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HomeMy WebLinkAboutMinutes - Health Care Benefits Trust Board - 6/3/2025MINUTES HEALTH CARE BENEFITS TRUST REGULAR SESSION June 3, 2025 KACHINA CONFERENCE ROOM 11000 N. LA CAÑADA DRIVE            REGULAR SESSION AT OR AFTER 10:00 AM   CALL TO ORDER The meeting was called to order at 10:02 a.m.   ROLL CALL Present: Frank Trembulak, Chair Dave Gephart, Vice Chair Mark Parston, Member Jennifer Marek, Member Absent: Harry Greene, Member Staff Present: Jennifer Inboden, Board Secretary Andrew Votava, Human Resources Director Tobin Sidles, Legal Services Director Sonya Martinez, CBIZ Account Executive CALL TO AUDIENCE - There were no speaker requests.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE APRIL 1, 2025 REGULAR SESSION MEETING MINUTES       Motion by Chair Frank Trembulak, seconded by Member Jennifer Marek to approve the April 1, 2025 regular session minutes.  Vote: 4 - 0 Carried   2.DISCUSSION AND POSSIBLE ACTION ON ELECTING A CHAIR AND VICE-CHAIR FOR THE HEALTH CARE BENEFITS TRUST BOARD FOR THE 2025-2026 PLAN YEAR A) Discussion and possible action in electing a Chair of the Health Care Benefits Trust Board for the upcoming plan year. B) Discussion and possible action in electing a Vice-Chair of the Health Care Benefits Trust Board for the upcoming plan year.       Motion by Chair Frank Trembulak, seconded by Member Mark Parston to elect Frank Trembulak as  Motion by Chair Frank Trembulak, seconded by Member Mark Parston to elect Frank Trembulak as the Chair of the Health Care Benefits Trust Board for the coming plan year with an effective start date of July 1, 2025.  Vote: 4 - 0 Carried    Motion by Chair Frank Trembulak, seconded by Member Mark Parston to elect Dave Gephart as the Vice-Chair of the Health Care Benefits Trust Board for the coming plan year with an effective start date of July 1, 2025.  Vote: 4 - 0 Carried   3.PRESENTATION AND DISCUSSION OF THE MEDICAL AND PHARMACY EXPERIENCE REPORT THROUGH MARCH 2025 Sonya Martinez, CBIZ Account Executive, presented the Medical and Pharmacy report through the end of March 2025. She started with the Executive Summary and focused on the 3rd Quarter End Utilization Highlights that lists the top three utilizations by diagnosis, prescription drugs net paid, and prescriptions by volume. She reviewed the Year-over-Year Financials and pointed out to the Trustees that the Total Medical/Pharmacy Claims Paid are still trending 6% lower than the prior plan year at $1.78 million compared to $1.9 million a year ago. The Net Medical/Pharmacy Paid Claims Per Employee Per Month (PEPM) are at $632.16 compared to $672.81 a year ago. Ms. Martinez continued by reviewing the paid claims and administration information through the end of March for all plans combined. The average enrollment is 312. The expected claims liability, which is CBIZ' expected number and the Town's budget number, is $2.25 million. The maximum claims liability, which is the UHC contractual amount, is $3.22 million. The amount paid for medical claims through March was $1.44 million. The amount paid for Rx claims was $508,000 and there have been $175,000 in Rx rebates. The total paid claims are $1.78 million YTD; with the admin fees of $645,000 and HSA contributions of $231,000, the total claims and admin fees for the first nine months of the plan year are $2.65 million. The loss ratio for expected claims is tracking at 76% and at 55% against maximum liability. The claims and admin fees PEPM is at $944 through March. The plan is running at 81% against budget. Ms. Martinez continued to review the report and focused on the High Deductible Health Plan (HDHP). 62% of employees are enrolled in the HDHP. This plan is tracking at 56% of expected liability or 45% of maximum liability. The claims and admin fees PEPM is $727 through March. For reference, the prior plan year ended at $727 PEPM. The HDHP plan is running at 64.7% against budget; the prior plan year ended at 73%. The PPO plan is tracking at 112% of expected liability or 90% of maximum liability with claims and admin fees PEPM at $1,409 through March. For reference, the prior plan year ended at $1,216 PEPM. The membership of the PPO has been decreasing every year for the past few years and is at 118 compared to 143 a year ago. The PPO plan is running at 108.4% of budget; the prior plan year ended at 102.6%. Ms. Martinez added that there are four large claimants so far this plan year, and they are all enrolled in the PPO which impacts the loss ratio. Next Ms. Martinez reviewed the year-over-year comparison and reminded the Trustees that the numbers on this page are very conservative. The 2023-2024 plan year finished at $3.4 million; the estimated annualized cost for the 2024-2025 plan year is $3.88 million with an expected increase of 13.7% or $468,000 from the prior year. These estimates are based on the trajectory of how the plans are being utilized. The estimated PEPM is currently $1,035, but the further into the plan year we are, the more accurate this projection gets. The annualized estimated budget vs. Annualized Paid Claims is 89.6%. Ms. Martinez finished by going over the Large Claims Report Over $50k. There are three large claimants with paid claims between $72,000 and $125,000 who also had claims in February. There is one new large claimant in March with paid claims of $52,000. These four large claimants represent 18.9% of total medical and Rx claims.      