HomeMy WebLinkAbout07/01/2008 15 2007 Year-End Medical Insurance Report BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
111 AGENDA STATEMENT
Item No. 15
For Meeting Of 7/1/08
ITEM TITLE: 2007 Year -End Medical Insurance Report
SUBMITTED BY: David Brush, Chair, Employees' Welfare Benefit Program Board
Sheryl M. Smith, Human Resources Manager
CONTACT PERSON /TELEPHONE: Sheryl M. Smith, 575 -6090
SUMMARY EXPLANATION:
Attached is the 2007 Year -End Report for the City of Yakima's Self- Insured Health Care Plan.
In reviewing this report, it is important to note that Healthcare Management Administrators
utilizes a paid claims system of reporting expenditures. This differs from Generally Accepted
Accounting Principles (GAAP), used by the City of Yakima for its records. The City recognizes
expenditures on a claims incurred basis. Further, the report does not include any revenues or
expenditures for City personnel and administrative costs, which are attributable to the City's
0 Health Benefit Reserve Fund.
•
Resolution_ Ordinance Contract Other (Specify) Report
Funding Source
APPROVE[) FOR SUBMITTAL: CI S ..!
City Manager
STAFF RECOMMENDATION: Accept report.
BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION:
� i P 509.575.6497. 218 Main St. #718
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PO Box 67 T 877.550.0088 Yakima
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Yakima WA 98907 F 509.457.3732 6 S. 2° st; #818
• w www.fcgbenefits.com Spokane
BENEFITS 601 W. Main, #812
May 23, 2008 .
City Council Members
CITY OF YAKIMA
129 North 2 Street .
Yakima, WA 98901
Re: Year 2007 Healthcare Plan Report
2008 Renewal and Current Status of Plan •
•
Dear Council Members:
•
Enclosed are the Financial Summaries and related reports of the City's Employee
• Health Plan for the calendar year 2007 and first quarter of 2008. These reports are
0 produced by Healthcare Management Administrators, Inc. (HMA) of Bellevue,
Washington, and record actual claims and direct plan expenses on a cash basis of
accounting. In addition to receiving another favorable annual audit from the .
Washington State Risk Manager's Office last year, this Plan continues to be well
monitored and managed by a cooperative relationship between the City Manager's
Office, the Human Resources Department and a voluntary Board representing all
employees and bargaining units. With over 20% of the net cost of this Plan paid for by
employee payroll deductions, all participants have a substantial incentive to participate
in efforts to keep the Plan on solid financial ground.
Based on the HMA Financial Reports and past experience with your Plan, I offer the
following executive summary.
What is the Plan?
The current City of Yakima Employees' Welfare Benefit Program (the "Plan ") became
effective April 1, 1994 when the seven separate benefit programs covering each .
collectively bargained group of employees consolidated into one Plan Document. At
that time, a Board with representatives from all employee groups was formed and
became responsible for defining covered benefits, eligibility rules, monitoring monthly
Plan financial reports, and making Plan recommendations to the City Manager. This
Board meets every month and has been chaired by I.A.F.F. representative Dave Brush
•
Employee Benefits • Insurance Broker • HR Consulting •
:9 Division of Fisher Consulting Group, Inc.
Report to City Council
5/23/2008
Page 2 ill
for the last few years. Employee and employer premium contribution levels are outside
of this Board's responsibilities and remain subject to the collective bargaining process.
In addition to meeting many of the statutory requirements for providing LEOFF 1
medical benefits, the purpose of this Plan is to attract and retain a quality workforce by
financing the collective health needs of City employees and their eligible dependents.
The Plan has been self - funded since the early 1980's.
Administration: what is a Self - Funded Health Plan?
The City of Yakima assumes the financial risk for providing covered health care benefits
to all eligible and participating employees and their dependents. Rather than paying a
fixed premium to an insurance company to assume the risk for all eligible claims, a self-
funded employer pays claims out of general assets as they are incurred. While the City
of Yakima hired Healthcare Management Administrators (HMA) to manage the Plan
and process claims, it is the City's money combined with employee payroll
contributions that pay for all Plan claims and expenses.
To protect against very large claims, the City purchases stop -loss insurance. This type
of insurance reimburses only for catastrophic claims that exceed a certain amount. That
amount, called a stop -loss deductible, was increased with the January 2008 health plan
renewal to $175,000. Since this policy reimburses the City and not the Plan, this is a
self- funded health care plan and not a health insurance plan.
