Group Health Insurance Plan Expected Claims Liability Administration and Professional Fees Specific Stop Loss (SSL) Aggregate Stop Loss (ASL)

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Presentation transcript:

Group Health Insurance Plan Expected Claims Liability Administration and Professional Fees Specific Stop Loss (SSL) Aggregate Stop Loss (ASL)

Plan Highlights For the first time, budget projections include costs for dental claims and administration, flex plan costs, and new Affordable Care Act (ACA) taxes/fees estimated at approximately $50,000. These projected costs total $366,240*. With the exception of ACA taxes, these are costs which have been paid annually by the plan and now included in this presentation for a comprehensive total for the benefit package.

An “integrated PBM” model was implemented as part of a change to Catamaran RX as Pharmaceutical Benefit Manager. Prescription drug data is now integrated into overall plan data improving case management outcomes. Early projections of savings resulting from this change were estimated at $14,000 monthly. This change was made June 1, 2013 but savings to date are immature. Plan Highlights (continued)

Expected health claims liability is $3,865,100, compared to original projections of $3,327,435 in This represents an increase of 16%. Large health claims have had significant impact on overall plan performance in last year. 1% of claimants represent 31% of total paid claims. $1,031,504 was spent on 11 participants during the current contract year to date. 93% of plan participants had claims under $3,000.

Based upon last year’s decision to accept a $100,000 Specific Stop Loss Deductible, the City qualified for a Premium Recovery Plan. Estimated recovery to date is $52,000. Recovery is available as premium credit to be applied against the next contract period stop loss premium. Plan Highlights (continued)

Group Insurance Expenditures Figures displayed in millions and include estimates *2014 includes total Group Insurance costs ($366,240 dental, ACA, flex plan)

Group Health Insurance Year Budget Amendment Amount $200k0$700k$450k$600k % Claims Funded 110%100% 90%95% Total Fiscal Budget $3.5m$4.0m$4.5m$4.6m$4.9m$4.1m $3.9m $4.0m Proj. $4.98m Proj.* Figures displayed in millions and include estimates *14-15 includes total Group Insurance costs ($366,240 dental, ACA, flex plan)

Fixed Cost Comparison Admin.& Prof. $174,293$172,567$176,705$309,586* SSL$574,269$502,920$498,657$491,384 ASL$ 19,404$ 15,713$ 16,470$ 21,624 Totals %Change $767, % $691,200 (-10%) $691, % $822, % *14-15 includes total Group Insurance costs (administrative costs of $68,804 - dental, ACA, flex plan)

Group Health Insurance Total Cost Adm.& Prof Fees $174,293$172,567$ 176,705$ 309,586* SSL$574,269$502,920$ 498,657 $ 491,384 ASL $19,404$15,713$ 16,470$ 21,624 Expected Claims $3,162,162$3,247,340$3,327,435 $3,865,100 (H) $297,436 (D)* Total % Change $3,930,128 (-3.34%) $3,938, % $4,019, % $4,985,130 16%* (% excludes $310k dental*) * includes total Group Insurance costs ($366,240 dental, ACA, flex plan) Note: H=Health claims D=Dental claims

Risk Advisory Group Handles and negotiates contract for MedCost Network Handles and negotiates contract for MedCost Benefit Services (Third Party Administrator) Designs the Prescription Drug Plan Provides on-going management oversight of Prescription Drug Plan Acts as facilitator between any aspect of plan and participant when questions or problems occur

Risk Advisory Group (continued) Negotiates with insurance underwriters for SSL and ASL coverage limits Handles and negotiates contract for both Short- Term and Long-Term Disability as well as Life Insurance Provides Independent Analysis of Plan Performance and Trends and represents the City of Lexington Group Health Plan to Markets Provides guidance in government compliance

MedCost Benefit Services Acts as the City’s Third Party Administrator (TPA) Handles all Claims Handles all Billing Functions Creates and Issues all Explanation Of Benefits (EOB) Handles all Pre-Tax Section 125 Plans Tracks and Reports all costs for Trend Analysis

Recommendations Acknowledge one-time accounting adjustment/forecasting discipline Approve Group Health Insurance Plan with MedCost Benefit Services Administration effective March 1, 2014 to February 28, 2015 Approve OptumHealth/UniAmerica contract for specific and aggregate reinsurance Approve estimated contract budget amount of $4,985,130