Travis County Commssioners Court
June 10, 2003
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Item 27
27. Consider and take appropriate action on the following employee healthcare issues: a. A new co-insured epo plan with coordinating changes on other plans; b. Plan design, options and corresponding rates and terms; c. An optional pharmacy only plan for retirees over 65; d. An increase to retiree-paid premium rate for fy 04 and benefits for over age 65 retirees who receive both medicare parts a and b; e. Changes in the "opt out" feature of the benefit plan; f. Ppo plan as the default option for employees who do not attend open enrollment; and. G. Proposed informational flier for employee public hearing.
>> good afternoon, judge and Commissioners. Alicia perez, executive analyst for administrative operations. We are here before you today to discuss health care benefits for Travis County employees. It a stark reality that health care costs have escalated significantly, not only for Travis County, but nationally. The three largest governmental entities in the area, Travis County, city of Austin and the state of Texas face diminishing resources and yet are required to provide for the increased cost in providing health care foremployees. Health care benefits is one of the very basic compensation components for public employees. A committee has been working, made up of county employees, and if you turn to page 1 of your backup you see the different departments that have participated. We have also had a representative of asme, we've had a representative of united health care and we've had working with the actuary [indiscernible] u.s.a. On the numbers that you have. This year the Commissioners court allocated 2.3 million to supplement the fy '03 budget in health care. In fy '04, we were facing an $8 million increase. As I said, the employee committee has been working to try to diminish the impact to Travis County and implement a reasonable cautionary measures for employees. The seven items that you have before you are unified recommendation of the committee. I would ask you to turn to page 4. In is the -- this is the overall plan, health care plan that we would present the court. The one plan but with three options. Those three options were developed after much research, debate, discussion, and we believe that it is a very good plan that provides the employee the options that they can choose in -- coringly with their financial situation, their family needs and their health care needs. Number 1 on your agenda, discusses the co-insured epo. This is a new option that we have not had before. It came as a result of much discussion in terms of affordability for employees. And what the health care, what health care would cost, not only to them, but to their families. The co-insured epo plan would require no contribution by employees, it would have a calendar year deductible for in network of 400, for individual 1200 for family. It would owe they would have to use network providers. Number 4 is one of the big differences, that this would be a co-insured of 80/20. Our standard ppo provides a co-insured of 90/10. What this means is that the county would pay for 80% of medical costs and the employee would pay for 20%. This is a -- above and beyond the office visits, the co-pay office, the co-pay for office visits and the company pay for pharmaceuticals. Now, the -- one of the key -- items to notice on each of the plan is that the employee risk is limited to 1500 individual and 3,000 for the family and that is a maximum out of pocket. So if you pick the 80/20, if the employee picks the 80/20 plan, they have a cap of $1,500 out-of-pocket expenses per individual. In terms of the hospital confinement, that will be $100 per confinement and then there are -- the pharmacy program and those have changed for all three plans. In the information that you have, we also covered the changes in both the epo and the ppo. Those are the colored-in, boxed areas. In the epo, that is a fully insured plan, much like an hmo. We are recommending that for that the employees pay $40 a month for that particular plan. That has been one of our most expensive plans because it does cover 100% of medical costs outside the co-pay for office and the pharmaceuticals. The majority of our employees are in that plan. So, again, to have some [indiscernible] for employees, we are recommending the $40 month charge for that. We have -- we have the rest of the plan, up until you get to the office visit co-pay, is the same. All the office -- on the office visit co-pay, both for epo and ppo, we have increased that from $15 to $20 for a gp and gp's include pediatricians and gynecologists and internists and then $35 for a specialist. One of the premier components of our plan is that employees can go to specialists without having a referral from a g.p. They can go straight to a specialist. But on this plan, it is our recommendation that again to cost share that would go up to $35 from 15. [indiscernible] for the ppo is up from -- that's never used or met, $100 per confinement in the hospital, then changes in the pharmacy from generic drugs, five to $10, name brand drugs, 15 to 25 and then 35 for name brand if generic is not available. Then, of course, you have your mail order that are three month supply for two co-pays. Under