Self-Funded Insurance Committee

CITY OF HENDERSON SELF-FUNDED INSURANCE COMMITTEE MEETING MINUTES Wednesday, September 21, 2022 I. CALL TO ORDER Chair Jim McIntosh called the City of Henderson Self-Funded Insurance Committee meeting to order at 1:02 p.m., in the Green Valley Training Room, City Hall 2nd Floor, 240 Water Street, Henderson, Nevada 89015. II. CONFIRMATION OF POSTING AND ROLL CALL Courtney Redsull, Employee Benefits Manager, confirmed the Self-Funded Insurance Committee meeting had been noticed in compliance with the Nevada Open Meeting Law. PRESENT: Chair Jim McIntosh Gary Hargis Christopher Aguiar Nick McLemore Brooke Stream ABSENT: Bret Hyde JJ Moyes (Excused) Daniel Pentkowski (Excused) ALTERNATES: Michael Charlton Carlos McDade Michael Page Shawn Thibeault ABSENT: Maria Gamboa (Excused) Charles Hedrick (Excused) STAFF: Kristina Gilmore, Assistant City Attorney III Courtney Redsull, Employee Benefits Manager Bre Beaumier, Employee Benefits Coordinator Michelle Reese, Deputy City Clerk GUESTS: Shawn Adkins, Gallagher Benefit Services Russell Garrett, HealthSCOPE Benefits Jonathan Glos, IngenioRx (via videoconference) Gabrielle Ruelas, IngenioRx (via videoconference) Self-Funded Insurance Committee Meeting Page 2 of 7 Wednesday, September 21, 2022 - Minutes III. PUBLIC COMMENT There were no public comments presented. IV. ACCEPTANCE OF AGENDA (For Possible Action) (Motion) Christopher Aguiar introduced a motion to accept the agenda, as presented. The vote favoring approval was unanimous. Chair Jim McIntosh declared the motion carried. V. NEW BUSINESS 1 MINUTES SELF-FUNDED HEALTH INSURANCE COMMITTEE AUGUST 17, 2022 FINANCE DEPARTMENT Self-Funded Health Insurance Committee minutes of August 17, 2022. (Motion) Gary Hargis introduced a motion to approve the Self-Funded Health Insurance Committee minutes of August 17, 2022, as presented. The vote favoring approval was unanimous. Chair Jim McIntosh declared the motion carried. 2 CARELON RX SPECIALTY PHARMACY COST RELIEF PROGRAM FINANCE DEPARTMENT Discuss Carelon RX specialty pharmacy cost relief program for consideration of implementation at an estimated savings to the City Self-Funded Health Plan of $271,617.00 annually. Implementation of this program would necessitate a plan design overlay such that specialty medications that have coverage under this program would have a different member cost share on both the Preferred Provider Organization (PPO) plan and the Consumer Driven Health Plan (CDHP) as identified below:  Specialty Preferred – 30 percent member co-insurance.  Specialty Non-Preferred – 45 percent member co-insurance.  All specialty medications covered under this program would be eligible for manufacturer coupon that would bring the cost of these medications down to $0 cost share on the PPO plan and $5.00 member cost share on the CDHP for members that enroll in the specialty pharmacy cost relief program. Self-Funded Insurance Committee Meeting Page 3 of 7 Wednesday, September 21, 2022 - Minutes Specialty medications that are not covered under the specialty cost relief program would have the normal PPO and CDHP cost share. (Minutes/Discussion) Jonathan Glos and Gabrielle Ruelas, with IngenioRx, presented a PowerPoint presentation via Microsoft Teams discussing the Carelon RX specialty pharmacy cost relief program and the cost savings they could offer the City. Shawn Adkins, Gallagher Benefit Services; and Courtney Redsull, Employee Benefits Manager, gave examples of how members currently get discounts and how the Plan could also benefit from manufacturer coupons. Responding to an inquiry from Ms. Redsull regarding how first-time users would find the program, Mr. Glos explained the process by which the participant is notified, and different ways members are contacted once a prescription is written. A discussion ensued regarding how this change would affect the Plan’s current users, different methods of contacting newly eligible members to ensure maximum enrollment in the program, and consequences if a member were to