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HomeMy WebLinkAboutMinutes - Health Care Benefits Trust Board - 6/2/2026MINUTES HEALTH CARE BENEFITS TRUST REGULAR SESSION June 2, 2026 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 10:00 a.m.   ROLL CALL Present: Frank Trembulak, Chair Dave Gephart, Vice Chair Harry Greene, Member Mark Parston, Member Absent: Jennifer Marek, Member Staff Present: Jennifer Inboden, Board Secretary Andrew Votava, Human Resources Director Sonya Martinez, CBIZ Account Executive Eric Rustand, CBIZ Business Unit President CALL TO AUDIENCE - There were no speaker requests.   REGULAR SESSION AGENDA   1.REVIEW AND APPROVAL OF THE APRIL 14, 2026 REGULAR SESSION MEETING MINUTES   Motion by Member Harry Greene, seconded by Member Mark Parston to approve the April 14, 2026 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 2026-2027 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 Member Mark Parston, seconded by Member Harry Greene 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, 2026. Vote: 4 - 0 Carried    Trustee Marek arrived at 10:02 a.m.   Motion by Chair Frank Trembulak, seconded by Member Harry Greene 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, 2026. Vote: 5 - 0 Carried   3.PRESENTATION AND DISCUSSION OF THE MEDICAL AND PHARMACY EXPERIENCE REPORT THROUGH MARCH 2026 Sonya Martinez, CBIZ Account Executive, presented the Medical and Pharmacy report through the end of the third quarter in March 2026. She started with the Year-over-Year Financials. Total Medical/Pharmacy Claims Paid is $2,717,494 compared to $1,952,187 a year ago. Pharmacy rebates are $140,582 compared to $174,566 a year ago. The lower rebate amount can be attributed to members coming off of specialty drugs or off of the plan. The Net Medical/Pharmacy Paid Claims are at $2,478,311 compared to $1,777,620 a year ago which is a 40.7% increase. The fixed costs are slightly lower than they were at the end of the third quarter last year due to a slight dip in enrollment. The total plan costs are up 30% from last year at $3,117,694 compared to $2,423,050 or $1,119 per employee per month (PEPM) compared to $862 a year ago. Ms. Martinez continued by reviewing the paid claims and administration information through the end of the third quarter for all plans combined. The average enrollment is 310. The expected claims liability, which is CBIZ' expected number and the Town's budget number, is $1.9 million. The maximum claims liability, which is the UHC contractual amount, is $2.9 million. The amount paid for medical claims through March was $2.2 million. The amount paid for Rx claims was $534,000 and there have been $140,000 in Rx rebates. The total paid claims are $2.5 million; with admin fees of $639,000 and HSA contributions of $236,000, the total claims and admin fees for the plan year are $3.3 million. The loss ratio for expected claims is 129.4% and 85.6% against maximum liability. The claims and admin fees PEPM are $1,204 through March. The plan is running at 122% against budget. Ms. Martinez continued to review the report and focused on the High-Deductible Health Plan (HDHP). The HDHP is running at 105% of expected liability or 84% of maximum liability. The claims and admin fees PEPM are $954 through March. The PEPM a year ago was $727. For reference, the prior plan year ended at $755 PEPM. The HDHP plan is running at 101% against budget. The PPO plan is running at 174% of expected liability or 140% of maximum liability with claims and admin fees PEPM at $1,742 through March. For reference, the prior plan year ended at $1,411 PEPM. The membership of the PPO has been decreasing every year for the past few years and is at 110 compared to 118 a year ago. The PPO plan is running at 157.3% of budget; the prior plan year ended at 109%. Next Ms. Martinez reviewed the year-over-year comparison and reminded the Trustees that the numbers on this page are typically very conservative, but as we approach the end of the plan year, they tend to be more realistic. The 2024-2025 plan year finished at $3.6 million; the estimated annualized cost for the 2025-2026 plan year is $4.5 million, which is an increase of 25% or $909,000 from the prior year. The PEPM is $1,212 compared with $962 in the prior year. The PEPM Total Cost History is up 26% from the prior year. The Budgeted Claims vs. Paid Claims & Admin is 123%. Ms. Martinez explained the Large Claims Report Over $50k. There are two large claimants with paid claims of $197,000 and $201,000 through March. Since these claims exceeded the $150,000 stop loss threshold, there has been $98,000 paid back to the plan as a stop loss reimbursement. The Plan paid $855,000 for nine large claimants which accounts for 35% of all claim expense prior to the stop-loss adjustment.   4.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH MARCH 2026 4.PRESENTATION AND DISCUSSION OF THE FUND BALANCE REPORT THROUGH MARCH 2026 Vice Chair Gephart reviewed the fund balance report through the end of March. Assets are down $683,000 since March 2025. The Total Cash is $3.49 million. Total Investments are $68,000, down from $820,000 at the end of March 2025. The fund has $3.1 million in Total Revenues, which is 10% less than a year ago. This is a combination of $2,157,000 in employer-paid premiums, $346,000 in employee-paid premiums, $282,000 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. The wellness program is $37,300 and claims are $2.9 million, up $911,000 compared to the end of the third quarter a year ago. The total ending fund balance is $3.3 million, down $705,000 from the end of the prior plan year. Chair Trembulak asked how the cash to investments is managed. Vice Chair Gephart explained that the self-insurance fund is pooled in cash and investments with the rest of the Town. Investment income of $112,669 this year is nearly identical compared to $112,628 last year. The fund has experienced a draw down in investments, but the investment income has remained stable which demonstrates a higher yield of over 4% with investments. The cash balance has an overnight investment mechanism that invests our excess reserves on our behalf which provides added stability.   5.PRESENTATION AND DISCUSSION ON OPEN ENROLLMENT 2026 Andrew Votava, Human Resources Director, presented a summary of open enrollment that took place during May. He reminded the trustees that the projected losses were expected since the Town implemented a premium reduction strategy for the 2025-2026 plan year to keep the cash balance within the 6-9 months of reserve. At the April meeting, the trustees voted to approve the reserve policy for the 2026-2027 plan year that should maintain reserves within the target range of 6 to 9 months. The Town will continue the strategy of a robust wellness program where employees are incentivized to work on healthy habits to mitigate the diabetes trend. In the first year, employees earned $88,000 through the UHC Rewards incentive program and $27,000 through the Pillars of Wellness program through the end of the third quarter. This year, UHC Rewards incentives have increased to $104,000 and Pillars to $28,000 through the end of the third quarter. Participation in the Pillars program is up from 158 in the first year to 192 this year. Open enrollment took place between May 7-18 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. 159 of 327 eligible participants did complete open enrollment. Mr. Votava said that the Town is switching stop loss insurance carriers for the 2026-2027 plan year from UHC to HCC.   ADJOURNMENT   Motion by Chair Frank Trembulak, seconded by Vice Chair Dave Gephart to adjourn the meeting at 10:41 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 _2nd_ day of __June, 2026__. I further certify that the meeting was duly called and held and that a quorum was present. Dated this __4th__ day of _June__, 2026. ______________________________ ______________________________ Jen Inboden Human Resource Analyst