Travis County Commissioners Court
May 1, 2007
Item 18
Item 18, to receive and discuss a report on the county's group benefits plan from frost insurance consultant. Also 19 consider and take appropriate action on group benefits health plan. As well as -- that's 19 a and b. A maintaining or eliminating a. Maintaining or eliminating epo (exclusive provider organization) for fy '08; employee health insurance rates and subsidies; health reimbursement account; and group life insurance:
>> my understanding is that you will lay out the issues today, no actions will be taken.
>> [one moment please for change in captioners]
>> I would ask you to refer to the backup memorandum and executive summary and I would turn it over to kevin. He will do the presentation for frost and awful the issues and their recommendations are included in your backup. Along with -- with an extensive detailed report. So -- kevin?
>> thank you. I'm kevin brown with frost insurance. On behalf of frost, I just want to thank you for the opportunity to partner on this project. The decision to go with self funded united health care six years ago, along with the wellness initiatives and off-site clinics have contributed a -- cost efficiencies over the last several years, saving the county millions of dollars so the -- so the court, the h.r. Department, and -- and those on the committee are to be commended for what they have been able to accomplish these last five or six years. We understand that time is limited so we are going to focus on the more important issues where critical decisions are needed. The first of those items is the epo plan. To your credit the committee the on-site clinics and wellness programs are a great step in the process. We do feel, however, that the epo plan design is not consistent with that strategy. Employee premiums and co-pays out of pocket costs when added together rarely result in a -- in -- in a scenario where the -- where the cost will be beneficial for the employees to participate in the epo program. Improved behaviors within the epo population that would reflect better health, wellness and personal accountability. It's uncommon that they would -- that it would take root that the -- that the -- by nature of that plan design, because there's no incentives to become wiser consumers, currently embedded in the epo type of plan. So -- so it would be our recommendation to adhere last year's decision to eliminate the epo plan effective on October 1st of '07 and
>> [indiscernible] is going to review the financial ramifications of that when we are done. The second area that we reviewed was the health reimbursement account area. It would serve as an excellent first step moving towards a consumerism type of plan. That would potentially open the door for introducing a health savings account in future years, which is again the evolution of consumer directed health care plans that right now is the -- the -- is where many organizations are heading. The county would set up and approve hra balances on behalf of employees. So it introduces a financial incentive for -- for wellness and well-being, and right now you -- the county utilizes predominantly education to incent folks towards wellness. This would introduce a financial incentive. If there's a balance that is -- that is available at the end of the year, that would be carried over into future years. So there's an opportunity for employees to grow that balance and use that to offset their out of pocket costs in the future. For things like deductibles, co-insurance, co-pays. Frost recommends designing that in hra to the current ppo and the -- and the cepo plans effective on January 1st of '08. With the modest amount of funding, that would be tied to wellness program participation. There are -- there are sample programs that we outlined for -- for generating hra credits on page 6, phase 2 report. Item no. 3 in our recommendations was periodontal treatments, this is recognized as a potential cause as well as contributing to complications for several diseases, including heart disease, stroke, diabetes and premature birth. We understand the county is currently exploring this. Introducing treatment with the health plan, we recommend that the county continue in that research. Stop loss insurance. On your self funded plan. One is an individual stop loss protection against catastrophic claims, that is called a specific stop loss. Also aggregate stop loss, which is protection on the cumulative claims on every member in the plan. The current $150,000 specific stop loss level, the individual cap does not incorporate prescription claims in that protection. The savings to the county over the past two years had it been included would have been on the average of $40,000 each of the last two years, had prescription coverage or had prescription been included this that protection. With the advent, introduction of more drugs, the -- and the fact that rx cost trends is outpacing medical trend, it would be our suggestion to include -- to include prescription coverage in the specific stop loss protection effective with your October first '07 plan date. The -- the -- another note on the stop loss is that -- that the current level of $150,000 is relatively low for a plan your size. As this goes out to rfp in the next few months, we would just recommend that you -- that you receive bids for 175,000 or a couple 100,000, just a few options that would raise that level up. And evaluate the financial prospects. The fifth item on the recommendations involves communication and education. Currently not a strategy and coordinated effort between departments. There are -- there are some -- some great initiatives that exist right now to promote wellness and to educate employees on opportunities to -- to -- to perhaps change their behaviors, but it's not necessarily coordinated. During the -- during the survey, which