the ppo, which we are also asking the court to make that our default plan, when people don't go and go to open enrollment, that they go ahead and default to the ppo. The ppo plan would have an increase in the calendar year deductible from 150 to 200 for individual, 450 to 600 for family. It is a 90/10 coverage, which means the county pays or picks up 90% of the coverage and the employee would pick up 10, up to $1,500. I think it's real important to -- to emphasize to employees that that is a very, very good protection. $1,500 is a maximum that you would pay. After that the county would -- would pick up the expenses. If you go out of network, on the ppo, you pay 70/30, that is the split for medical expenses. Office visit co-pay as we've discussed before, will have an increase from 15 to 20. For g.p. And 15 to 35 for specialist. We have talked about the out of pocket and maximum and then there is also maximum for families of 25 -- I'm sorry, out of pocket maximum for out of network, 2500 for individual and 7500 for family. 100 for hospital confinement and then the changes as I mentioned before on the pharmaceuticals. That is the -- the plan. I think this -- I think this plan does several things. It shares the cots with employees to assist the court in the -- in adding the increase in cost. It provides tremendous choice. Three options as opposed to two that we have had. It protects the employees in having the maximum amount out of pocket of 1500. It does not include a form lone stary, meaning that there is -- formulary, meaning there is not a required drug list and it also makes it very affordable for the families to ensure their children. In terms of the cost for these plans, I would refer you to the last page, in your backup. And you have the benefit committee unified recommendation, active employees.
>> you are looking at the proposed contribution amounts?
>> yes, sir.
>> the foldout?
>> yes, sir.
>> okay.
>> you have proposed county contribution, and in that first box you have what the actual cost is to insure each of those tiers, you have what the composite rate would be for budgeting purposes of 517 17. You have the current county premium for employees per month, you have the proposed contributions, the current contributions per tier, and the amount of monthly increase. Theris a -- there is an important factor to point out to employees. In that the county has traditionally subsidized the families of employees in Travis County. We have not focused on that component of the benefits as much as we probably should. In looking at the subsidies, as you can tell on the current county subsidy, they were not equitable. And there were reasons for that is because we used a percentage of increase to premiums as a determinant and now since you went to self-insured and we have more data and we have the experience in terms of medical costs, we believe that it is now time to recommend that those subsidies be more equitable. You have a subsidy for adult, any tier with adult in it at 65%. And the tiers with children in it at 70%. That is a generous subsidy. For the most part the city of Austin and the state of Texas provide 50% subsidies. Lcra, I do believe, provides about 72% subsidies. But these are very competitive with other governmental entities and I think are probably better than most governmental entities. And even with -- with that, you see that one of the tiers that is hardest hit in terms of the percentage of increase is the adult plus one, 94%, again, that is indicative of the actual medical costs that that particular tier is experiencing. So we believe that this is a -- a fair plan, that it equalizes the subsidy, that it provides choice, and is one that the committee again, we are unified in making the recommendations. There's a couple of other issues on your agenda that we would like to cover. Are there any questions on the plans?
>> alicia, it's more of a clarification so that we are clear about what language is being used. A pretty typical thing is somebody doesn't get sick, they go in to see the doctor maybe once a year. If they say, oh, let's get a blood test, kind of see what your cholesterol is doing, all of that kind of stuff. You would obviously be paying an office visit, that would be the $20. Is there anything else in terms of being associated with that visit that you would have to -- if you chose not to go with the all bills paid version of this, that someone would have to pick up in terms of related to that office visit? You know, something that's pretty routine that I think we have thought about being folded into that office visit, are we breaking thinking apart that all of a sudden now that diagnostic quick and dirt tee blood test or a pap test or something like that, the employee will have to pick up the full cost of that to apply towards the deductible?
>> it is on the -- how the provider bills the charge and where the service is performed. If everything is done right there at the doctor's office, it will probably be billed under the office visit charge and therefore we would just have a co-pay to deal with. If they send them out to an outside lab or to the outpatient department of a hospital to get a test done, then you're right the calendar year deductible would probably come into play and must be satisfied before the co-insurance can pay on the charges.
