1 2 3 4 5 6 7 KERR COUNTY COMMISSIONERS COURT 8 Workshop Session 9 Wednesday, November 3, 2010 10 9:00 a.m. 11 Commissioners' Courtroom 12 Kerr County Courthouse 13 Kerrville, Texas 14 15 16 17 Employee Health Benefits/Insurance 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 On Wednesday, November 3, 2010, at 9:00 a.m., a 2 workshop meeting of the Kerr County Commissioners Court was 3 held in 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: Let me call to order this workshop 8 of the Kerr County Commissioners Court posted and scheduled 9 for this date and time, Wednesday, November 3, 2010, at 10 9 a.m. It is a bit past that time now. The agenda item for 11 the workshop is review and discuss employee health benefits 12 and insurance. Ms. Hyde, our H.R. Director, is here, and 13 also we have with us Mr. Gary Looney, our health benefits and 14 insurance consultant. 15 COMMISSIONER OEHLER: Several trees died on this 16 deal. 17 MS. HYDE: Yep. One each. 18 JUDGE TINLEY: Which one of y'all are going to kick 19 it off, Ms. Hyde? 20 MS. HYDE: I'm going to kick it off, sir. 21 JUDGE TINLEY: You are? Okay. 22 MR. LOONEY: Eva, while you're passing that out, 23 Judge, if I may make just a quick statement in general, not 24 about the specifics of the workshop today, but I know there's 25 a lot of questions that are going to be asked in the near 11-3-10 wk 3 1 future about what the results of the election have on the 2 national health care and the federal legislative issues that 3 -- that we're facing. So, just in general, there's not going 4 to be a massive repeal of the PPACA. That's not going to 5 happen. There's going to be -- in the next two to three 6 years, with the legislative change, there will be some of the 7 elements of the national health care plan that will 8 potentially be unfunded. They'll simply take the funds away 9 from the -- and scrap the inability to perform certain things 10 under that program. We have no idea which pieces they're 11 going to pick at this point. But even though the -- 12 legislative changes occurred, we will still be following the 13 basics of the health care legislation that was passed in 14 March of this year. So, we're proceeding with the concept 15 that those changes may or may not take place in 2014, 2013. 16 But right now, the impact on our health care plan is only in 17 those changes that we have to make based on the legislative 18 changes on the unlimited lifetime maximum and the age 19 changes. So, just in general. 20 JUDGE TINLEY: Thank you, Mr. Looney. 21 MS. HYDE: Good morning, gentlemen. I sent you an 22 e-mail yesterday with the proposal that was sent to me by 23 Entrust. If you recall, Commissioner Letz and Commissioner 24 Baldwin requested that I go through T.C.P.N. and look at some 25 alternatives and some different options. I contacted 11-3-10 wk 4 1 T.C.P.N., and there were two insurance folks, and that is 2 T.C.G. and also Entrust. T.C.G. denied bidding on us. They 3 would like to look at us at a later date. Entrust did turn 4 in a proposal. You have the proposal, all parts of the 5 proposal. And I'm just going to take you through a high 6 level regarding their proposal so that you know what we're 7 looking at as far as when we come back and we tell you, 8 "Here's how much it is, here's how much we're looking at, and 9 here's the differences." From a high level perspective, 10 Entrust gave us a diverse set of options, some things that 11 we're not used to here in the county. So, for one, they have 12 what they call a family monthly deductible. In the options 13 that they sent to us, the family monthly deductible is 14 $1,000, to be capped at $4,000 annual. 15 So, let me make sure that everyone understands. In 16 January, I break my arm and I have to have surgery, so I go 17 into the hospital, and it's $5,000. The first $1,000 is my 18 deductible for the month. Then the insurance would pay 80 19 percent, okay? February, I break my other arm, and I go back 20 to the hospital and have surgery again, and it's five grand 21 again. I've got to pay my $1,000 deductible again, and then 22 my 80 percent will start kicking in. So, if you do that four 23 months -- I broke both arms and both legs -- then I'll hit my 24 4,000. This is not a cumulative. So, for example, when I 25 broke -- had my neck surgery last year, I can't -- say I want 11-3-10 wk 5 1 to pay my $4,000 in the one month. I can only pay 1,000. 2 And then the next time and the next time and the next time, I 3 have to pay my deductible again until I hit the $4,000 4 deductible. Okay? That's a different mind-set from what 5 we're used to. 6 In addition to that is a $2,000 out-of-pocket 7 expense. Co-pays and deductibles do not count towards it. 8 So, in essence, we would go from a $1,000 annual deductible 9 to a $4,000 annual deductible and a $2,000 out-of-pocket. 10 Okay? I'm trying to keep it as simple as possible. The 11 second option that they had gave to us was what they call a 12 $1,500 family monthly deductible. And it's the same concept, 13 except its $1,500, for a max of $4,500. Now, the difference 14 there is there's no out-of-pocket once you hit the $4,500. 15 Okay? Y'all -- y'all aren't even smiling, so I'm not sure -- 16 does everybody understand what I'm saying? 17 COMMISSIONER OEHLER: Yeah. 18 COMMISSIONER WILLIAMS: So far. 19 MS. HYDE: Okay. In addition, Entrust has offered 20 a suggestion that when we go to the doctor, for people that 21 are just going to the doctor -- let's say you don't have 22 major medical; you're not going to hit the major medical 23 portion -- that we can do what they call a $350. So, if I go 24 to the doctor, I don't -- I'm trying to think of something -- 25 let's say I had migraines. I have to go to the doctor every 11-3-10 wk 6 1 single month, a doctor's visit. They have to run some blood 2 work, do some typical office work. Then the first $350 of 3 that they would pay for. Anything over 350, I have to pay 4 for as the employee. 5 COMMISSIONER LETZ: Say that again? 6 MS. HYDE: Which part? The whole thing? 7 COMMISSIONER LETZ: The whole thing. 8 MS. HYDE: Okay. I'm going to the -- I'm going to 9 the doctor's office on a monthly basis for migraines, and I 10 know that it costs me about 500 bucks every time I go, 11 because they have to do some tests and yada, yada, yada, 12 within the office, okay? The first 350 Entrust would pay. 13 Anything above that, I have to pay, and it does not go 14 towards my deductible. So, that 150 that I'm paying does not 15 go towards my deductible. 16 COMMISSIONER LETZ: And that's any doctor visit? 17 MS. HYDE: That's your doctor visit with normal 18 illness. I tried to get more explanation as to what "normal 19 illness" was, and I was not successful. At this point. We 20 still have a couple more weeks that we can start working 21 through some stuff. 22 MR. LOONEY: In network. 23 MS. HYDE: And they also have to be in network. If 24 it's out of network, I pay the whole thing. 25 COMMISSIONER BALDWIN: Let's go back to the $1,000 11-3-10 wk 7 1 deal. That is the deductible, $1,000 a month or $4,000 a 2 year? It's capped at 4,000, right? 3 MS. HYDE: Yes, sir, but you have to do it per 4 month. 5 COMMISSIONER BALDWIN: I understand. Plus there's 6 a 2,000 annual out of your pocket. Now, why -- why doesn't 7 that 2,000 apply to the -- to the -- 8 MS. HYDE: Because that is considered -- through 9 the Entrust proposal, that is considered the fair share of 10 the employee, out-of-pocket expense. 11 COMMISSIONER BALDWIN: Okay, thank you. 12 COMMISSIONER LETZ: What is -- you mentioned the 13 network. Is the network comparable? Different? Same? 14 MS. HYDE: I printed out -- that's another tree 15 that I killed. I printed out the network. Our current 16 network -- this is our current network, and there are 88 17 providers within our network that is not within their 18 network. 19 COMMISSIONER LETZ: Okay. That's that -- the 20 "yes/no" final column? 