Insurance Committee Meeting 02/11/2014

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1 Insurance Committee Meeting 02/11/2014

2 Agenda Wellmark Medical Renewal Medical Utilization and Projection Medical RFP Next Steps Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 2

3 WELLMARK MEDICAL RENEWAL Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 3

4 Wellmark Renewal Wellmark issued a no change to current rates. PPO $500 plan: -0.37% decrease HDHP: +0.42% increase Pushing back on Wellmark on claim projections, too high ACA fees and required health changes are included in the premiums ACA fees ~4% ACA changes 0.22% Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 4

5 ACA Plan Changes No Pre-existing exclusions Late enrollees can only come on at open enrollment OPM maximums not to exceed $6,350 Single $12,700 Family Office copays will apply to OPM Rx copays will apply to OPM July 2015 Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 5

6 ACA Plan Changes Treatment of infertility, up to diagnosis, is considered essential health benefit Dollar limits cannot be placed on treatment of infertility, up to diagnosis, but can apply to transfer procedure(s). Plans currently allows for coverage up to a maximum of $25,000 per member per lifetime and must be updated. Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 6

7 ACA Plan Changes Infertility benefit options 1. Do not included coverage for infertility 2. Include coverage with no maximums-coinsurance will apply to OPM 3. Cover infertility up to first procedure 4. Cover infertility services, up to diagnosis, with no maximum, procedures will be covered up to a lifetime maximum Renewal priced option 4 with a $25,000 lifetime maximum for transfer procedures. Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 7

8 Demographics Enrollment increased from 152 contracts to 159, 4.61% increase Group is primarily female (72.33%) Mostly single contracts (84.28%) Primarily contracts over the age of 45 (59.75%) Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 8

9 Large Claimants Large Claims Distribution Prior - 1 Prior Current Wellmark Individuals 12/01/ /30/ /01/ /30/ /01/ /30/2013 Expected $10,000 - $35, $35, Source: Wellmark Marketing Analysis Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 9

10 Utilization Highlights Copays will apply towards OPM Source: Wellmark Core Report Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 10

11 Rx Utilization Highlights Pharmacy Comparison Generic utilization PPO $500 Plan: 77.7% HDHP: 80.8% Source: Wellmark Core Report. Current: December 2012 through November 2013 Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 11

12 MEDICAL UTILIZATION/PROJECTION Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 12

13 3-Year Medical Trend Projections 3 Year Trend line Slope -8.0% Monthly Claim Cost & Trend Line $800 $600 $400 $200 $0 Current 1st Prior 2nd Prior Paid Claim Cost $ $ $ Adj. Claim Cost $ $ $ Weighting 60.0% 40.0% 0.0% Weighted = $ Data updated through December Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 13

14 Medical Projection Periods Total Paid Claims Spec/Agg. Reimbursement(s) Current 12 months $635, $0.00 1st Prior 12 mos. $737, $64, nd Prior 12 mos. $841, $58, X $ Weighted Claim Cost 1.00 Benefit Plan Adjustments X 1.05 Margin for claim fluctuation X 1.07 Trend (14 6% X 159 Current Lives X 12 Annualize = $753, Proj. Net Paid Claims + $ - ACA Fees (3.8% of prem) + $ 590, Administrative Costs = $1,343, Est. Needed Premium vs. budgeted $ 1,424, Current Premium/rate level -5.7% Estimated from current budget ($80,742) Estimated from current budget Data updated through December Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 14

15 Claim Cost Sharing How much did employees pay via plan design requirements (deductibles, coinsurance, etc )? And how much did the plan pay? Plan Year 7/2007-6/2008 7/2008-6/2009 7/2009-6/2010 7/2010-6/2011 7/2011-6/2012 7/2012-6/2013 7/ /2013 Total Allowed $779,030 $1,338,222 $1,101,537 $973,246 $912,589 $797,427 $370,750 Plan Liability $ $647,101 $1,148,461 $928,272 $761,728 $738,742 $624,802 $299,129 Plan Liability % 83% 86% 84% 78% 81% 78% 81% Member Liability $ $131,929 $189,761 $173,265 $211,518 $173,847 $172,625 $71,621 Member Liability % 17% 14% 16% 22% 19% 22% 19% Source: Wellmark Quarterly Reports Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 15