>> one other thing that we have a lot of folk that are either diabetic or probably a better example would be allergy shots. In terms of how is that going to be handled? Is that anything -- because pop in, get your shot and you're out the door. Is that still going to be handled as an office visit --
>> yes. It will still be handled as an office visit and an allergist is going to be considered as one of the basic tier, the lower cost co-pays. Because that is a very good benefit and we -- we made that it way for a reason and we want to continue that in play. So that would come under the service that's an allergist would the most part would come under the office visit co-pay.
>> in terms of durable medical goods in terms of diabetics getting the protesting status, all of that kind of stuff, any change related to that.
>> we did not change any benefits. No benefits went away or were decreased. The only changes are on the cost sharing arrangement is how, you know, the amount of the co-pay or the premium. The benefits stayed exactly like they were.
>> let me -- those are just questions in terms of unintended consequence.
>> it was important to the committee to maintain the benefit that's employees identified as being important when this plan was first set up two years ago. Trying to create the balance of cost sharinand maintaining these benefits was a crucial aspect of the -- of the negotiation. There have been preserved, as alicia said earlier, we are still operating on an open market for pharmacy drugs. Still open access to any network to opt without a gate keep are, self referral specialists in the network, ppo outlet of network benefits, but that can be a disadvantage to employees. Still mail order to get three months of prescription drugs for two co-pays. The durable medical equipment is still paid at 100%. We maintain the 6 tiers, which was important to spread the contributions among our population that we had with single parent or [indiscernible] with child. And as alicia also said, there ended up being higher subsidies or more even spread of subsidies, as was mentioned that the allergy testing still remains for one co-pay with no change.
>> sorry, I have to add one more question. This year probably more than any others we may have folks that consider moving from the old ppo/epo into the cost sharing of a ppo. They are used to a set doctor being available on the old hmo. If they switch over for cost sharing reasons because they don't want to do the $40 a month for the all bills paid, would they be looking at a different set of doctors that are available under the ppo, is it more, is it less, is it the same?
>> co-insured epo is going to use the exact same epo provider network as our existing epo. Epo's will be using the same network. The ppo network then is different, slightly different. And it romaines in place -- it remains in place as well. Two networks. One network for both of the epo's, one for the ppo.
>> when will folks get that information about which doctors are in which network so they can start thinking now about what might work best for --
>> it's available all of the time on my uhc or uhc.com. They are not going the route of lists so much as we used to because they get outdated so quickly. The most current information is available online.
>> and -- and that's an excellent question because it would be a concern to me if I was going to be replaced by my doctor not being there. The networks are the same, would not change, we have not cancelled out any doctors nor introduced any other restrictions there.
>> that doesn't mean the exact same doctors are there as there was this time last year because it's an ongoing doctors come in and go off. But employees should go online and check and see what their status is with their provider. [inaudible - no mic]
>> our population has been used to being on on a ppo, some of the concerns that we've had, when you go to the doctor on the ppo, they give you a bill for $5,000, you have to pay it then you realize, does the insurance company reimburse you because they don't want to be in that situation or we would not be able to get treatment. That is not the case. The important thing is to stay in the network providers and the way all of these insurance plans work, the third party administrator enters into a contract with the doctors. They are bound by that contract. Whatever they have contracted to bill under our plan, that's what they can bill. They can't bill any more than that. If the doctor sends you a bill more than that you don't have to pay because they are not allowed to balance bill you on the contract. What you do when you go to the doctor, if you go to a united network doctor, you are on a ppo, you go to your doctor, pay your 15 to $20 like you always zoo. Like senddy said, if they run blood work you might pay another 10 or $15. But you will not be in a position that you have to pay any more than the deductible, if you had a large hospitalization, as she pointed out, you have coverage as long as you are staying within that network, of not exceeding $1,500. Some of the considerations for employees would be die want to be on an hmo where I'm paying a lot more money up front but if something happens I know that I'm not going to have to pay anything else. Or die want to say, you know, I would rather save that premium up front, I would rather not pay it up front, take the chance that I probably will not have a major hospitalization. If you are just going to the doctor, getting medication every month like high blood pressure medication, going to your doctor for a checkup, the two plans look very much alike. The benefits really are very much the same. Where do they become different if you would have a major medical