is another area that we are going to talk about next, the -- the employees survey that participate in the survey survey feel like there just wasn't a great degree of satisfaction with the level of education and communication and so -- so our recommendations are to develop an easy to read enrollment guide outlining benefits. Conduct open enrollment meetings each year. Combine the wellness and health plan communication between departments. And then consider using other resources such as the Travis County tv 12, the intra-tv station. Also take -- leverage the relationships that you have with your carrier partners, like united health care. They have communication departments and they will -- they will help in establishing some robust communication programs and oftentimes at no additional costs. The -- the 6th area has to do with the employee survey itself. There were 710 employees that completed the satisfaction survey, so we are very happy with the level of participation. We did find out that -- that only about 40% of those surveyed would rank the county plan as above average or excellent. And we were suprised by that because in -- in benchmarking the -- the program, it is -- it is in fact above average. It is noteworthy that -- that 28% of the epo participants rated the plan as excellent or above average and 48% of the ppo participants ranked it as above average or excellent and -- on phase 1, page 10, there is a -- there is a review of the -- of some contribution levels that would -- that would shift a great deal of the current epo participation to the ppo plan. As the payment increases there's going to be more transition to that sort of plan, so there's examples of that from the survey. The dental plan didn't rate very well in the satisfaction survey, so our recommendation is certainly to explore some dental plan enhancements, but also again it comes down to a lot -- around communication, if that's the key to the employee understanding. So -- so investing in a campaign and materials that would provide more education. For -- for item no. 7, I'm going to turn it over to brad.
>> we reviewed the prescription drug area and found that under the current united health care plan the county for all practical purposes is not -- does not really have a contract for prescription drugs. It is just addressed in a couple of very -- very vague paragraphs within the medical contract. We believe that the county should do a couple of things. One, negotiate a contract that has -- has hard and fast pricing guarantees in it. Right now the -- the contract does not guarantee dispensing fees, does not guarantee discounts. For instance, on -- on retail brand name drug, retail then rick drugs, mail order brand drugs or mail order generic drugs. So we would recommend that the county negotiate a contract that includes all of those price guarantees and we would also recommend that the county audit the existing plan to determine what pricing is being delivered by united health care currently. We estimate that -- that as kind of a rough estimate, that -- that the county could save significant dollars over $600,000, by -- by increasing the -- by improving the contractual terms, because we would suspect that those terms are not as competitive as the market could be. We also recommend that they conduct competitive -- excuse me, evaluate the drug mix and plan design. To encourage more generic drugs being used by employees, also look at having the plan cover some -- some particularly over the counter drugs for some particular conditions we think that could also save the county an estimated $600,000 a year.
>> [one moment please for change in captioners]
>> .
>> in some type of range where we can get even better praises or innovative waves to guess those pharmacists for employees. I hear what you are saying, all these kind of good things as far as the avenue that you are basically proceeding but I am still looking for an other out outreach, other avenues to ensure that in addition to what you are saying, that we can still go further to reduce the expense of pharmaceuticals. I want to be sure that door is still left open, what you are saying today is not the end of the line.
>> kind of the first couple steps to take.
>> right, heading this a direction. But I want to put my arm around a whole deal as far as making affordable pharmaceuticals available to the recipients of the healthcare benefit plan that we have for Travis County. I'm through. Go ahead.
>> on item number 8, we were asked to look at the early retiry benefits and asked to see if there was a way to fine a way of providing a benefit that provided comparable benefits to early retiries at a significantly reduced level. Basically, if you want to have another plan that provides similar benefits, than the cost is going to be similar. So we did not find a way to do that. However, we did have some recommendations that we think if the county looks at exploring other options to reduce the overall cost of retiry benefit, then those dollars that are freed up could be used by the county to further support subsidiz subsidized premiums to make et more forwardable to early retirees some of the that we had were to restrict the eligibility to be eligible for early retiry medical coverage an example would be to require greater number of years of service before a person is eligible for early retire medical another way is to increase the member for people with lesser years of service or lesser age , pay. A number of options to look at potential savings on the post 65 medical piece where, such as now there are things such as madecare advantage plans, medicare supplement plans, the new medicare part d drug plan available to seniors, those are some options that can be looked at at ways to save money on the post 65. All of those combined to potentially free up some dollars to make the plan more affordable.
