a long time we haven't had anybody lasered. But our -- we've 18 got a -- we're up to the point -- I got a call this morning 19 on the way here that said that the major case management 20 nurse had gotten a call that the patient that we were 21 concerned with will have an evaluation done next week, and 22 that'll give us an indication of what the status is. From 23 everything that we know at this point, it's just the 24 continuation examination that everything is fine. There's no 25 -- it's a standard follow-up session that they're going 11-05-08 10 1 through; it's not something that was especially -- especially 2 created for that particular individual. So, we're hoping 3 that -- and do not plan on seeing any laser for that 4 individual. 5 COMMISSIONER LETZ: Let me just make sure I 6 understand all these numbers. Which I never will, but under 7 aggregate factors, where -- where it says employee only, 8 that's the premium that the County is paying? 9 MR. LOONEY: No, sir. Aggregate factor is an 10 estimation that the actuaries give us that says that, based 11 on your open population, your previous experience, we expect 12 on a monthly basis on average for your employees to incur 13 that amount of medical expense. 14 COMMISSIONER LETZ: Okay. 15 MR. LOONEY: And then they factor that in for each 16 individual category of insured, and that's what they estimate 17 the maximum claim liability is. That's how they limit the 18 maximum claim liability. The actual premiums that we pay for 19 the services and for the -- that expense to cover those 20 expenses are listed under the monthly fixed cost category. 21 Those are the actual -- that actual hard dollar cost that we 22 deal with. 23 COMMISSIONER WILLIAMS: What is the attachment 24 point right below that, Gary? 25 MR. LOONEY: Attachment -- that's what the attach 11-05-08 11 1 -- the attachment points are that factor. That's the 2 attachment points, is the calculation of the amount of money 3 based on the population. That's -- you take the aggregate 4 factors times the overall exposure, and that gives you the 5 actual attachment points on a monthly basis. So, the 6 expectation is for them to -- to show $152,000 a month in 7 claims cash load. And they base that information based on 8 experience that we've given them through the RFP process and 9 through their own experience for the past three years. So, 10 basically, the recommendation at this point on the stop loss 11 carrier is to move to the $60,000 ISL process, "ISL" meaning 12 individual stop loss. And that the FARA contract for claims 13 administration is a three-year contract. This is the 14 beginning of their second year, and none of their expenses or 15 charges changed. 16 JUDGE TINLEY: No increase in the admin costs? 17 MR. LOONEY: No, no changes in any admin fees or 18 any of the administration costs. If you'll turn over to Tab 19 2 real quick, I'll show you basically where we are as far as 20 this first 10 months of the year. This is -- this is the -- 21 from left to right, the medical and prescription drug 22 charges. Those are charges, gross bill charges. Then we go 23 through the self-funded claims that were paid in relationship 24 to those charges, and eligible claims are claims that are 25 potentially -- either individuals are not eligible for 11-05-08 12 1 benefit in some manner, or there's a coordination of benefits 2 with another carrier, or it's not covered under the plan 3 design as such. That gives us the net claim. The net claim 4 that's paid is after the specific claim has been calculated 5 so that that reimbursement is calculated into that process. 6 So, through the end of 10 months, our total medical 7 charges have been paid at about $1,140,000. Based on simple 8 -- simple projection for the next two months, that takes us 9 to about 1,400,000 -- between a million four and a million 10 five, which is well within the budget numbers that we 11 projected last year for your expense in your plan. The 12 population is listed there as far as the number of covered 13 insured, so it gives you where the population is as far as 14 the enrollment is concerned. One of the things that I wanted 15 you to pay close attention to is the number on your 16 prescription drugs. $360,000 in prescription drugs. Based 17 on the total, that's about 28 percent of your total plan 18 cost. 19 JUDGE TINLEY: Relative to most well-managed plans, 20 where is that percentage? 21 MR. LOONEY: We -- we like to see it in the 12 to 22 15 percent range. 23 COMMISSIONER LETZ: So we're still high. 24 JUDGE TINLEY: So it's about double. 25 MR. LOONEY: So you're about double of where the 11-05-08 13 1 normal -- where we normally like to see a plan. 2 COMMISSIONER LETZ: We were at that level last 3 year, as I recall. Doing worse -- 4 MR. LOONEY: We were a little lower last year. 5 We've gone up just a few percentage points. 6 COMMISSIONER LETZ: Well, not worse, but -- 7 MR. LOONEY: Yeah. So, we're taking a lot of meds. 8 COMMISSIONER LETZ: Have to choose your words 9 carefully when you talk about this stuff. 10 MR. OEHLER: Yeah. 11 MR. LOONEY: So, that is something that I'll -- 12 I'll address in just a second. Just to give you some 13 indication of what we may or may not -- 14 COMMISSIONER LETZ: Gary, before you get to that, 15 didn't we do some changes to get -- to try to correct that 16 last year? To -- like, we basically -- I mean, the 17 copayment -- 18 MR. LOONEY: Copayments were changed. 19 COMMISSIONER LETZ: -- on the name brands, so to 20 speak. 21 MR. LOONEY: We changed the copayments. We 22 adjusted some of the formularies. 23 COMMISSIONER LETZ: And that didn't help? 24 MS. HYDE: Well, it helped, but the problem is, our 25 employees are getting older. And when we were talking during 11-05-08 14 1 budget, I told you that we're going to bring up some of these 2 numbers. The 50-year-olds -- 3 COMMISSIONER LETZ: Experience. They're 4 experienced. 5 MS. HYDE: Experience. Our maturity level is -- is 6 increasing. And when you start hitting the maturity level of 7 50, we have a lot of mature people, and it tends to start 8 showing maturity in many different ways, and this is it. 9 Which is why we're going to talk about retirees and stuff. 10 MR. LOONEY: We have -- we have 14 retirees on the 11 plan currently. We have another 15 employees that are active 12 that are over the age of 65. We've got another 8 to 10 13 employees over the age of 63. So, we have a pretty healthy 14 population -- percentage of the population that's getting 15 into that. As I -- as I say in my notes, with all due 16 respect to those of us who are older -- 17 COMMISSIONER LETZ: But in the over 65, doesn't 18 Medicare become primary for those people? 19 MR. LOONEY: Only if they're retired. Only if they 20 are in retired status, and that's one of the things that 21 we'll -- that I'll go over with you. But the -- the next two 22 pages under Tab 2 show you the -- the fact that, based on our 23 budget information, that I have projected that you needed an 24 increase in your budget of 8 percent. That budget increase 25 actually worked out to be 5.8 percent, so the factor that we 11-05-08 15 1 use for funding in the budget to fund the budget -- to fund 2 the program is 620 a month. It was projected originally at 3 633. Last year it was 587. So, we can fund it at 4 5.9 percent increase overall in the -- in the funding amount 5 in the budget itself. And I understand that it was estimated 6 to be 8 percent in the budget. So, the factors for -- the 7 premium factors for the employees, it's not necessary to 8 change the premium contribution for active employees. We do 9 want to consider and look very hard at the concept of 10 changing for the retirees the premium allocations that they 11 make on behalf of the plan. And I have given you some 12 examples. I'll skip ahead to that in a few minutes. 