event? And I think the other thing that alicia said, we really need to emphasize for employees, I think one of the things that they are really going to like with this third plan is that we have employees because the premiums were so high, because there wasn't any cost sharing, they could not afford to ensure their children -- to insure their children. This plan, while there are some out of pockets, if there's a major medical event, still you have insurance and you are protected no more than -- you won't be out of pocket for that child for more than $1,500 if something catastrophic happened. But if you are begin going to the doctor, your child has got the flu, you are getting prescription medication, you are paying $15 when you take your child to the pediatrician and you are paying 10 or $25 depending on the prescription they get. It's very good coverage for what happens to most of us. And the people that choose that may say, I would rather not pay that extra premium, I would rather save that money in my paycheck and take a chance that we are not going to have a serious illness. So it really is -- people should not panic about this recommendation because she is right. The coverage is still there. Some options will cost more than others. Some people will really see no noticeable change. And h.r. Is going to get a good education program for employees to see, but -- but I think everyone on the committee felt very good about this plan. One of the things that we needed to consider and some employees have been watching this on television all the time and some have not. But this is a $30 million plan. It's a huge amount of money. As alicia mentioned it went up in total $8 million. The plan design cannot remain the same because even if you all had 8 million, although you don't or if the employees had $8 million to pick up the shortfall, which we know they don't, the question is can we afford another 8 million next year? Or 10 million, or 12 million? Because that's what's happening in the health care industry. So what we tried do is say we can't just look at this year. We need to look at the viability plan, the long-term care of our employees, that's kind of embedded.
>> before we go on, I do want to make one more comment about networks that I forgot our favorite network, Travis County provider network, which we recently added 11 additional doctors to. They will be available for all three plans as well.
>> you know, in years past, there always seemed to be a few employees that -- that for whatever reason have taken advantage of the opportunity to enroll in the time frame that we suggest that they enroll. There's -- there's kind of always been a little problem here and there and I guess I -- I need to make sure that folks understand the real critical importance of enrolling during the time period that you must enroll. Or these are the consequences. Could you maybe just highlight on that just a little bit?
>> yes, sir. The open enrollment starts July the 21st. Is that correct? And goes until about August the 18th. It's approximately one month. We -- employees will be able to enroll right from their desk via the intranet. We will have that -- that option again this year. It is very important that employees take advantage of the enrollment to -- to enroll not only themselves but their families. If they do not enroll during that time period, we are asking the court as part of the items that you have before you to make the ppo the default option. Previously, it was the epo, but since there's a $40 charge, we will make the ppo the default option, which means that they don't enroll during that time period then they will be automatically enrolled in the ppo.
>> that --
>> that is correct, only the employee.
>> there would be basic life and ppo employee only coverage.
>> no family coverage for -- I think it's very important. I think folks need to understand that.
>> yes.
>> that the default coverage would be only for the employee of Travis County not the family if they are going to enroll their family.
>> that is correct.
>> okay. Thank you.
>> another I think important -- to put all of this in context is that the composite rate that this plan would provide us, was [indiscernible] per employee. It is -- it has been $370. So that's a 37% increase on the county's behalf. And employees are wondering, you know, is the county going to significantly invest in this. That is a very significant investment. And so the county is certainly coulding their share in this committee recommendation. The county pays most of the health costs. Roughly 80% of the cost of the plan is picked up by Travis County. And then the other 20% is picked up by employees for dependent kind of coverage. So it's a -- it's a good contribution and in the preliminary budget there is about 5 million and we are asking for about another million. It's a lot to ask for. [one moment please for change in captioners] .
>> so their retirement amounts are substantially below what individuals working today are. And so the committee felt that we ought to be sensitive on those retire eincreases, the amount that their premium increased last year was 14%, and we supported that. Also in light of the fact that we believe that the entire retiree health insurance policy for this county needs to be reviewed during the coming year to maybe revise the way that retirees are treated under the health insurance policy, based upon the number of years. Currently an employee that retires here with eight years gets the same benefits as someone that retires with 30 years. And the committee feels that there should be some differentiation based upon the longevity of the retiree. But those factors in the committee did support a minimal increase for retirees.
