Joint Insurance Committee

By The City of Oklahoma City Office of the City Clerk at 10:54 am, Aug 27, 2024 THE CITY OF OKLAHOMA CITY JOINT INSURANCE COMMITTEE Joanna McSpadden Isaac Locke Anne Lapuzza Donna Skidmore Larry Slaff Phil Smith 420 W Main Ste 110, Oklahoma City, OK 73102 Basement Conference Room September 4, 2024 8:30 a.m. It is the policy of the City to ensure that communications with participants and members of the public with disabilities are as effective as communications with others. Anyone with a disability who requires an accommodation, a modification of policies or procedures, or an auxiliary aid or service in order to participate in this meeting should contact the ADA Personnel Department Coordinator at 297-2861 or TDD 297-2020 as soon as possible but not later than 48 hours (not including weekends or holidays) before the scheduled meeting. The department will give primary consideration to the choice of auxiliary aid or service requested by the individual with disability. If you need an alternate format of the agenda or any information provided at said meeting, please contact the ADA department coordinator listed above 48 hours prior to the scheduled meeting.  CITY OF OKLAHOMA CITY JOINT INSURANCE COMMITTEE AGENDA and MEETING NOTICE DATE: September 4, 2024 TIME: 8:30 a.m. PLACE: 420 W Main Ste 110, Oklahoma City, OK 73102 Basement Conference Room AGENDA: I. Call to Order II. Approval of Minutes A. June 5, 2024 III. Information from Vendors IV. Information from Employee Benefits Division A. Plan Performance  AGENDA ITEM II. Approval of June 5, 2024 Minutes  CITY OF OKLAHOMA CITY JOINT INSURANCE COMMITTEE MINUTES June 5, 2024 The Joint Insurance Committee meeting was held on June 5, 2024 at 8:30 a.m. in the City Municipal Building, 420 W Main, Ste 110 Basement Large Conference Room Those in attendance were: Members Present: Larry Slaff, Citizen Member Donna Skidmore, Retiree Member Isaac Locke, AFSCME Representative Anne Lapuzza, FOP Lodge 123 Member Phil Smith, Citizen Member Joanna McSpadden, City Manager Designee Members Absent: Staff Present: Jason Long, Total Rewards Manager Richard Mahoney, Asst Municipal Counselor III Taylor Atherton, Benefits Systems Specialist I. Call to Order Jason Long, called to order the Joint Insurance Committee Meeting at 8:33 AM II. Approval of Minutes The minutes of the March 6, 2024 meeting was approved with no objection.  III. Information From Vendors IV. Information from Employee Benefits Division Lockton presented plan performance through March 2024. Review minutes from previous meeting Motion to approve minutes- Isaac Locke Second- Richard Mahoney Mr. Long asked if there were any questions - none were asked. Mr. Locke AFSME representative stated there were no complaints or issues at this time. Ms. Young reviewed plan performance materials. Ms. Young indicated the EPO and PPO combined loss ratio is at 77.5%. Mr. Long stated the low ratio should increase. Ms. Young indicated the EPO and PPO year to date gross plan cost details are under one umbrella now which is why the medical and pharmacy claims are near a 50/50 split. Ms. Young shared the rolling (paid plans by month) 12 month trend analysis for actives. Mr. Long shared HMO to EPO switch created cost savings. Ms. Young shared retiree financial's for January-March. Ms. Young reviewed the pharmacy program opportunity. Ms. Young shared the flex access program. There has been zero negative feedback to flex access. Mr. Long stated the flex access program if implemented, would start January 1st. Ms. Young shared dental benchmarking. In the March meeting, there were questions about the dental benchmarks so more information was gathered. Ms. Young asked if there are any highlights to be presented for next quarter? Mr. Long stated premiums and open enrollment would be the focus next quarter. Mr. Long asked if there are any questions from the committee? Mr. Locke asked a question on dental premiums for employer and employee. Mr. Long stated his team would gather data for the last ten years of dental premiums and send an email to the group. V. Citizens to be heard VI. Items from Committee Members VII. Adjournment Mr. Long adjourned the meeting at 9:03 A.M.  AGENDA ITEM III. Information from Vendors  AGENDA ITEM IV. Information From Employee Benefits Division A. Plan Performance JOINT INSURANCE COMMITTEE AGENDA September 4, 2024 • Active Plan Performance • Retiree Plan Performance • 2025 Stop Loss Renewal • Open Enrollment Update LOCKTON COMPANIES | 1 Active Plan Performance Data through June 2024 2 Executive Summary – Active Employees • On an all-plans combined basis; the plan is running at 91% loss ratio (funding vs. expenses). • The Active EPO plan is running with YTD expenses to budget/accrual ratios of 84.4% while the PPO Plan is running at 100.4%. • Projected Per Employee Per Month (PEPY) cost is $7,711 (in June 2023, it was $9,047). • Enrollment increased 3% from the prior plan year. • Plan had 40 claimants over $100k year to date, 2 of those claimants were in excess of the $300k stop loss level. 