HEALTH INSURANCE RENEWAL/UPDATE...HEALTH INSURANCE RENEWAL/UPDATE VOLUSIA COUNTY SCHOOL BOARD 1 Highlights 2 Acronyms and definitions Historical rate review and enrollment Federal

February 26, 2014

HEALTH INSURANCE RENEWAL/UPDATEVOLUSIA COUNTY SCHOOL BOARD

1

Highlights 2

Acronyms and definitions Historical rate review and enrollment Federal and Local Marketplace Preliminary Projection

Acronyms 3

ACA – Affordable Care Act

CAT Plan – Catastrophic Plan EAP – Employee Assistance Program

HMO – Health Maintenance Organization

HCR – Health Care Reform HRA – Health Reimbursement Account

OPEB – Other Post Employee Benefits Liability

OPPAGA – Office of Program Policy Analysis and Government Accountability

POS – Point of Service (Triple Option)

PPACA – Patient Protection and Affordable Care Act PPO – Preferred Provider Organization

RFP – Request for Proposal

WAT – Wellness Action Team

Definitions4

Medical Trend The projected cost of medical inflation

Retention The projected cost to administer the plan – including network access,

claims processing and administration Target Loss Ratio

The projected amount of total claims divided by total premiums Claims

The amount paid by the carrier for the cost of services for an insured member of the plan

Insurance Committee & Meetings

Rita Ware (AFSCME)

Laura Cloer (VESA)

Diane Vaissiere (VESA)

Dr. Maryann Bull (Non-barg)

Russ Tysinger (Non-barg)

Joe Zaffuto (AFSCME)

Carol Sawyer (replacing Mr. Zaffuto 3/6)

John Darby (VTO)

Jacqueline Sadler (VTO)

Denise Dietrich (Non-barg)

5

Volusia County School Board Insurance Committee (union representation and voting members as required by contracts)

Insurance Committee meetings for 2013-2014 (monthly during school year, * indicates Wellness Action Team meeting as well)• September 5, 2013 January 9, 2014• October 3, 2013* February 6, 2014• November 7, 2013• December 5, 2013* Next meeting March 6, 2014

Revisiting April 23, 20136

Significant increases to the Florida Health Care Plans – Increased deductibles Copays Maximum Out of Pocket In / Out Patient Emergency Room Lab

No changes to the Florida Blue Plans Renewal rates were 9.5% for Florida Blue and 4% for Florida Health Care

for a blended rate increase of 5.4% Projected financial impact - $3.5M

Revisiting April 10, 20127

Plan Design Changes to the Florida Blue Plans – Increased deductibles Maximum Out of Pocket

No changes to the Florida Health Care Plans Plan design changes kept rate renewal down to 0%

Review of Rates and Renewals8

VCSB Renewals National Trend (blended) (blended)

2004-2005 3.91% 14.83%2005-2006 12.80% 14.24%2006-2007 3.05%* 12.97%2007-2008 10.40% 11.18%2008-2009 9.30% 10.94%2009-2010 8.54% 10.50%2010-2011 6.36%** 8.00%2011-2012 6.10% 10.50%2012-2013 0% 9.06%2013-2014 5.40% 6.00%2014-2015 Up to 7.6%*** 7.00%Prior RFP was done in March, 2002 *RFP was done in November, 2005 (remained with BCBS/FHC)

**Vote against RFP in November, 2009 and March, 2010 ***Subject to potential plan design adjustments

Enrollment9

Health Enrollment Totals As of 10/1/2007 8,286*

As of 10/1/2008 7,867*

As of 10/1/2009 7,512*

As of 10/1/2010 7,585*

As of 10/1/2011 7,402*

As of 10/1/2012 7,079*

As of 10/1/2013 6,739*

Health Enrollment by Plan10/1/07 10/1/08 10/1/09 10/1/10 10/1/11 10/1/2012 10/1/2013

Preferred Provider Organization (PPO) 2,809 1,484 1,436 1,525 1,434 1,283 1,215

Health Reimbursement Account (HRA) 126 1,231 943 646 489 410 355

Triple Option (Point of Service) 2,869 2,946 3,117 3,550 3,723 3,706 3,581

Health Maintenance Organization (HMO) 2,482 2,206 2,016 1,848 1,737 1,659 1,554

Catastrophic Plan 16 19 21 34

(*Numbers do not include dependents or retirees)

(These numbers include both husband & wife that are enrolled under split family – approx. 230 couples)