13 But you have two charts in here. One is showing 14 the employee rate at 240, 129, 359, and that's the 15 contribution by the retiree at being $180 a month. It's 16 currently $135 a month. So, the $180 a month, and then the 17 next page shows a contribution level at $135 a month. It 18 shows the difference in collections based on those -- the 19 retired employees. The final entry into that one tab is our 20 HRA account. And it shows that through the end of 11 -- 10 21 months, that our HRA account has had contributions of 22 $143,000 made to employees, and we're at 50 percent of what 23 the liability is, and we're well under the amount that we had 24 projected to spend in the HRA for this year. So, for budget 25 purposes, we're well within range as far as that. Real 11-05-08 16 1 quickly, if you'll go to Tab 3 -- 2 MS. HYDE: Just one note for the HRA account. We 3 talked about it during the budget, but I don't think -- I 4 think the Judge brought it to my attention it was never voted 5 on, and this would need to be voted on as well. The HRA 6 somehow modified three or four years ago from the original 7 intent, which means that it was supposed to be $600 for the 8 employee. If it was an employee plus spouse, it was supposed 9 to be another $600, and if it was employee, spouse, and 10 children, it was supposed to be another $600, for a maximum 11 of $1,800. That was the original intent. It was never put 12 out that way. 13 JUDGE TINLEY: So, somehow, it got plugged in 14 where -- 15 MS. HYDE: Originally. 16 JUDGE TINLEY: -- employee and spouse, you got the 17 1,800. 18 MS. HYDE: You got the full 1,800. 19 JUDGE TINLEY: So we need to correct that today -- 20 MS. HYDE: The last four years. 21 JUDGE TINLEY: -- as part of our adoption. 22 MS. HYDE: We have been paying additional moneys, 23 and so I request that we change it back to what the original 24 intent was and what the contracts read, and -- and stop the 25 bleed. 11-05-08 17 1 JUDGE TINLEY: The contract does read 600, 600, 2 600? 3 MR. LOONEY: That's correct. 4 JUDGE TINLEY: If we approve the contract as part 5 of the order, why, we've covered; is that correct? 6 MR. LOONEY: That's the old contract. 7 MS. HYDE: This is the new contract. 8 JUDGE TINLEY: Well, does the new contract -- 9 MS. HYDE: It was not clarified in the old 10 contract; it was just in there that it was up to our 11 discretion. And in y'all's order, where y'all talked about 12 it and everything, it was six, six, and six, but somehow it 13 got modified to six and 1,800. 14 JUDGE TINLEY: The new contract -- 15 MS. HYDE: So, for single, the new contract is six, 16 six, and six. 17 COMMISSIONER BALDWIN: Don't give up. Hang in 18 there. 19 JUDGE TINLEY: Okay. I finally got it, didn't I? 20 COMMISSIONER BALDWIN: I didn't hear it; I was 21 talking. 22 JUDGE TINLEY: She said the new contract says six, 23 six, six. It's specified in the contract. 24 COMMISSIONER BALDWIN: So, if we adopt the new 25 contract, it's in there. 11-05-08 18 1 JUDGE TINLEY: Bingo. 2 COMMISSIONER BALDWIN: Dang, I love this country. 3 JUDGE TINLEY: What a concept. 4 COMMISSIONER BALDWIN: I love it. 5 MR. LOONEY: On the -- on Tab 3, there's a complete 6 description of the medications for all classes of employees. 7 It shows that the -- on here that the -- the cost analysis of 8 the prescription drug plan, you can see where our retail is 9 versus our preferred and non-preferred medication. One of 10 the things that we were trying to do, Commissioner Letz, is 11 to shift people into generic medications. Our generic 12 percentage actually is pretty high. We're in the 60 percent 13 range, and so that's -- that's actually pretty high. 14 However, the -- the balance of the claims coming through the 15 branded medications, we're getting some pretty heavy hits in 16 that area. This is a complete claims summary that gives you 17 all those statistics you want to know about, who's -- other 18 than telling you who specifically is taking the medication, 19 tells you as a group where the medications are -- are being 20 utilized, and there is a list of the types of medications. 21 Now, the last two pages are the pages I want you to 22 look at, if you will. You know, what it has to do with is 23 changing the copayment process. We currently have copayments 24 of $10, $20, and $35. $10 for generic, $20 for branded 25 medications, and then $35 for those that are not on the 11-05-08 19 1 formulary that are non-preferred branded medications. What 2 we did is we went through and we did an analysis on -- said, 3 okay, we're going to change that. We're going to leave 4 generic at $10, but we're going to move to $25 versus $20, 5 and to $40 versus $35. What impact would that have on the 6 claims that have been paid through this time? And the impact 7 over a 10-month period will be approximately $9,000. $9,000 8 based on moving it up to that level. 9 JUDGE TINLEY: You're talking about $9,000 in 10 additional copay? 11 MR. LOONEY: $9,000 in savings that were generated 12 that will be shifted to employees for this process of paying 13 for those -- those drugs. 14 JUDGE TINLEY: Okay. 15 MR. LOONEY: It's a cost shift back to the 16 employees simply by copayments being increased. Same thing 17 with Page 2, except we changed it to $10, $30, and $45. Then 18 in that case, it saves approximately 20,000 over the last ten 19 months, or a total of 24,000 -- 22,000, 24,000 over an annual 20 basis. 21 COMMISSIONER LETZ: The -- 22 MR. LOONEY: To be able to significantly impact the 23 medication process by changing the copays in that manner, 24 it's really not impacting the overall cost of our medical 25 plan significantly to go back in and -- while these may seem 11-05-08 20 1 like small pinpricks, you know, as far as the overall plan is 2 designed, for those individuals that are on medications, that 3 are taking medications on a regular basis, it can build up, 4 because you're taking five, six, or -- $5 a month or $10 a 5 month additional, and you're talking about another $60, $120, 6 whatever, out of their expense -- out of their pocket on an 7 annual basis. So, changing that -- I'm not a proponent of 8 changing that -- that process on the plan, because I don't 9 think we get enough dollar savings generated out of those 10 types of changes. 11 JUDGE TINLEY: Question. I'm sure you've seen a 12 lot of employee plans, groups this size. What is the norm on 13 those various classes of prescriptions? 14 MR. LOONEY: What we're seeing. 15 JUDGE TINLEY: And what do you see trending there? 16 MR. LOONEY: What we're seeing now is a trend 17 toward actually removing any type of copayments for generic 18 medications, actually going to a zero copay on generic 19 medications. Either that, or really moving into some of the 20 other -- some of the organizations out there. You can join 21 clubs or whatever else and get generic medications for $4 or 22 $5 or whatever, so that's under the copay limit now 23 currently, anyway. So, some of those medications are 24 available. Moving toward zero copays on the medication is 25 supposed to generate more of that transition from the branded 11-05-08 21 1 medications to the generic. 