>> if you recall, we started out per the actuary, and the rates that you have in front of you were developed by the actuary. But I have provided a sheet with an orange tab on it that should be on the dias. We started off with a 30-million-dollar amount for fy '04. And that gave us an eight-million-dollar increase in health benefits from fy '03. The court has in the preliminary budget approximately five million dollars for health care. The additional for fy '04 to fund the plans that you have before you is 985,000 approximately. In terms of what the employees or the employee committee has work to try to diminish again the burden on the court is the co-pay amount resulted in about dollars' worth of savings. The increased pharmacy co-pay amounts, about 820,000 dollars' worth of savings. The increase in the out of pocket cost was about 150,000. And then the increase of $40 per month in the premiums was about 835,000. And we have a reduction in the premiums for dependents. So overall the changes in the plan resulted in a little bit over two million dollars in savings or reductions to that eight million.
>> in terms of other fund, in terms of what's contributing, is that -- (indiscernible)?
>> yes.
>> so what we're asking from the court today is to establish a new co-insured epo plan with coordinating changes on the other plans as we discussed for you to provide preliminary approval on the plan design options and corresponding rates and terms to allow us to provide all the information to employees, embark on an education program in preparation for the employee hearing that is scheduled for the 25th of June, and then final approval from the court the 26th or the first of July. Establish a pharmacy -- an optional pharmacy, only plan for retirees over the age of 65. Daniel, do you want to discuss that?
>> certainly. Retirees are individuals who reach age 65 automatically become eligible for medicare part a. In a few moments we'll talk to you about medicare part b, which is the physician side. Part a is the hospital side. And when we have a retiree who enrolls for benefits, they generally have both part a and b. And consequently the benefits are paid out to retirees over 65. However, they're paying the same premium and using just the prescription drug benefits. Our recommendation is to offer retirees over age 65 and only to their spouses as dependents this feature, which allows them to enroll only for the prescription drug benefits and pay a reduced cost. The cost to the county -- the cost of the program would be $200, of which the retiree would pay $28 for themselves and for the spouse an additional $28. This also reduces the cost to the county from $258, which would be the retiree over 65 rate down to $172. So there are some savings to the county as well as the retiree over age 65. It's really more equitable because they're going to pay for the benefits they use, not for benefits they probably wouldn't get.
>> we're asking to maintain a 14 percent increase to retiree paid premium yowmz for fy '04 with the full knowledge that we will need to take a year to determine or to craft policies on retirees because that will be an increasing expense. Again, with the aging of america and Travis County employees, unfortunately. But I think we need to really take a comprehensive look at the full program. We are asking the court for approval to coordinate benefits for over age 65 retirees as though they have both medicaid parts a and b.
>> and part a is automatically offered to individuals over 65. Part b is something that they have to enroll in at certain times of the year, and that's the physician's side. And what we would like to do is to have a policy in place that says that payments will be coordinate the as though the retiree had both part a and b, that would allow us to do a medicare prosover, simple fi the plan payment and also help retirees from having to handle additional paperwork when a bill comes from their doctor.
>> one thing I need to add on that, we have about 12 retirees that we've identified that do not currently have medicare part b. We are going to give them an opportunity at the next medicare open season to enroll in part b. It wouldn't go into effect then until next summer, in July, before we would change how we're paying their particular benefits. We would encourage our retirees to have both part a and b. And as we will start coordinating benefits as if they have them, whether they have them nor not, except for those that we have identified that are currently being treated a little differently on the coordination.
>> so you've got some information in our backup, but as you've said there are a lot of employees that are watching this to get this information. I see an awful lot of folks who I presume were members of the employee committee. Could you just expound just a little bit about this process? How much time, how much effort? I have to presume you had some rather lively discussions about what people felt were appropriate changes, needed changes and unacceptable changes. And this is really their work product.