Marketplace/Volusia Comparison

FEDERAL MARKETPLACE

Platinum

Gold

Silver

Bronze

Catastrophic

VOLUSIA COUNTY SCHOOLS PLANS:

Florida Health Care HMO – Platinum

Florida Health Care Triple Option – Platinum

Florida Health Care POS (Catastrophic) – Gold

Florida Blue PPO – Gold

Florida Health Care HRA - Gold

Higher Premiums / Lower Out of Pocket Costs

Lower Premiums / Higher Out of Pocket

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Local Marketplace School District Comparisons

Brevard County Schools (Self-Insured)

Lake County Schools (Fully-Insured)

Lee County Schools (Self-Insured)

Manatee County Schools (Fully-Insured)

Pasco County Schools (Self-Insured)

Seminole County Schools (Self-Insured)

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HMOClassic VP-1, L-43

In-Network only In Ntwk Opt 1 Opt 2 Opt 3 In HMO NetworkIn BC PPO Network

& OOA In Network Out of Network In Network Out of Network

Deductible HRASingleFamily

Annual DeductibleSingle $0 $0 $250 $500 $1,500 $4,500Family $0 $0 $500 $1,000 Per Person Per Person

Coinsurance (Plan Pays) 100% 100% 70% 50% 90% 50% 85% 70% 85% 70%

Out of Pocket MaxSingle $2,000 $2,000 $3,000 $6,000 $5,000 $10,000Family $4,000 $4,000 $6,000 $12,000 $10,000 $20,000

Physician ServicesPCP Copay $20 $20 $30 50% AD $35 50% AD 15% AD 30% AD 15% AD 30% ADSpecialist Copay $35 $35 30% AD 50% AD $50 50% AD 15% AD 30% AD 15% AD 30% ADPreventive CareRoutine Physical Exam, Well Child, Immunization

$0 $0 $0 50% AD $0 50% AD $0 30%, Ded Waived

$0 30%, Ded Waived

Hospital Services

Inpatient $250/Day (Days 1-5)

$250/Day (Days 1-5) N/A 50% AD 10% AD 50% AD 15% AD $300 + 30%

AD 15% AD $300 + 30% AD

Outpatient $100 $100 N/A 50% AD 10% AD 50% AD 15% AD 30% AD 15% AD 30% ADEmergency ServicesEmergency Visit $100 $100 $100 $100 10% AD 10% AD 15% AD 15% AD 15% AD 15% ADUrgent Care $60 $60 $60 $60 10% AD 10% AD 15% AD 30% AD 15% AD 30% ADLab, Xray, & DiagnosticsLab and Radiology $0 $0 N/A 50% AD $0 lab, $50 X-ray 50% AD 15% AD 30% AD 15% AD 30% ADAdvanced Imaging $0 $0 N/A 50% AD 10% AD 50% AD 15% AD 30% AD 15% AD 30% ADPrescription Drugs

Retail (31 Day Supply)FHCP pharmacies; Select Walgreens /

Select Hours

Preferred Generic $3 NA NA

Non-Pref Generic $10 / $15 $10 50% $10 50%

Preferred Brand $30 / $35 $25 50% $25 50%

Non-preferred Brand $55 / $60 $40 50% $40 50%

$3 (FHCP pharmacies only) $3 (FHCP pharmacies only)

$10 FHCP Pharmacy$15 Walgreens or Publix Pharmacy

$10 FHCP Pharmacy$15 Walgreens Pharmacy





$2,250 AD $2,850 (Incl. Gap and HRA)$4,500 AD $5,700 (Incl. Gap and HRA)

FHCP pharmacies, Walgreens (nationwide), and Publix (Volusia and Flagler Co. only)

FHCP pharmacies and Walgreens (nationwide)

Retail 30-day supply Retail 30-day supply

$600 $600

$600 $1,650 ($1,050 Gap)$1,200 $2,400 ($1,800 Gap)

Florida Health Care Plans BCBSFL PlansTriple Option

Classic L03 POS Plan

Balance LQ16 - MOD 3PPO

Plan 117HRA

Plan 0317

Local Marketplace

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Local Marketplace - Brevard (In-network benefits only)

Benefit Feature VCSB Triple Option L03 Cigna PPO

Annual Deductible $0 $150/$300

Coinsurance 0% 20%

Out of Pocket Maximum $2,000 / $4,000 $3,000 / $6,000

Office visit copay $20 PCP$35 Spec

$25 PCP$45 Spec

Inpatient $250 / day(Days 1-5) $500 +20% AD

Outpatient $100 20% AD

Emergency Room $100 $150 + 20% AD

Prescription(30-day, Retail)