21 MS. HYDE: Yes, sir. 22 COMMISSIONER LETZ: Okay. 23 MS. HYDE: And as you all are well aware, when we 24 had a disruption last year of about 25 to 30 doctors, it was 25 not a -- it was not a happy place to be. Any questions so 11-3-10 wk 8 1 far? 2 COMMISSIONER OEHLER: Well, it seems to me that one 3 easy way to understand what the -- the deductible thing is 4 basically it's a per-occurrence, up to four occurrences 5 during the course of a year. 6 MS. HYDE: Kind of, sort of. Yes, sir. I'm trying 7 to keep it real simple. 8 MR. LOONEY: And the proper time frame. 9 MS. HYDE: But it has to be within that monthly 10 time frame. If you go over the monthly time frame, huh-uh, 11 you start over. 12 COMMISSIONER LETZ: Now, what -- you say you -- 13 what did you do last year? You broke something. 14 MS. HYDE: My neck. 15 COMMISSIONER LETZ: Broke your neck. You broke 16 your neck last year. 17 MS. HYDE: Kathy, you don't have to type that. 18 COMMISSIONER LETZ: Can you -- it happens in 19 January, and you pay your surgeries then. But there's rehab 20 out of that same event that carries over into February. 21 MS. HYDE: Right. I have to start over on my 22 deductible. 23 COMMISSIONER LETZ: Okay. So it's not the -- the 24 illness doesn't carry over; it's just -- it's a strict 25 calendar? 11-3-10 wk 9 1 MS. HYDE: Right. And -- 2 COMMISSIONER LETZ: Okay. 3 MS. HYDE: -- if I -- I mean, I asked that when -- 4 I used me for my questions in the most part, and I used that 5 because I felt like I should be able to take my $4,000 6 deductible and pay it when I had that -- that major surgery. 7 But I can't do that. 8 COMMISSIONER LETZ: Okay. 9 MS. HYDE: So that was kind of a -- okay. So, I 10 got to have four majors, or four major somethings. Okay, I 11 see the light bulb. 12 COMMISSIONER LETZ: No. No, that's not it. I'm 13 looking on here, and I'm -- I see one local doctor who's not 14 included, and one is, and I thought they're in the same 15 office. Isn't Dr. O'Donnell and Dr. Sprouse in the same 16 office? 17 AUDIENCE: No. 18 COMMISSIONER OEHLER: He's on his own now. 19 COMMISSIONER LETZ: Okay. That's where that light 20 bulb was. I was like, I'm confused on that one. 21 MS. HYDE: Now we're going to go to dollars. 22 Dollars and cents. I just want to make sure -- and the 23 Auditor is standing behind me, but I kind of have this number 24 memorized. 2.153640. That's what we budgeted. 25 COMMISSIONER WILLIAMS: Say it again? 11-3-10 wk 10 1 MS. HYDE: 2,153,640. That's our budget. And so I 2 thought maybe I ought to make sure that y'all remember that 3 number for the next several weeks, 'cause that's a pretty 4 important number. When we start talking about the 5 financials, I know I gave you trees, but if you will look at 6 this sheet -- and I know that you have the two-sheeter. 7 Commissioner Baldwin, I see that you're using that a lot, and 8 that -- that's good, but that would be a third change. So, I 9 just need -- if you could stick with me for just a second and 10 then pull out this big one that says "Financial." 11 COMMISSIONER WILLIAMS: Where's that? In this big 12 packet? 13 MS. HYDE: Yes, sir. When Gary and I start working 14 on insurance, this four-pager that looks like this, it starts 15 -- that looks like this, this is what we use for a high-level 16 objective look at -- at the insurances. Okay? And on this 17 sheet, if you go and you look across the top, it gave the 18 plan. A $1,000 family monthly deductible, 80/60. That's 80 19 percent coverage after your deductible and 60, which is 20 different. There was a 1,500 family monthly deductible. And 21 both of those -- the first two are both $60,000 on stop loss. 22 When you go to the next two columns, it's 80 percent plan at 23 75,000 on stop loss. Same thing with the 100 percent on the 24 1,500. If you go to Page 2, the bottom line is, we have an 25 expected or a maximum. The expected on all these -- all 11-3-10 wk 11 1 these numbers is what I was keying into the spreadsheet so 2 that I can start comparing. But then when I get to this, 3 there's an average of $200,000 difference when I get to these 4 financials telling me what my expected annual cost is. So, I 5 want to make sure that y'all understand that, that these 6 costs are not hard and fast. There are -- there are -- I 7 call them assessorials, or extra fees that you have to pay, 8 that have you to figure in, and our claims. 9 So, we started discussing it, and they did -- they 10 did tell me yesterday evening that they would cap out 11 transactions, and we're still going to discuss that a little 12 bit more. I gave you something real simple, and it's this 13 right here. It's a Clinical Pathology -- y'all don't have to 14 pull it out, 'cause I can show it to you. This is my bill 15 from C.P.L. when I go and do synthroid stuff, okay? This is 16 one bill. This is one claim. But within the Entrust 17 contract, what they want us to do is pay per transaction, not 18 per claim. And I -- I'm not -- I'm not real good with -- 19 I'll just say I'm opposed to that. Because what can 20 happen -- here's my bill. But when I get my EOB's, each one 21 of those is considered a transaction, and for one bill, this 22 small bill here, I have three transactions, at $7.50 a pop. 23 So, I went back and I did my reporting from UMR, and we will 24 average about 8,000 claims this year. So, if you take 8,000 25 and divide that by 2.5 -- or multiply that out by 2.5, we're 11-3-10 wk 12 1 talking about $196,000 more in transaction fees alone for 2 claims. That's big. Now, I can also do it on a different -- 3 different methodology where they offered me $29.50 per 4 employee, per month. It's $160,000, so I'm saving about 5 $30,000 there in potential transaction fees. 6 COMMISSIONER LETZ: So, what you're saying is that 7 if we look at Page 2 of this one, -- 8 MS. HYDE: Yes, sir. 9 COMMISSIONER LETZ: -- and we look at the expected 10 column at the bottom, -- 11 MS. HYDE: Yes, sir. 12 COMMISSIONER LETZ: -- we should add what? 13 MS. HYDE: Probably about $150,000. I'm not taking 14 the middle. 15 COMMISSIONER LETZ: Okay. 16 MS. HYDE: But if you go to the financials, it's 17 averaging 200,000. So, I just want to make sure that you 18 understand what I'm saying, Commissioner Letz. That's an 19 additional above the difference between those two pages that 20 I was talking about. 21 COMMISSIONER LETZ: Where -- you lost me when you 22 went to the financial, when you went over that. What page on 23 the financial sheet -- or financial packet? 24 MS. HYDE: Let me make sure we're on the same page. 25 COMMISSIONER LETZ: This is the page we're looking 11-3-10 wk 13 1 for. 2 MS. HYDE: It's like the third page in the 3 financials. 4 COMMISSIONER WILLIAMS: Is this the right one? I 5 can't find it. 6 COMMISSIONER LETZ: No. 7 COMMISSIONER WILLIAMS: Too many things to look at. 8 COMMISSIONER LETZ: The one that says "Self-funded 9 program cost projections." 10 JUDGE TINLEY: Mm-hmm. 11 COMMISSIONER WILLIAMS: Thanks, Eva. 12 COMMISSIONER LETZ: Okay. 13 MS. HYDE: Okay. So, if you look at those two, the 14 four-pager that I gave you that's stapled, that's long-ways, 15 that we typically look at, and this one in the financials, 16 you'll see that those expected numbers are about $200,000 17 difference. That is not the 150 that I just told you about, 18 about the transaction fees. 19 COMMISSIONER WILLIAMS: That will be additional? 20 MS. HYDE: It would be an additional. Commissioner 21 Letz, I can't tell if you're yessing or noeing, or you 22 understand what I'm saying. 23 COMMISSIONER LETZ: I understand what you're 24 saying. I'm looking at your numbers. I mean, columns vary, 25 so you're saying that we go -- we should go by this page, 11-3-10 wk 14 1 plus 150? 2 MS. HYDE: Those are not my numbers. Those are the 3 numbers they presented to me. 4 COMMISSIONER LETZ: That's what I'm saying. We 5 should go by the numbers they presented, plus 150? 