2 JUDGE TINLEY: What do the statistics show on that? 3 MR. LOONEY: It -- it varies from where you were 4 previously. You had a $10 copayment previously, but you're 5 not -- you're close to the 60 percent range right now for 6 using generics. We try -- what we try to do is move a client 7 from the -- in the 40 and 50 percent range up into the 60 and 8 65 percent range to get them into that generic utilization, 9 plus the mail-order utilization, because that does save us 10 money in those areas. So -- 11 MS. HYDE: We were at 35 to 40 last year. 12 COMMISSIONER LETZ: So we've moved a lot. 13 MS. HYDE: We have moved a lot. I mean, we have 14 pushed the scrips. 15 MR. LOONEY: So, we've made some changes. But I 16 think we need to look at some other methodology, either go 17 back in and do a tighter analysis of our formulary so that we 18 can identify those medications that are high-cost 19 medications, that do have generic equivalents, and then 20 additional costs, possibly, on those that are high frequency 21 utilization medications. Number one is Nexium. That's the 22 number one pill that -- that has generic options, and has 23 other therapeutic branded medications that are less expensive 24 also. So, changing plan design in that manner, the impact is 25 on just those individuals, obviously, that are using those 11-05-08 22 1 medications, whereas changing the copays impacts every 2 individual that takes medication, and obviously we've got a 3 lot of people taking medications. 4 COMMISSIONER LETZ: Are -- is the breakdown of the 5 categories pretty, oh, normal, I guess you'd say? I mean, I 6 guess -- 7 MR. LOONEY: As far as the formulary is concerned? 8 COMMISSIONER LETZ: No, just the category, the 9 types of drugs or medications that our people are taking. Is 10 it in the breakdown? 11 MR. LOONEY: It's relatively common. What we see 12 is -- 13 MS. HYDE: We've got a lot that our top -- our 14 top-dollar spenders are in the mature range, and sometimes 15 more expensive is not best. 16 COMMISSIONER LETZ: Well, I guess I'm looking more 17 -- I'm looking at just the category, the class totals. And 18 the -- I think the number one number of scrips written were 19 antidepressants. That surprises me, but I don't deal with 20 this. I mean, it seems that we have an awful lot of people 21 on antidepressants. 22 MR. LOONEY: You're the boss, not the employee. 23 (Laughter.) 24 COMMISSIONER LETZ: My question is -- 25 COMMISSIONER WILLIAMS: There's the answer. 11-05-08 23 1 COMMISSIONER LETZ: My question, though, is, is 2 that normal? Are antidepressants that widely prescribed in 3 the population? 4 MR. LOONEY: Very much so. 5 MS. HYDE: Yes. 6 MR. LOONEY: Whereas, you know, also -- 7 COMMISSIONER LETZ: I also saw some antimalarials. 8 I'm trying to figure out where we have a mosquito problem. 9 Anyway, I thought maybe they're military. I don't know where 10 it was I saw antimalarial. 11 MR. LOONEY: You have -- some of the medications 12 that you have, you know, again, identify an aging population, 13 such as arthritic medications. That doesn't necessarily -- 14 you know, arthritis occurs at all ages, but Humira is a 15 high-cost medication, and it's used for -- we looked it up 16 today; it's used for treatment of arthritis and other types 17 of inflammatory circumstances. The other one we run into 18 that's fairly high-cost is Imitrex. Imitrex is used for 19 headaches, for -- and those are either injectable or pills. 20 So, there's a possibility of adding a fourth category of 21 prescription, so we keep the copayments similar for the 22 branded that we have now. Call it -- we'd call it specialty 23 meds. We'll put it into a specialty med. Instead of having 24 it as a copayment, now we have it as coinsurance, so that we 25 move to either a 25 percent process or -- or a 30 percent or 11-05-08 24 1 a 50 percent process. If we're going to have that specialty 2 medication, then it is in a coinsurance process. 3 We always temper that with medical requirement 4 information, so that if there's absolutely no other 5 medication that can be used for the care and treatment of 6 that process, that -- and if there's no other way to acquire 7 that medication, because we have, through our PBM currently, 8 a specialty medication -- a specialty med delivery system, 9 which means they can go through the scrip care organization 10 and get those specialty meds at a discount base. If they're 11 through the retail operation, we don't get the discount. So, 12 we try to go through that specialty medication base. That 13 medication process, particularly your specialty medications, 14 is a very, very sensitive area. People who need special 15 medications, you do not want to create any burden or any 16 process for them not to be able to get the medication, 17 because that'll keep them from having additional costs in the 18 plan under the medical plan. So, we have to be very careful 19 about the categorization of those specialty medications. 20 JUDGE TINLEY: So, you bring nothing to us in the 21 way of proposal in that respect? Is that what I'm hearing? 22 MR. LOONEY: There -- not at this point. And 23 there's a couple -- there's a couple reasons for that. One 24 is, we're going through a situation where we're having 25 Medicare completely reevaluate their delivery of their 11-05-08 25 1 prescriptions -- their prescription programs. And a lot of 2 the special meds are tied to what Medicare evaluations are, 3 so we have to -- if we do something in advance of Medicare 4 changing their perspective on the Medicare prescription meds 5 and the way they're pricing them, then we could shoot 6 ourselves in the foot by trying to create something in 7 advance. That was supposed to have been done prior to 8 election. So, you know, the staging and timing of that -- I 9 won't know what the timing of that will be, probably, until 10 the first week in December, as to when that's going to take 11 place. So, later in the plan year, it may very well come 12 back and say, this is something we need to change. That is 13 not a requirement that you maintain that delivery of that 14 formulary on an annual basis. You can change it one time a 15 year during the plan year as long as you give employees 60 16 days notice of the change, so you can change that formulary 17 once during the plan year. So, that may occur first quarter 18 of next year, once we see what that -- what those numbers 19 actually are. That's the reason we don't have that in front 20 of you at this point. 21 Under tab -- on the next tab, one of the things 22 that we looked at, too, was we talked about the age 65 and 23 older individual. These are the actual claims for active 24 employees and retired employees that are over the age of 65. 25 We split out claims by age category in that situation. We've 11-05-08 26 1 got 10 months of claims; again, that's about 60,000 -- 59,000 2 total in paid claims. We know that the split between active 3 employee and retired employee is approximately 50/50. We 4 have 14, I believe, retirees, and 15 active employees, so 5 this is fairly representative of the entire group. Projected 6 annually, that's -- again, that's about -- that's, what, 7 60,000, 10 months; we're looking at maybe 72,000 annually. 8 Right now, the prescription drug program is one of the 9 primary reasons that retired county employees are on the 10 plan, because they fall under the same formulary that all 11 active employees do, so there is no restriction on 12 prescription drugs that retirees have under the program, and 13 the majority of them are not -- I take that back. I have no 14 idea of knowing, but many of them may not be on Medicare Part 15 D, which is the Medicare prescription drug process. One of 16 the things that we've done, and we've seen with other plans 17 as far as retirees are concerned, we've created a 18 coordination of benefits. Hi, Sheriff. 