>> that is also a good candidate for the increased education part of it. To explain any decision that people make.
>> correct. Next item was multiple year strategic plan. And we recommend basically that healthcare costs have been galloping along much greater than general inflation, and this puts pressures on all organizations to strike that balance between providing comprehensive benefits and affordable benefits. So therefore, rather than sort of looking at it on a year-to year-basis, we would recommend the county develop a multiple year strategic plan that would have various goals and a benefit philosophy as well as annual budget targets and metrics and a year-by-year tactical plan of how the county wants to get there. And this then vision, or philosophy, could then be shared with employees and incorporated into your communication plan. It would just be a way to have a deliberate plan, you know, well thought out plan on how, and deal with all the healthcare pressures in a very candid, formal way, to just help the county and its employees better prepare for the future.
>> next item in the recommendation sñs item number 10 regarding the health plan contingency reserve. We did have an opinion on the amount of reserve necessary, and frost was asked to examine this area just to see if there was anything else that should potentially be taken into consideration. And a few point that we would just suggest the county consider, factors that will potentiallily have a financial impact one the a adig of the health reimbursement account that ties in financial incentives incentives. There would be a cost to the county for that. There is an unknown liability that exists for employees that terminated prior to 10-1-04, they may be able to get back on to the plan for coverage, and that is just an unknown liability. Expansion of the on-site clinic and wellness initiatives. And then the final point on that is should the account choose to eliminate the e po now or in the future, there would be a resulting loss of revenue from employee contributions that go into that plan, and that would potentially require a greater subsidy on the ppo and the c e po plans by the county. Them number 11 on the recommendations involves disease management and involves your disease manage management clinical programs programs. United health care does provide disease management for over 20 disease states. We believe there is an opportunity, again, for education to enhance this area. For example, only six percent of the eligible maternities are enrolled in the healthy pregnancy program through united he will care and their norm is is that 18 percent would be enrolled. The county also has disease management program through the wellness clinics of so our recommendation--
>> you would still consider paying, it seems like that is semantics.
>> semantics, yes. The county also does have disease management through the wellness clinic. So it would be our recommendation to evaluate, to determine where overlap exists and if efficiencies can be experienced or can there, can you consider other disease management programs that could improve upon the existing plans, analyzing the overall efficiencies of the current united healthcare disease manage the programs, we think, is important stage in the process, and again, improving the communications and education is another important aspect. The financial point in our recommendationsre solves around the benchmarking sur vave that was done. This was a comparison of plan and benefits with five other counties and the city of Austin. Those counties included bexar, harris, den ton, dallas, and all of the results are in the attachment 1 under phase two two. In a nut shail, our recommendations from that benchmarking survey would be with to reevaluate the county policy regarding providing benefits for part time employees both active and retired. Four of the six counties in the benchmarking survey do not offer benefits to part time employees. The two that do, they require greater contribution contributions for those part time than they do for the full-time employees. So, there's opportunity there. Increasing the emergency room copay to an amount that ranges from 75 up to $150. Currently it's at $50. United healthcare would suggest their norm is 100 to $125. Travis County did have the lowest of all the entities in the survey. There is very the incentive for employees to consider options to the emergency room whenever they need care care. And the final thing on benchmarkinging survey was to consider charging a token amount for single coverage. Most of the other entities in the survey do charge for that.
>> right now we provide, the ppo and coib ed ppo, free to employees only. We charge for dependents but we do offer that. The only plan that has a charge is the epo, which is a hundred percent major medical coverage.
>> what kind of time lines are we on right now? I guess as we go into the budget cycle, you know, we have to deal with these benefits packages, especially with health insurance. What type of schedule is your suggests where by we are able to make sure the employees get the proper information, not only that, but also in line to the necessary thing that we have to take care of dealing with the actuary and stuff like that. I'm just trying to get something in my med right now as far as the process for us to make decisions, but also part of the process dealing with the availability of these change changes, recommended changes that the employees have to digest that is where I'm at at this point.
>> our plan was to make the presentation today to you, not only on frost but on all the benefit choices. We have a ballot if your backup. And then we were hope to go get some direction from you, especially on active employees, next week. The issue of retirees, I have heard from some of you that you want to wait on that because there are some ramifications in terms of just increasing the supplement for retirees. The committee ease recommendation is to, that there be no increases in any of the premiums in fy '08. There is some consideration if the court would want to increase the subsidy to retirees and so, our plan was to do the presentation today, get direction from you or get a vote from you at least on active employees next week. You have an employee hearing June 14.
