Travis County Commssioners Court
July 1, 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 5
Number 5. 5. Consider and take appropriate action on the following healthcare benefits issues: a. Plan design for fy 04, options and corresponding rates and terms; b. An optional pharmacy-only plan for retirees over the age of 65; 5 c-1, a 14% increase to retiree-paid premium rate for fy04; and. And 5 c-2, benefits for retirees over the age of 65 as though they have both medicare parts a and b; 5-did is changes in the "opt out" feature of the benefits plan; and. E. A default election for employees who do not attend open enrollment. If possible if we could take these in the order that they appear, it may be easier for us to discuss it. See if there are others here on it and then take action before going on to the next one. Forbes.
>> judge and Commissioners, alicia perez, executive manager for administrative operations. As you suggested we will take each of these items as they appear on your agenda. The first is to -- okay. Establish a new co-insured epo plan with the coordinating changes on other plans. And to address that or give you a perspective of it. If you turn to page 3 of your backup, it is the proposed health care options and that lays out all -- I’m sorry, page 4. 4. It has the -- the changes highlighted in light green. Look goes like this, page 4.
>> okay.
>> got it.
>> this page shows you what the proposed health care options and addresses number -- number 1. There are three options that we will be offering in terms of the health care coverage to employees. It will be epo and the changes in epo plan are highlighted as a $40 a month employee contribution before it had been zero. You also have an office of [indiscernible] co-pay, which is now $15 and will be $20 and 35 for specialists. You have on that one an out of pocket that really if you do -- if you take the epo, we have not -- we've not had anyone reach the [indiscernible], that particular plan does pay 100% of all major medical. Then you have a change in your pharmacy program that will increase the pharmacy co-pay from five to 10, 15 to 25 and name brand, generic is available, will cost 45 where now it is $35. We will be able to get mail order, three month supply for two months of co-pay. And the pharmacy changes are recommended for all three options. Second option is a pier, a preferred -- is a ppo, a preferred provider organization, and that is a 90-10 split meaning that the county will pay 90% of all major medical and the employee will be responsible for 10% up to a maximum of 1500 per individual and 3,000 per family. The calendar year deductible for that particular plan, the ppo, will go from 150 to 200 per individual, 450 to 600 for family and that's highlighted in -- in green. There is a calendar year deductible for out of network meaning if you go to doctors outside our network. Doctors that don't have a contract with us, then you will have to pay a higher co-insurance at 70-30. 70% the county will pay, 30% the employee will pay. Office visit co-pay is the same as epo, it is currently $15 and that will go from 15 to 20 and 35 for specialists. Out of pocket maximum for in network is 1500 per individual and 3,000 per family, out of pocket for out of network is 2500 per individual and then 7500 per family. All of these plans, all three plans have $100 per confinement, a co-pay for hospital. So if you go to the hospital and you stay a night, you are indeed admitted, then you pay $100 co-pay. Again --
>> is it fair to say that most -- we could almost guarantee if you stay overnight your hospital bill will exceed $100?
>> yes.
>> so really you go to the hospital and they put you in a room, chances are you have $100 deductible to pay upon release.
>> yes.
>> okay.