19 SHERIFF HIERHOLZER: Hello. 20 MR. LOONEY: You're not armed, are you? 21 SHERIFF HIERHOLZER: Yes, I am. 22 MR. LOONEY: Uh-oh, you are. 23 SHERIFF HIERHOLZER: I made sure of that. 24 MR. LOONEY: Are you nearing retirement? 25 SHERIFF HIERHOLZER: Not yet. Y'all won't let me. 11-05-08 27 1 MR. LOONEY: I'm safe right now. The thing that 2 we've seen other clients do, and as we -- we require -- or we 3 don't require an individual retiree to be on Part A and Part 4 B of Medicare. We do, however, calculate benefits as if they 5 were, so we coordinate with Medicare Part A and B, regardless 6 of whether the retiree has signed up for those benefits or 7 not. We have no -- we have no way of monitoring whether or 8 not, in addition to Part A and B, the individual retiree has 9 a supplement insurance policy, 'cause those benefits are 10 typically paid on an indemnity basis, and we don't know 11 whether they're paid or not. So, they may have the county 12 plan as a coordination of benefits, Part A and B, and also a 13 supplement of some sort; they may have it available. We 14 don't know that for a fact. But what we're seeing by other 15 employers, we're seeing other employers take Medicare Part D, 16 adding that into the plan, you know, with the assumption that 17 that employee -- retiree is on Medicare Part D, so that the 18 claims that are paid then are assumed to be a coordination of 19 claims against Medicare Part D, as opposed to having the 20 standard. Medicare Part D -- there's a lot of 21 misunderstanding about Medicare Part D. 22 So, if you'll turn over to Tab 6 real quick, on Tab 23 6 there is a listing of all of the Medicare Part D providers 24 in the state of Texas. It also has a brief description of 25 all the plans that are available, including the pricing and 11-05-08 28 1 the cost of all those plans. Medicare Part D is an 2 independent applied-for policy. It's a policy that an 3 individual applies for from an independent provider. As you 4 can see, the independent providers are Aetna, Blue Cross/Blue 5 Shield, WellPoint, a lot of the major insuring companies. 6 So, an individual who makes application for Part D then makes 7 application through one of these insuring companies, and then 8 whatever their policy is, is what the individual receives 9 benefits for under Medicare Part D. I did -- I have no idea 10 -- I'm not -- I don't sell Medicare Part D as an agent. We 11 try to help individuals understand Part D. But the best 12 thing I could do at this point is to give you this summary of 13 benefits based on Aetna's program, which is the most popular 14 here in this area, because Aetna is tied in with H.E.B. from 15 a supplier process, and so H.E.B. Market had Aetna through 16 all their stores, so they became probably the largest 17 provider in this area. 18 So, the last part of this is an explanation of the 19 Medicare Part D and the three different plans that Aetna 20 provides. Basically, what they provide is a copayment 21 function. Aetna -- Aetna pays for zero copayments on 22 preferred generics, $10 copayment on non-preferred generics, 23 $35 copayment on branded, $74 copayment on the non-preferred 24 branded, and then 33 percent coinsurance on medications that 25 are specialty meds. They have a 33 percent coinsurance 11-05-08 29 1 factor. So, the cost of that plan, that Part D Medicare 2 plan, for individuals in 2009 is $50.50 a month, I believe. 3 It's listed on there. It's under -- it's $53.10 for that, 4 for that plan. If we change the plan document that says that 5 we will coordinate with Parts A, B, and D, then the claim 6 administrator will automatically assume that the individual 7 has what we give them as a standard Part D medication 8 program, which would be in this point. What I'm saying is we 9 use Aetna's enhanced plan as the model for them to pay claims 10 against. The -- go back one tab now to Tab 5. You'll see a 11 listing of dates of birth. Some of you may recognize these 12 dates, and they are all pretty much individual. But the -- 13 the dates that you see here, the highlighted dates are 14 retirees. 15 COMMISSIONER LETZ: Tab 5? 16 MR. LOONEY: Tab 5. 17 JUDGE TINLEY: Retirees. 18 MR. LOONEY: The highlighted dates are the 19 retirees. The other -- the others that are from 1941 and up, 20 those are the individuals that work for the county currently 21 that are over the age of 65. Now we come to the complicated 22 page. The next page is the complicated page. What I tried 23 -- what I want to try to do is to give you an indication or a 24 feeling about Medicare in relationship to the county plan, 25 both for retirees and for active employees. 11-05-08 30 1 JUDGE TINLEY: That are Medicare eligible? 2 MR. LOONEY: Medicare eligible. 3 JUDGE TINLEY: Okay. 4 MR. LOONEY: Active employees. I got -- Monday, I 5 got in the mail -- I got a letter in the mail from United 6 Health Care. United Health Care is -- they're the sponsor 7 for the Medicare Medigap programs for A.A.R.P. Just barely 8 qualify, but I get A.A.R.P. This letter essentially says to 9 the individual, as a member of A.A.R.P., it says, you need to 10 look at joining Medicare as an option to selecting your 11 employer's coverage. This is the first time that we've ever 12 seen a letter of this type go out to the general public. 13 This has to be approved by -- before it can be mailed, it has 14 to be approved by CMS or has to be approved by Medicare. The 15 system -- 16 COMMISSIONER WILLIAMS: Approved by who? 17 MR. LOONEY: CMS. It has to be approved by them. 18 So, you know, timely -- I get this Monday, and it's talking 19 about, you know, Mr. Employee -- not employer, but 20 Mr. Employee, you need to take a -- consider this, what the 21 option might be. So, we take a look, and if you're a 22 retiree, Part B of Medicare currently has this under -- 23 you'll see on the chart the monthly premium for Part A is 24 zero. That's part of your Social Security; that's already 25 covered. You have to apply for Part B. Part B premium is 11-05-08 31 1 $96.40 for the 2009 year. You can get a lower premium than 2 that if you can show that your income basis is lower, but 3 this is the standard premium for Part B. Part D, I estimated 4 it as $55; we see that the Aetna premium is 53.10, so that's 5 pretty close. A part -- supplement to Medicare, you know, 6 they have the alphabet soup for supplements to Medicare. 7 They go from A to L. Part -- a Supplement G -- Supplement G, 8 let me explain real quickly what Supplement G does. 9 Supplement G pays the deductibles for the Part B -- I'm 10 sorry, it does not pay the deductible for Part B. It pays 11 the deductible for Part A, increases the hospital rooms up to 12 365 days, it takes care of that hospitalization number up to 13 a full year. It does not pay the deductible under Part B, 14 which is currently $136. $136. 15 A physician can charge up to 15 percent more for 16 care and treatment than actually he will be paid by Medicare, 17 so a physician that normally charges $100 has the ability to 18 charge $115 under Medicare if he wishes to do so. That 19 becomes a balance billed to the employee. Part G, the 20 Supplement G pays 80 percent of that additional amount. So, 21 there will be a 20 percent coinsurance payment for the 22 15 percent increase over and above what the physician can 23 charge. That supplement, plus a Part D supplement, plus Part 24 B, the total cost of that would be approximately $316 for an 25 individual per month, if they have those parts together. 