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Healthcare and Employee Benefits February 23, 2010.

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Presentation on theme: "Healthcare and Employee Benefits February 23, 2010."— Presentation transcript:

1 Healthcare and Employee Benefits February 23, 2010

2 Healthcare Employee Benefits Summary Presentation Outline

3 Healthcare

4 Presentation Outline Background Challenges and Trends Strategies Summary

5 Presentation Outline Background Challenges and Trends Strategies Summary

6 BCC Comptroller Tax Collector Supervisor of Elections Expressway Authority Housing Finance Authority OBT Development Board Metroplan Orlando Property Appraiser Lynx Clerk of Courts Research and Development I-Ride Trolley Background 8,370 Covered Employees Total Plan Members: 18,652

7 Background $42M

8 Background $42M $96M

9 Background 2002200420052006 2002: Live for Today, Plan for Tomorrow Benefits Newsletter launches, encouraging healthy lifestyles. 20031991 1991: Wellworks Central opened to employees and eligible dependents. 1993 1993: Began wellness education through classes, articles, e- mail tips, one-on- one wellness consultations. 1993: Began on-site Wellness Fairs, mobile mammography screenings and various mini- challenges to motivate employees toward better health. 2006: Incorporated a Wellness Nurse and Wellness challenge with a $5 bi-weekly incentive credit. 2003: Started the Wellness World Series engaging 1,200 participants to focus on their health. 2004: OC Wellness Games with 1,143 participants 2005: Implemented the Wellness for Life Program. 2005: Humana Medicare Advantage plan offered for the first time to Medicare eligible retirees.

10 Background 2009: HR In the Loop airs its first webisode communicating HR information to County employees each pay day. 2008: Implemented the Countys first online open enrollment. 2007: County plan goes self-funded saving $6.5 million in the first year. 2007: By 2007 a total of six fitness centers were available to employees. 2009: Implemented a Diabetes Management Pilot Program to employees as a result of the Wellness for Life Screenings. 2008: Began Wellness for Life Credit and Screenings increasing employee engagement in personal health. 200720082009 2009: Implemented the healthy pregnancy program to waive delivery co-pays. 2009: Implemented generic differential for prescriptions and carved out pharmacy with Express Scripts.

11 Background 2010: Began assessing a surcharge to tobacco users on the Countys medical plan. 2010: Orange County became a Tobacco-Free County, prohibiting tobacco use on County property. 2010 2010: Changed inpatient co- pays to $300 on day one, and $100 for days two – four. 2010: Increased hospital based outpatient surgery from $100 to $200. 2010: Implemented prescription step therapy and voluntary select home delivery. 2010: Began a Dependent Audit to remove ineligible dependents from the Countys medical plan.

12 Background $96M $229M 9%

13 Background 0% 0% Trend

14 Background FY2010 Health Plan Budget $96 Million

15 Background Orange County 87% Employer 13% Employees Premium Cost Share

16 Background Florida Industry Norm 76% Employer 24% Employees Premium Cost Share

17 Presentation Outline Background Challenges and Trends Strategies Summary

18 Challenges and Trends Overall cost of claims is trending at 9% and is expected to increase without major plan design changes Unable to sustain funding for large increases year after year Need to address total cost of plan and increase share of cost paid by employees

19 Challenges and Trends Health expenses are expected to jump as high as 10% nationally 41% of employers are planning to shift a larger portion of healthcare expenses to the employee Plan design changes (Co-Pays, Co- Insurance, Deductibles) Increased premiums Pharmacy plan changes

20 Challenges and Trends Plan Design Changes Co-Pays Fixed payment by plan member each time a medical service is accessed Co-Insurance Percentage amount paid by insured plan member each time a medical service is accessed

21 Challenges and Trends Measure Average Total Cost Employee Co- Pay Average Plan Cost % Spent Annually Primary Care Visits $108$15$938% Specialist Visits $210$25$18523% Ancillary MRI/CT $481 $25 $4561% Home Healthcare $482 $0 $4821% Outpatient Visits $1,159$100$1,05917% Inpatient Visits $13,413$600$12,81325%

22 Challenges and Trends Plan Design Changes Deductible Amount paid by covered member before plan begins Utilized with Health Savings or Reimbursement Account Plans Separate amounts for employee only and family coverage

23 Challenges and Trends Plan Design Changes Consumer Driven Health Plans High-Deductible Health Plan Individual Health Account Preventive Care Offered by 44% of U.S. employers

24 Employee Medical Clinics In 2008, 25% of employers offered onsite employee medical clinics City of Apopka City of Ocoee City of Port St. Lucie City of Palm Bay Darden Restaurants Florida Hospital Harris Corporation Lockheed Martin Rosen Hotels & Resorts Siemens Power Generation Universal Studios Wheeled Coach Challenges and Trends