>> June 14 ?
>> June 14.
>> okay.
>> then get the final vote soon after that on retirees that is the plan.
>> okay. So the action portion of this can delay until next week, it will not interfere with the process.
>> no.
>> okay.
>> okay.
>> thank you.
>> so basically we have some recommendations that will help us update our plans.
>> right.
>> but in the meantime we need to review these and look at them again next week.
>> all right. Yes, ma'am. What we were planning to do on frost was take the recommendations back to the committee, try to prioritize they will. Some of the recommendations like the stop loss we could probably implement relatively quickly, try to improve our education program. Other that, per dontal care, may be considered at another time. Hra perhaps could be implemented in January am we need to take those back to the committee and prioritize prioritize. Some of the recommendations like with the stop loss and prescription drugs I found were very, very good recommendations. So those are things that we will plan to act on.
>> okay. Thank you all very much.
>> thank you.
>> let me ask a question. If you go back to the employees survey number 6, just from your knowledge of the industry, I doubt that you would ever find it different, whatever entity we are talking about, whether city, other counties or whatever, if people pretty much have the same opinion of the cost of the insurance and the increasing cost of insurance to be un unsettling. And now you easily can just say, well, I mean, so is gas so is milk, so is everything everything. Is it the easiest way to explain what is going on with increased costs, somebody has to have the cost. Either the county is going to have the cost that we are going to, you new york get-- get--you know, get out of the taxpayer, or the employees are going to grow that cost that this e have along with the county and the taxpayer. But that is not, you wouldn't find that unusual , would you, that response? You know, or the question of I don't know why we keep having increased costs. Would that be consistent? I mean, if you ask that question in sacramento or if you ask it here.
>> cost is by all means the number one issue causing heartburn for employees as well as employers who are trying, many of those employers use that cost shifting to the employees as a strategy. But at the end of the day that doesn't contain costs, it just shifts the costs.
>> right.
>> so the survey specifically, yes, it does cause heartburn for they will. That is one of the points. And you are right. You're finding that across the country.
>> if I can add something.
>> yes.
>> the survey itself kind of identified an area that from a communication standpoint.
>> right.
>> what you are communicating to employees are what the benefits are each year.
>> right.
>> there is messaging out there that we want to engage in behaviors and better well wellness but there does not appear to be strong messag messaging each year around what's happening in the insurance world, so to speak what's happening and why are costs going up. So that is an opportunity to help education your employees. Generally speaking, I agree that other public entities like yourself, all employees are going to say, we are not happy with the costs. But to varying degrees, thosethe tis engage in communication efforts to help the employees understand the reason why they are going down a certain course of action. I think that is what we found is something that is an opportunity for the county to engage in.
>> I think that is where I was headed. You really have got to explain and educate people as to, you know, why this is happening. Hey, I mean, our wellness program, I mean, I am amazingly happy with, you know, what we have done. You know, we have made some great strides. When we first started that I thought, great here we go down this thing, this will never happen. We have really proven that you can take on some of these things and really witness, if nothing else, just the amount of calls or visits that our employees make, you know, in the system, you know, has decreased so much because of what we have done with well wellness. So, but that is another education piece. I mean, you know, where you have really got to hammer, you know, away at that. So maybe we are, you know, in a small step finding some advantages to doing that. But I agree. I think that the whole education, I mean, in every subject matter, whether you are talking about insurance or talking about, you name the subject matter, education is so, so important to make sure that people really understand why we are making the decisions that we are making. So I'm glad that you all hon honed in on that.
>> and thank you for making the distinction between shifting and containing the costs. Because we are self-insured and have taken that big step that creates a really partnership between the employer and employee to contain costs, not just shift it back and forth. There is no third party. It's just us. You just reminded me to take my prescription.
>> bingo.
>> thank you.
>> thank you.
