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Presented by: David Ford,Executive Director of Florida School Retiree

Benefit ConsortiumEmployed By: Polk County School Board

Reducing Retiree Health

Plan Costs

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History of Retirees Receiving Health Care

Retiree Demographics Cost Drivers Of Health Care GASB Changes On The Horizon Typical Retiree What Districts Are Doing To Control Cost Questions?

Presentation Overview

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F.S.112.08 Group insurance for public officers, employees, and certain volunteers; physical examinations.—

F.S.112.0805 Employer notice of insurance eligibility to employees who retire.—

F.S. 112.0801 Group insurance; participation by retired employees.—

History of Retirees Receiving

Health Care

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10,000 Baby Boomers are turning 65 each day for the next 19 years (69,350,000)

50% of workers indicated they will be unable to pay for medical expenses during retirement

50% probability of at least one member of a married couple being alive 25+ years after age 65

Retiree Demographics

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76% report having saved less than $100,000 for retirement

40% of employees feel they will never be able to retire

34% plan to work well past retirement age because they have to

40% plan to work well past retirement age because they want to

Retiree Demographics

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Employees 12,243 Employees over 65 working 381= 3.5% Employees 60-64 1,162 =

9.5% Employees 55-59 1,696

=14.0% Total Employees over 55 3,239 =

27.0%

Duval County Public Schools 2014 Demographics

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2015 Medical Trending around 10% 2015 Pharmacy Trending around 13.1%

Traditional 6.9%Specialty 30.9%Drugs in the pipeline

Traditional 31%Specialty 69%

Compounding increased 128.4% in 2014Specialty expected to increase 40-50% in 5 years

Health Care Costs

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Tentative plans to report full liability Effective fiscal years after 6/15/17 Changes with the evaluation method

GASB Rule Changes

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Avg. Annual Salary $41,670

Avg. Benefit 2013 $19,230

Avg. Teacher Salary of the big seven at the top 2014 estimated at $69,000

Avg. FRS pension with 30 years $33,120

Social Security @ age 62$16,869

Avg. Total Income $49,898

The Typical FRS Retiree

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Total Income Before Taxes $49,898 Less Income Taxes $

5,350 Less Health Care Costs $

6,500 Spendable Income

$38,048 Monthly Income $

3,170

The Typical FRS Retiree

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Nothing, take what we have or leave Allowing outside vendors to solicit Retirees for some

or all of the above Offering Options Medicare Advantage Plan Optional Medicare Supplement Plan with Drug Optional Seven Consortium Districts moved all retires to

Advantage or Supplement Plans with Drug Plan Offering and Voluntary Benefits

What Districts Are Offering Retirees

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Medicare Supplement (Medigap) Plans on a Statewide and National Basis Two (2) Companies Are Approved - United Healthcare (UHC)

and Cigna

Medicare Part D (EGWP) Pharmacy Plans on a Statewide and National BasisOne Company is Approved – United Healthcare

Medicare Advantage Plans Specifically Selected to Meet Individual School District NeedsApproved Companies – Aetna, AvMed, Cigna, Health First,

Humana and UHC,

Consortium Health Plan Options

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Medigap Benefits Plan A Plan F Plan NPart A Coinsurance and Hospital Costs

√ √ √

Medicare Part B Coinsurance or Copayment

√ √

Plan N pays 100% of the Part B coinsurance, except for a

copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits

that don’t result in an inpatient admission

Blood (First 3 Pints) √ √ √Part A Hospice Care Coinsurance or Copayment

√ √ √

Skilled Nursing Facility Care Coinsurance

  √ √

Medicare Part A Deductible   √ √Medicare Part B Deductible ($147)

  √  

Medicare Part B Excess Charges (15%)

  √  

Foreign Travel Emergency (To Limits)

  √ √

Medicare Supplement Benefit

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United Healthcare 2015 Issue Age

Plan A Plan F Plan N

Age 65 $131.49 $183.63 $132.03Age 66-69 $141.87 $203.05 $146.39Age 70-74 $163.16 $226.93 $162.89Age 75-79 $177.24 $246.28 $177.28Age 80 + $192.48 $266.90 $191.98

Medicare Supplement Monthly Premiums

Cigna 2015Issue Age

Plan A Plan F Plan N

Age 65 $179.44 $207.49 $155.60Age 66-69 $149.44 $207.49 $155.60Age 70-74 $166.68 $242.58 $187.33Age 75-79 $178.71 $272.82 $213.48Age 80 + $186.29 $305.36 $242.31

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Rx BenefitComprehensiv

e Premier

Drug CoverageDrug List 100% + Bonus 100% + BonusInitial Coverage Period      Deductible $0   $0Generic $2 to $10   $2 to $7Brand Preferred/Non-preferred $45/$75   $30/$60Specialty 33%   $75Gap      Generic Preferred $2 to $10   $2 to $7Brand Preferred/Non-preferred 55% Discount   $30/$60Specialty 55% Discount   $75Catastrophic    Generic $2.65 or 5%   $2.65 or 5%Brand $6.60 or 5%   $6.60 or 5%Monthly Premium $84.18 $155.31