decline enrollment. Mr. Glos stated that while the plan currently would only apply to 39 members, the potential savings would be approximately $271,617.00 per year. He stated recent trends have seen specialty pharmacy costs increase year over year which would translate into an increase in savings. (Motion) Gary Hargis introduced a motion to approve implementation of the Carelon RX specialty pharmacy cost relief program, and direct Committee staff to implement the program effective January 1, 2023, at an estimated annual cost savings to the City Self-Funded Health Plan of $271,617.00. The vote favoring approval was unanimous. Chair Jim McIntosh declared the motion carried. Self-Funded Insurance Committee Meeting Page 4 of 7 Wednesday, September 21, 2022 - Minutes 3 PLAN YEAR 2023 UPDATED SELF-FUNDED HEALTH PLAN RENEWAL REPORT AND FUNDING RATES FINANCE DEPARTMENT On August 17, 2022, the Self-Funded Health Insurance Committee voted to adopt a new funding model to increase funding to medical, prescription drug, Delta Dental, Sierra Healthcare Options dental, life insurance, long-term disability, and employee assistance program plans to account for projected shortfalls in the funding of these benefits. The approved funding model increased funding by an estimated 5.9 percent overall, or $1,115,751.00 for active employees in Plan Year 2023, and retiree and COBRA participant premiums would increase to new actuarial values of these benefits in Plan Year 2023. The Committee must now review an updated Plan Year 2023 Self- Funded Health Plan renewal report that includes changes to the estimated projected funding rate requirements for Plan Year 2023, and direct staff to implement the funding rate model selected by the Committee. Funding rate model options include: Option 1 - Retain current funding model for medical/prescription drug, dental, and vision rates for active employees, COBRA participants, and retirees, and absorb any anticipated funding shortage through plan reserves. Option 2 - Adjust the funding model to increase medical/prescription drug funding to account for projected shortfalls in the funding of these plans. This option will increase medical/prescription drug funding by an estimated 4.3 percent, or $733,245.00 (active employees), in Plan Year 2023. The monthly premium of retiree and COBRA participants would reflect the actuarial value of the cost of coverage as identified on page 3 of the updated Plan Year 2023 Self-Funded Health Plan renewal report. Option 3 - Adjust the funding model to increase dental funding in both the Delta Dental and Sierra Healthcare Options (SHO) dental plans to account for projected shortfalls in the funding of the dental plans. This option will increase dental funding by an estimated 12.6 percent, or $133,799.00 (active employees), in Plan Year 2023. The monthly premium of retiree and COBRA participants would reflect the actuarial value of the cost of coverage as identified on page 3 of the updated Plan Year 2023 Self-Funded Health Plan renewal report. Self-Funded Insurance Committee Meeting Page 5 of 7 Wednesday, September 21, 2022 - Minutes Option 4 - Adjust the funding model to increase funding for other benefits (life insurance, long-term disability, and employee assistance program) to account for projected shortfalls in the funding of these benefits. This option will increase funding for these benefits by an estimated 3.1 percent, or $16,032.00 (active employees), in Plan Year 2023. The monthly premium of retiree and COBRA participants would reflect the actual cost of monthly premium for applicable benefits as identified on page 3 of the updated Plan Year 2023 Self-Funded Health Plan renewal report. Option 5 - Adopt the medical/prescription drug, dental, and other benefit funding model increases listed above, and adjust the funding model to increase funding by an estimated 4.65 percent, or $883,076.00 (active employees), in Plan Year 2023. The monthly premium of retiree and COBRA participants would reflect the actuarial value of the cost of coverage