>> we are going to go on to 19. We have provided for the court a booklet look this that the the fy '08 group benefits health plan. As I discussed before, we have an employee benefit committee, self of them here with us today. It's a very active group, very ram bunctious group at this time. Over the years we have had a very stead membership so we have all learned together over the six, seven years that we have been self-insured. I have here with us also john barlan, with mill iman actuaries, our actuary for our $35 million healthcare fund. I'm happy to report that we are doing very, very well this year. We have seen an overall three percent decrease in the cost of medical claims. That is compared to a national average of about an eight percent increase in medical claims. So our wellness programs are attentiveness and vigilance on health, the availability of healthcare clinics for employees, I think, is starting to pay off. Due to that, the employee benefit committee has come up with several recommendations, and the first, there are several issues to consider. The first was whether we maintain or eliminate the ep epo. If you turn to page 4 of 17 in the booklet. You see the Travis County benefit summary, and there are three plans offered by Travis County. Epo, which there is a premium for and it's only one where we charge a premium to employees of $91 per month. The ppo which is a 9-10 coverage and about a 80-20 coverage. Both the ppo and epo have a maximum out of pocket of 150 150. That is your safety net. If you are able to save $15 $1500 that is the maximum out of pocket would you have take pay for major medical. You still have to kay co-pay and farm sti, but in-- in--pharmacy, but in terms of major medical that is the maximum, 1500 for individual and 3,000 for tamly. The decision last year, a recommendation adopted by the court, is to eliminate the epo for fy '08. Upon consideration of that, the committee looked at the financials. One of the items that we looked at was if indeed the epo is eliminated in fy '08, there would be a loss of revenues of approximately $1 $1.2 million. If indeed the court decided to keep everything the same, no increases in premiums, then the healthcare fund would have to absorb that cost or that loss in premiums of 1.2. That was one issue. The other points that the committee considered in terms of developing the recommendations was that there are many employees that are willing to pay the $91 or pay more for epo in order to assure that they will not have any out of pocket expenses.
>> yes.
>> frankly, if you go to the doctor 12 times a year and you have some sort of medical treatment or have to be hospitalized, you would be better to be on the pp or or coinsuranced epo. It would be less. You would make those $1500 up. Than you would be on the epo epo. But some people are willing to pay the premium not to hassle with reimbursement or with claims, to assure that they will be covered for major medical, and then also it just becomes difficult for some people to save the $1500. So if you take it out of their check on a monthly basis, it's just more convenient. Taking those things into consideration, the committee voted to recommend to the court to maintain the epo for one more year. They did that with some reservation to say to maintain for one more year because this year you may lose revenues if you eliminate, but monitor for next year because it may be just a one-year program. You may want to just extend it for one year. The thing about the epo is that the claims are indeed higher for --for epo than they are for the other two plans. So that was the recommendation for , and for the reasons that we talked about.
>> do we have a number for the offset of the higher claim versus the one million or 1..2 million.
>> the actuary, john, perhaps you can explain better.
>> sure. The premium they pay for the epo relative to ppo is about 1.million more. However, the difference in plan cost if those members were in the ppo plan, it's in the as rich of a plan so the plan saves in claims but only saves about half that much in claims, about $6 $600,000 would be the reduction in claims, trading off against that 1.2 million reduction in the premiums they are paying currently in the epo.
>> so there is some argument that there is an offset of about 50 percent if we were to eliminate.
>> yes.
>> rather than a loss, a lost opportunity cost of the 1.2, you have a $600,000.
>> right.
>> which could easily be exhausted very quickly in the epo because of the difference in claim costs.
>> yes.
>> just to give you an example, per capita, epo cost is about 2,000 per capita in claims per year, sorry, for the first five months of the plan year in the ppo it's about 1300. And in the coinsured ppo it's about 1200 per capita. You can see that indeed the cost per capita for the epo plan are indeed higher.
>> for the five-month period.
>> yes, ma'am.
>> okay.
>> so is the benefits committee convinced that, well, convinced isn't the word. Do they anticipate that come next year, people will feel any differently? I mean, I don't know how you are going to get people to feel any differently. It's just you are going to have the same question that is going to come to us next year, which is the reason why last year we said what we were going to do this year.
>> right.
>> you know, so, I mean, it begs to be answered with regards to why do people really feel that way? I guess people feel that way with the epo, I mean. It's the peace of mind that you have.
>> uh-huh.
>> it is amazing. But that is maybe the reason why we should consider, you know, reconsider, I mean, privatizing social security or whatever because people aren't very good at saving money or investing. What they need is to be able to go to bed every night thinking, okay, if something happens, I'm taken care of. I have it taken out of my paycheck.