6 MS. HYDE: I changed my -- my format to go to those 7 larger numbers, plus I added 150,000 for transaction fees on 8 a per-employee, per-month. 9 COMMISSIONER LETZ: Didn't you question why these 10 two numbers were different? 11 MS. HYDE: Yes, and they told me that you're plus 12 or minus 5 percent. And I said, "Plus or minus 5 percent" -- 13 and you guys know me; I kind of do numbers. That's more than 14 -- more than 5 percent. But I'm not going to argue that 15 point at this point. This is what they've given me. This is 16 what I got to use. 17 COMMISSIONER LETZ: Okay. 18 MS. HYDE: I know you guys have already folded the 19 pages back so that you can keep that. 20 COMMISSIONER LETZ: Okay. 21 MS. HYDE: Some questions that I asked Clint -- 22 Clint Wilson is the gentleman that I've been working with. 23 It is typical that when you have a cost savings out of 24 network, that your provider should be looking at other 25 savings when you go out of network. Let's say I go to Joe 11-3-10 wk 15 1 Blow, the hatchet man, doctor of something, and he's not 2 within our network, so he doesn't have to get paid based on 3 our cost structure. So, he charges $500, and I turn it in 4 under my insurance. My insurance should be checking to see 5 if that doctor is in network somewhere else, where they can 6 say, "Okay, this network he only charges $300, so you only 7 charge her $300." And then the -- the insurance company 8 would get 30 percent of that savings. That's typical, and 9 that's a good thing. We want that. What's not typical in 10 this proposal is that they also get 30 percent of any 11 in-network savings. So I asked the question, "Why in hell 12 would you have any in-network savings?" If you're giving me 13 the network, and my network is the cheapest, the best, why 14 then would I have a 30 percent -- where are you going to get 15 another network that I'm going to save another 30 percent on? 16 It could be that this person is in-network, but in 17 another network that they have it less expensive, and they'll 18 negotiate it down. My response to that is, if I'm asking for 19 the best rates, then my P.P.O., my -- my in-network P.P.O.'s 20 should be the best rates. So, I'm a little nervous about 21 that. That is -- that is a big change for me. And I've 22 checked with others, and that's not normally what -- what is 23 there. If there was a -- somebody went, say, to Houston or 24 the coast, and they got hurt or they had a heart attack at 25 the coast, and the hospital might be in network, but the 11-3-10 wk 16 1 doctors may not be in network, then I could see it where -- 2 where I'm going after the doctors to try to take my other 3 networks and bring that price down and save the 30 percent, 4 and then we pay it. But network is network is network; it 5 shouldn't matter. And I'll use Sid Pete. If Sid Pete is 6 going to charge me 1,000 bucks to walk in the E.R, and that's 7 my network price every single time, then it shouldn't be that 8 if I go to Sid Pete, "Oh, wait a minute. They're only going 9 to charge you 900 today, 'cause we have another rate with 10 another organization and it's only 900, and now I get 30 11 percent of that 100." Am I making sense? To me, that's kind 12 of double-dipping. 13 JUDGE TINLEY: In network, it ought to 14 automatically be the best price, period. 15 MS. HYDE: Right. 16 JUDGE TINLEY: So you shouldn't be able to get any 17 better in network. 18 MS. HYDE: Right. Don't tell me there's another 19 network better than my network and you're going to save money 20 on me, 'cause I want that network, you know. I also asked 21 them for -- I've asked them three times for a plan that is 22 like our plan, which is what we requested when we sent it 23 out. And what I was told repeatedly is the same thing, and 24 it is that they know our financial problems, and that this is 25 their design and that's what they're offering us. They 11-3-10 wk 17 1 refused to sign some paperwork that everyone else signed, and 2 one is to insure that there's no litigation or disbarment or 3 anything like that going against the organization, that 4 there's no conflict of interest, and a hold-harmless 5 agreement. And they refused to sign that as well, saying 6 that they were T.C.P.N. and they don't have to. 7 COMMISSIONER LETZ: Are you done with that? 8 MS. HYDE: Hmm-mm. 9 COMMISSIONER LETZ: Okay. 10 MS. HYDE: And I will send you this, but I figured 11 with the 1,800 pages that you already printed off, you didn't 12 need this. But this is my documentation on any questions 13 that I'm asking and the answers that I'm receiving. 14 COMMISSIONER LETZ: Okay. 15 MS. HYDE: The one that really concerns me the most 16 is that in three different places within their proposal, off 17 the same booklet that you have in the financials in the very 18 first part, although they're giving us rates, they have up to 19 24 months to go back and look at our claims and change our 20 rates. So, for example, right now they're telling us this is 21 the rate through the stop loss carrier, and they'll look 22 through October, which is -- which is typical; everyone looks 23 at the tenth month. But there's -- there's a -- they can go 24 back up to, you know, January 1 when we get ready, and go all 25 the way back for 24 months, and then change the rates. So, I 11-3-10 wk 18 1 want to make sure y'all understand that as well. So, that 2 could be a big oopsy. They gave us some really -- some 3 really diverse ways of looking at stuff. And the last thing 4 is the prescription plan is not included in this, the generic 5 prescription plan, so that would be an additional cost as 6 well. 7 COMMISSIONER BALDWIN: Did you find anything 8 positive in it at all? 9 MS. HYDE: It's very diverse. It gives us a 10 different way to look at things. 11 COMMISSIONER BALDWIN: That's the positive? 12 MS. HYDE: Yes, sir. 13 COMMISSIONER LETZ: There's -- the other company, I 14 can't remember their name. 15 MS. HYDE: T.C.G. 16 COMMISSIONER LETZ: T.C.G. From talking to you 17 before -- before the proposals came in, you were, I think, 18 under the impression they were going to submit a proposal. 19 MS. HYDE: Yes. 20 COMMISSIONER LETZ: Do you know why they didn't? 21 MS. HYDE: Yes. They couldn't find a stop loss 22 carrier. 23 COMMISSIONER LETZ: Okay. 24 MS. HYDE: But they're going to try again. I mean, 25 this has been a bad year. I think the Judge said early on, 11-3-10 wk 19 1 we're in the perfect storm; everything has hit. Any other 2 questions about Entrust at this point? 3 COMMISSIONER BALDWIN: Yeah. Let's see. I guess 4 all of those -- all of those things that you picked out of 5 there -- and if they are -- if they're true, as you say they 6 are, you're right. I don't want to have anything to do with 7 them either. But I'd like to have the list of those things 8 -- those issues that you brought out. 9 MS. HYDE: Okay. I'll e-mail that this afternoon. 10 COMMISSIONER BALDWIN: You're going to e-mail it to 11 me? I'd like for you to e-mail -- 12 MS. HYDE: All of you. 13 COMMISSIONER BALDWIN: Well, that's good, but 14 e-mail it to them as well. 15 MS. HYDE: They've got it. It's the e-mails back 16 and forth between me and them, sir. 17 COMMISSIONER BALDWIN: I expect them to answer 18 those questions. 19 COMMISSIONER WILLIAMS: You're not going to? 20 COMMISSIONER BALDWIN: What? 21 COMMISSIONER WILLIAMS: You're not going to? 22 COMMISSIONER BALDWIN: Answer their questions? No. 23 I don't even know them. 24 COMMISSIONER WILLIAMS: Don't even know the 25 questions. 11-3-10 wk 20 1 COMMISSIONER BALDWIN: I don't know the questions. 2 COMMISSIONER LETZ: I think -- you know, I don't 3 know if this is the right time or the wrong time. You made a 4 statement early on that Buster and I wanted to do this. I 5 think the Court voted to do it, not Buster and I. But the 6 point of the whole exercise was that my understanding is -- 7 and I think we really need to refer this to the County 8 Attorney -- is that one of the reasons we seem to be having a 9 problem this year is because of the way we've been bidding 10 insurance every year. Other counties are not doing that. 11 MS. HYDE: Right. 