Medicare Pharmacy Part D Premiums 2015

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Benefit Zero Premium Comprehensive Option 3Medical  PPO OON National PPO OON Same

Annual Deductible

$0 $0

Annual OOP $4,500 $2,500Hospital Admit $200/Day to

8 Days30% $175 $175

Office Visits $15/$40 $35/$50 $5/$15 $5/$15Emergency Care $65 $65 $65 $65Outpatient Surgery

20% 30% $15 $15

Rx  

Generic $10 N/A $5 N/A

Brand $40/$90 N/A $30/$60 N/ASpecialty $90 N/A $80 N/ACoverage Gap Applies No GapMonthly Premium

$0 $232-$328

Local Availability

Select Counties All Florida Counties

Medicare Advantage

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Brevard County Public Schools

Current New Difference

Monthly Retiree Premiums Compared to Active Plan $359.00

Plan N and Comp Rx Age 67

$305.89

$53 per Retiree per

Month

Administrative Savings of Cigna ASO Fees and TASC Administration

589 Retirees$284,444

Annual Savings

Active Health Plan Savings With Medicare Retirees on Consortium Plans

715 Retirees and

Dependents

$104,744 Annual

Savings

Savings to GASB Liability Over Next 20 Years $102 Million $51 Million - 50%

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Escambia County Public Schools

Current New Difference

Monthly Retiree Premiums Compared to Active Plan $422

Plan N and Comp Rx Age 67

$300.56

$121.44 per Retiree per

Month

Savings due to removal of monthly subsidy

$25 month /retiree $0 $122,000

Annual Savings

Administrative Savings of ASO Fees, Stop Loss and Administration

396 retirees $275,000 Annual Savings

Active Health Plan Savings With Medicare Retirees on Consortium Plans

396 retirees and their

Dependents

$326,000 Annual Savings

Savings to GASB Liability Over Next 30 Years $30.8 Million $15.4 Million -50%

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Premium Comparison Polk County Schools Health Plan = $505

Medigap UHC Age 65 Age 66-69 Age 70-74 Age 75-79 Age 80+

Plan A + Comp. Rx $211.31 $222.57 $239.26 $252.63 $266.82

Plan F + Comp. Rx $260.63 $276.09 $299.41 $318.23 $338.60

Plan N + Comp. Rx $211.11 $222.12 $239.10 $252.59 $266.92

Plan A + Premier Rx

$282.44 $293.70 $310.39 $323.76 $337.95

Plan F + Premier Rx $331.76 $347.22 $370.54 $389.36 $409.73

Plan N + Premier Rx

$282.24 $293.25 $310.23 $323.72 $338.05

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Financial Impact on Districts

District Retirees Revenue Expenses Cost

Brevard 715 $3,080,220 $3,469,408 $389,188

Duval 665 $7,883,000 $8,533,000 $650,000

Escambia 396 $2,005,000 $2,728,000 $723,000

GASB Current New Reduction of Liability

Brevard 102 Million 51 Million 51 Million

Duval 135 Million 62 Million 73 Million

Escambia 30.8 Million 15.4 Million 15.4 Million

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Third Party Administrative Services

Project Management Communications Annual Enrollment Planning and Coordination

o Eligibility, Including New Retirees and Aging-Ino Benefit Fair Schedulingo Customer Call Centero Enrollment in Non-Medical Benefitso (Carriers Enroll Medical)

Premium Billing, Collection (FRS, ACH and Direct Bill) and Direct Payment to Carriers

o Premium Payments to Districts for Dependents Under 65

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Options Available Through the Consortium Dental Insurance Plans PPO, DHMOGroup Vision Insurance Plan Identity Theft Protection Plan IT Tech Support ProgramLife Insurance (2016)Pet Insurance (2016)

Non-Medical Plan Options Will be Expanded to Meet the Unique Needs of Retirees in the Future

Non-Medical Benefit Plan Options Available

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Benefits Low PPO Plan High PPO Plan

In Network Out of Network

In Network Out of Network

Annual Maximum $800 per person per year $1,500 per person per year

 Annual Deductible

$50/ person to max $150 for Basic or Major

Services

$100/ person to max $300 for Basic or Major

Services

$50 per person to max $150 for Basic or Major Services

Diagnostic & Preventive 100%   100% 100%   100%

Basic 70% 70% 80% 80%Major 50% 50% 50% 50%Plan Inclusions 2 Preventive

Cleanings and 2 Perio. Basic

Cleanings/Year

2 Preventive Services

Cleanings per Year

2 Preventive Cleanings and 2

Perio. Basic Cleanings/Year

2 Preventive Cleanings and 2

Perio. Basic Cleanings/Year

OON Allowance   PPO Schedule   80th percentileMonthly RatesRetiree Only $28.25 $38.69Retiree + 1 $56.24 $77.04Retiree + Family $73.29 $100.04

Dental PPO Plans

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Services Low DHMO Plan High DHMO Plan

Network Network Only Network OnlyAnnual Maximum NA NADeductible $0 $0Office Visit Copay $0 $0Panoramic X-ray & Bitewings $0 $0Prophylaxis $0 $0Amalgam – One Surface – Permanent $5 $0Resin – Based Composite – One surface, Anterior