>> right.
>> even though you could show them, you know, quantitatively that that is not what they need to be doing. And that is what is driving the benefits committee, isn't it? I mean, the resistance from people to do away with the e epo ?
>> I think the two factors, first of all, are the loss of revenue, which is kind of questionable the other is the hassle factor that employees just would rather pay the $91 a month and avoid any hassle. You know, we worked to address that through some educational programs, but obviously it was effective to a point because last year we had a number of people leave the epo and come into the ppo. I think there is more that can be done. We visited with united healthcare and are looking at some aspects of programs that will eliminate or reduce the hassle factor. Those were the two main areas of concern that the committee looked at.
>> we also know the costs, the epo plan costs are increasing at a more rapid rate than the ppo and the co coinsured epo. And at some point we will need to more fully reflect that and that plan will just be too expensive to keep. You will have to increase the e pñx--epo premiums and at some point it just breaks down.
>> how many employees do on we have currently under epo ?
>> about a thousand.
>> about 30 percent of the group are still in that lan.
>> 50 percent of that thousand come from two dents just to give you--
>> which two ?
>> dnr is probably one.
>> sheriff's department and juvi, juvenile.
>> I do think, Commissioner Daugherty, that your point is well taken of it is the fear of not being fully covered. Especially with retirees. Some of them are still on the epo I which means they are a little overinsured with medicare also. They have a real fear of motor having--not having enough or losing their insurance. The feeling or security is definitely an issue.
>> yeah.
>> is there a difference in the lifetime cap in epo, ppo ppo--
>> no, $2 million.
>> two million across the board ?
>> yes, ma'am.
>> I see in the frost insurance piece, it's 25 percent of the employee enrolled population.
>> uh-huh.
>> I think we have a lot of education to do still on this, on those plans.
>> looks like the plan cost estimator is a good way to do some personal education.
>> we are look to go put that in place this year. It's very detailed and the more you put in, the more you got out. I think it will be a very nice tool.
>> it is comfortable for employees to have one on one sessions with you.
>> we did a lot of that the last couple of years with people that come in, to simply enroll at our desk now. We don't have the big meetings like we used to but still have a good stream of people through h r. Anyone that really want to sit down and talk about this, we are really wanting to do that with them so that they make the right choice for themselves.
>> okay.
>> I would advocate for including page 12, the hypotheticals in the epo for those who don't want to go through the cost calculator and log in their own education, they can look at the hypotheticals.
>> okay.
>> we'll move on to item b. Just to complete a, you have all the backup pros and cons and we'll discuss that and answer any questions next week and we'll request action from the court. Item b is the employee health insurance benefit and subsidy. Every year during budget process, we come to the court, the benefits committee works to bring recommendations to the court on what the health insurance rates will be for the three plans. You have starting on page 7 of 17 in your backup the proposed rates. There were two options this year. If first let me start with the active employees. For the first time since I've been here, 12 years, that we have not and are not recommending and do not believe that we require an increase in the cost of health insurance for the employees. Therefore, the benefits committee recommends that for active employees, all rates and tiers, which means dependent care premiums, stay the same in fy '08 as they were in fy '07. You have in your backup what those rates would be. Norman, I have a larger hand handout for you. Just to point out for the ep epo and coinsurancanced ppo, the county place all the premium for employee only coverage and there is a subsidy for each of the plans. And the percentage of the subsidy, for example, on epo if you are an employee on ep epo and insurance your spouse or another adult in the household, the county pays 48 percent of that insurance premium for the employee. Very, very good benefit. On the ppo, the county will pay 59 percent of the employee plus one adult premium. Again, an excellent benefit. On the insured epo it's 67 percent. And depending on what tier, whether you have a child or employee and children, employee spouse and children or employee and family, again, the subsidies are listed and that is a great benefit because the county is picking up a substantial portion of what it would cost to ensure other family members. So we have the premiums and you have them before you. The recommendation for active employees is that there be no increase in premiums. So therefore, they will remain as they were in fy '07.
>> okay.
