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HomeMy WebLinkAboutCBC Meeting Minutes 11.14.14Meeting Date: November 14, 2014 Conference Room 3 MEMBERS PRESENT: Ron Knaggs, Chair Dan Kurek, Vice Chair Ed Lounds Carl Hensley William Donovan Richard Pancoast Patrick Campion Craig Mundt Steven Weaver James Clasby Gwen Morris Jay L. McBee MEMBERS ABSENT: Jane Bachelor Stephanie Morgan John Culverhouse OTHERS PRESENT: CALL TO ORDER Robert Bentkofsky Jennifer Hill Beth Ryder George Landry Don West Guy Medor Jack Southard Marie Gouin Mark Satterlee Heather Young Marty Laven Julie Zicarelli Matt Hammond Madeline Yaroma Mr. Knaggs called the meeting to order at 7:30 a.m., thanked Mr. Laven for his service and introduced Steve Weaver. Mr. Weaver briefly shared his background. PUBLIC COMMENT No member of the public spoke at the meeting. APPROVAL OF JUNE 20, 2014 MINUTES After a motion and a second, the minutes were unanimously approved. MEET COUNTY ADMINISTRATOR HOWARD TIPTON Mr. Tipton thanked the members for their service and time. He gave history, told his Citizens' Budget Committee November 14, 2014 Page 2 impression of the County and vision for Economic Development. Each member introduced themselves. Mr. Knaggs asked Mr. Tipton about his biggest challenge and what the Committee could do for him. Mr. Tipton answered that the first and biggest challenge is to figure out what the County wants to be, so he can plan what would be needed to support that. As he prioritizes the needs, the experience around the table being a sounding board would be the greatest gift. Mr. Hensley asked if Mr. Tipton would try to get the legislature to help. Mr. Tipton is hoping for incentive matches for some upcoming projects. Unfunded mandates were discussed. Mr. Mundt praised staff. Mr. Clasby asked about impact fees. Mr. Tipton thinks there could be some rebalancing. Mr. Satterlee added some information. Ms. Morris started conversation on the port. Mr. Tipton agreed that it is a big opportunity with challenges. Mr. Weaver thinks the diversity causes some of the resistance. He gave his idea about impact fees. Mr. Lounds shared his opinion on the value of small business and asked what could be done to improve city relationships. Mr. Tipton agreed that the newspaper reports don't make the County seem appealing. We can meet with the newspaper, continue to work with current groups, be sure there are activities for kids and jobs cure a lot of ills. We need to be sure young people are being trained for available jobs. The budget is the ultimate policy document. You put your money where your mouth is. Mr. Tipton again thanked the Committee for their time and service. APPROVAL OF 2015 MEETING DATES Mr. Kurek cannot attend January 16t". It was decided to change the January meeting to the 9t". May and June will be flexible, depending on the budget process. Mr. Clasby started discussion on months without meetings. The draft dates were accepted with the exception of January. HEALTH INSURANCE PRESENTATION AND DISCUSSION Mr. Bentkofsky gave the attached PowerPoint presentation. Mr. Weaver started discussion about legal fees and the claims number. Mr. Kurek asked Citizens' Budget Committee November 14, 2014 Page 3 about the dental subsidy, stop loss and the consultant. Mr. Lounds asked about opting out. Mr. Knaggs started discussion on who is insured. The Constitutionals (except the Sheriff), Medical Examiner's office and Children's Services Council are also part of the self-insurance plan. They have representatives on the insurance committee to make recommendations to the Board. Mr. Weaver asked about the revenue interest and deductibles. Mr. Knaggs commented on history and making changes in steps. Mr. Mundt asked about employee compensation for insurance -rate -increases._ Some of the members asked for an explanation of the numbers and expressed concern. Mr. Donovan asked for the number of employees in the plan. Mr. Weaver asked about the funding rate. Mr. Lounds started discussion on the employee health center and benefits. The insurance committee was discussed. INFORMAL BOCC MEETING UPDATE Ms. Gouin informed the members that the budget was online. OTHER ISSUES Mr. Knaggs started discussion on topics for 2015. Stormwater, infrastructure, financial system, gas tax, -airport,_ Job Growth Incentive Grant (JGIG) program, golf course and 'landfill, bidding process, Peter Tesch, and the fairgrounds were suggested. ADJOURNMENT Mr. Knaggs adjourned the meeting at 9:23 a.m. Resp-ectfutly submitted by: Brenda Marlin The next CBC meeting will be held on Friday, January 09, 2015, at 7:30 a.m., in Conference Room 3, at the St. Lucie County Roger Poitras Administration Annex. ST. LUCIE COUNTY CITIZENS' BUDGET COMMITTEE 2015 MEETING -DATES: January 9 February 20 March 20 April 17 May 15 June 19 August 21 October 16. Overview • Fully insured vs. Self-insured • Health Insurance Fund - FY14 estimate & FY15 budget • Use of reserves to subsidize premiums • Internal rates vs. "true rates" • Employee share of premium and comparative data • Excise tax • Structure of health benefit plan and related issues Fully Insured vs. Se Fully Insured • Insurer assumes risk and pays all claims • Rates based upon trend and pooled risk-- * isk"• All services and vendors controlled by insurer • Insurer maintains reserves and