Speaker 1: Mr.
Speaker 1: Chairman.
Speaker 2: OK, thank you.
Speaker 2: The first item is approval of the agenda and I would like to move the health insurance renewal presentation to 8A and the budget update to 8B so that we can spend more time on the budget update hopefully than the insurance.
Speaker 2: So I would propose that amendment to the agenda.
Speaker 2: Are there any other changes from staff Miss McCoy?
Speaker 3: No changes, Mr.
Speaker 3: Chair.
Speaker 2: OK.
Speaker 2: Can I have a motion with that amendment as proposed?
Speaker 4: Move to approve as amended.
Speaker 4: Second.
Speaker 5: Councillor Beta, you're now host of the meeting.
Speaker 5: OK.
Speaker 2: OK.
Speaker 2: Thank you.
Speaker 2: OK.
Speaker 6: I'll 2nd.
Speaker 6: I'll second the motion, Mr.
Speaker 6: Chair.
Speaker 2: OK, we have a motion by Councilwoman Villarreal and a second by Councilwoman to Romero Works.
Speaker 2: All those in favor say aye.
Speaker 2: Or do we need to do a a?
Speaker 3: Roll call.
Speaker 1: Yes Sir, we have to do a roll call vote.
Speaker 3: On.
Speaker 1: Every thing.
Speaker 1: I'm sorry, Councillor Romanabeta.
Speaker 2: Yes.
Speaker 1: Councillor Signal Lindell Yes, Councillor Carroll Romero Wirth.
Speaker 6: Yes.
Speaker 1: Councillor Renee Villarreal.
Speaker 4: Yes.
Speaker 1: Councillor Jamie Cassette Sanchez Yes, motion passes.
Speaker 2: OK.
Speaker 2: Our next item then is approval of the consent agenda.
Speaker 2: Are there any items that we're going to pull from consent to be discussed?
Speaker 2: Is there a motion to approve the consent agenda?
Speaker 4: Move to approve second.
Speaker 2: OK, we have a motion by Councilwoman Lindell and a second by Councilwoman Villarreal.
Speaker 2: Can I have a roll call please?
Speaker 1: Yes, Sir, Councillor Mana Beta.
Speaker 2: Yes.
Speaker 1: Councillor Signal Lindell.
Speaker 3: Yeah.
Speaker 1: Councillor Romero Wirth Carol Romero Wirth.
Speaker 6: Yes.
Speaker 1: Councillor Renee Villarreal, Yes.
Speaker 1: Councillor Jamie Caset Sanchez?
Speaker 1: Yes.
Speaker 1: Motion passes.
Speaker 2: OK.
Speaker 2: That moves us to approval of the minutes, the regular Finance Committee minutes of March 30th, 2020.
Speaker 2: Are there any changes from staff?
Speaker 3: No changes from staff, Mr.
Speaker 3: Chair.
Speaker 2: OK.
Speaker 2: Are there any changes from the committee?
Speaker 2: Is there a motion?
Speaker 3: Move to.
Speaker 4: Approve second.
Speaker 2: OK, we have a motion and a second.
Speaker 2: Can I have a roll call please?
Speaker 1: Chair Roman Romana Baita.
Speaker 2: Yes.
Speaker 1: Councillor Signe Lindell.
Speaker 3: Yes.
Speaker 1: Council councillor Carol Romero Wirth.
Speaker 6: Yes.
Speaker 1: Councillor Renee Villarreal.
Speaker 4: Yes.
Speaker 1: Councillor Jamie Sanchez, Yes, motion passes.
Speaker 2: OK.
Speaker 2: So then that will bring us to our presentation and recommendations.
Speaker 2: We will first have a presentation on the City of Santa Fe Health Insurance renewal Aon Consulting.
Speaker 1: Mr.
Speaker 1: Chairman, can I get a spelling of Aon?
Speaker 2: Please capital A then small letter O and small letter NAON.
