city of homer council meeting august 4, 2014 presented by: jeff paxton principal & senior...
DESCRIPTION
MERCER Benefit Plan Financial PerformanceTRANSCRIPT
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CITY OF HOMERCOUNCIL MEETINGAugust 4, 2014
Presented by:Jeff PaxtonPrincipal & Senior Consultant
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MERCER
City of HomerDiscussion Topics
• Benefit Plan Financial Performance
• Effect of January 2014 Plan Changes
• ACA Excise Tax
• Benefit Plan Benchmark Comparison
• Fully Insured Marketing Status
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MERCER
Benefit Plan Financial Performance
Contract PeriodTotal Paid
Funding Level $1,028,691Total Fixed Costs $225,815
Net Paid Claims $741,957Total Expenses $967,772Gain / (Loss) $60,919Expense Loss Ratio 94.1%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2013 Avg. Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Monthly Funding Monthly Expenses YTD Average Funding YTD Average Expenses
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MERCER
Benefit Plan Financial Performance
A B1 B2 B3 B C D E F G HFunding Waiver Stop Loss Admin. Fixed Net Paid Total Expense Gain/(Loss) Emp Cost Per
Level Expenses Charges Fees Costs Claims Expenses Loss Ratio Monthly Count EmployeeB1+B2+B3 B+C D/A A-D D/G
2013Plan Yr. $1,967,039 --- $394,976 $41,840 $436,815 $1,780,675 $2,217,490 112.7% ($250,451) 1,191 $1,861.87---Mo. Avg $163,920 --- $32,915 $3,487 $36,401 $148,390 $184,791 112.7% ($20,871) 99 $1,861.87---
Jan-14 $171,097 $3,250 $30,644 $2,923 $36,817 $123,748 $160,565 94% $10,532 83 $1,931.87Feb-14 $171,097 $3,500 $30,644 $2,923 $37,067 $141,588 $178,654 104% ($7,558) 83 $2,147.28Mar-14 $171,530 $4,000 $31,013 $2,953 $37,966 $78,432 $116,398 68% $55,132 84 $1,384.58Apr-14 $171,232 $4,500 $29,905 $2,848 $37,253 $76,368 $113,622 66% $57,610 81 $1,401.78
May-14 $172,416 $4,750 $31,013 $2,939 $38,702 $109,482 $148,184 86% $24,232 84 $1,766.54Jun-14 $171,321 $5,250 $29,905 $2,856 $38,011 $212,338 $250,349 146% ($79,029) 81 $3,088.39Jul-14
Aug-14Sep-14Oct-14Nov-14Dec-14
2014Plan Yr. $1,028,691 $25,250 $183,123 $17,442 $225,815 $741,957 $967,772 94.1% $60,919 496 $1,949.86Mo. Avg $171,449 $4,208 $30,521 $2,907 $37,636 $123,659 $161,295 94.1% $10,153 83 $1,949.86Avg Mo.Change $7,529 N/A ($2,394) ($580) $1,235 ($24,730) ($23,495) $31,024 -17
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MERCER
Benefit Plan Financial Performance
Expenses through June
Expenses through May
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MERCER
Benefit Plan Financial PerformanceHistorical Expense Summary
Plan Year 2011 2012 2013 2014
Medical Plan $1,571.32 $1,748.57 $1,755.43 $1,842.59Dental Plan $74.38 $86.29 $83.75 $83.02Vision Plan $17.92 $18.26 $22.70 $24.25
Total Expenses PEPM $1,663.61 $1,853.12 $1,861.87 $1,949.86
Percent of Change 2011 to 2012 2012 to 2013 2013 to 2014
Medical Plan 11.3% 0.4% 5.0%Dental Plan 16.0% -3.0% -0.9%Vision Plan 1.9% 24.3% 6.8%
Total Expenses 11.4% 0.5% 4.7%
*PEPM - Per Employee Per Month
$0
$500
$1,000
$1,500
$2,000
$2,500
2011 2012 2013 2014
Medical Plan Dental Plan Vision Plan
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MERCER
Effect of January 2014 Plan Changes
Enrollment Migration Analysis
As of December 2013 As of May 2014 Change in Distribution
Total Total
Employee Only 23 Employee Only 31 8
EE + Spouse 24 EE + Spouse 16 (8)
EE + Child 2 EE + Child 2 0
EE + Children 2 EE + Children 6 4
EE + Sp + Child 13 EE + Sp + Child 7 (6)
EE + Sp + Children 33 EE + Sp + Children 22 (11)
Total 97 Total 84 (13)
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MERCER
Effect of January 2014 Plan Changes
• FINANCIAL CHANGES through June 2014
7.3% reduction in Stop Loss premium payments.
16.6% reduction in Health Plan administration costs.
3.4% increase in total fixed costs (employees waiving coverage).
16.7% reduction in claim costs.
12.7% reduction in total expenses.
4.7% increase cost per employee per month.