>> yes, that is correct. It has been a challenging endeavor. We've had a lot of participation from a very diverse group of employees. I believe this is a good model for any organization to use. We started off with the benefits as they were now. We met I think every Wednesday from 1:00 or 2:00 until 5:00 or 6:00 o'clock. We had representatives from retirees. We brought in people from the health care to talk to the committee. Also for our actuary came by and talked to the committee. We had representatives from the union. And if you look at the options before you, the option -- the co-insured epo, at one time we called it the howard plan, and that's -- [ laughter ]
>> howard herrin. He was very insistent that we have a plan that was -- that started off as a plan that was developed into what you have before you, but who wanted to make sure that his employees, roadworkers and tnr, were able to afford putting their families, enrolling their families in health insurance. So to that -- at his behest we developed that epo co-insured option. If you look at that particular option, you look at employees and one child, and the premium that will be $19 for a single parent with a child. And that is comparable to the chips. Employee plus children will be $79. Again, very, very affordable. And as susan said, if you are a normal employee with normal family, usually you have to take the kids to the doctor for colds or fevers, and that on that co-insured option will only be $15 to continue to do that. So we discussed and debated and had some heated moments, but I think overall all of us found it very rewarding because we were able to compromise on the plans and the options that you have before you and be able not only to bring them to you, but to take them to the workforce and say these are good plans that protect you, your pocketbook, you're able to ensure your families, and Travis County has put their portion in. This plan has subsidies. It is a quality plan, but you will also have to pay your part, depending on what insurance you pick.
>> okay. Commissioners, greg powell. We knew we had really traveled the miles and achieved something historic here when we had dan mansuer both in favor of this plan in the final meeting. We were starting to refer to him as darth vader. But we really seriously had -- everyone, truly had the employees in mind with the Travis County budget we knew what the cost of this plan was going to be. We took you at your word that you wanted to hold employees harmless or keep them as whole as possible. And I think we've achieved that. We've achieved some significant savings over the costs that were associated with continuing the plan, the epo plan, the current plan, which would have been prohibitive. And yet we can look at some of these arrangements, for instance, a family on the -- currently on the ppo plan, staying on the ppo plan will actually see a 426-dollar savings in their pocket from their deductible insurance amounts. That was a trade-off for that. It's that they're going to see a little bit higher of out of pocket and calendar year deductible, but if you look at those increases, they're still far offset by the savings that they're going to achieve by having their family on that plan. And also the increases to the co-pays and paying an extra five dollars now to go to a doctor and paying an extra five dollars for my generic descriptions. So there are some savings that are built in that they will realize every paycheck that will help offset some of the increases. These are more dramatic, of course, if they're willing to assume some of the risk. So i've got children and they're young and they're healthy and what we're finding and learn from all that is that children are generally more healthy an adults. Adults with my kind of life-style that really hit your plan hard. They can achieve a savings of $1,362 a year in out of pocket savings over what they are paying today. That will certainly help offset some of the increases where these co-insurance is concerned and so forth. So I think we've really tried to achieve a good balance here. I know that our -- like I was going to have to look at those guys at tnr and other departments in the eye and explain what we did and why. I know when people see this they're automatically going to react to I'm paying 40 bucks now, where I was paying nothing before. But there are some significant advantages for the employee that wants to do that. The employees that will do that are employees that know they have high experience, they're going to the doctors, they have fixed prescription amounts, they want to keep those costs flat. They're going to pay the 40 bucks a month to have no calendar year deductible, to have no increase in my maximum out-of-pocket expenses and so forth. And that just costs. When we talk about sharing the cost here and here's the important part of that, the costs are being shared by those who are utilizing the health care benefits. For those employees that aren't using the benefits, if you look across there, they truly are remaining whole and harmless through this. Those employees that use the plan are going to pay to use the plan. That absorbed incrementally and I think we can do that. I think we can be proud in what we accomplish on behalf of the employees. You should be proud for the commitment of your staff to this project. In spite of the many disparaging remarks I made toward dan in these committee hearings, he really came to these meetings prepared with the information, he and cindy are truly experts in the field. They came with a wealth of knowledge. You need a quick question, cindy was on the spot with the answer to those questions. And alicia provided us the ability to move forward when things got dicey. It helped to crint to this whole process and they should be commended for their work.