>> that is your ppo. With the ppo you are allowed to go out of network to doctors, that's one of the particular options or benefits of the ppo is that you can go out of network, even though you paid more. But you are allowed to do that on the epo and co-insured and we will not be responsible for the charges from a doctor that is not in the network. That's of course if you have an accident and you are in another state, have to go to the hospital, there is an exclusion for that, we will pay for those types of events. The co-insured epo which goes to number one on your agenda is a different plan, it is a very affordable plan to employees. It will not cost the employee anything to be on that plan. That is one that is covered by the county for employee only. The calendar year deductible on the individual would be $400 and family would be $1,200. The split or co-insurance in that particular plan is 08/20. On major medical, the county will pay 80% and the employee will be responsible for 20% up to 1500 per individual and 3,000 per family. That is a safety net. For that particular plan and in fact it is also for the regular ppo. The office visit co-pay for in network only will be less expensive in this plan at $15, if you go to the doctor, which is what it is now, and 25 if you go to the specialist. So this is again more affordable than the other two plans, depending on the employee situation and their family needs. Out of pocket, maximum network, 1500 per individual, 3,000 per family. Hospital admissions is 100 per confinee. As they are all for all other plans, then the pharmacy changes, five for generic going to $10, the 15 for name brand going to 25. And name brand, if generic is available, will cost the employee now $45 as opposed to 35 now and they will still be eligible for the mail order three month supply for two co-pays. There was a point of clarification that you had asked us to go back and clarify and that was on the maximum deductible. And what we have now is -- the way that it will work is at 1500 maximum out of pocket for an individual and 3,000 for the family. So it will be a total of 3,000 for the family, that doesn't mean that two people, if you are three or more in the plan, the cumulative for that, for those particular folks will be 3,000. If you are two then you would both have to have 1500 in order to get to the 3,000. [one moment please for change in captioners]
>> the reason, judge, is that from an underwriting standpoint, you would want three people to meet the out-of-pocket expense because it's a low figure from the standpoint of comparing it to what the out-of-pocket maximum is. And that amount tracks to that. There has to be a degree of cost sharing within each plan, and that's the reason that the individual deducted I believes are established as opposed to having an aggregate from the family plan, from the family unit, meaning that each personñr would have to meet an individual deductible. Unlike with the out-of-pocket, in which alicia said, the aggregate amount spent by the family would track to the $3,000 maximum. If in that event one person in that family unit had $1,500, the individual maximum, then their claim would be picked up at 100%, while the others continue to accumulate towards the 3 now. The -- 3,000 or the additional 1500. But to reduce the deductible by saying it also worked that way, it would reduce the cost sharing and it would affect the overall Austin plan.
>> budge the average employee with the family that's covered won't understand that interpretation f I have my spouse and five kids on there, when I see family $600, I’m thinking when a family member or multiple members get to the $600 figure, I have achieved the deductible.
>> we probably could have stated that more clearly. The way it is now, it's individual deductibles have to be met, and that was the intention with the three -- with the two plans that have deductibles.
>> if we pass it as it is, I think we ought to simplify it. The interpretation is first you have to meet the individual deductible, then you start multiplying and get to 600. One person goes out with a -- one family member have a bill of $601 won't get you there. One person exceeding the $200, right?
>> that's right. If you eliminate the need for three people to meet a family deductible, what you do is erode the cost share and increase the cost of the plan.
>> I understand the reason why. I’m just saying this language doesn't clearly --
>> I agree with you.
>> -- tell what you have to do to qualify.
>> and we do need to do a better job.
>> upon enrollment, if we let people know when they are making that choice.
>> yes.
>> that comes into play under the p.p.o. Proposed and also the co-insured e.p.o.
>> yes, sir.
>> and the interpretation was new to me when I heard it after the public hearing. I had always interpreted family to mean when the entire unit gets to that amount, then they have achieved the deductible limit.
>> and you are right, we could have done a better job breaking that out.
>> but we have another shot.
>> yes, sir.
>> isn't it true, though, if one family member has a bill for $600, that they would only pay 240 because they would have met their $200 deductible and they only have to pay 10% of the extra 400 hols dolls?
>> right.
>> but you still don't meet the family --
>> but they are not out of pocket $600 at that point, they are only out of pocket $240. Which is better than 600.
>> yeah, I agree. An example of how the whole thing works together. When you interpret family there's a kind of funny terpretation there like built-in conditions you have to meet.
>> right.
>> we may as well try to do a little more to simplify that and make sure employees understand before they take the option.
>> we'll do that definitely.