3 Performance Overview - Actives 4 Rolling 12 Month Trend Analysis – Annual Cost per Employee EPO Plan $24,000 $20,590 $22,000 $20,224 $20,172 $19,848 $19,938 $19,920 Cost Per Enrolled Employee - Rolling 12 Months $18,758 $18,490 $20,000 $18,157 $17,938 $17,383 $18,000 $17,020 $16,000 $14,000 $12,000 $10,000 Paid Claims Month Series1 Linear (Series1) 5 5 Rolling 12 Month Trend Analysis – Annual Cost per Employee PPO Plan $24,000 $22,000 Cost Per Enrolled Employee - Rolling 12 Months $20,000 $18,000 $15,919 $16,026 $15,976 $16,112 $15,940 $16,112 $16,008 $15,633 $15,649 $15,626 $15,782 $15,494 $16,000 $14,000 $12,000 $10,000 Paid Claims Month Net Claims + Fixed Cost Linear (Net Claims + Fixed Cost) 6 6 Retiree Update 7 Retiree Claims Experience for 2024 Estimated Cumulative Cumulative Monthly Enrolled Premium Stop Loss Month Retiree Premium Admin Cost Net Claims (1) Total Plan Costs Total Plan Funded Retirees Equivalents Premium Contributions Equivalents Costs Loss Ratio Jan-24 1,252 $718,299 $1,436,595 $1,436,595 -$208,270 $88,141 $1,606,998 $1,486,869 $1,486,869 103.5% Feb-24 1,250 $716,335 $1,432,667 $2,869,261 -$207,938 $88,000 $1,466,424 $1,346,487 $2,833,356 94.0% Mar-24 1,250 $714,463 $1,428,924 $4,298,185 -$207,938 $88,000 $1,792,148 $1,672,210 $3,018,697 117.0% Apr-24 1,253 $718,911 $1,437,819 $5,736,004 -$208,437 $88,211 $2,013,429 $1,893,203 $3,565,414 131.7% May-24 1,249 $713,662 $1,427,322 $7,163,326 -$207,771 $87,930 $1,905,975 $1,786,134 $3,679,337 125.1% Jun-24 1,250 $713,722 $1,427,442 $8,590,767 -$207,938 $88,000 $1,649,073 $1,529,136 $3,315,269 107.1% Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 YTD 7,504 4,295,392 8,590,767 -1,248,290 528,282 10,434,047 9,714,039 113.1% 8 Non-Medicare Retiree Rate History 15.0% Average increase over 5 years 12.7% has been 0.3% 10.0% 5.0% 2.0% 0.0% 0.0% 0.0% 2020 2021 2022 2023 2024 -5.0% -10.0% -15.0% -15.0% -20.0% 9  Medicare Retiree Rate History 25.0% Average increase over 5 years has been 3.7% 20.0% 19.6% 15.0% 10.0% 6.4% 5.0% 0.0% 0.0% 0.0% 2020 2021 2022 2023 2024 -5.0% -7.6% -10.0% 10 Stop Loss Renewal 11 Individual Stop Loss Renewal for 2025 Individual Stop Individual Stop Annualized Difference vs. Actual Number of Estimated Additional Loss (ISL) Limit Loss Per Individual Current (% / $$) Stop Loss Claims For Number of Liability Employee Per Stop Loss 2024 YTD Stop Loss Month (PEPM) Spend Claims for (4892 lives) 2025 Current $70.40 $4,132,762 2 Reimbursements YTD: $81,259 and $131,454* Renewal ($300k) $83.42 $4,897,088 +18.5% / $764,326 16 None Option ($350k) 69.10 $4,056,446 -1.8% / ($76,316) *If ISL would have been 12 $50k per claimant; $350k, reimbursements an additional $50k Savings vs. $300k would have been for 12 claimants = Renewal = $840,642 $31,259 and $81,454 $600,000 Recommendation – move to $350k ISL deductible Anticipated savings of $240,642 Note – Aggregate Stop Loss cost does not differ between offers. 12  Stop Loss Deductible Evaluation - Trendline ▪ The Specific Deductible by Group Size graph compares the City of Oklahoma City’s group size to that of similar sized clients on the Lockton Complex Claims Specialty Practice Book of Business ▪ Selecting the appropriate deductible level for the group’s size is important as this determines the amount of liability a client is responsible for before the carrier begins reimbursements ▪ A deductible size too low for a group’s size will result in higher Stop Loss premiums and undesirable market response • Lockton Trend is based on Lockton Complex Claims Specialty Practice Book of Business (BoB) 13 13  Stop Loss Deductible Evaluation Enrollment Range (2,501 – 5,000 Employees) ▪ We have provided a benchmarking bar graph that illustrates the percent of employers within a similar range of employees and the deductible they elected. ▪ Using our benchmarking graph supports a more specific approach to electing a deductible more in line with other employers of similar enrollment. This exhibit is based on Lockton Complex Claims Specialty Practice Book of Business (BoB) 14 14 Open Enrollment 15 OPEN ENROLLMENT DETAILS WHEN WHERE HOW LATE OCTOBER - EARLY NOVEMBER LOCATIONS ONLINE THROUGH ORACLE • Active – October 28 to November 1 • Active – OKC Convention Center • This will be our second year using Oracle Cloud to enroll active • Retiree – October 22 and 23 • Retiree – Central Maintenance employees. Facility • Be on the look out for additional • Support will be provided, and we information about open enrollment are happy to help with any meetings questions. 16 Independence changes everything. © 2022 Lockton Companies. All rights reserved.