25 Employee Medical Clinics Potential Benefits Improves Follow-up Care Lower County Cost for Care Coordinate Occupational Medical Care Potential Savings Initial ROI 1:1, 3:1 after three years Lower Workers Compensation Costs Lower Occupational Medical Costs Higher Generic Fill Rate Lower Risk Factors

26 Presentation Outline Background Challenges and Trends Strategies Summary

27 Strategies Decrease the overall cost of our health insurance plan More evenly share the costs of health insurance premiums Orange County Employees Premium Cost Share 87% Employer Florida Industry Norm 76% Employer 24% Employees Premium Cost Share 13%

28 Strategies Increase the premiums for all participants Encourage more judicious use of health care services Utilize models for cost control and cost sharing Look at onsite employee medical clinics Strengthen Wellness initiatives, requirements and incentives

29 Strategies Implement deductibles and co-insurance Create more of a financial partnership with employees Establish health savings or reimbursement accounts Out of pocket maximums Continue to cover preventive care

30 Strategies Typical employees will see: Premium increases Deductibles Co-insurance and co- pays Health Savings or Reimbursement Accounts Maximum out-of-pocket expenses

31 Presentation Outline Background Challenges and Trends Strategies Summary

32 Healthcare Summary Medical Plan Oversight Committee meetings bi- weekly Discussions with Employee Benefits Committee Follow-up BCC discussions and formal proposals in May Final decision by June Employee education campaign this summer Open enrollment in October Implementation in January 2011

33 Employee Benefits

34 Presentation Outline Employee Benefits Strategies Summary

35 Presentation Outline Employee Benefits Strategies Summary

36 Employee Benefits Paid Leave Retirement Contributions Educational Assistance

37 Employee Benefits Paid Leave Personal Leave Used for vacations, illness, medical appointments, personal or business, etc. Leave accruals based on length of service

38 Employee Benefits Length of Continuous Service Hours Accrued Per Pay Period Maximum Days Accrued Per Year Maximum Accrual Hours Under 5 Years5.5418432 Over 5 Years6.1620480 Over 6 Years6.4621504 Over 7 Years6.7822528 Over 8 Years7.0823552 Over 9 Years7.3924576 Over 10 Years7.69625600 Over 15 Years8.3127648 Personal Leave Based on an 8-hour day/40 hour week

39 Employee Benefits Paid Leave Term Leave 40 or more consecutive hours absent due to illness or injury Maximum of 48 hours (Six 8-hour days) accrued annually May require medical documentation for approval

40 Employee Benefits Florida Retirement System State Mandated County paid contributions determined annually Regular Risk: 9.85% Special Risk: 20.92% 2009 Contributions: Approx. $45M

41 Employee Benefits Educational Assistance Program funding is determined annually Up to $1,500 per fiscal year for successful course completion

42 Employee Benefits Educational Assistance Increases each year in participation and cost Many Counties have reduced or eliminated Educational Assistance FYEmployeesCost 2007462$408,349 2008550$522,746 2009579$554,933

43 Presentation Outline Employee Benefits Strategies Summary

44 Strategies Reevaluate Paid Leave Explore Early Retirement Options Review Educational Assistance

45 Strategies Reevaluate Paid Leave State and National Trends For new employees with 1-5 years of service, 20 days is the average combined number of personal, vacation and sick days off In 2004, 29% of employers offered Paid Time Off (PTO) Plans By 2008, 42% offered PTO Plans

46 Strategies Reevaluate Paid Leave Effective October 1, 2010 for New Employees: Eliminate Term Leave Transition to a Paid Time Off Plan

47 Strategies 15 17 18 20 22 26 18

48 Strategies Explore Early Retirement Options Develop incentives to bridge gap between the time an employee is FRS eligible to retire and eligible for Medicare Review Educational Assistance Consider a temporary freeze on funding for the educational assistance program effective October 1, 2010

49 Presentation Outline Employee Benefits Strategies Summary

50 Employee Benefits Summary Revise paid leave Explore early retirement options Suspend Educational Assistance

51 Summary

52 9% annual increase in healthcare cost is not sustainable Fundamental changes to the health plan are needed Benefits for new employees need to be adjusted Suspension of benefit programs and early retirement options need to be evaluated

53 Summary Follow-up BCC discussions and formal proposals in May Final decision by June 2010 Implement benefit changes in October 2010 Implement health plan changes in January 2011

54 Healthcare and Employee Benefits February 23, 2010

55 Employee Benefits 15

56 Strategies 27 28 29 32 33

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