4.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH MARCH 2025 4.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH MARCH 2025 Vice Chair Gephart reviewed the fund balance report through the end of March. The Total Cash is $3.46 million. Total Investments are $820,000 at the end of March for Total Assets of $4.33 million. The fund has $3.4 million in Total Revenues, which is $250,000 higher than a year ago. This is a combination of $2.5 million in employer-paid premiums, $458,000 in employee-paid premiums, $307,000 in cost allocation for the health clinic and pharmacy rebates and $112,000 in investment income. Vice Chair Gephart continued to review the income statement and reviewed expenditures. Outside professional services are $780,000 at the end of March. The wellness program is $48,000 and claims are $2 million. The total ending fund balance is $4 million. The trust fund remains very healthy, up $600,000 since the end of the last fiscal year.      5.PRESENTATION AND DISCUSSION ON OPEN ENROLLMENT 2025 Andrew Votava, Human Resources Director, presented a summary of open enrollment that took place during May. He reminded the trustees of the reserve calculation from a year ago at the beginning of the 2024-2025 plan year that included a cash balance that was between 6-9 months of reserve. In comparison, the reserve calculation that was presented at the April 2025 meeting showed a cash balance that was between 9-12 months of reserve. For the current reserve calculation, the assumptions are a favorable renewal and that expected claims went down. Management worked to devise a strategy to bring the cash balance back within the 6-9 months of reserves within one year. Premiums were lowered across the board for the 2025-2026 plan year for a planned budget deficit. The projected claims reversal splits the expected and maximum claims liability with an amount of $1 million which will result in 8 months of cash reserves. This will put the cash balance back within the 6-9 months of reserve. Even if the plan has a maximum claims year, the cash balance will still be at the minimum 6 months of reserve. The Town will continue the strategy of a robust wellness program where employees are incentivized to work on healthy habits. In the first year, the Town remained within the budgetary target of $155,000. Employees earned $88,000 through the UHC Rewards incentive program and $27,000 through the Pillars of Wellness program. 158 employees participated in the Pillars program. Approximately 70 employees met the requirements to earn an incentive for the philanthropy pillar, lifestyle pillar and screening pillar. 120 employees met the requirements to earn an incentive for the financial pillar. The Town will engage CBIZ to conduct a survey to gauge employees' impressions of the wellness program and continue to watch the prescription drug claims data to see if spending on drugs is reducing as members move away from the pre-diabetic and diabetic range and the lifestyle drugs associated with this disease. Open enrollment took place between May 8-19 last month. It was a passive enrollment which means that if employees chose not to participate, all of their current benefits would roll over into the new plan year. 169 of 331 eligible participants did complete open enrollment. Six employees switched from the PPO to the HDHP. Two employees elected medical coverage for the first time and both elected the HDHP. Only one employee switched from the HDHP to the PPO. Going into the new plan year, 65% of employees are enrolled in the HDHP compared with 62% last year. Chair Trembulak asked how the Town manages premium reductions this year and a possible increase in premiums in the future. Mr. Votava answered that there was not much communication or emphasis placed on the premium reduction this year since rates do tend to fluctuate each year. Trustee Parston asked if screenings are recommended as a part of the wellness program. Mr. Votava answered that yes, age-appropriate screenings are recommended. Trustee Parston reported about some new medical technology he learned about recently. Chair Trembulak asked if the Town has plans to expand the wellness program. Mr. Votava answered that the Town will keep the wellness program the same for a second plan year.      ADJOURNMENT    Motion by Chair Frank Trembulak, seconded by Vice Chair Dave Gephart to adjourn the meeting at 10:40 a.m.  Vote: 4 - 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 _3rd_ day of _June, 2025_. I further certify that the meeting was duly called and held and that a quorum was present. Dated this _4th__ day of _June__, 2025. ______________________________ Jen Inboden Senior Human Resources Analyst