>> judge, Commissioners. One of the things that struck me when we started this process and itd been ongoing and in that position for several years now was the very high mountain that had to be crossed. Initially we were looking at some extraordinary cost figures that were in here, and the options that were open to the committee to make the recommendation to the court were quite limited. So second a little bit of what greg said and with our staff and the auditors office and pbo and the way we were able to work as a committee to come up with the compromises that were necessary, it was stunning to me in a lot of ways. There were some very -- (indiscernible). I'm not saying that some of them were almost distasteful, choices of colors and compromises and things with the yellows and golds and blue colors, but what ultimately came out was what I think as a member of the committee and what we recommend as a committee is a good compromise that offers a balanced plan for all employees with a reasonable rate. And I strongly recommend that the Commissioners court look favorably to the recommendation. Thank you.
>> thank you.
>> my name is randy harris. I'm with facilities. It's my first time I ever had to be invited to an organizational committee like this, and it's been a challenge to me. My goal in it was for the lght man in the -- the little man in the county. The plans that we developed in the committee we feel is a great option. Of course, a lot of it might seem to be strained and might not, but the plans are good, because the little man here is the one who has to carry everybody in the county. If the little man can't work because of family, the little man can't work to help support y'all, then it comes up more or less a distraction to everybody down the line. So I hope that y'all will go ahead and choose the options that we gave, the options that we work hard and fought for so that we as the little man, the frontline people, we continue on supporting y'all. And also help us along to be supported. Thank you.
>> thank you.
>> we've got two more options than we asked for court approval. We are also recommending the court consider changes in the opt out feature for the benefit plan. The benefit committee recommends a change in the benefit opt out practice, and this was based on the actuary recommendation. Currently the county fund is about $184 for any employee who shows proof of other group insurance. We are recommending that that amount be frozen at that rate. No new employee would be offered an opt out option, no employee would be offered an opt out option at open enrollment if they are not currently opting out. And if an opt-out employee experiences a change in other coverage that allows him to reenroll in Travis County, that person would lose their option to opt out. The theory behind this according to the actuary is that people who opt out for the most part are healthy individuals, and paying them is something that we need to change in order to save some money because they would not be costly to the plan and yet we could recover that funding.
>> but that would cost us $517.
>> yes.
>> how many folk are we talking about?
>> 430, I believe right now.
>> 430 have opted out today?
>> yes.
>> and how many -- do we know how many did not go through open enrollment and we just assigned coverage to this year?
>> I think it was about 116 employees that did not complete their open enrollment process last year and therefore were defaulted with the manager with the epo plan.
>> 517 a month is a little bit more than 6,000 a year. Per employee. So if 400 of them -- if the county is not paying out that incentive, I would just take the county's insurance. It costs us 400 something times 6,000.
>> and if they're healthy then it means we're not paying out the claims, so really those dollars, judge, are staying in our account and can be applied toward everybody else that remains in the system and did not opt out.
>> and that's the idea I think on a long-term basis, that these particular group of employees according to the actuary are relatively healthy and would not cost in terms of medical claims, would not cost the program in terms of medical claims.
>> but can we concern, though, the assumption that these are healthy people who don't take our insurance because they don't need it as opposed to they don't take our insurance because their spouses have better coverage elsewhere?
>> I would be hesitant to go down that road, judge, because of the hippa privacy complaints that we operate under. An employee's medical information is confidential, so --
>> so it's confidential if -- if I'm not in the county's program and you asked me, sam, does your spouse have insurance coverage for you at her place of employment, that's protected?
>> no, sir, that is perfectly legitimate to ask.
>> that's what I'm asking, though. He's assuming I take it and that these are healthy people who don't have insurance, and I have always thought they didn't need insurance with us because they had it elsewhere.
>> that is correct. And that's a requirement, that they are indeed required to show proof of insurance elsewhere before they can opt out.
>> okay. What makes us think then that without the incentive that they will get off the other insurance and come back to ours? That's what he's assuming, right?
>> well, the recommendation for '04 is to maintain the same incentive at 184.86 a month. 430.
>> but don't add any new ones.