16 MEDICAL RFP Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 16

17 Carriers Coventry Health Care Submitted Fully Insured Proposal Health Alliance Submitted Fully Insured Proposal United Healthcare Submitted Fully Insured Proposal ISEBA- Wellmark Declined to Quote by requested deadline. May provide quote later. Cooportunity Health Declined to Quote Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 17

18 Evaluation Criteria As part of evaluating the RFP, MJBA rates the responses on their overall completeness and presentation. The following criteria are rated: July 1 effective date? Rates net of commissions? Current pooling level quoted? Creditability and experience rating, specified weightings Health care cost management services Explain reporting capabilities available Provide renewal notification Feb 1? PBM Services included/addressed? Access: Geo Access Reports MH/SA and Transplant Networks: information provided and rating of network Complete and concise proposal? Articulated variances from current plan designs? Proposal: 4 hardcopies and electronic version received by due date? Vendor Acknowledgement complete? Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 18

19 RFP Responses RFP Evaluation CoOpportunity - DTQ ISEBA - DTQ HAMP Coventry UHC Low Scores Are Preferable Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 19

20 RFP Rates Deductible Single $500 $2,500 Family $1,000 $5,000 Current Rates EFF 7/1/2013 EFF 7/1/2013 Single 60 $ $ Family 13 $1, $1, Monthly Premium $63,557 $55,624 Total Annual Premium $1,430,175 Renewal Rates EFF 7/1/2014 EFF 7/1/2014 Single 60 $ $ Family 13 $1, $1, Monthly Premium $63,323 $55,855 Total Annual Premium $1,430,138 Annual Premium Decrease/Increase -$37 Percent Change from Current 0.00% UHC Rates EFF 7/1/2014 EFF 7/1/2014 Single 60 $ $ Family 13 $1, $1, Monthly Premium $65,811 $60,616 Total Annual Premium $1,517,130 Annual Premium Decrease/Increase $86,955 Percent Change from Current 6.08% Coventry Rates EFF 7/1/2014 EFF 7/1/2014 Single 60 $ $ Family 13 $1, $1, Monthly Premium $59,167 $46,128 Total Annual Premium $1,263,538 Annual Premium Decrease/Increase -$166,636 Percent Change from Current % HAMP Rates EFF 7/1/2014 EFF 7/1/2014 Single 60 $ $ Family 13 $1, $1, Monthly Premium $66,514 $51,584 Total Annual Premium $1,417,176 Annual Premium Decrease/Increase -$12,999 Percent Change from Current -0.91% Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 20

21 RFP Annual Premiums Current Rates $1,430,175 Renewal Rates $1,430,138 UHC Rates $1,517,130 Coventry Rates $1,263,538 HAMP Rates $1,417,176 Annual Premium Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 21

22 Coventry Pros & Cons Pros Cons Rates include ACA fees. Matched pooling level of $35,000 Mayo Clinic and Univ. of IA Hosp./Clinics are contracted providers for both PPO and POS networks. Offers employers online account management Employees have access to My Online Services Offers online health risk assessments GEO access report did not include everyone listed on census. Offered preliminary rates, not final. Did not provide references. Did not match current benefits, such as coverage for private duty nursing care, bariatric surgery and non-emergent treatment outside the United States. Based on our experience, reporting capabilities are inferior to other carriers. Uses separate network for mental health and substance abuse. Coventry recommends their POS network rather than PPO network. Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 22

