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HomeMy WebLinkAboutMinutes - Health Care Benefits Trust Board - 9/24/2024MINUTES HEALTH CARE BENEFITS TRUST REGULAR SESSION September 24, 2024 KACHINA CONFERENCE ROOM 11000 N. LA CAÑADA DRIVE            REGULAR SESSION AT OR AFTER 10:00 AM   CALL TO ORDER   ROLL CALL Present: Frank Trembulak, Chair Dave Gephart, Vice Chair Harry Greene, Member Mark Parston, Member Jennifer Marek, Member Staff Present:Jennifer Inboden, Board Secretary Andrew Votava, Human Resources Director Tobin Sidles, Legal Services Director Oscar Diaz, CBIZ VP of Business Development Sonya Martinez, CBIZ Account Executive CALL TO AUDIENCE - There were no speaker requests.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE JUNE 4, 2024 REGULAR SESSION MEETING MINUTES       Motion by Member Harry Greene, seconded by Member Jennifer Marek to approve the June 4, 2024 regular session minutes.  Vote: 5 - 0 Carried   2.PRESENTATION AND DISCUSSION OF THE MEDICAL AND PHARMACY EXPERIENCE REPORT THROUGH JULY 2024 AND THE PREMIUM ADEQUACY REPORT FOR A JULY 1, 2024 EFFECTIVE DATE Oscar Diaz, CBIZ VP of Business Development, presented the Medical and Pharmacy report for the end of the 2023-2024 plan year. He prefaced by pointing out that the Plan Year ended quite well. He started by reviewing the paid claims and administration information for all plans combined. Mr. Diaz reminded the trustees that the Maximum Claims Liability is what the Stop Loss Insurance company holds the plan to. Anything above that will be covered by stop loss insurance. The maximum liability is 25% higher than Expected liability. There were no stop loss recoveries this year. The average is 1-2 per year. The amount paid for medical claims was $1.9 million, which was under the expected claims liability of $3 million. The amount paid for Rx claims was $700,000 with rebates of $236,000. Mr. Diaz reminded the Trustees that    9/24/2024 Minutes, Health Care Benefits Trust 1 the higher the rebates, the higher the expense. The total paid claims were $2.4 million; with the admin fees of $783,000 and HSA contributions of $246,000, the total claims and admin costs were $3.4 million, finishing the year $300,000 under budget. This number is equivalent to an additional month of reserves. The loss ratio for the year was 78.9% for the expected claims liability and 63.7% for the maximum claims liability . The claims and admin fees per employee per month (PEPM) costs finished the year at $905. Mr. Diaz pointed out that he would expect a plan of the Town's size to be over $1000 PEPM, so $905 is impressive. Ms. Martinez followed up on the Change Healthcare cyberattack from a few months ago, and said that based on the findings in this report, the Town's claims were not impacted by the delayed processing and payment. Mr. Diaz continued to review the report and focused on the High Deductible Health Plan (HDHP) which finished the year with a 66% loss ratio against expected liability and 53% against maximum liability. The claims and admin fees PEPM costs were $727. The total spend was $1.5 million of a budgeted amount of $1.7 million, so the Plan finished $200,000 under budget. For the PPO Plan, total claims and admin fees were $2.06 million, just over the $2 million budget with a 103% loss ratio against expected liability. Mr. Diaz reminded the trustees that it is typical for the loss ratio to be higher on PPO plans than on HDHP plans. The claims and admin fees PEPM costs for the PPO were $1,216. Mr. Diaz reviewed the year-over-year comparison. The plan finished at $3.4 million which is better than the previous year that ended at $3.6 million. The PEPM costs for the 2023-2024 plan year were $905 compared to $986 in the prior year. The biggest savings was due to medical claims cost that were $1 million less this year. Mr. Diaz pointed out that the PEPM Total cost continued to follow the pattern that it has for the past 10 years alternating between increases and decreases every year. Vice Chair Gephart noted how the Rx Claims costs went down but the Rx Rebates went up and asked Mr. Diaz for an explanation. Mr. Diaz explained that this was due to the claim mix. There may have been a higher cost for a single prescription. That one prescription could account for a higher rebate. The formulary changes every 6 months. Mr. Diaz explained that in the near future there is lots of legislation regarding prescription drugs. Congress wants to lower the cost of prescription drugs. The larger Pharmacy Benefit Managers (PBMs) are owned by insurance carriers. United Healthcare owns Optum. UHC would charge a fee if the Town chose to carve out their PBM which would cancel out any savings. Mr. Diaz finished by going over the large claims over $50k, and was pleased to report that there were no claims large enough to trigger stop loss coverage. Stop loss gets triggered when a claim exceeds $150,000 and the largest claim of the year was $82,000. The large claim percentage of medical and Rx claims is 22% which is lower than the typical 26-33%. Next Mr. Diaz reviewed the Premium Adequacy Report. This is a projection that CBIZ does based on a look back at a full year of claims and changes in enrollment. Their actuarial team used -1.22% for their projection of the expected funding rate. An 80/20 credibility rating is typical for a group of the Town's size, but the actuaries are considering switching to a 60/40 rating based on the historical trend and pattern of the Town's plan. This means the Town's plan is 60% credible; the remaining 40% is based on national trends. At this time, CBIZ is not recommending any changes to the rates or funding methodology. Mr. Diaz finished by going over the Medical and Pharmacy report for the first month of the 2024-2025 plan year. He pointed out to the Trustees that there is not much credibility to the report after just one month of data. The loss ratio for all plans for July was 97.5% for the expected claims liability, The loss ratio for the HDHP plan was 57% and it was 181% for the PPO plan. There is one large claim over $50k.   3.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH JUNE 2024    9/24/2024 Minutes, Health Care Benefits Trust 2 3.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH JUNE 2024 Vice Chair Gephart reviewed the fund balance through the end of the plan year. He noted that the Town had a good year last year. Even though there was higher claims activity in the 2022-2023 plan year, there were some claims that exceeded the stop-loss so the Town was reimbursed; that did not happen in the 2023-2024 plan year causing the revenues for stop-loss to be $550,000 less in the 2023-2024 plan year. The Employer-paid premiums were up by $250,000 but the Employee-paid premiums were down by $100,000 due to some restructuring and migration to the HSA platform. Total fund balance started the year at $2.9 million and ended at $3.4 million for an increase of $500,000.      4.DISCUSSION AND POSSIBLE ACTION TO SET THE HEALTH CARE BENEFITS TRUST MEETING DATES FOR 2024-2025       Motion by Vice Chair Dave Gephart, seconded by Chair Frank Trembulak to reschedule the November 19, 2024 meeting to December 3, 2024 AND to approve the 2025 Health Care Benefits Trust meeting schedule.  Vote: 5 - 0 Carried   ADJOURNMENT    Motion by Chair Frank Trembulak, seconded by Member Mark Parston to adjourn the meeting at 10:31 a.m.  Vote: 5 - 0 Carried     I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Town of Oro Valley Health Care Benefits Trust held on the _24th_ day of _September_. I further certify that the meeting was duly called and held and that a quorum was present. Dated this _27th__ day of _September_, 2024. ______________________________ Jen Inboden Senior Human Resources Analyst 9/24/2024 Minutes, Health Care Benefits Trust 3