The City self -funds this Plan for several reasons. First, the City does not have to prepay
all claims with a monthly premium. The City also maintains its own Plan reserves and
keeps any investment income. In addition to having more control over cash flow, the
City maintains more control over the Plan's benefits and can negotiate more favorable
administrative fees. For example, administrative and consulting expenses for the Plan
in 2007 were 4% of Plan costs; a comparable fully- insured plan would pay from two to
four times as much in their premium for administration and brokerage.
Census: Who is on the Plan?
In 2007, the Plan covered an average of 895 City employees: 160 are LEOFF 1, 43 are
non -LEOFF 1 retirees, and the remaining are active employees, Council Members and
self -pay COBRA participants. Counting all dependents, the Plan covered a monthly
average of 2,519 total participants last year - 31 less people than in 2006. Of the 895
total employees, 665 are men and 230 are women.
Employee Benefits • Insurance Broker • HR Consulting
=1 Division 01 Fisher Consu/tino Group. Inc
Report to City Council
5/23/2008
Page 3
•
For the past 8 years, the Plan has covered more than double the number of employees
(active and retired) over the age of 60 (187) than under the age of 30 (70) Just in the past
15 months, 10 more employees joined the over age 60 category. Unlike many plans with
average participant turnover, this Plan's average age increases by more than one full
year every 12 month. Unfortunately, advancing age and increasing medical care costs is .
directly correlated.
Actuaries commonly analyze three components of healthcare plans to project future
claims: census (who is covered), benefits (what is covered) and administration (how is it
paid). Of the three components, who is covered is by far the biggest factor in
determining the cost of a healthcare plan.
Benefits: what is covered under the Plan?
•
All terms, conditions and benefits are detailed in a newly updated Plan Document. The
new Document (also called a Summary Plan Description) became effective January 1,
2008, and has been copied in its entirety in a Health Care Plan booklet and distributed
to all employees and retirees by your Human Resources Division. This Plan Document
• was written to facilitate compliance with the latest Department of Labor (DOL) rules,
Health Insurance Portability and Accountability Act (HIPAA) amendments, and
describe benefit changes affecting office visit co- payments, preventive care, dental and
vision coverage.
In general, the Plan pays for eligible expenses after the participant pays a $100 annual
deductible per person, or $200 for their family. After the deductible, the Plan pays 80%
and the participant pays 20% of the bill for most services: this is called "co- insurance."
After the participant has paid out -of- pocket $600 (or $1,200 for the family), the Plan
pays 100% of eligible expenses up to a lifetime maximum of one million dollars per
covered participant. Outpatient prescription drugs are covered after a $10 /generic,
$20 /brand name or $40 /non - formulary co- payment for a one month supply. 90 day
maintenance prescriptions are available through a mail order program for 2X the
monthly co- payments. Dental, vision, chiropractic and most other major categories of
care are included. There is a free choice of providers, though the City's Plan includes
"HMA Preferred / Regence Blue Shield" - a preferred network of physicians and
hospitals that offers discounts and direct billing. This . Regence preferred provider
network currently offers the most favorable medical claim pricing available in the State
of Washington and is one of the primary reasons the City contracts with HMA of
Bellevue for health claims administration.
III
Employee Benefits • Insurance Broker • HR Consulting
4 Division of Fisher Consulting Group. Inc. •
Report to City Council
5/23/2008
Page 4 •
Dental benefits are covered up to $1,000 per year with no deductible, and co- insurance
applies to most services. Vision benefits include an annual eye exam and up to a $200
allowance for lenses and frames every two calendar years.
Changes made on January 1, 2008 include adding a $15 co- payment for the 6th and
subsequent office visits perr year, adding preventive care coverage after a $15 co-
payment with no annual maximum, moving dental claim processing from HMA to
Washington Dental Service (WDS) and vision claims to Vision Service Plan (VSP). The
dental and vision benefits did not materially change, but the administration was moved
to WDS and VSP in order to take advantage of their respective network discounts.
Attached to this report is the Summary of Benefit changes effective January 1, 2008 that
was mailed to each employee in December and is also used in handouts for the
employee meetings taking place now through June 13th at locations throughout the City.
How much did the Plan cost in 2007?