23 Coventry Plan Comparisons Current Plans Coventry Alliance Select Alliance Select HSA Qualified HDHP BCSD PPO/POS BB B501L MPL PPO/POS QHH A2500 MPL Deductible Amount In Out In Out In Out In Out Single: $500 $2,500 $3,500 $500 $2,500 $3,500 Family: $1,000 $5,000 $7,000 $1,000 $5,000 $7,000 Coinsurance In Out In Out In Out In Out Schedule 90/10% 80/20% 100/0% 100/0% 90/10% 80/20% 100/0% 100/0% Out-Of-Pocket Max. In Out In Out In Out In Out Single: $1,000 $2,500 $3,500 $1,000 $2,500 $3,500 Family: $2,000 $5,000 $7,000 $2,000 $5,000 $7,000 Prescription Drugs In Out In Out In Out In Out Tier 1: $10 0% after Ded $10 Not Covered 0% after Ded Not Covered Tier 2: $25 0% after Ded $20 Not Covered 0% after Ded Not Covered Tier 3: $40 0% after Ded $45 Not Covered 0% after Ded Not Covered Specialty: $85 0% after Ded $85 Not Covered 0% after Ded Not Covered Rx Deductible (Waived for Tier 1) Single: $50 NA $100 Not Covered $0 Not Covered Family: $100 NA $300 Not Covered $0 Not Covered Office Visits In Out In Out In Out In Out $20 copay 20% after Ded 0% after Ded 0% after Ded $20 copay 20% after Ded 0% after Ded 0% after Ded Emergency Room In Out In In Out In 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 20% after Ded 0% after Ded 0% after Ded Inpt/Outpt Hospital In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 20% after Ded 0% after Ded 0% after Ded Preventive Care In Out In Out In Out In Out No charge 20% after Ded No charge 0% after Ded No charge 20% after Ded No charge 0% after Ded Infertility Benefits In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 20% after Ded 0% after Ded 0% after Ded $25,000 Lifetime Max $25,000 Lifetime Max $25,000 Lifetime Max Coins does not apply to OPM Coins does not apply to OPM $25,000 Lifetime Max Routine Vision Exam In Out In Out In Out In Out (Including Refraction) No charge 20% after Ded No charge 0% after Ded No charge Not Covered No charge 0% after Ded Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 23

24 Health Alliance Pros & Cons Pros Cons Provided final rates Provided references Rates include ACA fees Uses same PBM, Catamaran, that Wellmark uses. Health Alliance manages formulary independent of PBM Has not had a strong presence in Iowa for the past few years. Quote did not match current benefits. Pooling level quoted $50,000, willing to consider $25,000 if selected as finalist. Mayo Clinic is not contracted network provider. Univ. of IA Hosp./Clinic is contracted network provider Rated best response to RFP by our office No third party network for behavioral health Online tools for employer and employees Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 24

25 Health Alliance Plan Comparisons Current Plans Health Alliance Alliance Select Alliance Select HSA Qualified HDHP PPO Plan # 16,664 QHDHP Plan # 16,665 Deductible Amount In Out In Out In Out In Out Single: $500 $2,500 $3,500 $500 $500 $2,500 $3,500 Family: $1,000 $5,000 $7,000 $1,000 $1,000 $5,000 $7,000 Coinsurance In Out In Out In Out In Out Schedule 90/10% 80/20% 100/0% 100/0% 90/10% 80/20% 100/0% 90/10% Out-Of-Pocket Max. In Out In Out In Out In Out Single: $1,000 $2,500 $3,500 $1,000 $1,000 $2,500 $3,500 Family: $2,000 $5,000 $7,000 $2,000 $2,000 $5,000 $7,000 Prescription Drugs In Out In Out In Out In Out Tier 1: $10 0% after Ded $10 0% after Ded Tier 2: $25 0% after Ded $25 0% after Ded Tier 3: $40 0% after Ded $40 0% after Ded Specialty: $85 0% after Ded $85/50% 0% after Ded Rx Deductible (Waived for Tier 1) Single: $50 NA no ded N/A Family: $100 NA no ded N/A Office Visits In Out In Out In Out In Out $20 copay 20% after Ded 0% after Ded 0% after Ded $20 copay 20% after Ded 0% after Ded 0% after Ded Emergency Room In Out In In Out In 10% after Ded 20% after Ded 0% after Ded 0% after Ded $175 copay (ded does not apply) 0% after Ded 0% after Ded Inpt/Outpt Hospital In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 20% after Ded 0% after Ded 0% after Ded Preventive Care In Out In Out In Out In Out No charge 20% after Ded No charge 0% after Ded No charge 20% after Ded No charge 0% after Ded Infertility Benefits In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after ded 20% after Ded 0% afer Ded 0% after Ded $25,000 Lifetime Max $25,000 Lifetime Max Coins does not apply to No lifetime max Routine Vision Exam In Out In Out In Out In Out (Including Refraction) No charge 20% after Ded No charge 0% after Ded No charge 20% after Ded No charge 0% after Ded Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 25

