I.
Call to order.
II. Introductions:
Members Present:
Glen Leavitt - OCHE
Susan Briggs- Western
Kris Jones- Mellon Consultants
Jackie Salveson- MSU-Northern
Susan Wortman- U of M Labor Union
Janae Heap- MSU-Bozeman MPEA
Maggie Peterson- Montana Tech
Sue Hill- OCHE
Kathy Crego- U of M - Missoula
Jim Handley- Montana Tech
Norma Tatarka- MSU-Bozeman
Allison Justman- UM - Missoula
Don Mathre- MSU - Bozeman
Rita Garland- UM - Missoula
Jill Young- UM - Missoula
Rob Gannon- UM - Missoula
Mike Kupilik- UM - Missoula
Kerri Marx- MSU - Bozeman
James Coffey- MSU - Bozeman
Mark Seiffert- MSU - Northern
D.J. Whitaker- UM - HCOT
Terri Gruba- UM - MPEA
Deborah Peters- MSU - Billings
Vicki Miller- MSU - Billings
Kathy Haggart- MSU- Great Falls COT
Susan Alt- MSU - Bozeman
Earl Salley- IUOE Local 400
Tom Schneider- MPEA
Michael Francisconi- UMW - MFTMEA
Others Present:
Kris Jones- Mellon Consultants
Ginger Keleti- Blue Cross-Blue Shield
Linda Ryckman- OCHE
Tammy Christiansen- OCHE
III. Election of Officers
Mike Brown has retired as the Chairperson and we need to elect new officers.
Motion: A motion to elect a new Chairperson was made and seconded to elect Susan Briggs as the new Chairperson. No other nominations were made.
Action: The Motion was carried. None opposedMotion: A motion was made to elect a Vice-Chairperson. A nomination was made and seconded to elect Tom Schneider as Vice Chairperson.
Action: The motion was carried. None Opposed
IV. Directors Report - Glen Leavitt
Glen reported on the Governors Summit on Healthcare. The Surgeon General of the United States was in attendance and reported on Wellness and Health promotion. He said that 80% of the diseases that we deal with now are preventable. Others are saying 70%. Everyone agrees that we need to promote Wellness.
Glen also reported that we had a good year last year in that the trends were lower than anticipated. We finished the year with a positive balance. We are starting out this year with a large increase in the trend. Looking better now than a few weeks ago, it looked like we were trending in the mid 30% range for this coming year, now it appears like it will stay in the 20-26% range (predictions). If the trends hold the way they appear to be going, the best-case scenario, we should still come out with a positive balance at the end of this fiscal year. Hopefully we will come out better than the projections. Average claims are paid within a couple of weeks of receiving them (BC/BS).
V. Mellon Consultants Report - Kris Jones
Buck Consultants was sold to Mellon Consultants. The same company, just a different name.
The report: exhibit A life and disability section. There were 3 basic life claims paid this past quarter. Paid out about $60,000.00. Paid loss ratio is 96% for July, August, September and 54% for the last twelve months. No supplemental life claims paid last quarter. Paid loss ratio is 96% for paid premiums and paid claims for the last quarter and 54% overall for the last 12 months. There was an error on the previous reports they have been double counting the reserve monies. Paid claims are lower than what we have had in the past. The incurred loss ratio is 83% (12 months). The active COBRA indemnity for the first 3 months, enrollment was up about 1%. Funding is up 13%. Medical Claims are up 40% for the active population over the first quarter of 2003.
Dental claims are up 8%. For the active group, Prescription drugs actually down 1% and total Claims up 28%. The ASO expenses for the first 3 months of this year are good.
Total claims and expenses are up about 25% for the active group. Per employee costs are up to about $426.00 per month an increase of about 24%. The active indemnity group is generating a surplus of about a million dollars.
Exhibit C: Retirees - Under the age of 65. The enrollment for this bracket is down 48 people or 14% to 300 enrollees. Probably due to cost increases. Total funding is about the same as last year per retiree per month is actually up 16%. Medical Claims for this group are down 12.5%. RX claims are up 1%. Total claims are down 9%. The group is right at break-even, which is better than last year.
Kris recommends that everyone read a book called "Epidemic of Care: A call for Safer, Better and more accountable healthcare" by George Halvorson & George Isham.
Exhibit D: Medicare Retirees. This group is down 5% or 53 enrollees leaving us with 982 enrollees. Medical claims for this group is up 12% and prescription drugs are up 4%. Total claims are up 12.5%.
Exhibit E: Total retirees - total enrollment is down 7% funding overall is up 6%. Medical claims up 2% and prescription drug claims up 3%. Claims and expenses are up 1%. Per employee per month for all retirees is up 9% to $363.00 and expenses to funding is running 111%.