Speaker 1: OK.
Speaker 1: And may I ask for the for the presentation to be emailed to me please?
Speaker 2: Yes, we will do that.
Speaker 1: Thank.
Speaker 1: Thank you.
Speaker 2: OK, I believe.
Speaker 2: Miss Mintanya, will you be making the presentation?
Speaker 3: Yes, I'll take the lead.
Speaker 3: And then I've got Todd Burley Elizabeth.
Speaker 3: His last name spelling is Burley.
Speaker 3: Thank you.
Speaker 3: That was Todd.
Speaker 3: He is our senior financial manager in our office and he will probably help to address a few of the slides.
Speaker 3: So everyone who has the the presentation, I'm going to begin on slide 3.
Speaker 3: This is just an overview of the summary.
Speaker 3: You know the the ask is to renew your contract with Cigna.
Speaker 3: Your as a reminder you are a self funded program and as such your medical renewal has three pieces.
Speaker 3: You have your administrative costs that you pay Cigna to administer your plan, provide customer service, pay your claims and then you have the stop loss piece.
Speaker 3: This is the insurance to protect the city against any large claims or an excess amount of claims.
Speaker 3: And then you have the money you set aside to pay for claims as a self funded program.
Speaker 3: So your administrative costs are are a 5.8% increase.
Speaker 3: The stop loss is a 9% increase.
Speaker 3: And then overall with what we projected for claims increase, we're looking at an overall 9.4% increase.
Speaker 3: We'll go into a little bit more in depth into these numbers.
Speaker 3: Your dental program is also self funded.
Speaker 3: The that plan is running really well.
Speaker 3: So at this time we're recommending no change in the funding to that program.
Speaker 3: If we move to slide 4, this gives you an overview of the cost.
Speaker 3: Now this is the total cost of your program.
Speaker 3: So this includes what the city of Santa Fe contributes towards the cost and what the employees also contribute if they are contributing to any of the programs through their payroll deductions.
Speaker 3: So you can see in line 2 we have your medical program cost in column B.
Speaker 3: This is the estimated current cost for the 2019-2020 plan year.
Speaker 3: Column C would be the total projected cost for the 20/20/21 plan year.
Speaker 3: Column D shows the percent difference and column E is the dollar amount difference between what you're currently paying per year to what it would go up to.
Speaker 4: Mr.
Speaker 4: Chair and done.
Speaker 4: Just curious if you could share the screen as to what you're talking about if possible so that online YouTube folks will know what you're referring to since it is a public document.
Speaker 3: Sure, let me select my screen to share.
Speaker 6: Don, can I ask 2 questions, Mr.
Speaker 6: Chair?
Speaker 2: Yes, go ahead, Councilwoman Romero Ward.
Speaker 6: So I assume that this is the cost of renewal with the plan as it is.
Speaker 6: This is without making any changes that are selected late that are outlined later, correct?
Speaker 3: That is correct.
Speaker 6: And then also this is these, the cost of renewal is current and is there any notion that it might change or between now and when we actually renew?
Speaker 3: No, we went through and did it.
Speaker 3: We went back through, looked at your claims to update everything with more current claims information.
Speaker 3: And so we don't expect any changes from what we're presenting today.
Speaker 6: OK.
Speaker 6: Thank you, Mr.
Speaker 6: Chair.
Speaker 2: OK.
Speaker 4: Mr.
Speaker 4: Chair.
Speaker 2: Yes.
Speaker 3: Counselor.
Speaker 4: To ask questions as we go through the slides or at the end, or if we have questions on a specific slide, what's the?
Speaker 2: I I think let's ask on a specific slide.
Speaker 2: So yeah, but I can't see everybody.
Speaker 2: So just like you've been doing just.
Speaker 4: OK.
Speaker 4: I know, John, I know you're trying to find the view out there.
Speaker 4: That looks great.
Speaker 4: I do have a question on stop loss, but I'll wait till you get to that section.