12 COMMISSIONER LETZ: We need to find out why we're 13 looking at doing things -- one way of doing business, and 14 other counties do it another way; if they're doing things 15 illegal, or there's other options that we haven't explored. 16 And one of the reasons that T.C.P.N. came into the picture 17 was it was my understanding that they -- we can negotiate 18 with them, and probably other entities like T.C.P.N., 19 one-on-one without going out to bid. And I'd like the County 20 Attorney to advise on that point as well. But I think that's 21 a -- that was the reason for this whole exercise, in my mind, 22 is that we have a problem with the way we've been doing 23 business, in my opinion, and we need to look at other 24 alternatives. 25 MR. LOONEY: If I can respond to that, the bid 11-3-10 wk 21 1 process that we've gone through for the selection of an 2 administrator has been on a three-year contract. We've 3 actually asked for three-year contracts for the people that 4 are administering the claims. That particular piece of it, 5 we fix and try to fix as best we can. Stop loss carriers 6 will not give guaranteed contracts more than one year. They 7 go through a process of renewing each year on stop loss 8 contracts. 9 COMMISSIONER LETZ: Right. But the question -- the 10 reason I question that is that TAC told us they're not going 11 to even bid because we go out every year. 12 MS. HYDE: Right. But -- but TAC, although TAC is 13 self-insured and fully insured, they have both, keep in mind 14 that it's a risk pool. It's a risk pool, and that's 15 different. And you guys know that. 16 COMMISSIONER LETZ: Well, but I -- 17 MS. HYDE: Because as a risk pool, we're increasing 18 our risk, and so are they. So, if all five of you are part 19 of the risk pool, and everybody is hunkering down and you got 20 20 percent claims and there's no -- no harm, no foul, which 21 keeps your rates down, and so next year your rates -- each of 22 you get $20,000 to decrease your rates. But then this year, 23 your group goes up to a 40 percent claim year, and it impacts 24 the rest of the pool. You can and will get kicked out, 25 because you've impacted the pool, depending on how much. Do 11-3-10 wk 22 1 you get a year's grace? It depends. Because it is a big 2 pool. Now, where they're using it is they're able to 3 continue with the big group to decrease the total overall 4 rate and maintain it. But there is ins and outs as well. If 5 we go to a fully insured this year, or look at a fully 6 insured, you know, I hope you'll write this down, the 7 2,153,640, because we're going to run out, and that won't be 8 included. So, whatever it is, plus anywhere from 200,000 to 9 350,000 we got to still find. 10 COMMISSIONER LETZ: Right. I'm just -- I'm just 11 saying we need to, you know, -- 12 MR. LOONEY: The -- 13 COMMISSIONER LETZ: -- look at the broader picture. 14 MS. HYDE: Absolutely. 15 MR. LOONEY: The Texas Association of Counties pool 16 has been around for some time, and what they do is they've 17 got an administrator, which is Blue Cross/Blue Shield of 18 Texas; that's their administrator. They also do a lot of 19 their stop loss bidding for their entire pool, which gives us 20 -- but they also bid that pool on an annual basis. They 21 don't bid it individually for the -- this particular county; 22 they bid for the entire pool. 23 COMMISSIONER LETZ: Right. 24 MR. LOONEY: So -- 25 COMMISSIONER LETZ: But I'm just -- 11-3-10 wk 23 1 MR. LOONEY: And that -- you know, we'd love to get 2 a three-year fixed contract for -- 3 MS. HYDE: Stop loss. 4 MR. LOONEY: -- stop loss. I mean, that would 5 be -- you know, that's just not in the market. They don't do 6 that. And it's not in the market for the high risk pool 7 either. They have to go through and they bid on an annual 8 basis for that piece of it. You just don't see it. You 9 know, they're doing it internally. But we've asked the Texas 10 Association of Counties to bid on a number of occasions. 11 They've turned us down in the past, because they say we 12 weren't a good enough risk, and so this time I think it's a 13 combination of things. I think it's not only because it's 14 bid on a regular basis, but it is because of the -- 15 MS. HYDE: Risk. 16 MR. LOONEY: If our claims experience had been 17 good, I guarantee you, they'd have given us a quote. 18 COMMISSIONER LETZ: I guess -- 19 MS. HYDE: They gave us a quote last year. They 20 were one of the quotes last year, but they were a little bit 21 high. And when we talked this year, part of the reason why 22 they were high is because they were looking at -- our trend 23 was we were doing pretty well, and there's an increased risk 24 here that this is going to be your year. Well, guess what? 25 This was our year. 11-3-10 wk 24 1 COMMISSIONER OEHLER: They should have bid this 2 year, because -- 3 MS. HYDE: I know, 'cause next year we won't have 4 this; we're going to go back down. 5 MR. LOONEY: Yeah. 6 COMMISSIONER LETZ: Okay. 7 MR. LOONEY: But getting involved in the pool would 8 make my job easier. 9 MS. HYDE: Oh, yeah. 10 MR. LOONEY: All I have to do is come back and say, 11 "Well, here's the rate." But let me bring you up to date on 12 the balance, what else is going on. So, all of the bid 13 proposals that have come in so far have requested information 14 through the month of October as far as claims experience is 15 concerned. We got that report from UMR yesterday. So, we 16 got that major case management report yesterday. That'll be 17 submitted now to the people that have bid on the contract. 18 We have three third-party administrators. We have a number 19 of stop loss carriers that will be given that information. 20 But once they see that, then we will be able to get final 21 numbers from them, and that includes the proposal that's been 22 offered by Entrust. They want to see through 10 months. In 23 the -- the information that they've requested, it says we 24 want this through 10 months, but then we'll also look at it 25 for the previous 12 months. Then we'll do our rating 11-3-10 wk 25 1 structure after we see the full 12 months. 2 The other negotiations that we're doing here, then 3 that will be 10 months; then those numbers will be fixed. 4 Whatever that number is, that's what we're moving forward 5 with as far as bids are concerned. The administrative costs 6 for the third-party administration piece of it, we're going 7 to get that to pretty close to where we are today. It's 8 going to be maybe a few points off, as far as that's 9 concerned. The balance of the cost of the plan is going to 10 be in the claims. We have the 2 million, 1 number that we're 11 dealing with. I take that 2 million, 1 number; I see what 12 the maximum cost is after all of the numbers are in, and then 13 I calculate back what charge has to be made to the dependents 14 in an effort to make those budget considerations. There's a 15 possibility this year that we will have a competitive 16 fully-insured quote. To have a competitive fully-insured 17 quote, we will have to take into consideration the runoff 18 claim, so the fixed cost for the fully-insured quote will 19 have to be enough under that 2 million, 1 plus the employee 20 contributions to pay the estimated runoff claim. 21 COMMISSIONER LETZ: What's a runoff -- what do you 22 mean by "runoff claim"? 23 MR. LOONEY: Runoff claims are incurred claims that 24 are being incurred today, but that won't be submitted for 25 payment until such time after the plan year is finished. 