$30 $0

Endodontic Therapy, Molar $250 $210Periodontal Scaling & Root Planning- 4 or More Teeth

$55 $50

Complete Denture – Maxillary $375* $325*Crown – Porcelain Fused to Nobel Metal $270* $245*Extraction, Erupted Tooth or Exposed Root

$0 $5

Monthly RatesRetiree Only $9.95 $16.15Retiree + 1 $19.70 $31.98Retiree + Family $35.02 $56.85

Dental HMO Plans

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Plan In Network Benefits

Frequency (Exam /Lenses/ Frames) 12/12/24Exam/Spectacle Lenses $10/$15Eyeglass Benefit – Frame

Non-Collection Frame Allowance (Retail): Up to $130 OR Up to $180 at Vision Works

Davis Vision Frame Collection (in lieu of Allowance):Fashion Level and Designer Level IncludedPremier Level $25Eyeglass Benefit – Spectacle Lenses Member ChargesClear Plastic Lenses & Scratch-Resistant Coating Included

Polycarbonate Lenses Adults $30Progressive Lenses (Standard / Premium / Ultra) $50/$90/$140Contact Lens Benefit (in lieu of Eyeglasses) Up to $130Monthly Rates:Retiree $6.17Retiree + 1 $11.11Retiree + Family $17.28

Vision Plan

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Plan Features Premium Ultimate

Restoration services Yes YesLost wallet assistance Yes YesIdentity safety resource center Yes YesInternet surveillance monitoring and alerts Yes Yes

Social security monitoring and alerts Yes Yes

Change of address monitoring and alerts Not Available Yes

Court/criminal monitoring and alerts Not Available Yes

Sex offender monitoring and alerts Not Available YesAnti-Virus, anti-spyware protection Not Available YesAnti-phishing, anti spam protection Not Available YesJunk mail-list removal Not Available YesMonthly RatesRetiree $7.00 $10.50Retiree + Family $15.00 $22.50

Identity Theft Protection

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Remote Support via Internet, Live Chat, Telephone◦ 24/ 7/ 365

Assistance With Various Devices Including:◦ Computers (PC and MAC)◦ Smartphones◦ Cameras◦ Printers and Scanners◦ Modems ◦ Gaming Consoles

Computer Protection Software Self Help Database for Assistance With Technology Issues Secure Data Back Up Data Protection Onsite Support Available at $80 per Hour

IT Technical Support

Unlimited Support Unlimited Support with Data Backup

$10.00 per Household $14.00 per Household

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Retiree Medical Plans Are Selected Through Public RFP Process

Retirees Have More Options, Guarantee Issue, Same or Better Premiums, and Can Change Coverage if They Move

District Cost of the Active Employee Health Plan Has Been Reduced Because the Consortium Program

Non-medical Benefits, Specifically Designed for the Retirees, Will be Provided and Expanded Annually

Additional Retiree Administrative Assistance Is Provided by TPA, Freeing Up District Service Time

GASB Liability of the Districts Has Been Reduced

Collective Purchasing Power of the Consortium

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Reduce self-funded health plan costs.Reduce liability under Government Accounting

Standards Board (GASB) requirements to report liabilities for Other Post-Employment Benefits (OPEB).

Reduce administrative costs (medical Third-Party Administrator and TPA for retiree accounts receivable).

Potentially better/broader mix of retiree benefits.

Brevard Public Schools’ Experience

Why We Were Interested

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RobinsonBush met with a Select Group of Retirees to Provide Information and Request Feedback.

Brevard Public Schools Participated in RFP Process for Medical Products to be Offered in Brevard.

Office of Employee Benefits Submitted Board Agenda Item in June 2014, Which was Approved.

Set Up Weekly Implementation Calls with TPAWorked with TPA to Communicate to Retirees and

Conduct Open Enrollment Meetings.

Brevard Public Schools’ Experience

How We Proceeded

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Brevard Public Schools’ Experience

What We Learned

The Change was Very Emotional for our Retirees.Expect Your Enrollment Meetings to be SRO.Create a Diagram of the Process Flow for Every

Step of Implementation.Communicate, Communicate, Communicate (early

and often)!Factor in Loss of Retiree Drug Subsidy (RDS) when

Completing Financial Analysis.

Questions and Comments

Survey

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Authorizes each local governmental agency to provide insurance,

Enter into contracts, Self-fund, Charge employees for cost, Confidentiality of medical records back

F.S.112.08 Group insurance for public

officers, employees, ..-

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Any employer who provides insurance coverage under s.110.123 or s.112.0801 notify those employees who retire of their eligibility to participate in either same group insurance plan or self-insurance as provided in ss. 110.123 back

F.S.112.0805 Employer notice of insurance

eligibility to employees who retire.—

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Became Law in 1985 Required all employers provide insurance

coverage to all retired employees Required notification of the retirees of their

eligibility to participate Retirees covered under Medicare may be

experience-rated separately and coverage is basically the same as active group 3

F.S. 112.0801 Group insurance; participation by retired employees.—