Speaker 4: Thank you.
Speaker 4: OK.
Speaker 3: So when this first row is your total medical plan cost, so it contains your fixed cost, your stopwatch insurance cost and then the amount of money you're putting aside to pay claims.
Speaker 3: CNC current spend is roughly 20 million, a little over 20 million projected to to go up to 21 million, 937.
Speaker 3: So it's a 9.4% increase of and it's a difference of 1.8 million, almost 1.9 million in the blue we broke out.
Speaker 3: So you could see the difference between what is going towards your fixed class, which includes the administrative cost that you paid a Cigna and your stop loss and then what you're putting aside for funding to pay towards claims.
Speaker 3: So you can see that make up row 5 is your dental cost.
Speaker 3: Again, we projected the plan is running really well.
Speaker 3: We actually are projecting costs to be down.
Speaker 3: So we're we're recommending that you make no changes to your funding.
Speaker 3: So that way you're able to contribute to your reserve, your life insurance.
Speaker 3: There is when you see these numbers here, you're going to see a big, a pretty big percentage increase.
Speaker 3: But what we did is in working with the HR team is look at a benefit change and a a structural change compared to what you're doing with your life insurance today.
Speaker 3: I have in a later slide, I have more information about that.
Speaker 3: So we'll hang on to that thought and we'll get back to it when we get to that slide.
Speaker 3: And then your dependent life then begin on row 10 through 14.
Speaker 3: These are all voluntary programs.
Speaker 3: So these are programs where the employees pay 100% of his premiums.
Speaker 3: The vision is having a slight increase of 3%.
Speaker 3: It's a annual difference of $5657.
Speaker 3: So just a couple of notes on the on the fees is Cigna was willing to put in a rate guarantee on their fixed cost that they charge for administering your dental and your medical plans.
Speaker 3: There is for 2020, there's no increase, but for 2021 and 2022 their guarantee it will not exceed more than 2%.
Speaker 3: That's just for their administrative costs.
Speaker 3: The stop loss, you have a 9% increase on those costs and your current individual stop loss pulling level is $250,000.
Speaker 3: So as a reminder, stop loss, the individual stop loss is what you purchase to protect you against large claimants.
Speaker 3: So the city is responsible for the 1st $250,000 in paid claims for any member covered by your plan.
Speaker 3: If their claims exceed $250,000, that's where the stop loss is going to pick up the amount in excess of of that $250,000.
Speaker 4: You answered my question.
Speaker 4: Thank you.
Speaker 3: OK, perfect.
Speaker 3: This slide, not going to spend a lot of time unless there's questions, but just wanted to on Slide 5 give you an overview of your renewal history back to 2012.
Speaker 3: You can see year over year how the renewal has gone for each of your programs.
Speaker 3: The bottom row is a composited average over the information shown.
Speaker 3: And then I think what's important to look at these numbers is against the nationally to see how you've done.
Speaker 3: So you can see some years you've been a little bit higher than trend, but there's been a lot of years when you've been below trend and the trends are based on Aeon's book of business and our national trend survey.
Speaker 3: Now, what are the questions since we're that we get asked a lot by the council is when we look at these medical and dental clock costs, because they are the most significant pieces of the of the benefits is how much is the city actually contributing towards those costs.
Speaker 3: So if you'll remember a couple slides back on the medical I had showed you that the costs were currently but a little over 20 million and going up to 21 million.
Speaker 3: When we calculate what the city is contributing into it and take out what the employees pieces, you can see currently the city is contributing about 15 million, 398 with the renewal that will go up to 16.849 million.
Speaker 3: So the the increase at 9% equates to 1.451 million and the dental since there's no increase, there's not an increase to your share, but the city's share of the dental program is $635,804.00 a year.
Speaker 3: So when we add those two together, that's where we get the 16,000,000.
Speaker 3: I'm currently going up to 17.485 million.
Speaker 3: Any questions on this?