11-3-10 wk 26 1 We'll still have an obligation to pay those claims, so we 2 have that -- that portion of the plan. That gives credit 3 for -- a fully-insured program, that actually gives them a 4 month or two of premium before they really start getting the 5 incurred claims from the other side of it. The prescription 6 drug claims will start immediately. The other claims will 7 start -- so they'll get a little cushion on the front end, 8 because we're paying runoff on the back end. That, then, 9 just constitutes a premium increase for the following year. 10 So, we know that we know -- we know that we're going to, so 11 we have to look at not only the budget number for this year, 12 but projected budget number for next year in relationship to 13 that total cost moving forward. It's not -- we can't just 14 look at a one-year capsule for long-term budgeting purposes. 15 COMMISSIONER LETZ: Gary, I mean, you haven't quite 16 said this, but I think that, you know, we got all the 17 proposals in, and we can't afford business as usual. We have 18 to make changes in our plan. 19 MR. LOONEY: Correct. 20 COMMISSIONER LETZ: Okay. That being said, why 21 don't we go to all the parties that we're still talking to 22 and say, "We have 2,153,640; give us your best plan for that 23 amount of money, all fees, everything included." 24 MR. LOONEY: You're reading my mind, because that's 25 what we're doing. That's in the process that we're -- 11-3-10 wk 27 1 COMMISSIONER BALDWIN: You're reading his mind. 2 MR. LOONEY: Yeah. And that process, though, it's 3 not just the County's contribution number. You know, it's 4 the county contribution plus the employee contribution. 5 COMMISSIONER LETZ: Right. 6 MR. LOONEY: So, one of the things that you asked 7 was whether or not we could just eliminate dependent coverage 8 completely, so I took that to counsel just to be sure, and 9 yes, you can do it. But you have to offer the employee the 10 dependent COBRA coverage at that point, which is an extension 11 of 36 months. They would have to pay the premium, but -- but 12 that individual -- those individuals would still stay on the 13 plan. And under COBRA, the individual person that's 14 receiving benefits is not responsible for the premium. 15 Anyone can pay that premium for him. So, trust me, if 16 there's a -- a claimant out there that needs service, 17 whoever's providing that service will find a way to pay that 18 premium. 19 MS. HYDE: Gary, also keep in mind that we pay 65 20 percent and they pay 35, depending on their status. 21 COMMISSIONER LETZ: So, let me make sure I 22 understand what you just said. It sounds crooked to me, but 23 I guess it's probably -- so you're telling me that if there's 24 a -- someone's on COBRA -- dependent's on COBRA, and their 25 premium's $1,000 a month, -- 11-3-10 wk 28 1 MR. LOONEY: Right. 2 COMMISSIONER LETZ: -- and they're going through 3 regular treatment at Sid Peterson -- 4 MR. LOONEY: Right. 5 COMMISSIONER LETZ: I probably shouldn't use them. 6 MR. LOONEY: That's a good example. 7 COMMISSIONER LETZ: Sid Peterson. That Sid 8 Peterson could give that employee $1,000, or just pay it 9 direct -- 10 MR. LOONEY: Pay it direct. 11 MS. HYDE: Pay it direct. 12 COMMISSIONER LETZ: -- to keep them under the 13 insurance going forward? 14 MS. HYDE: Yes. 15 MR. LOONEY: Keep them on the insurance plan. 16 COMMISSIONER LETZ: I just want to make sure I 17 understood what goes on in this business. 18 MR. LOONEY: There are a number of agents -- a 19 number of circumstances that we see where church-affiliated 20 groups will actually pay premiums for people. The Methodist 21 foundation -- Methodist Hospital Foundation, they -- you make 22 application to them for them to make COBRA premiums on your 23 behalf. Many times those are accepted. 24 COMMISSIONER LETZ: Okay. 25 MR. LOONEY: So there are a number of those 11-3-10 wk 29 1 locations that do that. Now, you know, I know there are a 2 number of employees behind me, so if any of them are armed -- 3 (Laughter.) 4 COMMISSIONER WILLIAMS: Three or four. 5 MR. LOONEY: Y'all can see them; I can't, so if the 6 Sheriff starts drawing his gun, would y'all please... But 7 there is a -- in the corporate world, out there in the 8 corporate world, when you measure what a corporation pays 9 toward their employee benefits program, quite often they do 10 it on the basis of what the corporation pays in relationship 11 to the total cost of the plan. So, when you measure that 12 total premium allocation against the employee and the 13 dependent coverage, many of those corporate entities will 14 only pay for the employee premium. They pay the employee 15 premium only, and then whatever additional costs are 16 attributable to the plan for dependents, the dependents pay 17 that portion of the plan. All employees are covered. 18 Dependents are at the option of the employee. Right now, 19 that would constitute close to a 50 percent contribution by 20 the County, 50 coming from the employee. Except in -- 21 don't -- don't stick with that number. But right now, 22 basically, you all are paying about 80 percent -- 82 percent 23 of the total cost of the plan, so you're subsidizing the 24 employee/dependent cost. 25 So, that number is also a number that we're looking 11-3-10 wk 30 1 at very closely, because there's not going to be any way for 2 us to meet the 2.1 million on the current plan. We know 3 that, so we're already making plan design changes, including 4 increasing deductibles, increasing co-pays, restricting the 5 prescription drug program to a tighter formulary. There's a 6 number of those items that we're looking at having to change. 7 We're also looking at the probability of having to freeze the 8 H.R.A. contribution at this point. Have to -- potentially 9 have to freeze that -- that number that we use every year to 10 reimburse the deductible, which is up to $600 in some cases. 11 COMMISSIONER LETZ: When you say "freeze," you mean 12 not have any? 13 MR. LOONEY: Not have any payments coming out of 14 that. 15 COMMISSIONER LETZ: And you just keep your account? 16 MR. LOONEY: Keep your account. 17 COMMISSIONER LETZ: It can be used, but there's no 18 new money -- there's no new H.R.A. for the year? 19 MR. LOONEY: Talking about making no payments out 20 of that account at all until such time as we start the 21 recovery process on the claims process. As an equation, we 22 talked about the possibility of charging the employee $50 or 23 $55 a month for their coverage. That equates to about 24 $180,000 a year. Freezing the H.R.A. plan equates to 25 approximately $180,000 a year, so we're almost trading, okay, 11-3-10 wk 31 1 no employee contribution for the freeze of the H.R.A. plan. 2 So -- 3 COMMISSIONER BALDWIN: Go ahead and pull your gun 4 out now. 5 SHERIFF HIERHOLZER: Okay. (Laughter.) 6 MR. LOONEY: Yeah. It's -- it's not -- it's not 7 going to be -- the numbers that we've been able -- or been 8 projecting with the 250, 250, 400, everything, those numbers 9 are going to have to go up to meet that budget restriction of 10 the $2.1 million. 11 JUDGE TINLEY: Well, the fully-insured plan, 12 however, we don't get into this factor on subsidizing claims 13 on employee dependents. 14 MR. LOONEY: It's -- 15 JUDGE TINLEY: That's out of the equation. 16 MR. LOONEY: Pure premium. We're talking about 17 pure premium right now. What we're trying to do with the -- 18 the fully-insured people that are -- that are offering -- 19 there's three items that we've asked them to be certain that 20 they clarify for us. One of them is an actively-at-work 21 provision. Actively-at-work provision means that if an 22 employee is not on the job as of the date -- the effective 23 date of the contract, they don't accept any responsibility 24 for that individual until such time as they return to active 25 employment. We want that waived. We want that waived. We 11-3-10 wk 32 1 want -- if they're going to take over the plan, we want them 2 to be effective on all employees as of the anniversary date 3 of the contract, which does not leave us with any incurred 4 claims that would be incurred after the effective date that 5 wouldn't be covered either by the previous carrier or the 6 current carrier. So, we don't want that gap in coverage. 