>> now, I did a little calculating at $40 for the first time seems like a lot of money and I guess it is because it's just employees. A substantial amount over the year's period, 12 times 40, 480 bucks. Travis County picks up an additional 1776. So instead of our contribution being 4,428, it becomes $6,200 per employee. So per employee under this proposal, the county spends $6,204 annually. That's whether you make 20,000 or 80,000, we pay the same amount of money. And what we tried to do here basically is take the additional $8 million, figure out a way that we could provide same or similar benefits for employees and share some of that cost. So we pick up this year an additional 2 million. Next year it will be the same 2 million plus 6 million more.
>> right.
>> judge, going one step further in terms of that very good analysis, the county is picking up $6,200 per employee under that $40 per month, the employee is being asked to do 480. 480, and the county does 6204. And that's just on the [inaudible] costs.
>> right. And the employee can choose the zero p.p.o., However, if you do need medical services wherein the 90-10 starts kicking in, that 10% could be a substantial amount. But there are ceilings there, but the ceilings are set several times, the $480. So I mean if you are the epitome of fitness, have a need of -- haven't needed health services, p.p.o. Makes all the sense in the world as long as good health and good luck continues. That's just an old man passing on advice. [laughter]
>> and judge, also in terms of a woman passing on vice here is that I think the biggest change this year is that folks are really going to have to figure out what works best for their particular circumstances. It's not a one size fits all. There are folks like me who are single. That's it. There are folks who are single parents. There are those that have a spouse and children. There are those that are having, you know, the plus one. There is no one size fits all. And so it's in the past it's been easy to say give me the one that's easy, I don't real have I to think about it very much. I’m covered. We no longer have that luxury of being able to say everything fits everybody. People are really going to have to see -- and i've got back and -- gone back and forth. I've figured out where all three of these plans will work well with me and I’m still not sure and i've got a pretty simple circumstance. Folks have to figure out what's going to work out best in terms of something up front and you are covered 100% or as the judge was saying what is your family history or your individual circumstances. I think the one other thing that I got from reading all the e-mails and hearing about last week's hearing from lots of folks about what happened, is that I still have to believe, the firm belief that folks have no real idea of how much this stuff costs. I know I was shocked one time to find out that my little $10 co-pay on a prescription I was getting cost the county $120. I was shocked by that. And i've always asked, and I’m wondering now since we can control so much of this information, totally under hipaa, respecting privacy, but is there not a way that when somebody goes in for a visit, they can find out -- it's printed on their receipt employee pays this. That's the plan is county is picking up this so that people can start being educated about what does a doctor's visit cost. What does that prescription cost. What does that medical procedure cost. What they are having to pick up, but also what the county is having to pick up. Because it is an eye-opener when you see it. It's kind of like reading the label. We are not giving people the information they need to understand -- have a better understanding of what's going on here because I’m just seeing people saying it just costs too much. Yeah, it does, but that is truly what it's costing. In terms of the other comment that I kept getting, why can't we find another company. We know from being with another company, somebody low balls it for one year, they might lock you into a certain guaranteed renewal rate next year, and then you get it in the you know where the third and fourth year and you have zero control over the rates. I mean it is just what the market will bear and allow. And I hate to break it for folks, but I sat on the committee at Texas county for a couple of years related to health insurance. No one is begging to take counties' business or school districts or cities. And there are a lot of folks that go out for these r.f.p.s to try and find there's surely another place out there and a lot of times they are finding out no one will cover them. No one will cover them. So there are no good options here, but this was an employee-driven recommendation. Rather than, you know, the suits saying this is what we're going to do and the actuaries. This is where the employees really did build this plan and they looked at a lot of stuff and made some tough recommendation, but it is one that was employee driven to say this is what we think will work for the most number of people knowing that perfection is not an option here.
>> is suits a new name for --
>> we came up with that one the other day.
>> [indiscernible] especially with clarity, as far as the $480, because that was during the public hearing, you know that did come up, and of course e-mails and things like that have been directed at us for that particular concern. That [inaudible] on suggestion that the judge brought up, the language that simplifies, how long do you think you will need to do that? And number two, okay, make sure that the information is given to the employee so everybody kind of understands, because it is kind of a ambiguous language, and of course to make a decision on the health insurance, I think that's very important. So I’m just trying to figure out in my mind the time frame when those things will be done.