City of Yakima
2007 Employee Health Care Plan
v 3
Stop -Loss Reimbursement
W ` ra_ e 6.' ' s'. "+
- $1ss,s12
9
•
•
kh fr f�C4 ^ " r :•
Stop Loss Premium Dental Paid pains
$416,510 $678,192
5% Administrative Fees Vision Paid Claims 8%
$349,054 Prescription Paid Claim $91,188
4% $1,637,361 1%
19%
Total 2007 Plan Cost: $8,512,184
12 months experience 1/1/2007 through 12/31/2007 FCG)
Total 2007 Plan cost, as shown on the pie chart above, was $8,512,184 verses $7,285,461
in 2006. This 17% increase in 2007 is primarily due to the aging of the census and an
increase in the number of large catastrophic medical claims. Like most employer plans,
a disproportionate share of the Plan's money is spent on individuals with the highest
claims.
Employee Benefits • Insurance Broker • HR Consulting
1 Da1 Group. Inc '.
Report to City Council
5/23/2008
Page 5
1 11 1
A fully integrated disease management and wellness program has been reviewed and
approved for implementation January 1, 2009 to address this alarming trend. In
addition, the City contracts with the lowest net cost preferred provider organization
(PPO) network (Regence) and we constantly monitor the all available alternatives. The
Plan includes advanced case management, utilization review procedures and hospital
bill audits - all the programs you would expect to find in a modern health care plan.
If we divide total annual plan costs by the number of employee participants (which
include retirees, LEOFF 1, and COBRA participants), and divide again by 12 months,
we get the Total Average Monthly Cost per Employee of $797.92 for 2007.
City of Yakima
2007 Employee Health Care Plan
Total Average Monthly Cost per Employee
Sirs mtu rte €. X10. 0g P�'C -�.t e y p 3 a' s'°
2007 $797.92 , _
III !' l ml ,may ?� y �. yn , "4' ! ,,_., '�`r°'yssTe ,- xet. � ° :, _, `�'�',,, o .� t ;..
,..�.;,: %F,.> `w t wl..x a�a..,S.E.e.'"..2z. �`.'�- ,.,..a .�e k ?� ,y,
�2004 ;; r r 4++*d? "'... 1 : r ,tr S^+� ' S' w . , *. • n < m 7 8 +� try .
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C. , r.,�, 5 i `'�° -';'+` fc..',aV 1+i® 7.1e;240
';2660 , `:k_ n I F
•1:999 , F , 7* ` ;7 • g 8 s
=1998 ,x { , ; �. q5 , 30.0
. 197.z-; K1 a
1:996 .n.1 J, . r :.. 409.07"_ '
1995 8 ::. Win7 . ` .:: t , : $366 31
1994 . $313.48
$0 $200 $400 $600 $800
FCG)
BENEFITS
Through the first quarter of 2008, we have been fortunate to avoid any new catastrophic
claims and the average has dropped. Unfortunately, as promising as it appears,
experience dictates that this 3 month downward trend cannot be projected too far
forward.
i
Unless the age of the census gets substantially younger (from turnover and hiring), the
4110 schedule of benefits changes dramatically, and/or the new integrated wellness and
disease management program coming in 2009 achieves immediate and remarkable
Employee Benefits • Insurance Broker • HR Consulting
1 Division of Fisher Construing Group. Inc
Report to City Council
5/23/2008
Page 6 0
results, the steady increase in Plan costs will continue for the foreseeable future. The
broader the support and stronger the participation incentives given the new wellness
initiative, the more controllable the cost burden on the City and its employees will be.
Benchmarking: how do our costs compare to others?
While the City of Yakima has experienced the same cost pressures that all U.S.
employer - sponsored health plans have incurred since the inception of Medicare, the
Plan has absorbed an average increase of just under 7% over the last 12 years. Over the
same period, many national and regional surveys report average increases from 8% to
14 %. The latest Watson Wyatt National Survey reports employers averaged an increase
of 8% in 2007. Other public employer benchmarks reflect average increases in the 9% to
16% range for static PPO plans over the same period.
Our most relevant benchmark - the Association of Washington Cities - increased their
fully- insured Regence Blue Shield Plan A, Plan B, PPO, and PPO -500 between 10.6%
and 15.8% (depending on coverage selected) effective January 1, 2008. Even their new
high deductible HSA Plan experienced an increase of more than 11%.