>> the second portion, b 2, though there are two options for the court to consider when it comes to retirees. The retiree insurance, we have heard especially for retirees under the age of 65 about the cost of their insurance. If you look under tab 5, the proposed rates for fy '08, this is the portion for the health subsidy right now on the epo if you insurance yourself and an adult, the cost of on the ep epo is $619 per month and the coinsured epo premium is about $500 per month. There are two options, like I said, on the retirees. One is to leave everything the same as it was in fy '07 '07. The other is to increase the subsidy by $200 for retirees under the age of 65, 100 if you are in the tier that is a retiree and one child, and then increased subsidy by $ $40 for retirees over the age of 65. How that affected premiums are listed in your backup. The cost for taking that action, if the court would like, is about 170,000 in today's cost. Given any retirements by gas gasby 45 or increase in the cost of healthcare, that could, that may mean more. But we are on a year-to-year been at this time plan, meaning that the court decides this year what the plan is and there is no commitment for future years to provide health insurance for retirees. So those are the options. C on health reimbursement account, you heard frost talk about it. I'll turn it over to dan.
>> the health reimbursement account, the gentleman from frost pointed out, is a vehicle by way employees can share in some of the reduced costs to our health plan, by attending wellness classes, but leading a change in behavior wellness program. It would be an enhancement to the program and I think we could bring back before you a structured program that would have to be met before contributions could be earned. I think that it's a good vehicle to use to share in the savings. We talk about cost sharing and this would be savings, sharing in the savings.
>> this is a wonderful way to contain costs, I believe. A really wonderful tool. My only question, and I think we discussed it before was the rollover and the cashout issues, how to craft it. How much can accumulate in that account and how much can an employee take out once they leave, if any.
>> my an understanding is it's flexible to the point that the county creates parameters.
>> I think that is correct.
>> expert is back that.
>> okay . The health reimbursement county, just to make clear, is an account set up, indeed, it rewards healthy behavior, for example, just an example, $ $20 for getting a physical. And that goes into the account and then is able to be used by the employee to pay copay or any medical reimbursement. That would accumulate over the year and it could be rolled over, unlike the flexible spending account, use it or lose it, this could be rolled over. We estimate the cost for that given 1600 employees, dan, would be ?
>> 2380 and 600,000 per year.
>> when the employee leaves, the if they roll that over and leave the county, they can't take that with them. How would that work ?
>> that is something that would be part of the plan development. Whether they could or could not would be something we would bring back to the court.
>> that decision would be made by the court.
>> thank you.
>> to give you a idea, we talked about 16 had--1600 lives as a pro an injection. --projection. The coinsurance ppo has about a knife and a half percent utilization of the clinic. The ppo enroll ees that is about a 86 percent utilization and the ep ork has about a three, almost four percent. That kind of gives you an idea of the number of people we would be working with.
>> okay. The last item to cover is the group life insurance. The recommendation is to increase basic life from 25 25,000 to 50,000. Right now, if an employee passes away, the county provides 25 thousand basic life insurance. That has been the same for at least 20 years, that we can recall. The recommendation is to increase from 25 to $50,000 for basic life insurance. We looked at the city of Austin that has increased increased their basic life insurance times the, it's one times the employee salary. Then the employee has a right to cap it at $50,000. The state is very, very low in their life insurance. We thought since it had not been increased for so long, that it may be time for us to consider that. The cost to the county in terms of increased costs would be about $155,000 over what we pay now for a total of about $300,000 annually for life insurance. Against, it would increase the basic life coverage for all employees at Travis County. . Number two is increase in retiry life from 10,000 to 15,000. This is paid for by the retiree so it is at no cost to the county that the coverage would increase. And then increase maximum supplemental life from $2 $200,000 to $250,000 again, the supplemental life is paid for by county employees so it would be a no cost to the county to increase the amount of life insurance. Those are the recommendation recommendations on page 5 of 17 in your booklet. You see a preference sheet that we will ask the court to act on next week. The judge, county judge, returns on Monday. We will be briefing with him and hopefully can get some direction next week.
>> thank. Then employees will have an opportunity to comment on all these issues at the public hearing on June 14. Right is this.
>> yesbefore we take action.
>> what we normally do is --
>> yes.
>> before we take action.
>> what we normally do is send out information before manned telling them this is what we are looking at this year, and we get comments from them before and during the hearing.
>> thanks so much. We'll see you all next week.
>> thank you. .
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.
Last Modified:
Wednesday, May 2, 2007, 8:00 AM