11-05-08 32 1 Then, at this point, if they do not take the supplements, if 2 they just simply selected the county's plan, they would have 3 a $135 payment to make. They would not have to have Part D 4 or a supplement, because the County's plan takes care of 5 those two benefits. The county obligation, on the other 6 hand, is we fund for retirees, less what their contribution 7 is. So, our total funding is $620, and we've got a $135 8 payment by the retiree. Then we've got a net of $485 per 9 month that we actually budget for a retiree. Are y'all with 10 me so far? 11 COMMISSIONER BALDWIN: Yep. 12 JUDGE TINLEY: I can find those numbers. 13 MR. LOONEY: You see the -- 14 JUDGE TINLEY: Understanding them may not be 15 totally -- 16 MR. LOONEY: Okay, you see them. 17 JUDGE TINLEY: -- in line, but... 18 MR. LOONEY: Well, let's take -- now, that's the 19 retiree circumstance. That's the retiree person. 20 COMMISSIONER LETZ: Before -- how many of our 21 retirees are under 65? That are getting -- that are in 22 there? 23 MR. LOONEY: That I don't know. 24 MS. HYDE: One. 25 MR. LOONEY: One? 11-05-08 33 1 MS. HYDE: We're showing 14, because we have a 2 brand-new one, and that'll be the only one that's under 65. 3 COMMISSIONER LETZ: So, we're paying $485 a month 4 for employees that are on Medicare -- for retirees that are 5 on Medicare? 6 MR. LOONEY: Correct, on that payment for funding. 7 MS. HYDE: That's right. $6,011 per employee as of 8 this time, on the 14. 9 COMMISSIONER LETZ: And that is just a secondary 10 insurance for them. 11 COMMISSIONER BALDWIN: Pretty nice benefit. 12 JUDGE TINLEY: I think you got the problem spotted, 13 Jon. 14 MS. HYDE: Plus your $600 HRA. 15 COMMISSIONER LETZ: 600. 16 MR. LOONEY: For retired employees, though, we 17 don't give them -- 18 COMMISSIONER LETZ: We don't give them the HRA? 19 MS. HYDE: Yes, we do. 20 COMMISSIONER LETZ: Not -- no, only the active 21 ones, it says here. It says on this little chart that we 22 only give 600 if it's a -- 23 MS. HYDE: HRA's go to your 65-year-olds, and then 24 they went to retirees. And we stopped it this year. 25 MR. LOONEY: Oh. 11-05-08 34 1 MS. HYDE: We did not go there. 2 JUDGE TINLEY: Okay. 3 MR. LOONEY: That was not supposed to happen. 4 COMMISSIONER LETZ: Do you have a breakdown of, I 5 guess, the claims that we've paid for these retirees that are 6 on Medicare? 7 MR. LOONEY: I can get that information. 8 COMMISSIONER LETZ: It's my understanding that 9 Medicare is pretty -- 10 MR. LOONEY: Medicare pays virtually 100 percent. 11 COMMISSIONER LETZ: Right, so it's -- I don't know 12 why we're -- 13 MR. LOONEY: It's the prescription drug -- 14 MS. HYDE: Prescriptions. 15 COMMISSIONER LETZ: Just the drugs, okay. 16 MR. LOONEY: We're spending -- 17 MS. HYDE: Prescriptions. 18 MR. LOONEY: -- a lot of money in the prescription 19 drug program. 20 COMMISSIONER LETZ: Okay. 21 MR. LOONEY: So, an active employee who's over the 22 age of 65 is eligible to participate with Medicare. And that 23 is just -- you know, for purposes of discussion, if you've 24 got an active employee, we fund at, again, $620 a month. The 25 plan that's provided is an HRA plan that has a $600 annual 11-05-08 35 1 contribution to that individual's account. They have a 2 $1,000 deductible, so you have a net deductible allocation 3 during that year of $400. Then you have a maximum 4 out-of-pocket in case of critical illness of $2,000. So, 5 once an individual employee exceeds that $2,000 number, less 6 the $600 HRA then the benefits are covered at 100 percent for 7 the balance of the year, with a couple of exceptions. The 8 exceptions are that copayments don't go away. Copayments 9 don't -- are not debited against -- or credited against your 10 max out-of-pocket, so if you continue to see the physician, 11 copayments to see physicians are $30 per visit to the 12 physician. And you still have the copayments that you make 13 for medications on a monthly basis, which, again, depending 14 on the category depends on what you -- what you pay for in 15 that area. So, as a county employee, you potentially have 16 $2,000 out-of-pocket max, less the HRA, $1,400, and then that 17 continuation of copayments. They go on if you're in a 18 critical illness. 19 JUDGE TINLEY: Under the current setup, if an 20 individual is Medicare-enrolled -- eligible and enrolled, 21 Medicare becomes secondary to our plan, does it not? 22 MR. LOONEY: Medicare, I don't think, becomes 23 secondary. I don't think -- maybe -- that's a good question. 24 I'm not really sure. 25 COMMISSIONER WILLIAMS: No, it doesn't. 11-05-08 36 1 MS. HYDE: On our active employees, Medicare is 2 secondary. 3 COMMISSIONER WILLIAMS: Secondary. 4 MR. LOONEY: It's secondary. 5 JUDGE TINLEY: Yeah. 6 MS. HYDE: It is secondary right now. 7 MR. LOONEY: So -- 8 MR. OEHLER: Medicare is secondary. 9 MS. HYDE: Medicare is secondary on active -- 10 COMMISSIONER WILLIAMS: For active employees. For 11 retired employees, -- 12 JUDGE TINLEY: Not retirees. 13 COMMISSIONER WILLIAMS: -- it's primary. 14 MS. HYDE: Not retirees. Retirees, we become 15 secondary. 16 MR. LOONEY: So, we haven't excluded that. We -- 17 in other cases, we've excluded that payment for Medicare. 18 Participated in the plan. 19 JUDGE TINLEY: Can the plan be written whereby -- 20 legally, whereby those that are Medicare-eligible as active 21 employees, that the coverage we provide is secondary 22 coverage? 23 MR. LOONEY: No. No, the -- the option for an 24 employee to be covered under Medicare as an active employee 25 is strictly a voluntary action by the employee. The employer 11-05-08 37 1 cannot write documentation that creates a situation where 2 Medicare becomes primary for any employer who has 20 or more 3 employees. Medicare is always secondary. Medicare, if they 4 pay -- if the employer -- if they pay in full, under the 5 plan, they audit the employers on a regular basis, and they 6 will go back and charge that employer for any expenses that 7 they paid that were in excess of their employer's plan. 8 Okay. They actually do -- we get audits from the Medicare 9 people all the time, where they've said, no, we overpaid your 10 employee. Since we overpaid your employee, you're 11 responsible for reimbursing us as the employer. Not the 12 employee, the employer. It's an employer -- 13 MS. HYDE: Judge, if you'll think back, we've 14 gotten some of those letters. 15 JUDGE TINLEY: Oh, yeah. Oh, yeah. 16 MS. HYDE: And so that's not -- that's not unusual. 17 We've probably had 20 letters this year. 18 MR. LOONEY: If an active employee, though, 19 voluntarily chooses to become covered under Medicare, you 20 know, what is -- what is, then, his responsibility or 21 liability? We still have the HRA program, because they're an 22 active employee. So, as an active employee, the individual 23 still has the HRA. If they're under Part B of the Medicare, 24 then their premium allocation is $96.40 per month. If they 25 take a Part B circumstance, then their deductible -- and they 11-05-08 38 1 have that supplement that I described, the G supplement, that 2 costs approximately $165. Then they have a deductible of 3 $136 they have to satisfy, whereas under the other plan, 4 under the county plan, they have a $400 deductible. Under 5 Medicare, there are no copays. Under Medicare, once you're 6 in the Medicare system, there's not any copayments. You may 7 have that 15 percent excess that the doctor charges, but the 8 plan G, again, pays 80 percent of that, so your potential 9 maximum out-of-pocket as an employee potentially centers 10 around, again, the prescription drug program. 