>> Commissioner, once we have the direction from the court and we know the plan, we're ready to begin working with individual departments and their employees on one to one and inform them of the benefits in detail so that they can make intelligent decision on which plan best fits their need. So we're ready to start immediately as soon as we have direction from the court.
>> well, I’m ready to give you all direction. [laughter]
>> and number two, dan, since we are basically self-funded, we used to not be in a position, I remember when I first came on board, we were dealing at that time with blue shield, blue cross and there was a lot of [indiscernible] we didn't have access to. I think there were a lot of suggestions, ms. Sonleitner brought up as far as comparison, is there data available to know exactly how much we as Travis County spend out of -- you know, for the employees as opposed to the co-pays as per services as far as what they have to put out of pocket? Is that dollar somewhere available? It may not have been in the past, but of course we're not under the same type of situation as we were before where we couldn't acquire data and receive data. Now we're in a better position. Is there analysis that can be put to the test as far as -- because I think folks need to know.
>> what we're spending in the way of claim payments on the afnlg for each employee?
>> well, I couldn't, just expenses, but out of pocket as what Travis County is also spending.
>> absolutely. We have that data and --
>> we do have that? That welcome back good to see that.
>> we'll put something together and send it out to you.
>> one final question, and this has to do with folks who are employees of cscd. There was a state law that passed. How are we going to get the information out to those folks that while tore this next fiscal year, they are still staying on the county health plan. There is a transition fixing to happen that was not of our making but was mandated by state law. What information do we have and how are we going to communicate with those employees about what is afoot and what decisions they are going to have to make the the future?
>> we've been working with cscd, shawn in my office has been talking to individuals in that department, russ, and they are going to develop a memorandum and h.r. Will also do the same just to let them know when it is effective.
>> thank you.
>> when the change is effective.
>> it's a big change.
>> do we think that page 4 sets out the plan design in 5 a?
>> yes, sir.
>> and all we need is basically to approve 4 if you want to see the plan and the facts that make up the plan.
>> that will take care of item number schlapper establish the co-insured, and the corresponding rates oopts. We haven't gone over the corresponding rates that will take care of -- that's your plan, and then your corresponding rates.
>> and corresponding rates are what?
>> that is -- I think at the end of the long sheet. The backup, you have it, and -- it's behind page 6, start page 7? Because I do think the motion ought to cover these pages.
>> yes.
>> one point on the rates, the 517 per month is calculated and laid out on the rate sheet still results in approximately a $1.2 million deficit unfunded in the general fund. And that 517 will -- if in fact p.b.o.'s recommendation to fund the 5% contingency reserve, which is approximately $1.2 million out of risk management for '04, then that 517 would need to be proportionately reduced.
>> do we have to make that decision now?
>> as long as you don't vote to solidify the 517 per month, we're okay because that number is going to need to be reduced or the jpb fund will have to come up with 1.2 million -- it's actually 1.1 million more dollars.
>> it is it fair to say that the 517 is the maximum number? Kind of like setting the tax rate, we know what the maximum will be. It can come down if we may adjustments.
>> that's right.
>> we set the high mark of what it is.
>> and since that's the amount is court is paying, it does not have any effect on h.r. Going forward with all the open enrollment.
>> right.
>> I think we're looking at approving 517.
>> well, if you approve 517, you need to approve 1.2 million more in the general fund because all of the --.
>> but we don't have to do that today, do we?
>> you don't have to do that today.
>> we just have to understand it. I did understand if we said 5157, it would have to be -- 517, it would have to be funded at some point.
>> I’m just saying if you want to utilize any of the risk management or any other funds, then there needs to be a provision for 517 to be adjusted in the event the court decides to use other funds.
>> but that's a court decision, right?
>> right.
>> the court's allocation. It will have zero to do with what the individual employee will have for their individual rate. That's like saying -- another day. I understand we have other decisions to make, but we don't have to make them today.