Exhibit F: Combines all of the indemnity enrollees, non-CHO enrollment is down 1% and funding is up 12% for the first quarter. Medical claims for indemnity and dental plans for all MUS enrollees are up 30%. Prescription drug claims for all indemnity enrollees are 1% high than last years' claims. Total claims and expenses up 20% and the expenses to funding ratio is 91%. The average cost per enrollee is up $72.50 from last year. It went from $342. to $414. Generating a surplus of $837,000. for the first three months of the year.
Exhibit G: CHO is in its second year of being self-funded. Enrollment is up 15% about 150 new people came into the plan. Funding is up 28% due largely to the increase in enrollment. Paid claims are way up as well as prescription drugs. The per employee per month costs per CHO participant is $288.00 or 67% of the per employee indemnity actives. The expense to funding ration is 87% and CHO generated a surplus of $972,000 for the first quarter.
Exhibit H: The graph for July August and September, note where the funds are going.
Exhibit I: Early Retirees fund is losing money.
Exhibit J:
Exhibit K: The projections for this plan year. The Indemnity application for the year, we are looking at a deficit of about $400,000. CHO plan generating a surplus of about 1 million 9 for a bottom line grand total of about $1,500,000 surplus, a little more than Glen's report is projecting. Next plan year a medical trend of 15% and a prescription drug trend of 20%. Bottom line projection for the indemnity plan is a loss of about $2,000,000. The CHO plan producing a surplus of about $1,200,000. The grand total loss of about $700,000. If these numbers turn out they way they are running, we won't be looking at a large increase in the employee contribution.
VI. Retirement System Investment Shortfalls - David Senn & Keith McCallum
People are very concerned about the funds in the retirement plan. The trust fund is solid and will continue to be solid for a number of years. There will be no problems with the fund and they will continue with the same benefit structure that they have right now. The defined benefit program is figured on a formula and no matter what happens, that is the benefit you will receive. If you are in the defined contribution program this does not apply to you. The Board of Investments manages these trust funds; PERA does not manage these funds.
VII. VEBA / HRA- Melanie Denning & John Wing
VEBA stands for Voluntary Employees Beneficiary Association. A not for profit tax exempt employee benefit trust and is set up under 501C9 Internal Revenue code. Most employees have Social Security and another part of their retirement plan will be TRS or PERS or the ORP. These are also a tax advantage. The money (VEBA) goes in on a pretax basis and when used for qualified medical expenses, will be distributed without being taxed at all. A health reimbursement arrangement must be funded by employer contributions only, this is different than the normal flex plans in that it can carry balances over from year to year. The average pre 65 medical costs for 2 people are about $7000 a year and for after 65 is about $4000 and the cost keeps going up so this is a great way to save money for retirement medical costs. This is funded primarily with unused sick leave or unused vacation pay, which can be used to pay medical premiums. There is no W-2, 1099, 1040, no state return, no employer- tax reporting. Can be funded when someone has more than 240 hours of sick leave. The flex plan would need to be used up first then the VEBA plan would pay. May also be funded by reducing wages to be put in the VEBA plan, this is not an individual election; the majority would have to approve this plan. This plan is a yearly election (majority). Claims for out of pocket expenses need to be accompanied by receipts, which are paid on a weekly basis. Premium payments can be paid directly out of your check then VEBA would automatically be deposited in your checking account. Administrative fees will be about $3-5.00 a month per account.
VIII. Health Promotion & Cost Containment (Wellness)
The Governors conference on heath care and the Surgeon General was in attendance. Big companies are starting to invest their dollars in "Wellness" programs' they are seeing Wellness programs as a way to reduce health care costs in the future. The committee has recommended that MUS move to the Level 2 (moderate program) Wellness program.
IX. Task Force on Employee Affordability
The task force has not yet had a meeting, the "Robin Hood" plan failed on a 11 to 12 vote last spring, the decision being that we need more information. We asked for recommending people for the task force and received several names and the task force will be operating very soon. We still need a few more recommendations for a few more task force members. We are planning to have the first task force meeting sometime in November.
X. RFP - various RFP's for the next plan year
We had quotes for life and disability insurance with UNUM last year, and they had little or minimal increases. We are going to go out for new bids on life and disability coverage's.
We have also been trying to get new information on the 403B's.
XI. Committee Action - Motions & Subcommittee Referrals
We need to get a list of current standing committees and members.
Motion: To create an innovative solutions task force and have 4 IUBC members, equal management and equal labor, a pharmacy and a nursing representative to be put in place by November 15th.
Motion Carried. None opposed.
Motion: To move to a level 2 in the wellness allocation after being sent back to the Wellness directors to put together a level 2 program with a solid budget, measurable objectives, goals and bring the information back to the committee.
Motion carried. None opposed.Motion: The Wellness directors need to bring before this committee and recommend a pilot program, what each level is about and locations.
Motion Carried. None Opposed.
XII. New Business
The next meeting will be held in Butte, MT on February 5th, 2004 @ 10:00 am.
The meeting in March will be held in Helena, MT on March 2nd, 2004 @ 10:00 am.
The next workshop will be held again at Bucks T-4 on September 30th and October1st, 2004
XIII. Adjourn