11 The statistics from the Medicare people tell us 12 that only about 18 or 19 percent of the people under the Part 13 D Medicare actually fall into what is happily called the 14 doughnut hole, where they move out of copays to where they're 15 making full payment, and then they move back into major 16 medical coverage by Part D. That hole that sits out there is 17 about $4,000. If you take into consideration all the 18 expenses that the individual has to incur before they drop 19 into that category under Part D that pays for their expenses 20 in excess of that. So, the exposure for an employee, again, 21 is back to that prescription drug program. So, somebody that 22 is an active employee who would want to make a change and 23 come in to Eva and say, you know, Medicare is going to be a 24 better long-term circumstance for me. I'm going to be under 25 Medicare; it's going to continue even after I retire or after 11-05-08 39 1 I leave or whatever. I'll stay on that plan. I've got my 2 supplements in place. I've got, then -- I do or do not have 3 Part D, which, again, is that $50-a-month number. And I've 4 got my HRA from the County; it helps reimburse me for 5 expenses that I have under that plan. If those individuals 6 choose to do that, then that removes them from the 7 self-funded claim liability and shifts it to Medicare. 8 COMMISSIONER OEHLER: But it has to be their 9 choice. 10 MR. LOONEY: Has to be their choice. You cannot 11 physically twist an arm, or -- or not -- you know -- 12 MS. HYDE: I can't even talk to them. I can 13 explain to them. 14 MR. LOONEY: You can explain. 15 MS. HYDE: I can give them information, but I 16 cannot -- I cannot -- 17 JUDGE TINLEY: Recommend. Suggest. 18 MS. HYDE: No. Modify, discuss, huh-uh. 19 MR. LOONEY: No, that's -- but, you know, that 20 temperament is changing. Because now -- 21 MS. HYDE: Last night. 22 MR. LOONEY: Yeah, it changed a great deal last 23 night. But the temperament is changing, because this letter 24 was approved by Medicare to go out, to encourage employees to 25 reconsider the fact that their employee -- employer coverage, 11-05-08 40 1 which has greater out-of-pockets, has greater coinsurance 2 factors, has more exposure, that Medicare is a better -- the 3 best place for them to be. 4 JUDGE TINLEY: Well, you are making a 5 recommendation relative to our retirees, are you not? 6 MR. LOONEY: To the retirees. 7 JUDGE TINLEY: Premium-wise? 8 MR. LOONEY: I made a recommendation to increase 9 the premiums up to -- again, two benefits that they get are 10 the coordination, which satisfies all of the outstanding 11 deductibles, and the prescription drug program. A standard G 12 program is $165. Part D, which covers prescriptions, is 50. 13 That's $215. So, at $180, there's still a benefit for being 14 under the county plan. 15 JUDGE TINLEY: And that's a $45-a-month increase 16 from where we are at this point. 17 MR. LOONEY: Right. 18 JUDGE TINLEY: We increased it slightly last year, 19 I believe, from 110 to 135? 20 MS. HYDE: And I needed Kevlar. 21 JUDGE TINLEY: Pardon? 22 MS. HYDE: And I needed Kevlar. 23 JUDGE TINLEY: It wasn't that bad, was it? 24 MS. HYDE: Yeah. 25 JUDGE TINLEY: Here, again, I didn't need to take 11-05-08 41 1 the pill. You did, right? 2 COMMISSIONER WILLIAMS: You're the boss. 3 MS. HYDE: It will be at S.O. this year, so, you 4 know, I'll be safe. Maybe. 5 MR. LOONEY: As far as a recommendation to the 6 active employees, you know, my recommendation would be to 7 provide an educational seminar to inform them of the option, 8 and if they wish to participate, then that will be their 9 option. 10 JUDGE TINLEY: Should this be done prior to 11 enrollment? 12 MR. LOONEY: Yes, it should. It should be done 13 prior to enrollment, and some of the ability for them to move 14 will be determined by what dates and time they change, and 15 whether they're eligible for Part B or not at the time. If 16 they're eligible for Part B. So, it may not be just a simple 17 mass change at the anniversary date. They may opt out at a 18 later date when they become eligible for Part B, if they're 19 not eligible for Part B currently, either for the fact that 20 they have enrolled or there's a waiting period for that 21 purpose. Typically, if you -- if you move from your employer 22 to Part B, there is no waiting period because of the loss of 23 coverage from your employer, so you have a certificate of 24 continuation and authority to move onto the other plan. 25 MR. OEHLER: Basically, by upping that premium, or 11-05-08 42 1 their contribution, makes Medicare look a little more -- 2 JUDGE TINLEY: Well, it makes it more in line with 3 what their actual costs would be if they were to go that 4 route, but still not to that level. Still a bargain -- 5 MS. HYDE: Absolutely. 6 JUDGE TINLEY: -- to remain here. Absolute 7 bargain. 8 MS. HYDE: Absolute bargain. 9 JUDGE TINLEY: Just for the scrip coverage. And -- 10 and it's paying for that, plus the coordination of benefits, 11 which is a major plus. As we get older -- and I'll speak for 12 myself -- it's a real hassle to mess with that stuff, because 13 it's a paper tiger, and there's rules out the gazoo. And so 14 it's really good to have those folks that do that stuff, that 15 know what they're doing, take care of it for you. 16 COMMISSIONER WILLIAMS: Second that. 17 JUDGE TINLEY: Yeah. 18 MR. LOONEY: So, primarily, my -- my, you know, 19 basic recommendation is that we increase our individual stop 20 loss from $50,000 to $60,000. The renewal that we received 21 from Mutual of Omaha for our group term life insurance, it 22 was bid also. There's nobody -- the closest bid to their bid 23 was about a 30 percent increase over current rates, so it 24 didn't make any sense to make a change in that coverage. 25 That's in force. That total annual premium is still less 11-05-08 43 1 than $15,000 a year, so it's not a great impact on the 2 overall cost of the plan. Recommendation, again, is to leave 3 the employee contribution for active employees at the current 4 level, but to change the retirees' contribution level and 5 increase that by $45 on a monthly basis from $135 to $180, 6 and to offer an educational seminar to those employees that 7 are over 65 who wish to attend that seminar, to consider the 8 possibility of -- of some other Medicare process as opposed 9 to the county plan. 10 JUDGE TINLEY: And to do an HRA contract with the 11 specific -- 12 MR. LOONEY: HRA. 13 JUDGE TINLEY: -- 600, 1,200, 1,800. 14 MR. LOONEY: Six, six, and six. 15 MS. HYDE: And retirees do not get the HRA part. 16 MR. LOONEY: Right. I think we -- we've already 17 changed that, but we can do that documentation, make sure 18 it's documented also. 19 COMMISSIONER BALDWIN: How long have they been 20 getting that? 21 MS. HYDE: As long as I've been here. 22 COMMISSIONER BALDWIN: How long have they been 23 getting that? 24 MS. HYDE: Since y'all started the HRA card. 25 JUDGE TINLEY: Could you give me a number, Judge? 11-05-08 44 1 Would you get a number out of her? 2 MS. HYDE: I don't know when you guys started your 3 HRA. 4 MR. LOONEY: Four years ago. 5 AUDIENCE: With Mutual of Omaha. 