7 We also want a no-loss, no-gain process, which is 8 pretty well done at this point. The actively-at-work applies 9 not only to employees. We want to make certain that it 10 doesn't apply to dependents also, because in some contracts 11 it says that a dependent is not considered actively at work 12 if they're unable to perform the duties of a person that is 13 similarly situated in their status. So, if you're unable to 14 be a housewife, if you're somehow disabled and not able to 15 perform the duties, you -- of that process, then they 16 consider that person not actively at work. That's why we're 17 making certain that we don't have that gap in coverage. 18 COMMISSIONER LETZ: Gary, can you put down, I 19 guess, a list of all of the nonnegotiable points that we're 20 putting out? I say nonnegotiable, such as the things you're 21 just going over right now, so that we can kind of look at, 22 you know, what is off of the table from a negotiation 23 standpoint, and then kind of what is -- you know, what is -- 24 where the negotiations can be. 25 MR. LOONEY: I've got kind of a standard checklist 11-3-10 wk 33 1 that I use; it's about four pages long. The print is similar 2 to this. I'll be glad to send it to you to show you the 3 items that -- I'll outline the items in red that we -- 4 COMMISSIONER LETZ: That we -- that you're judging 5 the plans on, so we can at least be aware of that? 6 MR. LOONEY: Right. 7 COMMISSIONER LETZ: I'd appreciate that. 8 MR. LOONEY: Yeah. You're -- you know, you're 9 going into training now to be an agent. So -- 10 COMMISSIONER LETZ: I'm not going there. 11 MR. LOONEY: -- you're starting to read my mind, 12 and so now you're asking for this stuff, so -- 13 COMMISSIONER LETZ: That's scary. 14 JUDGE TINLEY: In your next life, Jon. 15 COMMISSIONER LETZ: Yeah, it'll be the next life 16 before I go into that. 17 COMMISSIONER OEHLER: Couple of next lives. 18 MR. LOONEY: I can promise you, in this 19 environment, you don't want to be standing here making these 20 presentations. I promise. 21 COMMISSIONER LETZ: That would just be -- you know, 22 I think -- 23 JUDGE TINLEY: Let's talk about timelines. 24 MR. LOONEY: I would like for y'all to, if you 25 could, have a called session for the 15th of the month. I'm 11-3-10 wk 34 1 putting that as a deadline for all proposals, all projects, 2 everything to be done. That's a Monday. If -- if you could 3 have a special meeting that day, I'd appreciate it, because 4 my travel schedules and time schedules don't allow me to be 5 here at your ordinary court date. 6 COMMISSIONER WILLIAMS: Gary, is the Entrust 7 proposal your only one we're going to vet, or are there going 8 to be others? 9 MR. LOONEY: Say again? 10 COMMISSIONER WILLIAMS: Are we going to vet any 11 other proposals, or just the Entrust one? 12 JUDGE TINLEY: Talking about today? 13 COMMISSIONER WILLIAMS: Any time. 14 COMMISSIONER LETZ: Today. 15 COMMISSIONER OEHLER: Could you do it on the 16th 16 rather than the 15th? 17 MR. LOONEY: I've got to be teaching a class in San 18 Diego on the 16th. 19 COMMISSIONER WILLIAMS: That's pretty tough duty. 20 MR. LOONEY: We can meet in San Diego if you like. 21 My problem with the Entrust quote, obviously, one is the 22 cover sheet says, "Don't consider talking to your consultant 23 about this. We want to deal directly with the county." The 24 other is, basically, they just did not follow the RFP 25 requirements. They didn't answer any of the questions. No 11-3-10 wk 35 1 questionnaires have been completed. There's no -- counselor, 2 you know, I think you've -- I don't know if you reviewed that 3 process or not. So that -- 4 JUDGE TINLEY: What's the -- what's the members of 5 the Court's position on -- 6 COMMISSIONER BALDWIN: Yes. 7 JUDGE TINLEY: -- the 15th? 8 COMMISSIONER BALDWIN: Yes. 9 COMMISSIONER WILLIAMS: 15th? 10 JUDGE TINLEY: Yeah, morning of the 15th. 11 COMMISSIONER WILLIAMS: Tell you in a second. 12 COMMISSIONER LETZ: That's fine. 13 JUDGE TINLEY: Okay. 9 o'clock? That work for 14 you? 15 MR. LOONEY: Yes, sir. 16 JUDGE TINLEY: 9 o'clock on the 15th. At that 17 particular time, -- 18 COMMISSIONER WILLIAMS: Yeah, that's good. 19 JUDGE TINLEY: -- you'll have everything in from 20 the proposers on -- I guess I'm going to call it initial 21 final pricing? 22 MR. LOONEY: They should have all the final -- we 23 should have all the final pricing at that time. 24 COMMISSIONER BALDWIN: You'll be ready to make a 25 recommendation? 11-3-10 wk 36 1 MR. LOONEY: I will be able to make the 2 recommendation on the 15th. I will make a recommendation on 3 the -- on the 15th. 4 JUDGE TINLEY: Will there be the opportunity or the 5 possibility of further negotiation after that date? 6 MR. LOONEY: Yes, very much so. We can, depending 7 on the Court's status at that time. If you wish to negotiate 8 with -- something specifically at that time, yes. 9 COMMISSIONER LETZ: The -- 10 COMMISSIONER OEHLER: Can you make a recommendation 11 that we can negotiate a different -- 12 MR. LOONEY: Actually -- 13 COMMISSIONER OEHLER: -- modified version of 14 something to get our cost in line with what we have? 15 MR. LOONEY: Under the -- the bid rules for the 16 county, I don't know. The specification says that when I 17 make my recommendation as to number one, that the Court then 18 at that point has the ability to negotiate with the 19 number-one selection, and if they're not able to accomplish 20 what they want with number one, then they can move to number 21 two. 22 COMMISSIONER OEHLER: Okay. 23 COMMISSIONER WILLIAMS: Okay. 24 COMMISSIONER BALDWIN: But not number three? 25 MR. LOONEY: Keep on going. Go on down. 11-3-10 wk 37 1 COMMISSIONER BALDWIN: Can we skip number two, 2 though, and negotiate with number three? 3 MR. LOONEY: No. 4 COMMISSIONER WILLIAMS: Can't do that. 5 COMMISSIONER LETZ: Gary, you made a statement that 6 Entrust doesn't want to work with you or through you, which 7 is troubling, but anyway, it's neither here nor there at this 8 point. I guess at some point, I'm -- this is really more for 9 the Court; not to you, Gary. Do we want Entrust to present 10 their plan to us at about the same time? I mean, I don't 11 know that -- you know, it's -- if they're not going to use 12 you, -- 13 MR. LOONEY: Well, if I -- 14 COMMISSIONER LETZ: -- someone's got to present 15 what they're saying. 16 MR. LOONEY: Commissioner, if you want to do that, 17 I would suggest that you go ahead and do it well in advance, 18 so that whatever they present to you, then when I make my 19 representation, -- 20 COMMISSIONER LETZ: We can -- 21 MR. LOONEY: -- I can put their information into 22 the process too. They don't want -- 23 COMMISSIONER LETZ: If they don't want to, then 24 they don't want to. 25 COMMISSIONER BALDWIN: I think that we need -- I 11-3-10 wk 38 1 mean, I -- personally, I want to give them the opportunity to 2 rebut the issues that were put on the table this morning, 3 because I want to know. 4 COMMISSIONER LETZ: Right. The other question, on 5 the other -- I keep forgetting the other -- 6 MS. HYDE: T.C.G. 7 COMMISSIONER LETZ: T.C.G. They just are out for 8 this year? Or are they still -- they're out? 9 MS. HYDE: They're out. 10 COMMISSIONER LETZ: Okay. 11 MR. HENNEKE: Well, Commissioners, I would suggest, 12 too, that the -- you know, the rebuttal first be in writing, 13 and there is a dialogue that's been going back and forth that 14 Ms. Hyde said that she was going to share with the Court. I 15 think there's some straightforward questions that will be 16 answered, and if there's need for follow-up. But that's the 17 best way to make sure that we're on the same page, is to be 18 on a page. 19 MS. HYDE: I don't think I was clear, but I had -- 20 our County Attorney was involved every step of the way, so 21 that I'm not asking incorrect or inaccurate or I'm breaking 22 the law. 23 MR. LOONEY: And in the same vein, you may have 24 people that are offering the fully-insured plan, and other 25 people that are offering their plan. If you give Entrust an 11-3-10 wk 39 1 opportunity to present to the Court, in fairness, I think you 2 should allow them -- even though I'm putting their numbers on 3 the spreadsheet, if you're going to listen to Entrust, I 4 think you should listen to the other two to three bidders. 