Minutes 05-13-2014 - Laserfiche WebLink

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Mark Browder reviewed the slide outlining 2014 plan rates, and noted that the dependent cost for the employee is less in the PPO plan than in the HSA plan. Looking at the 2014 plan experience data, he noted that claims were higher in March of this year. He reviewed the final slide outlining 2015 claim expectation. He said they are expecting about a 14% for the 2015 claim year, and this will change as the claims continue to move forward in 2014. Commissioner Gordon asked how to figure out if something breaks even for United Healthcare. Mark Browder said this goes back to the second slide on the 2013 plan experience. He noted the bottom right hand side, which shows a 79 percent loss ratio. He said based on where the targets are, this is a break even or slight positive position for United Healthcare. Commissioner Gordon asked about the 79% loss ratio. Mark Browder said with healthcare reform, the target loss ratio is 85 percent. He said this shows that United Healthcare did not make significant amounts of money while insuring the plan. Commissioner Gordon asked how the stop loss ratio figures in. Mark Browder referred to slide 5 and said the County pays for stop loss insurance, and the pooling point is $105,000. He noted that in March the County received reimbursement from a claimant that from $181,000. He said reimbursement was received for that month for that high claimant. Commissioner Gordon asked about slide 6 and questioned what numbers go into determining what the contribution has to be. Mark Browder said everything above the contribution lines falls into the green line on slide 6. He said there is a claims expectation for 2015, which takes the current 12 months of claims and trends it forward. He said the administration and stop lost insurance costs are estimated, the health care reform fees are considered, as well as the HSA costs, and this totals about $11,739,828. Commissioner Gordon said the 14.3 percent increase is higher than other numbers, such as the inflation rate and cost of living increases. Mark Browder said health care claims are increasing at a rate greater than inflation, and health care reform adds additional costs. Chair Jacobs said March 2013 and July 2013 had higher claims, and there is logic to this since people are more active in March, and in July school is out. He asked why this jump in March was not projected. Mark Browder said historically claims activity is around $600,000, so $900,000 is a significantly different month. He said July was up, but not as significantly as March and November. He said the March increase was due to abnormal claim activities. Commissioner Pelissier asked how the County can assess whether it is still an advantage to remain self insured moving forward. Mark Browder said a projection could be done to show what a fully insured renewal would look like; however, the County is not paying 2 percent in premium taxes to the state, and in 2015, 3 percent in health insurance tax to the federal government. He said this equates to $500,000 in avoided costs automatically from self funding. He said he works with 30 counties across the state, and there is a wide disparity in what renewals look like. He said when a client asks for a fully insured quote compared to a self funded quote, it is often an increase in the mid teens. He said there has only been one situation where the fully insured plan was competitive to a self funded plan, and this was a small company with high expenses.