>> we're told we need to make these decisions. But I understand your point is at some point we have to -- approv the funding strategy. Page 4 and page 7 is what we're looking at.
>> yes.
>> and that will cover all of 5 a.
>> well, it will cover -- I’m sorry, it will cover 1 and 2 of 5 a, and it will cover --
>> 5 a does not have a 1 and 2. 5 a is just 5 a.
>> our backup is different than yours. What it will cover is to establish a new co-insured p.p.o. Ploon incorporating changes. That is a in yours. It will cover then b, consider plan design. Consider plan design options and or responding rates and terms. Is that your b?
>> no. That's a.
>> what we have called up is plan design for f.y. '04, options and cost funding, rates and terms.
>> that's page 4 and 7.
>> page 4 and 7.
>> and the establishing of a new co-insured e.p.o. Plan.
>> that's on page 4.
>> yes.
>> on 4.
>> i've got what you are looking at.
>> 4 sets out the county options, right?
>> yes.
>> kind of like the base. And the add on-things related to retirees.
>> a, plan design for '04, that's correct. It also does c, because these rates establish for retirees. They are included in 7 as a 14% benefit.
>> any more discussion of the motion? We're headed towards c. And we're going to be heading there faster.
>> and this is a.
>> page 4, page 7. All in favor? That passes -- anybody else undecided? That passes by unanimous vote. Now, b is a -- of 5 is an optional pharmacy-only plan for retirees over the age of 65. What's that about?
>> this is a option we are offering retirees over the age of 65 who are enrolled in parts a and b so if they are now paying for benefits, they probably won't have access or won't use because medicare picks up pretty much all of those costs. And it gives the opportunity to the retiree to select the farmly only at a -- pharmacy only at a reduced rate, $28 for the retiree, and also $28 if they enroll a spouse. They are entitle to do the same prescription drugs benefits we described earlier.
>> what page is that on?
>> it's on --
>> page 5.
>> it's on page 5 and looks like it's item 3 on page 5.
>> so basically we're giving retirees that option.
>> that's correct.
>> and if they elect not to take advantage of it, it's their call.
>> that's correct.
>> we think this offers advantages to them.
>> yes.
>> and the advantages are, for those listening --
>> the advantages are they are not paying the standard premium for one of our health plans when most of the time their expenses will be covered by medicare parts a and b. So they will pay a reduced rate and still have pharmacy benefit privileges.
>> that's why I move approval.
>> second.
>> any more discussion? All in favor? That passes by unanimous vote. 5 c 1 is a 14% increase to retiree-paid premium rate for f.y. '04, and 5 c 2, been fits for retirees over the age 65 as though they have both medicare parts a and b.
>> yes, sir. And that is in your backup on page 5. That talks about what that would mean. And then the actual rate for the retirees under the age of 65 and over the age of 65 is in that page 7. And the committee decided that this year we would increase the premium by 14% for retirees. This in lieu of taking a look at all policies for retirees and benefits in this coming year.
>> and what was their response to that?
>> they were favorable. The two members that we -- two retirees that we had as members of the committee were favorable.
>> the alternative, in their view, is worse?
>> the alternative would have been higher rates.
>> okay. And what's b about?
>> b is the -- yes, it's on page 5, 4 b is the requirement that we process claims for payments on retirees who are eligible for medicare as though they had parts a and b. The premium structure set up for retirees is predicated on us being secondary payer where medicare is first -- primary payer.
>> coordination.
>> that's correct.
>> move approval.
>> second.
>> any more discussion? We believe that c 2 is doable.
>> yes, sir.
>> okay. All in favor? That passes by unanimous vote. And 5 d is the changes in the opt out features of the benefits plan.
>> and there would be on page 6.
>> page 6. The [inaudible] allows for employee to decline coverage and to be paid one-half of the premium that the county contributes towards employee-only premium. Our recommendation and the committee's recommendation is to freeze that opt out and decline privilege to those who are doing so now, not add any additional -- or allow any additional individuals to opt out. And also to freeze the contribution paid to to current level which is $184.86.