5 COMMISSIONER LETZ: I'd actually like that. 6 Personally, I'd like that. I mean, I want your evaluation, 7 but hearing from them certainly isn't going to be a bad 8 thing, in my mind. 9 COMMISSIONER BALDWIN: It's not a bad thing. I was 10 just thinking in terms of they're the ones that got whacked 11 on pretty good this morning. Nobody else did. 12 MR. LOONEY: Well, they didn't give -- they got 13 whacked on publicly because you asked Eva to do the review. 14 COMMISSIONER BALDWIN: That's exactly right. 15 MR. LOONEY: I've whacked on these others pretty 16 heavily myself, but not in public. 17 COMMISSIONER BALDWIN: And as far as the -- doing 18 it in writing, that's exactly the reason I wanted to get her 19 list of concerns to them. Not -- not just us, but to them, 20 so that -- so that they can be prepared to answer the -- 21 answer it. 22 MR. HENNEKE: That makes sense. I agree. 23 COMMISSIONER BALDWIN: Okay. 24 JUDGE TINLEY: If we're going to have each of these 25 proposers to make personal presentation to the Court ahead of 11-3-10 wk 40 1 the November 15 meeting, -- 2 COMMISSIONER OEHLER: Got to be pretty soon. 3 JUDGE TINLEY: -- it's going to be pretty tight. 4 Number one, they've got to incorporate all these numbers from 5 these -- these 10 months claims information and the case 6 management, the major claims and so forth. 7 MR. LOONEY: I'm pushing them really hard to get 8 everything so that I can get it on paper before the 15th. 9 COMMISSIONER LETZ: I guess the other option is we 10 can contact them, see if they have any interest in making a 11 presentation to the Court. And they all may say, "No, we 12 don't." 13 JUDGE TINLEY: The -- you know, they made a 14 presentation by virtue of the proposals they've submitted, in 15 essence. Now, the final pricing, of course, is going to -- 16 is going to be refined as result of -- of -- 17 MR. LOONEY: My recommendation. 18 JUDGE TINLEY: -- this claims information, and 19 maybe some -- some ensuing negotiations as a result of that. 20 But that's basically going to change some bottom line figures 21 for the most part, and not a whole lot else. 22 COMMISSIONER LETZ: I guess I look at it as the 23 fully-insured plan is a big difference -- 24 MR. LOONEY: Right. 25 COMMISSIONER LETZ: -- from what we've had. And 11-3-10 wk 41 1 that's what I'm kind of -- what I'm thinking of the others. 2 That's the -- the others, I wouldn't want to give all of them 3 the opportunity to discuss it, but a fully-insured plan is 4 very different than we've done as long as I've been a 5 Commissioner. So, I think that's -- that is a different way 6 of doing or handling our insurance; that, you know, I'd be 7 interested to know the pros and cons of doing that. 8 MR. LOONEY: Okay. 9 COMMISSIONER LETZ: And from them, and from you as 10 a recommendation. Because, you know, I guess I look at going 11 forward where we are -- where we are now. We need to figure 12 out how to -- if -- you know, if there's a way to keep a -- 13 kind of level the playing field a little bit on insurance, 14 whether it's a way for to us try to -- a goal to get into a 15 bigger pool, do a risk pool, you know, join with the city. I 16 mean, there's got to be alternatives out there that are going 17 to help us, because we can't afford this again. 18 MR. LOONEY: Well, one of the -- one of the things 19 that's going to be an impact from this federal legislative 20 process is that there -- you're going to see more combining. 21 You're going to see more pooling in the whole area. 22 COMMISSIONER LETZ: There's a number of entities in 23 Kerrville that we could combine with, seems to me. You have 24 the hospital, you have the big employers, you have the city. 25 And I think -- and you go into various associations, TAC, and 11-3-10 wk 42 1 there's lots -- there's others. You know, there's -- we've 2 never -- I don't even know if they do it, but was it NACO? I 3 think -- 4 COMMISSIONER WILLIAMS: NACO. 5 COMMISSIONER LETZ: You know, there may be an 6 option there. I mean, I think we need to really look at how 7 we're doing our insurance. 8 MR. LOONEY: We try to canvass the market as 9 completely as possible any time we do an RFP. But, again, if 10 you change carriers on a frequent basis, you're going to lose 11 contact with -- the markets are not going to participate. 12 COMMISSIONER LETZ: Right. 13 MR. LOONEY: That's one of the things that TAC 14 said. But on the other side of it, you know, our T.P.A. -- 15 again, we fixed their numbers for the three-year period, so 16 that fixed cost portion of it is not a number that we have to 17 deal with on an annual basis. 18 COMMISSIONER LETZ: That's why I'd be interested, 19 you know -- 20 COMMISSIONER OEHLER: I think we're running out of 21 time, is one of our problems. 22 COMMISSIONER WILLIAMS: That's the problem. 23 COMMISSIONER OEHLER: They've all -- we've asked 24 for specific things to be bid by these companies, and they 25 made their bids, and now they're going to make their final -- 11-3-10 wk 43 1 seems to me like what they can do and what they're not going 2 to do. 3 COMMISSIONER BALDWIN: No, I agree. The way I see 4 it is that all those other companies, Looney is -- has his 5 hand on them. He's dealing with them every day, and 6 questions and answers back and forth, squeezing them for 7 everything he can. But he's not doing that with Entrust. 8 Entrust is the only one that's outside of his deal. And I 9 think they're the only ones that I think that needs to come 10 in here and -- and have the rebut time. Just my opinion. 11 JUDGE TINLEY: Commissioner, if they're provided 12 with a written itemization of what the concerns or problems 13 that we perceive, and they have a problem to respond in 14 writing, would that not be an appropriate rebuttal? Give 15 them an opportunity to rebut? 16 COMMISSIONER BALDWIN: No, sir. I want them to 17 stand right there answering the questions, looking us in the 18 eye. And I don't -- I can't -- I cannot imagine why you 19 wouldn't want that. 20 COMMISSIONER OEHLER: In my mind, it's kind of like 21 giving preferential treatment to one bidder who refuses to 22 follow the plan. 23 COMMISSIONER WILLIAMS: Yeah. 24 COMMISSIONER OEHLER: That's just that's the way I 25 see it. 11-3-10 wk 44 1 COMMISSIONER BALDWIN: Okay. 2 COMMISSIONER OEHLER: They've all been given the 3 same thing to bid, and we have one that doesn't want to 4 cooperate with that and wants to try to, I think, pull the 5 wool over our eyes. And I don't know anything about Entrust. 6 Don't have a clue about them. Don't have any tie or 7 whatever, but why wouldn't you bid what was requested and 8 then go through the proper procedures? 9 COMMISSIONER BALDWIN: That's a good question. 10 That's why I would like for them to answer that question. 11 COMMISSIONER OEHLER: Yeah. Maybe we could send 12 that to them in writing. But I'm not sure that any of us -- 13 COMMISSIONER BALDWIN: I think maybe the answer is 14 just to receive a letter from them. I mean, whatever. 15 Something. 16 COMMISSIONER OEHLER: I'm not sure that the five of 17 us have the expertise to sit here and -- and decide whether 18 their plan is good or not. 19 COMMISSIONER WILLIAMS: We do not. 20 JUDGE TINLEY: I think we came to that conclusion a 21 long time ago, and that's why this gentleman is on the 22 payroll. 23 COMMISSIONER OEHLER: I mean, it's kind of like, 24 well, you know, they have this little clause in the bottom, 25 or anybody could do it, you know, in a plan -- 11-3-10 wk 45 1 COMMISSIONER WILLIAMS: Sure. 2 COMMISSIONER OEHLER: -- that was outside of what 3 the -- what the written request was for proposals, and say, 4 "Oh, no, you just changed the whole deal here"; all of a 5 sudden we got the fine print at the bottom. They say, "Well, 6 you're going to pay. We're not going to pay that claim, 7 'cause it was..." -- you know, for some unknown reason. 