Speaker 3: This is how we projected your renewal and Todd, if you want to talk some high levels through this and then I'll just I'll keep control of the slides slide deck.
Speaker 5: OK, that sounds good.
Speaker 5: Mr.
Speaker 5: Chair.
Speaker 5: Counselors, I'll walk through this quickly.
Speaker 5: I think everybody has seen this before, but if not, correct me.
Speaker 5: Essentially what I do is I take the past 20-4 months of claims.
Speaker 5: So you'll see in the very first row from April of 19 through March of 2020, there were $18.576 million in medical claims, two and a half, $1,000,000 in RX for a total of $21 million.
Speaker 5: There's a reimbursement of $800,000 for stop loss.
Speaker 5: Again, any claimant who exceeds $250,000, any amounts above that will be paid by Cigna.
Speaker 5: So net claims of $20.3 million or $1419.16 per employee per month annual trend.
Speaker 5: As you saw a couple slides ago, this comes from our trend survey, which survey is various carriers and internal and external data sources.
Speaker 5: So I'm trending medical costs at 5%, our exit 7%.
Speaker 5: They get trended to the midpoint of next year.
Speaker 5: Long story short, right before that red bar in the middle, projected claims based on this time period are 21.621 million.
Speaker 5: I performed the same exercise for the prior, make some adjustments in the very bottom right hand corner.
Speaker 5: I'm estimating claims for next year to be just under $20 million.
Speaker 5: This is just the claim piece.
Speaker 5: This does not include the fixed cost, the administration or the stop loss.
Speaker 5: Any questions on how I got there?
Speaker 5: I hope not because we've moved on.
Speaker 5: Next slide just adds in the administrative fee and the stop loss.
Speaker 5: As you can see, the admin fee is a little under 600,000.
Speaker 5: Individual stop loss is 1.3 million aggregate stop loss, which we haven't talked about, but that protects the city.
Speaker 5: If claims are essentially more than 25% higher than expected, Cigna would pay anything above that amount.
Speaker 5: So my estimated claims about $20 million, if they for some reason exceeded roughly $25 million, Cigna would pick up any amount in total over that $25 million amount.
Speaker 5: Very rarely happens and even with COVID-19, doubt it will happen next year.
Speaker 5: So total costs are $21,937,000 and if you go down to the bottom section, all I do is take that 21.9 million and distribute it amongst the various plans and the union and non union rates that you currently have in place.
Speaker 5: Bottom right hand corner.
Speaker 5: That's the 9.4% increase that we've talked about previously.
Speaker 4: Mr.
Speaker 4: Chair.
Speaker 2: Yes.
Speaker 4: I just wanted to can you remind me why the premium plan for union is higher than premium plan for non union again?
Speaker 5: Mr.
Speaker 5: Chair, Counselor Villarreal, they have richer benefits than the non union.
Speaker 5: A few years ago when when it was decided to reduce benefits on the premium plan, the unions did not agree to that, so they are still on a richer plan.
Speaker 4: OK.
Speaker 4: Thank you.
Speaker 7: Mr.
Speaker 7: Chairman, this is Burn.
Speaker 2: Yes.
Speaker 7: I would like to just clarify the fun that Todd just spoke about that is solely for the fire union.
Speaker 7: All the rest of city employees are on the regular plan.
Speaker 2: OK.
Speaker 2: So the so it's the fire unions premium plan that's a little higher or richer than the other union and non union.
Speaker 4: Thank you for the clarification, Vern.
Speaker 7: No problem.
Speaker 7: That's correct.
Speaker 7: Thank you.
Speaker 4: And I'm having a hard time hearing Don, were you talking earlier?
Speaker 4: I don't.
Speaker 4: I can't.
Speaker 1: Hear it all?
Speaker 1: I can't.
Speaker 1: I can't hear her either.
Speaker 5: Toby I'll I'll I'll take it over while Don while we're trying to fix this.
