health insurance committees keys for success presented by caryn coss cta nodd specialist, region 2...
TRANSCRIPT
Health Insurance CommitteesKeys for Success
Presented by
Caryn CossCTA NODD Specialist, Region 2
Angela Marese BoyleCTA NODD Specialist, Region 3
Dan VaughnRegional UniServ Staff, Region 3
What Effective Health Benefit Committees Should Know --
Types of purchasing models
Strategies for success
Committee roles and responsibilities
Fiduciary and ethical responsibilities
How to work effectively with brokers and consultants
Common School District Insurance Purchasing Models
Health insurance for school employees is purchased through one of the following delivery models:• Jointly Managed Trust (JMT)• Joint Powers Authority (JPA)• Direct Purchase• Large Group Purchasers
Jointly Managed Trust (JMT)
• Labor and management are represented on the trust and each group gets one vote
• Each group selects their representatives
• Contract directly with provider for services including consultants and third party administrators (TPAs)
• Trustees have specific fiduciary responsibilities that govern their conduct
Jointly Managed Trust (JMT)
All money contributed to the JMT must be used for the exclusive benefit of covered participantsExamples in California:
CVT (California’s Valued Trust) VEBA (Voluntary Employees’
Beneficiary Association), MEBA (Metropolitan
Employees’ Benefits Association),
SCEET (South Counties Employer Employee Trust)
HDIEET (High Desert and Inland Employee/Employer Trust)
Joint Powers Authority (JPA)
• Final decision making authority rests with the management representatives to JPA
• Surplus revenue is returned to the school districts
An entity formed and operated by two or more public agencies to spread risk among them for the purpose of establishing, operating, and maintaining a joint program for medical, dental, vision and other employee benefits
Joint Powers Authority (JPA)
JPA may operate with representatives from the employee organizations in an advisory role to the board of directors
JPAs establish their operating rules (data sharing, opting in or opting out of the JPA)
JPAs contract with providers through consultants hired by the JPA
California examples are Riverside Employer/Employee Partnership for Benefits (REEP) and Self Insured Schools of California (SISC)
Direct Purchase
Districts directly purchase from insurance companies for benefits
Districts directly contract with consultants or brokers to provide advice and services
Districts are self-rated on their own experience
Direct Purchase
Stand alone districts do not have clout and may suffer wide swings in claims Each bargaining unit negotiates benefits and may result fragmented benefits
Large Group Purchasers
• Districts contract with larger purchasing pools to provide insurance for health, dental, vision and other benefits
• Large group purchasers negotiate with insurance providers for best rates
• Premium share is negotiated locally
• Examples are the JMT’s JPA’s, and CalPERS
Roles and Functions
District Administrators– Advocate for the district– Communicate to
superintendent and boardDistrict Bargaining Team Members
– Understand the process and information
– Communicate to respective bargaining teams
Union Members– Advocate for the units– Communicate to respective
boardsUnion Bargaining Team Members
– Understand the process and information
– Communicate to respective bargaining teams
NOT!
Roles and Functions
District Insurance Committees Understand: – Changes in laws and
regulations affecting insurance plans
– The need to coordinate with other insurance pools
– The needs of district staff– Competitive conditions;
district priorities and constraints
– Education– Communication
Responsibilities of the Committee
“It is not enough to have good heart and an empty head”
District Health Insurance Committees
• Mgt/Labor make their own appointment to the Committees
• Brokers/consultants do not “run” the meeting
• Mgt/Labor should alternate the “Chair” position
• Always attend• Ask questions
District Health Insurance Committees
• What is the long and short-term agenda?
• Have a work plan• All information and
recommendations go to both Parties
• Insist that both Union and Management have access to professionals
• If disputes arise, how are they resolved?
District Health Insurance Committees
• Develop open enrollment procedures to minimize negative enrollment consequences
• Require the incorporation of Wellness Programs
• Incorporate a good communications strategy
• Regularly review the financial status of benefit programs ensuring financial and fiscal stability
• Monitor the benefit plans to assure high quality and avoid unnecessary costs
District Health Insurance Committees
Advantages:1. Interaction among
district management, unions, and healthcare professionals
2. Opportunity to ascertain where $$ are being spent
3. Get familiar with insurance plans
4. Get to know the “players”
5. Getting everyone on the same page
6. Group expertise
District Insurance Committees
Advantages:– Interaction among district
management, unions and healthcare professionals
– Opportunity to ascertain where $$ are being spent
– Get familiar with insurance plans
– Get to know the “players”– Getting everyone on the
same page – Group expertise
District Insurance Committees
Pitfalls:1.Brokers/consultants can take
over leadership of the Committee, and push their own agendas
2.The parties receive only partial information
3.Can be considered a precedent for bargaining for either labor or management
4.Agreement in kind without input from the bargaining teams
The Most Important Thing You Should Know About Your Broker…
He works for you!
Brokers and Consultants
The Role of the Broker
• Provide relevant information to the Committee • Be an advisor to the Committee• Provide options regarding plan designs, deductibles, out of pocket costs, etc.• Be knowledgeable of funding mechanisms• Negotiate rates for premiums• Understand how the plan operates• Know plan design issues
The Broker/Advisor should:
Other Broker Considerations
Labor and management should consider these questions and judge for themselves: Are they selling a product or service? Are they working for labor and management to achieve the goals and objectives of both parties? Is the broker/consultant paid a commission, retainer, or fee for a particular job?
Other Broker Considerations
Do some real digging:Has the district entered into an agreement already. If so, what is the current fee agreement (fixed dollar or %)?If premium goes up, does commission go up?Does your broker’s firm receive any overrides from the products placed?Brokers/consultants should be paid a set fee for work, within the scope of the submitted proposalWhat happens in a commissioned arrangement?
Basic Underwriting Guidelines
Four basic principals to health plan underwriting --
1. Young Participants2. Old Participants3. Well Participants4. Sick Participants
If you upset the cart, it will tilt!
Opting Out
Good or
Bad?
10 Questions To Determine If You AreFulfilling Your Fiduciary Responsibility
Does your Health Benefits Committee:
Keep abreast of changes in laws and regulations affecting insurance plans?
Consider the needs of your plan participants (employee + dependants)?
Consider competitive conditions; district priorities, and constraints?
Regularly review the financial status of the benefit programs – financial and fiscal stability?
Monitor the Benefit plans to assure high quality?
Create a fair bidding system by excluding people who have an interest in the outcome?
10 Questions To Determine If You AreFulfilling Your Fiduciary Responsibility
Does your Health Benefits Committee:
Require that members abstain from voting when there are conflicts of interest?
Develop open enrollment procedures to minimize negative enrollment consequences, for example, major changes which do not include deaths in family, divorce, dependent age maximums?
Require the incorporation of Wellness Programs?
Incorporate a good communications strategy?
Keys for Success
• Knowledge & Training
• Time• Representation• Roles &
Responsibilities• Clear Governance
Lines• Trust• Commonality• Clear Plan• Transparency• Communications