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MERCER
2018 ACA Excise Tax
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2013 NATIONAL SURVEY OFEMPLOYER-SPONSORED HEALTH PLANSCITY OF HOMERAugust 2014
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MERCER
About the Survey
EmployersNumber of participants
City of Homer 1
City <500 106
50-199 Employees 315
National All 2842
• The employer groups shown in this presentation are:
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MERCER
Demographics
City of Homer City <50050-199
Employees National All
Average employee age 47 43 41 41
% of female employees 33% 31% 47% 43%
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MERCER
+0.5% +5.1% -1.6% +2.1%
$12,340$9,805 $10,779$10,558$9,966
$11,736
$22,237 $22,342
City of Homer City <500 50-199 Employees National All
2012 % Change 2013
*Total health cost includes medical, dental, Rx and specialty benefits
Average total health benefit cost* per employee
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MERCER
Employee contribution for individual coverageAverage monthly contribution ($)
City of Homer City <50050-199
Employees National All
PPO / POS Buy-up - $89.53Core - $79.99 $120 $124 $143
HMO $0 $111 $151 $169
HSA-eligible CDHP $0 $43 $72 $76
HRA-based CDHP $0 $45 ID ID
Dental $5.01 $22 $23 $30
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MERCER
Employee contribution for individual coverageAverage contribution as a % of premium
City of Homer City <50050-199
Employees National All
PPO / POS Buy-up - 11%Core - 12% 14% 24% 30%
HMO 0% 23% 32% 33%
HSA-eligible CDHP 0% 25% 21% 23%
HRA-based CDHP 0% 8% ID ID
Dental 15% 55% 64% 68%
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MERCER
Employee contribution for family coverage*Average monthly contribution ($)
*Family coverage is defined as coverage for employee, spouse and two children
City of Homer City <50050-199
Employees National All
PPO / POSBuy-up - $509.43
Core - $240.00
$340 $545 $540
HMO $0 $352 $549 $584
HSA-eligible CDHP $0 $171 $318 $422
HRA-based CDHP $0 $217 ID ID
Dental $25 $58 $68 $72
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MERCER
Employee contribution for family coverage*Average contribution as a % of premium
*Family coverage is defined as coverage for employee, spouse and two children
City of Homer City <50050-199
Employees National All
PPO / POS Buy-up - 18%Core - 10% 33% 52% 56%
HMO 0% 28% 48% 49%
HSA-eligible CDHP 0% 19% 34% 42%
HRA-based CDHP 0% 19% ID ID
Dental 21% 60% 70% 73%
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MERCER
City of Homer 2013
City of Homer 2014 City <500
50-199 Employees National All
Average % of employees waiving own coverage
0% 20% 8% 20% 22%
% of employers offering incentive to waive coverage
No Yes 42% 11% 11%
Coverage waivers
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MERCER
City of Homer 2013
City of Homer 2014 City <500
50-199 Employees National All
% of employees electing dependent coverage
73% 62% 58% 45% 53%
Make spouses ineligible for coverage if other coverage is available
No No 6% 9% 4%
Surcharge applies for spouses with other coverage available
No Yes 0% 2% 1%
Dependent coverage
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MERCER
In-network City of Homer City <50050-199
Employees National AllDeductible required (% of employers) Yes 87% 93% 91%
Median individual deductible amount Buy-up - $400
Core - $1,500 $750 $1,000 $1,500
Median family deductible amount
Buy-up - $1,200Core - $4,500 $1,500 $3,000 $3,000
PPO / POS deductibles
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MERCER
City of Homer City <50050-199
Employees National All
Median copay amount Buy-up - $30Core - $35 $20 $25 $25
PPO / POS in-network primary care physician (PCP) visit cost-sharing
PPO / POS emergency room visit cost-sharing
City of Homer City <50050-199
Employees National All
Median emergency room copay amount
Buy-up - $100Core - $150 $100 $150 $100
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MERCER
Individual OOP maximum City of Homer City <50050-199
Employees National All
Median for in-network services
Buy-up - $2,400Core - $4,500 $2,000 $3,000 $3,000
PPO / POS out-of-pocket (OOP) maximums*
Family OOP maximum
Median for in-network services
Buy-up - $7,200Core -
$12,500 $4,000 $6,000 $6,000
*Includes deductible
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MERCER
Retail City of Homer City <50050-199
Employees National All
GenericBuy-up - $10Core -$25 $9 $12 $12
Brand-name formularyBuy-up - $20Core -$50 $24 $33 $32
Brand-name non-formularyBuy-up - $30Core -$75 $47 $56 $54
Copayments in prescription drug plansAverage copayment among employers with three payment levels
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MERCER
-3.0% +2.2% -8.9% -0.1%
$852
$653$763$764$717
$834
$1,036 $1,005
City of Homer City <500 50-199 Employees National All
2012 % Change 2013
Average cost of dental coverage, per employee
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MERCER
2015 Fully Insured Marketing Status
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