The Employee Medical Benefits Board held a Regular Meeting Monday, February 10, 2014 in Meeting Room #1 at the Municipal Center, 3 Primrose Street, Newtown, CT.
THESE MINUTES ARE SUBJECT TO APPROVAL BY EMPLOYEE MEDICAL BENEFITS BOARD
Chairman Mark Mattioli called the meeting to order at 6:16 pm.
PRESENT: Ron Bienkowski, James Loring, Dan McAloon, Mark Mattioli (Chair), Paul Smith, and Donna Van Waalwijk; ALSO PRESENT: Robert Tait, Director of Finance and Joseph Spurgeon, Consultant with Lindberg and Ripple.
ACCEPTANCE OF THE MINUTES: Mr. Mattioli moved to accept the minutes of December 2, 2013. Mr. McAloon seconded the motion. The motion passed and the minutes were approved as written.
VOTER COMMENTS: There was no voter input
NEW BUSINESS
REVIEW MOST RECENT CLAIMS: December was $1,089,000 & January was rather low at $766,000.~ Mr. Spurgeon indicated that Anthem has been having an issue with Rx claims reporting since September. He believes the Anthem Rx~numbers are still low. In his renewal exhibits, he adjusted for that ongoing issue.
REVIEW RESERVE FUND STATUS: Mr. Mattioli shared that Bob Tait had provided numbers to insert in the draft communication. June 30, 2012 = $2,339,622 (audited); June 30, 2013 = $2,266,439 (audited); June 30, 2014 = $2,296,439 (forecast).
REVIEW ANTHEM RENEWAL AND INSURANCE CONSULTANT CALCULATIONS: Mr. Spurgeon shared two exhibits stating that July 2013 thru December 2013 claims were $6.054 million, which was very close to Bob Tait's projection. After walking through the claim projections, the administrative costs, the cost of the Affordable Care Act and the variance in reinsurance cost, they determined the bottom line. The plan year total cost projection was at $15.091 million, with a reserve recommendation of $3.509 million. In light of the fact that the renewal does not include the most recent two months claims, or that the enrollment projection is to be -20, instead of minus 10,~Mr. Spurgeon~indicated that~incorporating those factors into the renewal should have positive impacts. Additionally, there might be
opportunity to improve on the administrative costs Anthem is quoting. ~Mr. Spurgeon mentioned that perhaps the board should wait another month before providing the reserve determination. The board decided to move ahead with a reserve determination, taking into account: (a) the budget cycle; (b) the renewal projection delivered on 2/10 was likely~the worst-case scenario; (c) there is a $1.3 million difference between the Anthem renewal projection (8.2%) and Bob Tait's renewal (4%) projection (~$13.791 million). The reality is likely to fall between those two points; and (d) Mr. Mattioli supplied several references, which show large group insurers and health care consultants in the CT~marketplace are projecting 6% to 7% trend during the 2014 year.~ A~Towers Watson's report~indicated that the 6.1% increase would likely be knocked down (on average) to 5.2%, due to large employer groups implementing benefit changes and shifting costs to employees.
DETERMINE RESERVE FUND LEVEL FOR 2014-2015 PLAN YEAR: (During this conversation, Mr. Tait had to step out for another meeting.) The group discussed how it is important to get an increase into the budget discussions as soon as possible; they do not want to wait to share bad news. The group decided to take another look at the updated renewal when it is delivered in two weeks, and, in the interim, to act on what information they have so they can supply a floor reserve recommendation.
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Mr. Mattioli made a motion to increase the health insurance reserve fund by $400,000 for the coming plan year. Ms. Van Waalwijk seconded the motion. All were in favor. The motion passed. ~Mr. Bienkowski indicated that he and Mr. Tait would bring this to the Superintendent, the First Selectman, and the Board of Finance. ~
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DETERMINE SHARE OF EXPENSE BY BOE/TOWN: Mr. Mattioli made a motion to recommend continuing the current 76% BOE and 24% Town apportionment, as included in Bob Tait's exhibit. Ms. Waalwijk seconded the motion. All were in favor and the motion passed.
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COMMUNICATION: Mr. Mattioli stated that he would update the draft communication with the figures Mr. Tait shared and the reserve determination, and~send~to the distribution.
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ANNOUNCEMENTS: Mr. Mattioli shared the results of a Survey on the performance of Aetna's Health Fund product portfolio. Health Fund represents Aetna's consumer directed products. The survey indicates that consumer directed products, over a ten year period, have $208 per enrollee lower costs. These members also are better educated about health care consumption. They are better informed about quality data which exists. They tend to consume preventive care more regularly. Mr. Spurgeon stated that he has seen studies which show that members of HSAs have on average 83% generic Rx substitution, which members in typical copayment Rx plans have 73% generic substitution. There will be a special meeting on February 24, 2014.
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Mr. Mattioli made a motion to adjourn the meeting at 7:50 pm,~Mr. Loring seconded and all were in favor.
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Respectfully Submitted by Tammy Hazen, Clerk.
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