Speaker 5: So what you see in column A is the current if you think back of page the current non union and ask me benefits, you can see there is no deductible.
Speaker 5: A $2500 out of pocket maximum for preventive services pays 100%.
Speaker 5: The PCP visit is $15.
Speaker 5: Specialist is 30 hospital inpatients 250, outpatients 150, lab and X-ray are 100%, CAT scans 100%, ER 125 and so on down the list.
Speaker 5: You can see that here's the fire plan and you can see it's even richer.
Speaker 5: Anything in red is a benefit that did not that we changed a few years ago for the at the time everyone except police and fire and now it's just fire, Mr.
Speaker 5: Chair.
Speaker 2: Yes.
Speaker 6: We don't have this slide in our packet correct.
Speaker 2: No, I don't believe we do.
Speaker 2: I don't.
Speaker 3: No, I, no, this was something I, I did not, we did not have in the packet, but I did send it over to Ashley with the HR team so we can get this distributed to you.
Speaker 3: I we just had it ready just in case there were specifics around the plan design for you.
Speaker 6: Yeah, we should probably have a copy.
Speaker 3: Yes.
Speaker 6: Thank you, Mr.
Speaker 7: We'll make sure that everyone gets it now.
Speaker 2: OK.
Speaker 2: So we can go back to the presentation that we do have.
Speaker 2: That would be great.
Speaker 1: Mr.
Speaker 1: Chairman, if I could be included on the list, send for that, I'd appreciate it for the minute, the exhibits.
Speaker 2: OK.
Speaker 3: OK, can everyone hear me?
Speaker 2: Yes, OK.
Speaker 3: It muted me and I didn't realize it had.
Speaker 3: So slide 9 is showing you what the contributions will be.
Speaker 3: So this what we call reference as the non union plan.
Speaker 3: So this is really all the employees except for fire.
Speaker 3: This red side is what the current rates are set at and then the blue table is what they would be effective 2019.
Speaker 3: Again, this is current plan designs not accounting for any changes.
Speaker 3: So you can see this is your premium plan.
Speaker 3: Here you have 997 employees enrolled.
Speaker 3: The premium plan is showing rows one through 7.
Speaker 3: The budget rate is the like per month premium equivalent.
Speaker 3: Column D shows your employer cost.
Speaker 3: This is what the City of Santa Fe is contributing towards the cost.
Speaker 3: Column E is how much the employee is paying per month and column F is what the employee is paying per pay period.
Speaker 3: And when you shift to the right in the blue box is the same setup.
Speaker 3: The only difference is we have column M which is showing the per pay period change.
Speaker 3: So you can see when we look at the employee only tier, they're paying $87.03 per pay period.
Speaker 3: Today, July 1st, this would go up to $95.22.
Speaker 3: So that's an increase of $8.19.
Speaker 3: And then that just follows down by each plan.
Speaker 3: The core plan you have beginning on row 8 through 14, there's 55 employees enrolled in that.
Speaker 3: And then your HRA plan beginning on row 15 through 21 is has 16 employees on that.
Speaker 3: Then row 22, what it does is it adds the total roles from each of your plan to give you your total cost.
Speaker 3: Any questions on this page?
Speaker 3: Then when we move to slide 10, this is the fire plan and same format.
Speaker 3: So you can see because their contributions, their costs are a little bit higher.
Speaker 3: You can see their per pay period changes are a little bit higher.
Speaker 3: Again, this does not take into account any plan design changes.
Speaker 3: Now slide 11, this is where the first slide where we wanted to talk about presenting some plan design changes.
Speaker 3: So Berna and her team had come to us and you know, we talked about plan designs many times in the past and then she came to us most recently with just some of the budget concerns and asked us to present some options for for you all to consider this option.
Speaker 3: What it would be doing is adding a deductible to your premium plan and it would be an individual deductible of $300 and a family deductible of $600 and then coinsurance at 10%.
