Upload
ambrose-fleming
View
214
Download
0
Tags:
Embed Size (px)
Citation preview
FY 07-08Budget Worksession
July 17, 2007
ORANGE COUNTY MEDICAL & DENTAL PLAN
RENEWALS
PRESENTATION OUTLINE
•Self-Funded Medical Plan
•Retiree Medical
•Employee Wellness
•Wellness Screenings & Incentives
•Dental Plan Renewal
•Recommendations
SELF-FUNDED MEDICAL PLAN
BACKGROUND
• County moved to self-funded medical in 2007, with an ASO contract with United Healthcare (UHC)
• Move was seamless to employees – no change in plan design
• Risk transferred from UHC to the County
• Premiums increased 5% in 2007 versus 8% UHC proposed for fully insured
BACKGROUND
• County now collects premiums from all participating agencies and reimburses UHC for plan costs
• Position established in Human Resources to work with UHC, Comptroller’s office and participating agencies to monitor premium payments and plan enrollment
• Process working well
BACKGROUND
• Medical Plan Oversight Committee established for self-funded medical plan
• Committee works with UHC and Benefits Consultant to monitor plan experience, costs and County’s medical plan budget
2008 MEDICAL PLAN
• Plan experience (trend) remains stable - around 8%
• Minimum reserves must be established & maintained for self-funded medical plans
• Move to self-insured projected to increase reserves by $4 million
• Savings allows County to absorb much of 8% trend increase in 2008
2008 MEDICAL PLAN
• UHC met with oversight committee in June to review 2006 experience & trends
Key Findings• Inpatient costs increased 13%
• Emergency Room costs up 14%
• Diabetics account for 21% of total medical spend – 17% increase over previous year
• Pharmacy increased 7%
2008 MEDICAL PLAN
Based on annual experience, oversight committee recommends the following co-pay changes
• Inpatient $250 $300• Emergency Room 75 125• Major X-Ray 0 25• Outpatient Surgery 0 25
Pharmacy Co-Pays• Tier 1 $10 $10• Tier 2 25 30• Tier 3 40 50
2008 MEDICAL PLAN
• Co-pays for recommended screening procedures, and key disease management and maintenance drugs will not increase
– Colonoscopies– Cholesterol & Blood pressure
maintenance drugs – Diabetic drugs and supplies
• Committee & Benefits Consultant to work with UHC to identify exclusions
• Oversight committee recommends 1.35% premium increase with co-pay changes
RETIREE MEDICAL
RETIREE MEDICAL
• 127 Medicare eligible retirees and spouses enrolled in medical plan
• County does not currently require Medicare eligible retirees to enroll in Medicare Part B, so County plan remains primary
• This practice increases plan costs
• Medicare eligible retirees have Humana Choice plan option
• Oversight committee recommends requiring Medicare Part B enrollment in 2008
EMPLOYEE WELLNESS
EMPLOYEE WELLNESS
• County medical premiums have increased from
5 – 11% each year over past 5 years
• Increases primarily driven by plan experience
• Initial focus on controlling costs
• Learned that cost containment alone is not enough
• Must focus on employee wellness
EMPLOYEE WELLNESS
• County has focused on wellness over the past 4+ years
• Goal has been to increase employee wellness – control medical plan experience
• Conducted annual health screenings, health risk assessments, county-wide challenges, wellness fairs, etc.
WELLNESS FOR LIFE
• Annual wellness challenge participation levels have not changed (800 – 900 each year)
• Created “Wellness For Life” logo and program in 05/06
– Added wellness RN
– Created $5 wellness Beneflex credit
• Program objective – increase annual challenge participation to 2,000
BACKGROUND
2006 Wellness for Life participation:
– 1,250 screenings
– 899 also completed Health Risk Assessments (HRAs) and earned $5 Beneflex credit
– 463 also attended wellness class and submitted proof of physical
– Participation level disappointing
BACKGROUND
Learned
– Program design challenging to administer
– Employees uncomfortable with HIPAA release and health info shared with County
– Need for integration of screenings & HRAs
– Need for greater management support and participation
WHERE DO WE GO FROM HERE
• Move to self-funded medical increases the need to engage employees and control medical costs
• Need to integrate employee wellness into overall Benefits plans
• Propose redesign of Wellness for Life program
WELLNESS FOR LIFE 2007
• Wellness for Life – Continue wellness focus throughout the year
• Connect Benefits & Wellness –
One program that promotes
“physical, emotional &
financial well being”
• Revise annual screenings and incentives
WELLNESS SCREENINGS & INCENTIVES
WELLNESS SCREENINGS & INCENTIVES
• Must engage more employees in wellness screenings to impact medical plan costs
• Previous incentives have not been effective
• Current budget challenge mandates new approach
WELLNESS SCREENINGS & INCENTIVES
• Employees now receive $25 Beneflex credit each pay period – $650 annually
• Annual cost to County – $4.4M
• Propose changing Beneflex credit to Wellness for Life credit
2007 WELLNESS SCREENINGS & INCENTIVES
Required Wellness Activities
• Health Screening
• Health Risk Assessment
(HRA)
2007 WELLNESS SCREENINGS & INCENTIVES
• Employees who complete both activities earn $25 Wellness for Life credit
• Employees who choose not to participate forfeit $25 credit
DENTAL PLAN RENEWAL
BACKGROUND
• Dental insurance is 100% employee paid
• Dental Insurance provided by the Standard – three plan options (Low, Middle, High)
• Employees like current plan, provider network and plan options
2008 DENTAL PLAN
• Low plan experience increased slightly in past year
• Middle dental plan remained stable
• High plan experience continues to increase with high utilization of out of network dentists
• Plan participants have expressed interest in increased coverage of resin fillings
2008 DENTAL PLAN
• The Standard proposed two dental renewal options
1. No increase to Low and Middle Plans4% increase to High plan with 80% UCR coverage for out of network dentists
2. Add coverage of posterior resins with3% increase to low plan1.5% increase to Middle plan5% increase to High Plan – 80% UCR
• Oversight Committee Recommends Option 2
RECOMMEDATIONS
• Approve 1.35% medical plan premium increase, with recommended co-pay increases
• Approve mandatory Medicare Part B enrollment for Medicare eligible retirees
• Approve elimination of $25 Beneflex Credit, and replacement with a $25 Wellness For Life Credit
• Approve dental contract renewal with the Standard with addition of posterior resin fillings, 3% increase to low plan, 1.5% increase to middle plan and 5% increase to the high plan – with move to 80% UCR
FY 07-08Budget Worksession
July 17, 2007
ORANGE COUNTY MEDICAL & DENTAL PLAN
RENEWALS