>> so if you have been a opt-out employee, we basically preserve that status.
>> yes.
>> but new ones would not be added.
>> that's correct.
>> and the amount is what they are receiving right now.
>> that's correct.
>> move approval.
>> second.
>> any more discussion? All in favor? That passes unanimously. And finally -- no -- yes, finally, 5 e is a default election for employees who do not attend open enrollment. The question was why we would put them in p.p.o. Rather than e.p.o.
>> you have some information that was handed out earlier today. The question was why we would not put them in the co-insured e.p.o. And that was a decision or recommendation of the committee in terms of the p.p.o. Is a 90-10 split, and the deductibles, the yearly deductibles are -- calendar year deductibles are less. But the question is why wouldn't you put them in the co-insured e.p.o. You very well could. These are individuals who do not register -- I mean who do not enroll at all. Last year we had 115 despite numerous efforts to get them to enroll. This would enroll only the employee, so it would not affect their family since they did not bother to register. So if we went with the co-insured e.p.o. And put those 115 people on their, it would save us an estimate of $33,000 per year.
>> I move approval. For 5 eevment and it's the co-insured e.p.o.
>> yes.
>> let me ask this question as far as making sure that folks -- I think we brought that up during the public heang, as far as the default. Is there any way possible for them to really understand the severity of how important it is to enroll into the plan that we have available and the consequence if you do not have a chance to do that? Is there any way possible that that could be highlighted?
>> and we have in the past and we will again. In fact, what happens now that we have an automated enrollment system is that we take tallies every day, and then towards the end of the enrollment period we start calling the departments and saying, jane doe didn't have -- has not enrolled. Would you please talk to her. And a lot of times then all of you all have heard of stories where I have a very ill, you know, person in my family and I’m sorry I didn't get to enroll in the whole month enrollment period. So I think some of them understand, it's just -- I don't see a reason why they don't, given that now we have open enrollment is -- can be done right from their desk or they can come to h.r. And do it. And there's a whole month at hich they can enroll. So we try to stress it in all the materials that we have. We have numerous reminders also via the telephone and the internet, and then we start calling departments and saying juan vasquez didn't enroll, would you please let him know, or maria Gomez didn't enroll, would you please let her know. And we do that in order to follow up and try to get everyone to enroll.
>> all right. Thank you.
>> so the motion basically is to put people who do not enroll into the e.p.o. And that means that we start taking $40 a month out of their paycheck.
>> co-insured e.p.o.
>> it's a co-insured e.p.o.
>> it has a $400 deductible and an 80-20 co-insurance.
>> and the family members will not be covered.
>> that's correct.
>> because I think it's very important, just the eloyee will be covered if they end up getting in default status. Other family members will not be covered. I think that's something that really needs to be stressed.
>> and their coverage would be just for health insurance --
>> I’m sorry?
>> their coverage would be just for health insurance and basic life. There would be no dental and -- no disabled.
>> well only because we don't want to commit them to something, you know. We just want to make sure --
>> they will be given exactly what the county pays for.
>> then the county is financially better off with the e.p.o. Co-insured e.p.o.
>> we save money.
>> any more discussion on the motion? All in favor? That passes by unanimous vote. Now we need to make sure exactly what we've done so if there are other issues that we need to take action on, they will be covered by a new agenda item next week.
>> yes. But I think we've covered everything.
>> thank you all very much.
>> thank you all very much.
>> and I want to thank the employee committee because they did a lot of hard work. I really appreciate the fact that it's an employee-driven process.
>> absolutely it was, and we had a very good participation of about 15 to 18 employees, and we're very, very thankful for their input and their help in the development of the program that you see before you. I think it's a good program. It provides plenty of options and has very, very affordable premiums for everyone and their family.
>> okay. Thank you very much.
>> thank you.
Last Modified: Wednesday, July 2, 2003 3:23 PM