>> but don't add any new ones. So it's kind of a phrase-in that we're looking at. And we believe that the incentive at the fy '03 level, the $184 a month, is enough to maintain those employees on someone else's coverage. And that's yet to be seen. We won't know how many opt out until after --
>> I misunderstood that part. So we leave the ones that are on there now, on the opt-out list and we just freeze it there.
>> that's correct.
>> the last item is something that we previously discussed, is approval from the court for individuals who don't attend open enrollment or don't enroll. Again, the enrollment this coming year, as it was last year, will be able to be done from your desktop computers for those people that have diswop desktop computers and any others will be able to during that month go to hr and get assistance with enrollment. But any of those that don't, and we always have some that don't, that the default option for those employees be the ppo.
>> is that rather than us assuming that they don't go through open enrollment?
>> yes, sir. We assume that they just did not go to open enrollment for whatever purpose and so we default them to ppo.
>> is it better for us to have them in the ppo program rather than not cover them at all? And I don't know the answer.
>> I think that's a decision that we would ask the court to make.
>> which is better off financially? Which one is a better financial option for us?
>> I think to make them -- make them be a member because the reality is is if one of them gets sick, they will very likely come back and say I thought I had coverage. I thought I didn't have to come to enrollment and I thought that I was covered and then we're into that. So most plans have a default, and that is if you do not sign up for whatever reason, they put you in one. Ppo -- we can't put them in an hmo and charge them $40 a mnt if they don't allow us to take it from their paycheck.
>> [inaudible - no mic].
>> you really have to split that because from the standpoint of your budget and your expense item, it would be better to have them in any plan. From the standpoint of the financial stability of the plan and the well-being of the plan, it is better to have them in the plan. And because we have had a particularly difficult year in terms of bad experience, it definitely is to the advantage of the county and the advantage of the plan by having as many people as is possible. So it's find cooind of a split answer on it. It depend on which hat you're wearing, your budget hat or your trustee of the health plan hat type of situation when you ask the question.
>> how many are there that this effects?
>> last year it was 116.
>> we always have about 100.
>> that's the best we've ever done.
>> when we went to electronic enrollment, tim proved the process dramatically. We still had 116, though. And traditionally we have had a default plan for employees to go into.
>> well, it would be pretty difficult to come to us and say we had no -- we didn't know when 98% of the people -- maybe I'm a humanitarian -- you can say you stuck in something because we knew noo we needed to take care of you. You didn't do what you needed to do. It's interesting to see what the savings would be if somebody --
>> they're saying, again, that every single person need to reenroll every year, every single person. Even if you sign up for the same program you had last year, with no changes, every single person, every single county employee must reenroll, every year.
>> but frankly, we don't have a default provision in there. It seems like we would have to put in gigantic letters that say failure to sign up means you are responsible for 100% of any medical emergency that araises during the next year. Have a nice day. That's pretty -- I don't think people don't fill it out because they don't want health insurance for whatever reason. They tonight care, they will still take the default, they're covered.
>> it's right in the middle of summer vacation, open enrollment. They're gone and they forget or they say they're going do the same thing as last' year.
>> the adult work.
>> I mean, I don't know that -- [ inaudible ].
>> judge, I would be ready to say that I would move approval of a through g as laid out by staff.
>> second.
>> and that we take this as a preliminary plan. It's not as concrete, it's simply for the purpose of educating our county workforce about the plan that is available this year, and for their comment. Then they will come back to the public hearing on June 25th and make comments regarding what is going to be presented to them.
>> are we working on the informational flyer to share with information?
>> yes, we sure are.
>> so the motion basically picks up the recommendations contained in pages 1 through 6. As well as this sheet which we will call 7? Is that all right?
>> yes.
>> and what we'll call page 8? That's for all the reasons that --
>> and this plan takes care of families who are associated with Travis County government.
>> and just for clarification, the material that we have has 1 through 7. And then it would be the proposed contribution amounts. And then the financial information.
>> does 1 through 7 correspond to a through g? Okay.
>> any more discussion? All in favor? That passes by unanimous vote.
>> thank you.
Last Modified: Tuesday, July 10, 2003 7:52 PM