6 MR. LOONEY: Four years ago. 7 MS. HYDE: You were still with E.B.A. -- E.P.A.? 8 MR. LOONEY: That was right after that. 9 MS. HYDE: Right when they left, and they picked up 10 Mutual. 11 AUDIENCE: Mutual of Omaha. 12 COMMISSIONER WILLIAMS: Either three or four years. 13 COMMISSIONER LETZ: Four. 14 JUDGE TINLEY: Four. 15 COMMISSIONER LETZ: Last year we went back with the 16 -- started -- HRA started rolling off this year. 17 MR. LOONEY: The excess of the -- 18 COMMISSIONER LETZ: Right. I mean, you accumulate 19 it up to three years, and then it started rolling off. 20 MR. LOONEY: It didn't roll off; it just stays 21 flat. 22 COMMISSIONER LETZ: It stopped increasing. 23 MR. LOONEY: Yeah. That's my story, and I'm 24 sticking to it. 25 JUDGE TINLEY: You heard the recommendations of Mr. 11-05-08 45 1 Looney, our consultant. Do I hear a motion with regard to 2 the 2009 employee health benefits plan? 3 COMMISSIONER WILLIAMS: Move we approve the 4 recommendations as presented by Mr. Looney. 5 COMMISSIONER BALDWIN: Can we outline them in 6 the -- in the motion, please? 7 JUDGE TINLEY: Okay. 8 COMMISSIONER BALDWIN: I know you're saying his 9 recommendations, but just for fun -- you do it. You give us 10 the language one more time. 11 COMMISSIONER WILLIAMS: I'll withdraw the motion 12 till we hear the recommendations spelled out. 13 MR. LOONEY: Okay. 14 COMMISSIONER BALDWIN: Please. I'm sorry about 15 this. 16 MR. LOONEY: That's all right. We'll increase the 17 individual stop loss level from $50,000 per annum to $60,000 18 per annum. Want to increase the contribution by the retired 19 employee from $135 a month, to increase it by $45 a month to 20 $180 a month. We want to leave the employees' current 21 contributions at their current level, the active employees at 22 their current level. Want to make certain that our contract 23 with -- our HRA contract reads 600 plus 600 plus 600, to a 24 maximum of $1,800 per family; $600 for a spouse, $600 for -- 25 to a maximum of $1,800. 11-05-08 46 1 COMMISSIONER LETZ: And the HRA is only applicable 2 to active employees. 3 MR. LOONEY: HRA is only active employees. 4 COMMISSIONER WILLIAMS: Prior to making a motion, 5 let me ask a question. 6 (Low-voice discussion off the record.) 7 COMMISSIONER WILLIAMS: I'm sorry? 8 MS. HYDE: You might want to discuss that last one, 9 'cause they have been doing it -- we've been doing it, so we 10 have a precedent. Do we want to continue it or not? I mean, 11 that's pretty big. 12 COMMISSIONER BALDWIN: I think he's saying no. 13 MR. LOONEY: I thought we stopped it. 14 MR. OEHLER: Especially when you increase them $45 15 a month, and then you take 600 away from them. 16 COMMISSIONER BALDWIN: Yeah. 17 COMMISSIONER OEHLER: You know, how hard do you 18 want to get beat up? 19 COMMISSIONER WILLIAMS: That's a $1,000 hickey, 20 isn't it? 21 JUDGE TINLEY: Let me come back to another couple 22 of items that maybe need to be included as part of the 23 recommendation going into the motion. That we maintain our 24 employee life and accident coverage with Mutual of Omaha. 25 MR. LOONEY: Maintain employee life and accident 11-05-08 47 1 coverage with Mutual of Omaha, and also the recommendation to 2 have the employee seminar based on Medicare. 3 JUDGE TINLEY: And we approve the stop loss as 4 shown by Option C with Monumental Life, which includes the 5 $60,000 individual stop loss limit. 6 COMMISSIONER WILLIAMS: Up from 50 to 60. 7 MR. LOONEY: Right. 8 JUDGE TINLEY: Is that it? 9 MR. LOONEY: I think so. 10 COMMISSIONER WILLIAMS: Now, the question is, all 11 of which requires a funding level increase of 5.9 percent. 12 We budgeted 8, is what I've been told, so that all of this 13 falls within the budgetary constraints that we've placed -- 14 MR. LOONEY: The number that -- the hard number 15 that I use is $620 per employee per month, and that's for 16 active employee positions, whether they're filled or not. 17 COMMISSIONER WILLIAMS: Okay. I move approval of 18 the Kerr County medical benefit plan for year 2009, as per 19 the recommendations of Mr. Gary Looney. 20 COMMISSIONER BALDWIN: I second. 21 JUDGE TINLEY: Motion made and seconded. Question 22 or discussion on the motion? 23 COMMISSIONER BALDWIN: I have a question about the 24 retirees -- us providing any kind of program for retirees. 25 How long have we been doing that? 11-05-08 48 1 MR. LOONEY: For -- forever. It was here when I 2 got here. It was in all the plan documents that I reviewed 3 prior to that. I assume it's been a tradition within the 4 county for a number of years. 5 COMMISSIONER WILLIAMS: Forever. 6 COMMISSIONER LETZ: I think it's -- I'm in favor of 7 that. I think that's, you know, a good -- a good benefit for 8 our retirees. 9 COMMISSIONER BALDWIN: Sure. 10 COMMISSIONER LETZ: But I also think we need to try 11 to, you know, encourage them into Medicare as much as 12 possible. 13 COMMISSIONER OEHLER: What happens if there's a 14 funding shortfall in our budget for this? Tying that to what 15 Commissioner Williams just did, that the 5 point whatever 16 percent that we budgeted -- 17 COMMISSIONER WILLIAMS: Eight. 18 MR. OEHLER: Supposedly eight. What if that amount 19 doesn't cover it? 20 MR. LOONEY: That's set at the maximum funding 21 limitation for the -- 22 COMMISSIONER WILLIAMS: Well, I don't know how to 23 answer that, except that, you know, we've always operated 24 that way. 25 COMMISSIONER OEHLER: I understand. 11-05-08 49 1 COMMISSIONER WILLIAMS: We had an estimate of cost 2 based on an early evaluation, not final evaluation, as to 3 what we could anticipate. We budgeted accordingly. In most 4 instances, I think Mr. Looney's recommendations and the plans 5 that's come back were at or under. And I don't recall that 6 we've ever had a budgetary shortfall on the -- on the macro 7 picture. 8 COMMISSIONER OEHLER: I hope not. 9 JUDGE TINLEY: What -- 10 COMMISSIONER WILLIAMS: I do too, but -- 11 JUDGE TINLEY: I believe the numbers last year, 12 what we've budgeted and what we -- what was not utilized was, 13 ballpark, 400? 14 MS. HARGIS: 400,000. 15 JUDGE TINLEY: Yeah. A lot of discussion in that. 16 MR. OEHLER: Okay. I just want to make sure we're 17 not shooting ourselves in the foot here. 18 JUDGE TINLEY: Not getting outside the -- outside 19 the ditches. I appreciate that. 20 COMMISSIONER LETZ: It's possible. 21 COMMISSIONER OEHLER: There may be some things that 22 pop up that may not be expected. 23 COMMISSIONER WILLIAMS: Before we -- 24 MR. LOONEY: Fortunately, we have that insured. 25 Those are the types of things we do have insured. 11-05-08 50 1 MR. OEHLER: Okay. 2 COMMISSIONER WILLIAMS: I don't -- where are we 3 with the six, six and six? 4 COMMISSIONER LETZ: That -- that's -- 5 MR. LOONEY: For retirees? 6 COMMISSIONER LETZ: I agree with that. It's the 7 retirees that's questionable, I think. 8 COMMISSIONER WILLIAMS: That's what I'm talking 9 about, for retirees. 10 COMMISSIONER LETZ: Because it -- on the 600 for 11 the HRA for the retirees, only the retiree is eligible, 12 correct? 13 MS. HYDE: Yes. 14 COMMISSIONER LETZ: Not their -- 15 MS. HYDE: No spouses, no nothing. Just the 16 retirees. 17 COMMISSIONER LETZ: Max at 600 for the retirees. 18 COMMISSIONER WILLIAMS: So, the motion that I made 19 doesn't affect the current situation with the retirees. 20 MS. HYDE: Well, the one you did make said cut it. 21 JUDGE TINLEY: Yeah. 22 MS. HYDE: So, I'm hoping you meant don't cut it. 23 COMMISSIONER WILLIAMS: That's what I'm trying to 24 clarify. 25 MS. HYDE: It's just $600. 