Changes to Municipal Health Insurance. Municipal Health Care Changes

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1 Changes to Municipal Health Insurance Voting to Accept Sec Municipal Health Care Changes MGL Ch32B sections Gives the Town the ability to implement plan design changes without having to bargain with the individual unions Plan changes can be made within stated parameters (comparable GIC plan) Negotiate use of calculated savings with PEC Does not deal with contribution rates 1

2 Tonight s Process Review of Process / Timeline Comparison of plan design changes Review potential savings for each alternative Decision and vote to accept Selection of Plan Determination of Savings Approval of Mitigation Plan Points to Remember Plan design changes under Ch do not effect the contribution percentage from the Town Current contribution level 70% Town / 30% employee Retiree health plan will not be affected if we remain with MIIA No restrictive language exists in current labor contracts to prevent acceptance 2

3 Process / Timeline Process begins w/ BOS vote to accept Calculation of savings Final meeting w/ IAC Notify Ins Carrier & all employees of plan change New PEC formed Negotiate mitigation plan w/ PEC New health plan year begins June 1st Current Enrollment Plan Individual Family HMO Blue NE Blue Care Elect 4 2 Medex2 130 Current Monthly Premiums at Renewal Plan Individual Family HMO Blue NE $ $1, Blue Care Elect $ $1, Medex2 $ Total Projected Annual Premium at Renewal Town Employee Total $3,450, $1,478, $4,928,670 3

4 Plan / Feature Premium / Individual Premium / Family Current HMO Plan Alternatives MIIA #1 MIIA #2 GIC (1) Benchmark $ $ $ $ $1, $1, $1, $1, Deductibles $0.00 $250 / $750 Co-pays (PCP) Emergency Room $250 / $750 $250 / $750 $15.00 $20.00 $20.00 $20.00 $ (2) $ (3) $ (2) $ (3) MRI / CT $0.00 $ (4) $50 / $100 $ (4) Surgical Day $0.00 $ (4) $ (4) $ (4) Drugs $10/20/35 $10/25/50 $10/25/50 $10/25/50 (1) GIC quotes from previous plan year / renewal rates not yet available (2) Waived if admitted (3) Waived if admitted after deductable (4) After deductable Cost Comparisons Plan Town Employee Total HMO Blue (current plan) $3,450, $1,478, $4,928, MIIA #1 Savings fr current $3,188, $261, $1,366, $112, $4,554, $373, MIIA #2 Savings fr current $3,234, $215, $1,386, $92, $4,620, $308, GIC Benchmark (1) Savings fr current 3,258, $191, $1,396, $82, $4,654, $273, (1) GIC quotes from previous plan year / renewal rates not yet available Assumes no changes in enrollment data 4

5 Estimated Out-of-Pocket Expenses Individual Current Plan MIIA#1 MIIA#2 Annual Prem $2, $1, $1, Deductible $0.00 $ $ Well Care $15.00 $0.00 $0.00 PCP $15.00 $20.00 $20.00 Chiro or PT visit (6) $90.00 $ $ Xray, Labs $0.00 $0.00 $0.00 Inpatient Stay $0.00 $ $ Surgical Day $0.00 $ $ CT, MRI $0.00 $ $ ER (not admitted) $ $ $ Drugs $ $ $ Total Out-of-pocket $2, $3, $3, % cost > premium 21.58% 68.85% 67.72% Estimated Out-of-Pocket Expenses Family Current Plan MIIA#1 MIIA#2 Annual Prem $5, $5, $5, Deductible $0.00 $ $ Well Care $60.00 $0.00 $0.00 PCP $60.00 $80.00 $80.00 Chiro or PT visit (6) $ $ $ Xray, Labs $0.00 $0.00 $0.00 Inpatient Stay $0.00 $ $ Surgical Day $0.00 $ $ CT, MRI $0.00 $ $ ER (not admitted) $ $ $ Drugs $ $ $ Total Out-of-pocket $6, $7, $7, % cost > premium 15.74% 48.39% 37.96% 5

6 Mitigation Plan Up to 25% of TOTAL SAVINGS must be returned in some manner to the employees as part of a mitigation plan Calculated from the total savings of 1 st year only Plan is negotiated with PEC (weighted vote by eligible membership) Non-union employees do not have any input or vote in process Benefit Eligible Employees Union 182 Non-union Possible Mitigation Plans Should retirees be allowed to participate? No plan changes / not affected by increased out-of-pocket expenses. Premium holiday Would cover approximately 3 weeks of employee premiums depending on plan chosen Health Reimbursement Account (HRA) Options available for set amount per employee Able to roll over unused portions from year-to-year Cannot be added to unless this process is repeated with future plan changes Provides employees with available dollars to cover increased out-ofpocket expenses Would be net of cost to administer program (est $3.50 / empl or $14,700 + annual set-up fee) Fees would use up approx 15% - 20% of pool 6

7 Plan Calculated Savings 25% of Total Savings MIIA #1 $93, MIIA #2 $77, GIC Benchmark (1) $68, Plan example MIIA#2 - Savings of $77, Prem Holiday HRA # employees (exclude retirees) 122 indiv / 183 family 122 indiv / 183 family Administration costs (est) - $15,000 Net available $77, $62, Potential benefit Approx 3 week holiday Approx $250 / family $125/ indiv (1) GIC quotes from previous plan year / renewal rates not yet available 7