keeps unspent portion of reserves • 45% of all covered workers are covered by a fully insured benefit plan (88% for employers with 3-199 employees) nsu Self -Insured • Employer assumes risk up to the stop- loss deductible level ($135K in 2015) • Rates based upon claims experience • Employer sets plan design, network and providers • Employer maintains reserves and retains all unspent portions • 55% of all covered workers are covered by a self-insured plan 12/2/2014 1 Current • Conscious decision to use reserves from Health Insurance Fund to subsidize premiums, but..... • As reserves are drawn down, premiums must increase each year until the Health Insurance Fund becomes self-sufficient. • Share of premium that employees currently pay is relatively low especially for dependent coverages. Increases can be expected in future years (subject to Board approval). • The structure of health plan benefits will also continue to change towards a higher deductible plan. This in turn will likely result in greater demand for health clinic services. • The phased -in changes towards a high deductible plan in future years is necessary to avoid paying an excise tax in 2o18. 12/2/2014 701 Estimate 20 •-.---_ . (Unauiiite __ '._...Renewal Revenues FY 2014 FY 2015 Employer Share 7,658,608 8,152,384 Employee Contribution 653,668 747,786 Cobra Payments 51,997 42,005 Interest 73,205 150,000 2.5%Admin. Fee 186,261 203,810 Stop Loss Reimbursements 348,885 100,000 Rebates, Settlements, Misc. 226.637 g Total 9,199, 261 9,395,984 Expenses Claims 10,440, 532 10,446,068 Dental Subsidy 114,383 0 Florida Blue Admin. Fees ` 692,722 657,732 Reinsur, Premium 1,118,235 999,753 Trans.Reinsurance Fee (ACA) 134,001 93,588 EAP Premium 75,499 17,280 Health & Wellness Center 1,178,979 1,167,513 3rd Party Fees and Misc. 36,773 34,895 Indirect Cost Allocation 253,261 253,261 HR Adrrrin. Costs 132,961 109.563 Total 14,177,346 13, 779, 653 Reserve Usage 4,978,085 4,383,668 Current • Conscious decision to use reserves from Health Insurance Fund to subsidize premiums, but..... • As reserves are drawn down, premiums must increase each year until the Health Insurance Fund becomes self-sufficient. • Share of premium that employees currently pay is relatively low especially for dependent coverages. Increases can be expected in future years (subject to Board approval). • The structure of health plan benefits will also continue to change towards a higher deductible plan. This in turn will likely result in greater demand for health clinic services. • The phased -in changes towards a high deductible plan in future years is necessary to avoid paying an excise tax in 2o18. 12/2/2014 701 Employee Only - SLC 4,748 FY1S True Funding Rate 8,460 Monthly - SLC 396 FY1S True Funding Rate 705 Current Premium as % of True Premium 56.1% Employee +1 - SLG 9,808 FY1S True Funding Rate 14,772 -Monthly - SLC 817 FY15 True Funding Rate 1,231 Current Premium as % of $25.00 True Premium 66.4% Fam ily - SLC 12,014 FY15 True Funding Rate 21,708 Monthly - SLC 1,001 FY1S True Funding Rate 1,809 Current Premium as % of 10.0% True Premium 55.39 -. 90.0% -Health Insurance Premium Cost Share Employee Share Employer Share Total Health Insurance Premium Single Emp +1 Family Single Emp+1 Family Single Emp.+1 Family FY 2014 6.7% 95% 9.0% 93.3% 90.5% 91.0% Share of Premium $300 $876 $1,020 $4,179 $8,377 $10,314 $4,479 $9,253 $11,334 Monthly Cost $25.00 $73.00 $85.00 $348.25 $698.08 $859.50 $373.25 $771.08 $944.50 FY 2015 - standardized % 7.0% 10.0% 10.0% 93.0% 90.0% 90.0% Share of Premium $332 $981 $1,201 $4,415 $8,827 $10,813 $4,748 $9,808 $12,014 Monthly Cost $27.70 $81.73 $100.12 $367.95 $735.61 $901.05 $395.65 $817.35 $1,001.17 Annual Increase $32 $105 $181 $236 $450 $499 $269 $555 $680 Monthly Increase $2.70 $8.73 $15.12 $19.70 $37.53 $41.55 %Increase 10.8% 12.0% 17.8% 5.7% 5.4% 4.8% 6.0% 6.0% 6.0% 12/2/2014 3 • Beginning in 2o18, a 4o% excise tax will be assessed on the cost of coverage for health plans that exceed certain annual limits as set in the ACA. $10,200 for individual coverage ➢ $27,500 for family coverage • Sponsors of self-funded group health plans must pay the 40% tax of on any dollar amount above the caps. • Based on estimates of medical claims trend and health care inflation from our health benefits consultant, the premium value of individual coverage and family coverage will exceed the annual limits in 2o18. • Without any plan changes, the excise tax is estimated at $523,000. • To avoid the excise tax, health benefits will likely be adjusted in future years, resulting in further cost shifting to the employee. • -= nsurance om`r itt ctions • Standardized employee premium contribution rates: • 7% for Employee -only coverage (from 6.7%) • 10% for both Employee + 1 and Family coverages (from 9.5% and 9% respectively). Comparative Contribution Levels: • U.S. averages for premium contribution levels (from Bureau of Labor Statistics): • Employee only =13% • Family coverage = 29% • Employee cost shares are even higher for other public sector employers in St. Lucie County such as School District, FPUA and the cities of Port St. Lucie and Fort Pierce. • Changed health plan structure and benefits that generally include higher deductibles and out of pocket costs for individuals and families (effective January 1,2015)- 12/2/2014 E!