Agenda - 04-04-2017 - 6-c - Recommendations for Employee Health Insurance and Other Benefits

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2 The UHC renewal was negotiated from $41.50 per employee per month to $29.50 per employee per month with a guaranteed fee for 2 years and a 3 percent rate cap for July 1, 2018's renewal. UnitedHealth Care will also fund $25,000 for FY 2017/2018 for wellness programs. Health Insurance The FY2016/2017 total adopted budget for health coverage for employees is $8,645,863 and $2,189,174 for retirees. The net increase for FY2017/18 is $524,433 based on the current enrollment of employees and participating pre-65 retirees. The net increase assumes that the pharmacy services will be independent of the UnitedHealth Care contract as described below. The increase represents 5.05 percent to the County's health insurance appropriation. An addition to the current plan design is trans-inclusive health care coverage effective July 1, 2017. Trans-inclusive health coverage includes benefit coverage for the treatment of gender dysphoria, a condition when a person's gender at birth is contrary to the one with which they identify. The coverage for the treatment of gender dysphoria allows member access to medical services based on gender identity and is not restrictive to services associated by a member's gender at birth. More specifically, services will include cross-sex hormone therapy administered by a medical provider, genital surgery, and pharmacy therapy, laboratory testing to monitor the safety of continuous cross-sex hormone therapy, and mental health services including psychotherapy and associated psychiatric diagnoses. All other health benefits, co-pays, co-insurance and deductibles will remain the same. The County Manager is recommending no increase in premium equivalent for employees or participating pre-65 retirees for FY2017/2018. The County participated in a Pharmacy Benefit Manager (PBM) Bid Comparison to "carve out" pharmacy coverage with another PBM for July 1, 2017 coverage. The County evaluated the PBM marketplace to accomplish two goals: 1) review the current contract with UHC-Optum Rx and 2) review proposals from other PBM vendors for consideration of changing pharmacy coverage effective July 1, 2017. Eights bids were received and two vendors were interviewed, the current vendor UHC-Optum Rx and Envision Rx. Staff provided the analysis for review and recommendation by the County Manager. The County Manager is recommending contracting with Envision Rx for pharmacy benefits. Envision Rx will offer the following: • Expenditure reduction of $141,000 annually is projected compared to the current contract with UHC-Optum Rx. • The County will only be responsible for paying an administrative fee for each prescription dispensed offering more transparency to actual cost because there is no undisclosed revenue. This is defined as a 100% pass-through offer. • If Envision Rx negotiates deeper rates with network pharmacies during the contract, the County is the beneficiary. It is likely that the network rates will exceed the minimums, providing additional savings, which is very common with pass-through models. • Envision Rx will communicate with employees directly during the transition. Employees currently taking non-formulary maintenance medications will be grandfathered into their program for 90 days. Employees not medically respondent to any drug change may be granted continuance because of medical necessity.