11-05-08 51 1 COMMISSIONER WILLIAMS: Leave it as it is, is the 2 sense of my motion. 3 JUDGE TINLEY: You want to leave the HRA 4 coverage -- HRA benefit in place for retirees? 5 COMMISSIONER WILLIAMS: Yes, sir. That will be 6 included in my motion. 7 COMMISSIONER OEHLER: That's a wise choice, being 8 that you upped it $45 a month. 9 COMMISSIONER BALDWIN: That means you enjoy living 10 in Kerrville. 11 MR. OEHLER: Means you enjoy living. 12 COMMISSIONER WILLIAMS: I heard your words of 13 caution. 14 COMMISSIONER LETZ: What that means is that the -- 15 currently, if my calculations are correct, they pay 135, but 16 we give them 600, so they're only paying -- four and a half 17 months they're getting free. We're cutting that to three 18 months free. 19 MS. HYDE: Right. 20 COMMISSIONER LETZ: We'll be going up. 21 COMMISSIONER WILLIAMS: That's about the size of 22 it. 23 COMMISSIONER LETZ: They pay one and a half months 24 more. 25 COMMISSIONER BALDWIN: My question -- my question 11-05-08 52 1 earlier about how long have we been participating in -- with 2 the retirees, it really goes to this -- the IRA -- 3 COMMISSIONER LETZ: HRA. 4 COMMISSIONER BALDWIN: HRA. IRA is the 5 professional rodeo association. But -- 6 COMMISSIONER WILLIAMS: Also a rebel group in 7 Ireland, but that's okay. 8 COMMISSIONER BALDWIN: That's right. Well, I 9 wasn't thinking of that one. After last night, are you 10 kidding me? My question was really directed to that. How 11 long have we been contributing to that program for them? And 12 the answer is just a short four years. And, to me -- to me, 13 that is a major, major thing that the taxpayers are doing for 14 our retirees. That is a big deal. If I were a retiree, I 15 would -- I think I would -- I would think what a nice thing 16 these people are doing for me. I really don't have a lot of 17 reason to complain. There's been a slight increase of $45, 18 but the overall picture, they're really giving me a good 19 benefit. 20 COMMISSIONER WILLIAMS: That's a good point. 21 COMMISSIONER BALDWIN: It's a good program. So, I 22 guess bottom line is, I really don't want to hear it. 23 COMMISSIONER OEHLER: We'll see what happens. 24 We'll see what happens. 25 COMMISSIONER BALDWIN: I'm sending them to y'all. 11-05-08 53 1 I'm not going to listen. 2 COMMISSIONER OEHLER: You know, there might be 3 several individuals that may come see you and I and everybody 4 else on this Court. 5 COMMISSIONER BALDWIN: I know of a couple, but I 6 suddenly don't speak English any more, so they're going to 7 you. 8 MR. LOONEY: The budget number that I provided 9 included funding the HRA for the retirees. 10 COMMISSIONER BALDWIN: Okay. I second whatever 11 happened here. 12 COMMISSIONER WILLIAMS: Whatever I said? 13 JUDGE TINLEY: I just wanted to clarify your -- 14 that your second was to the motion that included the HRA for 15 the retirees. 16 COMMISSIONER BALDWIN: Yes, sir. 17 JUDGE TINLEY: All right. Any further question or 18 discussion on the motion? All in favor of the motion, 19 signify by raising your right hand. 20 (The motion carried by unanimous vote.) 21 JUDGE TINLEY: All opposed, same sign. 22 (No response.) 23 JUDGE TINLEY: The motion carries. 24 COMMISSIONER WILLIAMS: Gary, thank you. You 25 helped make some sense out of all of this for us. 11-05-08 54 1 MR. LOONEY: Thank you, sir. 2 JUDGE TINLEY: Again, thank you for your help, 3 Mr. Looney. 4 COMMISSIONER BALDWIN: Don't encourage him. Good 5 gosh. 6 (Low-voice discussion off the record.) 7 JUDGE TINLEY: Do we need -- do we need a separate 8 motion to continue in force the supplementals that we have? 9 MS. HYDE: I would not think so, but I asked 10 earlier and y'all backed me with a rock saying that if it was 11 in the contract, you don't have to, so I'm unsure. 12 JUDGE TINLEY: That's a voluntary plan, but -- but 13 it is administered through you, so -- 14 MS. HYDE: Right. 15 COMMISSIONER LETZ: Wouldn't hurt to do a motion. 16 JUDGE TINLEY: That's what I'm thinking. 17 COMMISSIONER LETZ: I'll make a motion that we keep 18 the supplemental plan offered to the employees the same as 19 last year. 20 MR. OEHLER: Second. 21 JUDGE TINLEY: Motion made and seconded as 22 indicated. Question or discussion on the motion? All in 23 favor of the motion, signify by raising your right hand. 24 (The motion carried by unanimous vote.) 25 JUDGE TINLEY: All opposed, same sign. 11-05-08 55 1 (No response.) 2 JUDGE TINLEY: The motion carries. Why don't we 3 take a few minutes recess here? 4 (Recess taken from 2:20 p.m. to 2:39 p.m.) 5 - - - - - - - - - - 6 JUDGE TINLEY: Okay, let's come back to order, if 7 we might. We'll be back in session. We were in recess for a 8 short period of time. One more item on the 1 o'clock meeting 9 agenda, to consider, discuss, take appropriate action to 10 receive recommendations from the courthouse windows committee 11 and to award bid for courthouse windows and doors, 12 replacements and/or renovation. We've got some legal issues 13 relating more to the advertisement and solicitation for bids 14 than we do the bids themselves, and the County Attorney has 15 recommended that -- that the Court reject all bids and that 16 we rebid in the proper manner. The improper manner was -- 17 that responsibility lies with me, and I'll take 18 responsibility for that, but it needs to be rebid. 19 COMMISSIONER BALDWIN: I move that we do so. 20 COMMISSIONER LETZ: I'll second, with a question. 21 JUDGE TINLEY: Motion made and seconded to reject 22 all bids and -- and rebid the project. 23 COMMISSIONER LETZ: My question is, I know that the 24 -- we lacked specificity in some things like insurance and 25 bonding and all that, but the -- what we're going to put in 11-05-08 56 1 there is following the state law, which we would have to 2 follow anyway, so why do we have to put it in there? 3 MR. EMERSON: Because the statutes, under 262, 4 specifically says you shall include the following five or six 5 items -- 6 COMMISSIONER LETZ: Oh, okay. 7 MR. EMERSON: -- in your notice. 8 COMMISSIONER OEHLER: It says you shall. 9 COMMISSIONER LETZ: Answers that one. 10 COMMISSIONER BALDWIN: See how easy Jon is to get 11 along with? 12 COMMISSIONER WILLIAMS: When you explain things to 13 him. 14 COMMISSIONER BALDWIN: When you explain things to 15 him. 16 JUDGE TINLEY: Any other attention to be given to 17 my shortcomings? All in favor of the motion, signify by 18 raising -- 19 COMMISSIONER BALDWIN: Wait a minute. Whoa, whoa, 20 whoa, whoa. Here's an opportunity, guys. 21 COMMISSIONER WILLIAMS: Maybe we should ask him 22 what the other shortcomings are. 23 COMMISSIONER BALDWIN: And you're bald-headed. I'm 24 ready to vote. 25 JUDGE TINLEY: All in favor of the motion, signify 11-05-08 57 1 by raising your right hand. 2 (The motion carried by unanimous vote.) 3 JUDGE TINLEY: All opposed, same sign. 4 (No response.) 5 JUDGE TINLEY: The motion carried. Anything else 6 on the 1 o'clock meeting agenda? Hearing nothing, we will 7 adjourn that meeting. 8 (Commissioners Court adjourned at 2:43 p.m.) 9 - - - - - - - - - - 10 11 12 STATE OF TEXAS | 13 COUNTY OF KERR | 14 The above and foregoing is a true and complete 15 transcription of my stenotype notes taken in my capacity as 16 County Clerk of the Commissioners Court of Kerr County, 17 Texas, at the time and place heretofore set forth. 18 DATED at Kerrville, Texas, this 7th day of November, 19 2008. 20 21 JANNETT PIEPER, Kerr County Clerk 22 BY: _________________________________ Kathy Banik, Deputy County Clerk 23 Certified Shorthand Reporter 24 25 11-05-08