Chairman Mike Brown called the meeting to order at 10:30a.m.

I. Call to Order

2. Prescription Costs/Pharmaceutical Industry - Tim Stratton, UM School of Pharmacy
Presentation available on the Web at timstrat@selway.umt.edu.

3. Lunch

4. Member Provider Contracting - Radiation Oncology - Mark Burzynski
Mark is the vice president of Health Care Management at Blue Cross/ Blue Shield. He is responsible for provider contracting and aspects of quality and clinical functions. His presentation was on the problems of provider contracting and how this particularly relates to radiation oncology here in the State of Montana.

5. Introductions

6. Election of Officers
The motion was made and seconded to nominate Mike Brown for chairperson. The motion passed. The motion was made and seconded to nominate Susan Briggs for vice-chair. The motion passed.

7. Tax Considerations of New Tax Relief Act - Dirk Camilletti, TIAA/CREF
Dirk updated the Committee on the Economic Growth and Tax Relief Reconciliation Act of 2001(the Act). This Act contains most of the pension reform provisions Congress has been working on since 1996. The new Act will eliminate the complex Maximum Exclusion Allowance calculation applicable to 403(b) plans; allow larger pension and IRA contributions; increase the portability of pension assets, and help simplify the administration of plans. The Act also reduces income taxes; raises contribution limits for Education IRA's; eliminates federal income taxes on qualified withdrawals from Section 529 college savings plans, and gradually reduces, then eliminates, estates taxes.

8. Director's Report - Glen Leavitt
Glen is predicting the self-funded plan to be about 1.6 million in the red at the end of the current plan year. This is before adding in the interest of $448,139 which then reduces the deficit to $1,159,078. The CHO plan has a surplus of $470,801. Combining the two plans and adding in the interest leaves a deficit of $688,277. These predictions are based on three months of data and are subject to change. With no increase in employee out-of-pocket expense, and assuming an increase in the state share contribution of $30.00 and the inflation rate at 15%, the plan would have a deficit of 17 million dollars in 2005. To balance the plan next year would require an increase in the state contribution of $41.00 and employee out-of-pocket increase of $41.00. Under this scenario the plan would have a shortfall of approximately 7 million dollars in 2005. To keep the plan solvent would require an increase of $68.00 per employee and retiree in 2004 and an increase of $79.75 per employee and retiree in 2005. Costs to the plan could double in the next five years.


9. Consultant's Report - Kris Jones
The basic life insurance has a 72% loss ratio, that ratio is better than last years. The supplemental life insurance loss ratio is up to 97.81%. On the paid claims experience report, the claims and administrative expense are about 84% of funding for the first quarter of this plan year. The expense to funding ratio for the active/COBRA self-funded group is 84.05% for July 2001-September 2001.

Total retiree expense to funding ratio is 120.83% and the combined self-funded active/COBRA/retiree ratio is 89.41%. The total funding for the first three months of this plan year was $7,324,370 and the total expense was $6,548,732 making the ratio 89.41%. The Community Health Options (CHO) expense to funding ratio is 82.83%.

In the current year for the self-funded plan, Buck projects funding of $30,056,569, expenses of $32,734,387 leaving a $2,676,000 deficit. The CHO plan funding is projected to be $2,673,748, expenses of $2,209,164 for a surplus of $464,584, leaving a $2,213,416 plan deficit.

10. Wellness Discussion - Glen Leavitt
Glen discussed the results of the survey done by the Wellness Directors on all the campuses. The majority of employees completing the Wellness survey were age 40 or older. Some of the issues affecting personal health were weight management, lack of exercise, and work related stress. Most of the employees wanted to keep the funding for Wellness. The campus Wellness Directors would like to see a sub-committee formed to review their ideas on health and wellness improvement areas.

11. RFP for 403(b) Vendors - Glen Leavitt
An RFP for the 403(b) vendors needs to be done to update the vendors who can market to the University System. A screening committee will be formed to help with this process.

12. Motions
No motions were made. Several committees were formed.
Wellness Committee 403(b) Change Committee
Kathy Haggart Tom Schneider Sue Hill
Don Mathe Sue Briggs Mike Brown
Kevin Turner Maggie Peterson Cathy Crego
Richard Miller Susan Alt Jim Handley
Vicky Miller Don Herzog Tom Schneider
D.J. Whitaker
Susie Wortman
Ken Emerson

13. The motion was made and seconded to adjoin the meeting.