as identified on page 3 of the updated Plan Year 2023 Self-Funded Health Plan renewal report. Option 6 - Retain current funding model for medical/prescription drug, dental, and vision rates for active employees for Plan Year 2023. The monthly premium of retiree and COBRA participants would increase to reflect the actuarial value of the cost of coverage as identified on page 3 of the updated Plan Year 2023 Self-Funded Health Plan renewal report. Option 7 - Any additional funding model the Committee may suggest, consider, and approve. (Minutes/Discussion) Courtney Redsull, Employee Benefits Manager, provided a history of this item and recent updates. Shawn Adkins, Gallagher Benefit Services, presented a summary of the Plan Year 2023 Self-Funded Health Plan Updated Renewal Report and discussed the estimated projected funding rate requirements and possible modifications to the medical and dental plan funding. Ms. Redsull stated that historically, when facing similar shortage amounts, the Committee has elected to do a rate pass and leave the rate the same as previous years. A discussion ensued regarding how the different options affect retirees, the balance of the funding reserves, cost projections, and past decisions. Self-Funded Insurance Committee Meeting Page 6 of 7 Wednesday, September 21, 2022 - Minutes (Motion) Michael Charlton introduced a motion to approve and direct staff to implement the funding model outlined in Option 1: Retain current funding model for medical/prescription drug, dental, and vision rates for active employees, COBRA participants, and retirees, and absorb any anticipated funding shortage through plan reserves. The vote favoring approval was unanimous. Chair Jim McIntosh declared the motion carried. 4 SELF-FUNDED HEALTH PLAN ACTIVE EMPLOYEE MONTHLY PREMIUM RATES FOR PLAN YEAR 2023 FINANCE DEPARTMENT Discuss active employee monthly premium rate tier structure recommendation from the updated Plan Year 2023 Self-Funded Health Plan renewal report, and consider continuing this active employee rate tier structure, or implement another structure as selected by the Committee. The following tier structures are available options: Option 1 – Retain Current Rate Tier Structure – Active Employee Funding Rate Not Increased and Specialty Pharmacy Cost Relief Program Implemented. Employee Only - $92.24 Employee Plus Spouse - $220.56 Employee Plus Child(ren) - $171.09 Employee Plus Family - $280.94 Option 2 – Increase Rate Tiers by 0.50 percent – Active Employee Funding Rate Increased and Specialty Pharmacy Cost Relief Program Implemented. Employee Only - $92.71 Employee Plus Spouse - $221.69 Employee Plus Child(ren) - $171.89 Employee Plus Family - $282.38 Option 3 – Increase Rate Tier Structure by 1.70 percent – Active Employee Funding Rate Increased, but Specialty Pharmacy Cost Relief Program Not Implemented. Employee Only - $93.80 Employee Plus Spouse - $224.28 Employee Plus Child(ren) - $173.92 Employee Plus Family - $285.70 Option 4 – Any other Rate Tier Structure the Committee may suggest, consider, and approve. (Minutes/Discussion) Courtney Redsull, Employee Benefits Manager, reviewed the options available to the Committee to decide for Plan Year 2023 rates. Self-Funded Insurance Committee Meeting Page 7 of 7 Wednesday, September 21, 2022 - Minutes (Motion) Chris Aguiar introduced a motion approving Option 1: Retain Current Rate Tier Structure – Active Employee Funding Rate Not Increased and Specialty Pharmacy Cost Relief Program Implemented. The vote favoring approval was unanimous. Chair Jim McIntosh declared the motion carried. VI. CHAIRMAN\MEMBER COMMENTS There were no Chairman/Member comments presented. VII. SET NEXT MEETING The next meeting date was set for Wednesday, October 19, 2022, at a time to be determined later. VIII. PUBLIC COMMENT There were no public comments presented. IX. ADJOURNMENT There being no further business to discuss, Chair McIntosh adjourned the meeting at 2:18 p.m. Respectfully Submitted, /s/ Michelle Reese Michelle Reese, Deputy City Clerk