26 UHC Pros & Cons Pros Cons ACA fees are included in rates. Access to national network of providers. Mayo Clinic and Univ. of IA Hosp./Clinics are contracted providers for both PPO and POS networks. Provided preliminary rates, not final. Would not commit to provide renewal notification by Feb 1. Uses third party for MH/SA benefits. Pooling level is $100,000 Did not match current benefits, many deviations. Could not confirm what monthly reports would be available. Reporting is inferior to Wellmark. Did not provide references. Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 26

27 UHC Plan Comparisons Current Plans UnitedHealthcare Alliance Select Alliance Select HSA Qualified HDHP Choice Plus_Mod JY-Z Choice Plus_Mod GP-L Deductible Amount In Out In Out In Out In Out Single: $500 $2,500 $3,500 $500 $2,500 $3,500 Family: $1,000 $5,000 $7,000 $1,000 $5,000 $7,000 Coinsurance In Out In Out In Out In Out Schedule 90/10% 80/20% 100/0% 100/0% 90/10% 70/30% 100/0% 80/20% Out-Of-Pocket Max. In Out In Out In Out In Out Single: $1,000 $2,500 $3,500 $1,000 $2,500 $3,500 Family: $2,000 $5,000 $7,000 $2,000 $5,000 $7,000 Prescription Drugs In Out In Out In Out In Out Tier 1: $10 0% after Ded $10 $10 0% after Ded Tier 2: $25 0% after Ded $25 $25 0% after Ded Tier 3: $40 0% after Ded $40 $40 0% after Ded Specialty: $85 0% after Ded $85 $85 0% after Ded Rx Deductible (Waived for Tier 1) Single: $50 NA $50 $50 NA Family: $100 NA $100 $100 NA Office Visits In Out In Out In Out In Out $20 copay 20% after Ded 0% after Ded 0% after Ded $20 copay 30% after Ded 0% after Ded 20% after Ded Emergency Room In Out In In Out In 10% after Ded 20% after Ded 0% after Ded 0% after Ded $100 copay $100 copay 0% after Ded 20% after Ded Inpt/Outpt Hospital In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 30% after Ded 0% after Ded 20% after Ded Preventive Care In Out In Out In Out In Out No charge 20% after Ded No charge 0% after Ded 100% 30% after Ded No charge 20% after Ded Infertility Benefits In Out In Out In Out In Out 10% after Ded 20% after Ded 0% after Ded 0% after Ded 10% after Ded 30% after Ded 0% after Ded 20% after Ded $25,000 Lifetime Max $25,000 Lifetime Max Coins does not apply to OPM Routine Vision Exam In Out In Out In Out In Out (Including Refraction) No charge 20% after Ded No charge 0% after Ded 10% after Ded 30% after Ded 0% after Ded 20% after Ded Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 27

28 Medical GEO Access Reports The following carriers provided the information using the requested parameters in the RFP Primary Care Physician (PCP): 2 Providers within 10 Miles Specialists: 2 Providers within 10 Miles Hospitals: 1 Facility within 20 Miles Physician Type Coventry (162 ees)* CHC Iowa PPO Network % of Employees WITH desired Access Primary Care Physician 99.4% Specialist 99.4% Hospital 100% Physician Type Health Alliance (223 ees) Midwest PPO Network % of Employees WITH desired Access Primary Care Physician 96.9% Specialist 96.0% Hospital 100% Physician Type UHC (223 ees) POS Iowa Choice Plus IP Network % of Employees WITH desired Access Primary Care Physician 99.6% Specialist 98.7% Hospital 100% *Coventry did not include all employees in geo access distribution report. Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 28

29 NEXT STEPS Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 29

30 Next Steps RFP Decision Finalist Interviews or Remain with Wellmark? Medical Renewal Wellmark is reconsidering renewal Model alternate Plans? Consolidate plans? Copyright by Mark J. Becker & Associates, LLC All Rights Reserved 30

31 Questions? Copyright by Mark J. Becker & Associates, LLC All Rights Reserved