Speaker 3: And what this means is that anytime somebody accesses care, whether they have an overnight stay in the hospital and outpatient hospital service, which could include like a day surgery, your advanced radiology.
Speaker 3: So those are your Mris, CAT scans, PET scans and then your non preventive labs and radiologies.
Speaker 3: So how this would work is say somebody was having an outpatient surgery and they had not had any care so far in the year, they would be responsible for paying their deductible.
Speaker 3: When they've met their deductible for the year, that's all they pay for that.
Speaker 3: So an individual had a surgery, they would pay $300 then they would pay 10% up to their out of pocket maximum.
Speaker 3: And as a reminder, they're out of pocket maximum is 2500 for an individual and 5000 for family.
Speaker 3: Now with this.
Speaker 2: Excuse me Don and this this option.
Speaker 2: What's the 900,000 and the 4.6?
Speaker 3: Sure, Chairman Abatha, what the what that represents is if we were to adopt these saving these changes to your plan, these would be the savings.
Speaker 3: So it would take your 9.4% renewal increase and reduce it by 4.6% or it'd be roughly a $900,000 savings.
Speaker 2: Out of how much are is it increasing a million?
Speaker 2: What?
Speaker 5: Let me jump in real quick.
Speaker 5: That's $900,000 total, not the city share.
Speaker 2: So the.
Speaker 5: Would be the 76 1/2% of that the overall increase was a little less than 1.5 million to the city.
Speaker 5: So if you take 7% of that is roughly I should be able to do this 220 five 675,000.
Speaker 2: So it would be the other portion is the employee's portion and that's how we get to 100%.
Speaker 2: So so the employees would save money also.
Speaker 5: Well, the well that the employees would say German and Beta.
Speaker 5: The employees would save money in the contributions from their paychecks.
Speaker 2: OK.
Speaker 5: But that $900,000 savings is really shifting the cost to the employees at the time of service.
Speaker 5: So they would pay more to the hospitals, labs, X-rays for their services on the previous page.
Speaker 2: Yeah, those employees that needed it, correct.
Speaker 2: OK, OK.
Speaker 2: Thank you.
Speaker 3: Any other questions regarding this option?
Speaker 8: One quick question, Councillor Lindell here.
Speaker 8: Are you looking only at the one of the 900,000 or are you looking at also the 500,000?
Speaker 8: And both of those only apply to the premium plan.
Speaker 3: So Councillor Lindell, and so this is just looking at if we made this change, this one change to the premium plan on the this on slide 12, we provided another option.
Speaker 3: These two options don't add together.
Speaker 3: They're just one or the other.
Speaker 3: You choose one.
Speaker 3: You either choose option one on the on page 11 or this would be considered like option 2.
Speaker 5: And Mr.
Speaker 5: Chair Councillor Lindell, what I was trying to show with this is even with with substantial increases to the various co-pays you have in place on on that richest plan right now, it's going to be difficult without implementing A deductible and coinsurance to see any significant savings.
Speaker 8: My question was, are these both only to the premium plan?
Speaker 5: Mr.
Speaker 5: Chair, Councillor Lindell, yes, and again, keep in mind over 90, close to 95% of your employees are on the premium plan.
Speaker 4: Mr.
Speaker 4: Chair.
Speaker 2: Yes, Councilwoman will be right on miss.
Speaker 4: Montano, just curious, you said that you can have either one or the other possible consideration changes, but not both.
Speaker 4: Can you say more about that?
Speaker 5: Did your chairman of a tech counselor Villarreal the If you look at the previous slide, the deductible and coinsurance applies to inpatient, outpatient, radiology and lab.
Speaker 5: If you go to the next slide, you'll see what I've shown is increasing the inpatient hospital co-pay.
Speaker 5: For example, from 2:50 to 1000, you can't have both a deductible and a co-pay on on a service.
Speaker 5: So really what I was trying to show with this slide is even increasing the inpatient hospital.