$3/10/30/55 $15/40/70

Employee cost is $72 per month for single coverage

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Lake County Schools (In-network benefits only)

Benefit Feature VCSB Triple Option L03

Florida BlueBlue Choice 3359 PPO

Florida BlueBlue Choice

HSA

Annual Deductible $0 $500 / $1,500 $1,500 / $3,000

Coinsurance 0% 20% 20%

Out of Pocket Maximum $2,000 / $4,000 $3,000 / $6,000 $4,000 / $8,000


$25 PCP$60 Spec

$35 PCP$85 Spec

Inpatient $250/day(Days 1-5) $100 +20% AD $300 +20% AD

Outpatient $100 $100 + 20% AD 20% AD

Emergency Room $100 $300 $350


$3/10/30/55 $0/25/40(Mandatory Generic / Mandatory Mail Order)

$0/25/40(Mandatory Generic / Mandatory Mail Order)


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Lee County Schools (In-network benefits only)

Benefit Feature VCSB Triple Option L03 Florida Blue BlueOptions 3769

Florida Blue BlueOptions 5773

Annual Deductible $0 $500/$1,500 $1,000/$3,000

Coinsurance 0% 20% 20%

Out of Pocket Maximum $2,000 / $4,000 $3,000/$6,000 $4,000 / $8,000


$25 PCP$60 Spec

$35 PCP$85 Spec

Inpatient $250/day(Days 1-5) $100 +20% AD $300 + 20% AD

Outpatient $100 $100 + 20% AD 20% AD

Emergency Room $100 $300 $350


$3/10/30/55$0/$25/$40

(Mandatory Generic / Mandatory Mail Order)

$0/$25/$40(Mandatory Generic / Mandatory Mail

Order)


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Manatee County Schools (In-network benefits only)

Benefit Feature

VCSB Triple Option L03

Florida Blue BlueChoice PPO

117

Florida Blue BlueOptions PPO

3359

Florida BlueBlue Care HMO 59

Florida Blue BlueChoice HMO

52Annual Deductible $0 $1,500/$3,000 $1,250/$2,500 $250/$500 $1,500 per person

Coinsurance 0% 20% 20% 20% 30%

Out of Pocket Maximum $2,000 / $4,000 $3,000 / $6,000 $3,500/$7,000 $4,500/$9,000 $10,000/$10,000

Office visit copay $20 PCP$35 Spec 20% AD $25 PCP

$50 Spec$30 PCP$60 Spec

$40 PCP$65 Spec

Inpatient $250/day(Days 1-5) $200 + 20% AD $250 + 20%AD $300 + 20% AD 30% AD

Outpatient $100 20% AD 20% AD 20% AD 30% AD

Emergency Room $100 $200 + 20% AD $250 + 20% AD $100 + 20% $300


$3/10/30/55 $4/25/50 $4/$25/$50 $8/50/100 $8/50/100


16

Pasco County Schools (In-network benefits only)

Benefit Feature VCSB Triple Option L03

Florida Blue BlueCarePremium HMO

Florida Blue BlueOptions

Standard PPO

Florida Blue Basic HMO

Annual Deductible $0 $0 $250/$750 $2,000/$6,000

Coinsurance 0% 0% 20% 20%

Out of Pocket Maximum $2,000 / $4,000 $3,000 / $9,000 $3,000 / $6,000 $5,500 / $11,000


$30 PCP$50 Spec

$30 PCP$50 Spec

$35 PCP$65 Spec

Inpatient $250/day(Days 1-5)

$500 / day(Max $2,500) 20% AD $100 + 20% AD

Outpatient $100 $500 $300 $20% AD

Emergency Room $100 $200 $100 $300


$3/10/30/55 $10/25/40 $10/25/40 $10/25/40


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Seminole County Schools (In-network benefits only)

Benefit Feature

VCSB Triple Option L03

UHCWellness HMO

UHCStandard HMO UHC Family HMO

Annual Deductible $0 $400 / $800 $1,500 / $3,000 $5,000 / $10,000

Coinsurance 0% 20% 20% 20%

Out of Pocket Maximum $2,000 / $4,000 $5,000 / $10,000 $6,350 / $12,700 $6,350 / $12,700