8 COMMISSIONER LETZ: I guess my difference a little 9 bit is, Commissioner, is that Entrust is -- from what Eva 10 said, gave us a proposal that's very different; it's outside 11 the box, and that's what I like about discussing it with 12 them, because I think that we're going to have to start doing 13 things differently. I mean, we obviously can't afford to 14 continue business as usual. And they're -- they're a company 15 that, from what the proposal -- you know, are looking at 16 things a little bit differently. A month-to-month 17 deductible, you know, I look at that. I look at the dollars. 18 COMMISSIONER OEHLER: Yeah. 19 COMMISSIONER LETZ: The thing that bothers me with 20 Entrust is they're not -- they're not meeting our budget 21 numbers, and that's my big concern. If they came in with a 22 number that was at 2 million with some of those things, I'd 23 be a whole lot more interested in them, to be honest. But I 24 do like the fact they're looking at things in a different 25 light. 11-3-10 wk 46 1 COMMISSIONER OEHLER: But how do you do that? How 2 do you -- how do you put out a specification and then, all of 3 a sudden after you receive all that, you decide to change the 4 rules and allow somebody else to bid something different? 5 COMMISSIONER LETZ: Well, I think it's -- that's -- 6 I guess the reason is they're with a -- they're like going to 7 the government Buy Board, which is what they are, basically. 8 They've already, for better -- or good or bad, they've gone 9 around the system, and you can negotiate with them one-on-one 10 without going for an RFQ or RFP. 11 COMMISSIONER OEHLER: That's my question. I just 12 want to know if it's legal to do that, or whether we are 13 blowing our own foot off on this thing, trying -- you know, 14 going outside of what we asked for, and asked the consultant 15 and our H.R. person to put together a package to bid. 16 COMMISSIONER LETZ: I mean, to me, the first number 17 that I look at is who's going to be below that number, within 18 2,153,640? You know, you got to be below there first. Then 19 you start talking with them. 20 MR. LOONEY: Regardless of what the plan is and 21 stop loss carrier or anything else, you still got that -- 22 that maximum number to look at. Entrust and all the rest of 23 them, I want to see what's the best deal you can give us 24 below that number. 25 JUDGE TINLEY: Commissioner, you say that the 11-3-10 wk 47 1 cooperative is exempt, somewhat like the Buy Board. I've not 2 -- I'm not satisfied that that, in fact, is the case. I 3 understand there's a cooperative. I can form a cooperative 4 before the sun goes down today, but that doesn't make me 5 exempt from anything. 6 COMMISSIONER LETZ: Well, that's what I -- 7 JUDGE TINLEY: They assert that. Certainly, the 8 Buy Board is recognized, and that's state-recognized. You 9 got state contracts. But merely because there's a 10 cooperative and they assert that, I have not accepted that at 11 face value. I don't know that they're -- that they have 12 any right to operate under any rules other than what 13 everybody else has to operate under. 14 COMMISSIONER LETZ: That's why I -- 15 JUDGE TINLEY: I just don't know. 16 COMMISSIONER LETZ: That's why early in my -- 17 today's meeting, I referred that to the County Attorney to 18 give us an answer on that very point. 19 COMMISSIONER OEHLER: I agree with that. I think 20 that'll be a good challenge for him. 21 COMMISSIONER LETZ: He can do that driving back and 22 forth to Austin. 23 MR. LOONEY: Did you get that, counselor? 24 MR. HENNEKE: She's writing it down. (Laughter.) 25 COMMISSIONER OEHLER: I just don't -- I want to 11-3-10 wk 48 1 make real sure that we don't -- we don't violate the bidding 2 practices of what we're doing here. 3 COMMISSIONER LETZ: I agree. That's probably 4 number one on my list. Number two is the number. 5 COMMISSIONER OEHLER: Yeah. That's not -- I go in 6 that order. 7 JUDGE TINLEY: Anything else you got for us this 8 morning, Mr. Looney? 9 MR. LOONEY: Well, I assume I'm protected -- oh, 10 the Sheriff is still there. 11 COMMISSIONER OEHLER: Rusty hasn't pulled his pants 12 leg up to get it out of his boot yet. 13 MR. LOONEY: I'm going to get you on the budget 14 number. It's just, you know, what it's going to look like 15 after that. 16 COMMISSIONER LETZ: Well, that's where we need to 17 make a decision. I mean, and try to -- it's difficult, 18 'cause there's so many different moving parts. If you tweak 19 one here, it changes something there. 20 MR. LOONEY: Right. 21 COMMISSIONER LETZ: And that's -- that's the hard 22 part. I mean, you know, but that's a call that we're going 23 to have to make, 'cause that is the budget. 24 COMMISSIONER OEHLER: Well, and all of it is 25 relative, because, you know, having -- having the mix of 11-3-10 wk 49 1 employees, dependents, and families, and what you do with 2 that, whether you eliminate it, whether you pay the COBRA, 3 you know, how much dependents will have to kick in, it all 4 factors into the bottom line to what kind of coverage you're 5 going to get and what it's going to look like. 6 MR. LOONEY: Yeah. 7 COMMISSIONER LETZ: Do you need any more -- on that 8 point, any direction from the Court as to what -- where -- 9 MR. LOONEY: I'm almost afraid to ask. I think 10 that -- I think that's -- Commissioner, you're going to have 11 to leave that up to me, where we're doing the tweaking. 12 COMMISSIONER LETZ: Okay. 13 COMMISSIONER BALDWIN: As far as us having 14 knowledge of, understanding, all these things, I was on this 15 Court when we bought our first computer, and these folks are 16 coming through here by the -- I swear they were chartering 17 buses to get into here to sell us computers. What did we do? 18 We had to take the word of a salesman, because nobody knew. 19 So, we stumbled around. I mean, it was a zoo. It was a 20 circus for several years. We don't want to do that. 21 COMMISSIONER OEHLER: I do believe that a 22 consultant that's working for us has merit over -- you know, 23 if we were buying -- if we were buying a bulldozer or a 24 loader, I can really weigh in on it maybe a little more than 25 some. But, you know, when you talk about health insurance, 11-3-10 wk 50 1 you know, it's got to be pretty simple. 2 JUDGE TINLEY: When it gets beyond that, it's a 3 little out of your league? 4 COMMISSIONER OEHLER: Little out of my league. 5 JUDGE TINLEY: Anything else for us, Ms. Hyde? 6 MS. HYDE: Would you like for me to go ahead and 7 y'all take a 10-minute break and let me make you a copy of 8 this so that -- the County Attorney has already reviewed it, 9 and see if there's any questions, anything else you would 10 like for me to ask Entrust? 11 JUDGE TINLEY: I think what you covered this 12 morning, if I understand correctly, is the grocery list 13 that -- that is going to be submitted and itemized. 14 COMMISSIONER BALDWIN: Yes, sir, that's correct. 15 JUDGE TINLEY: So I don't think we need to take a 16 break for that purpose. 17 COMMISSIONER BALDWIN: Yeah, I don't either. 18 MR. LOONEY: Judge, Commissioners, thank you very 19 much. 20 COMMISSIONER WILLIAMS: Thank you. 21 COMMISSIONER BALDWIN: Thank you. 22 JUDGE TINLEY: Thank you. Anything else at this 23 time in connection with the workshop agenda item? We'll be 24 adjourned. 25 (Commissioners Court workshop adjourned at 10:10 a.m.) - - - - - - - - - - 11-3-10 wk 51 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 official reporter for the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 4th day of November, 8 2010. 9 10 JANNETT PIEPER, Kerr County Clerk 11 BY: _________________________________ Kathy Banik, Deputy County Clerk 12 Certified Shorthand Reporter 13 14 15 16 17 18 19 20 21 22 23 24 25 11-3-10 wk