$25 PCP$50 Spec

$35 PCP$45 Spec

$35 PCP$45 Spec

Inpatient $250/day(Days 1-5) 20% AD 30% AD 30% AD

Outpatient $100 20% AD 30% AD 30% AD

Emergency Room $100 $250 copay $250 copay $250 copay


$3/10/30/55 $7/30/60 $7/$30/$60 $7/30/60


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December 2013 Preliminary Renewal ProjectionPrepared by Aon Hewitt (Based on Claims through October, 2013)

19

Trend 9%Trend 9%

Retention 11%Retention 11%

Target Loss Ratio 88.9%Target Loss Ratio 88.9%

Projected Increase

8.17%Approximately 6.1% of this is Health Care Reform taxes

and fees

Projected Increase


and fees

Trend 9%Trend 9%

Retention 13%Retention 13%

Target Loss Ratio 80.9%Target Loss Ratio 80.9%

Projected Increase


and fees

Projected Increase


and fees

December 2013 Preliminary Renewal Projection 20

Large claimant costs (claims in excess of $100,000) Total enrollment (employees and dependents) in all plans

continues to decrease however, large claimant costs are continuing to increase, Florida Blue by 13% and Florida Health Care by 2%.

Pharmacy Costs are up by 10% over the prior 12 month period

Prepared by Aon Hewitt (VCSB Consultant)

December 2013 Projected Financial Impact21

CurrentPremium

ProjectedRenewal Premium

Increase

Florida Blue $17M $18M $1.4M

Florida Health Care Plans $46M $50M $3.5M

TOTAL Projected Increase $63M $68M$4.9M

(All Funds)

Based on the current active enrollment (excluding retirees) as of November 2013, the estimated increase to the total premium are projected to be approximately $4.9M.

2014 Medical Renewal As Of February 2013Florida Health Care Plans

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Florida Health Care Plans delivered the initial renewal to the Triple Option, HMO, and POS medical plans with an increase of 9.3%. After Aon negotiations around the method used to calculate the renewal, FHCP reduced the 9.3% increase to 6.9% for the current plans.

Initial Renewal

• 9.3% Increase• Trend 8%

Aon Negotiation

• 2.4% reduction

FinalRenewal

• 6.9% as is

Increase of$3,169,259Increase of

$4,267,107Decrease of $1,097,848

2014 Medical Renewal As Of February 2013Florida Blue

23

Florida Blue delivered the initial renewal to the PPO and HRA medical plans with an increase of 13.6% using a trend of 9.6%. After Aon negotiations around the method used when calculating the renewal, Florida Blue reduced the renewal to 9.7% above the current rates including Health Care Reform plan design changes.

Initial Renewal

• 13.6% Increase

• Trend 9.6%

Aon Negotiation

• 3.9% reduction

Final Renewal

• 9.7% as isTotal Increase $1,607,872Increase of

$2,265,148

Decrease of $657,306

Projected Financial Impact – 2014 Renewal24

The exhibit below illustrates the estimated financial impact to VCSB and employees for the 2014-2015 Plan Year based on the current active enrollment, excluding retirees.

Total Annual Premium District Paid Portion (Net) Employee Portion

2013-2014 Plan Year $62,812,506 $52,413,750 $10,398,756

2014–2015 Plan Year (Estimated) $67,589,637 $56,547,565 $11,042,072

$ Increase over Current $4,777,131 $4,133,815 (all funds) $643,315

% Increase over Current 7.6% 7.9% 6.2%

Aon Negotiated Total Decrease of $1,755,154 from Initial to Final Renewal

What’s Next?25

March, 2014 Insurance Committee will meet on March 6th and make a

recommendation to the Superintendent on health insurance plans for the 2014-2015 plan year

Renewals for other employee benefit

Other Employee Benefit Renewals26

Delta Dental & Delta Care – no plan changes

5.68% rate change for two (2) years ending 9/30/2016

Hartford Personal Accident Insurance – Waiting on renewal from carrier

Humana Vision Insurance – Waiting on renewal from carrier

UNUM Disability Insurance – Waiting on renewal from carrier

UNUM Life Insurance – Waiting on renewal from carrier

Conclusion of the Health Insurance Renewal/Update Presentation

Questions?

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Documents

HEALTH INSURANCE RENEWAL/UPDATE...HEALTH INSURANCE RENEWAL/UPDATE VOLUSIA COUNTY SCHOOL BOARD 1 Highlights 2 Acronyms and definitions Historical rate review and enrollment Federal