• The Washington Counties Insurance Pool CIP has done substantially better than the
Association of Washington Cities in the recent past, with increases more in line with
those of our Plan. Like the City of Yakima plan, the WCIP is self - funded.
What changed in the last Plan renewal?
In addition to the office visit co- payment, preventive care, dental and vision changes
described earlier, the Benefits Board and City Manager reviewed proposals for
competing service vendors and stop -loss insurance.
The 2008 Renewal was presented to the City Manager and Benefits Board on November
27, 2007. The City's stop -loss deductible was renewed at $175,000 with Sun Life, up
from $150,000, in return for a $79,509 premium discount. Sun Life is one of the largest
and highest -rated stop -loss insurers in North America, and this policy includes a future
renewal increase cap and a "no- laser" agreement (a provision hidden in many contracts
that allows the insurer to exclude, or laser, a high cost individual upon renewal).
What are we doing now to control future cost increases to the Plan?
The attached Benefit Analysis Report for 2007 provides detail by diagnostic category
and shows where every dollar went. As reported above, a disproportionate share of the
Plan's money is spent on our individuals with the highest claims.
Employee Benefits • Insurance Broker • HR Consulting
-I Division of n,hei Consullini Group. Inc
Report to City Council
5/23/2008
Page 7
•
Cost control recently implemented:
• Renegotiated Healthcare Management Administrators (HMA) contract
• Competitively bid and negotiated stop -loss renewal
• Added co- payments to certain office visits to offset costs of new preventive
benefits
• Added dental PPO and changed administrator from HMA to Washington Dental
Service
• Added vision PPO and changed administrator from HMA to Vision Service Plan
• Competitively bid and negotiated pharmacy benefit management contract with
CVS/ Caremark
• iBenefit report distribution to educate employees about their own prescriptions
Cost control measures approved for January 1, 2009:
• Approved contract with American Health Holdings to provide integrated
wellness support, 24 -hour nurse line, online Health -e Outlook web services,
health risk appraisals, predictive modeling and advanced disease management.
• Maternity & Newborn wellness and support program for expectant mothers.
Cost control recommendations receiving on -going attention from the Benefits Board
• Potential for consumer -driven programs (HRAs and HSAs)
• Adopting financial incentives to support full participation in the upcoming
wellness and integrated disease management programs.
• Increasing out -of- pocket maximums from the current $600
• Increasing annual deductible from the current $100
• Adding a waiting period of 30 to 60 days for new hire eligibility
• Adding stronger benefit disincentives for using out -of- network providers
• Negotiate new prescription network contract to include maintenance supply
service from local pharmacies. .
• Carve -out transplant coverage and fully- insure risk for these potential claims
Conclusion
As the City's workforce ages, solutions to the . same issues that affect all larger
employers must be monitored closely. However, any further changes that will have a
substantive effect on costs will require significant cuts in benefits and / or reduction in
choice of providers. Without significant support from everyone involved, the City and
the employees will not be able to sustain a Plan with benefits as rich as those now
provided. No matter what our political and social beliefs are, waiting for healthcare
0 reform to alleviate the financial and administrative burden is not a viable option.
Employee Benefits • Insurance Broker. • HR Consulting
a Division o(Fislter Cunstaring Grotth. Inc
Report to City Council
5/23/2008
Page 8 0
Working in the Plan's favor, the City's Employee Benefits Board continues to be actively
involved in Plan management. In addition to cost containment, their time and attention
is focused on claim reviews, financial reporting analysis, HIPAA compliance, and new
voluntary benefit options. The mission of FCG Benefits and this Board is to balance
substantive changes in the benefits while meeting the long -term needs of the people
whose financial security depend on this Plan.
We are also enjoying the surprisingly favorable stop -loss market that allows our self-
funded plan to operate with significant cash flow and control advantages over fully -
insured health insurance plans. I do not anticipate the self - insurance market to lose
these advantages any time soon.
Another positive distinction for the Plan is the favorable outcomes from the annual
audits by the State of Washington's Office of Risk Management. Not only are the audits
consistently clean, but the benchmark comparisons with the State's other self - insured
cities all favor the City of Yakima. What makes this even more remarkable is that these
other larger municipal plans do not have as high of a percentage of LEOFF 1
participants as Yakima. The State Risk Manager's Office continues to use this Plan as an
example of how other municipal programs should be run.
•
Compared with many health insurance plans offered by private employers, there is no
question the City of Yakima's Plan offers richer benefits. However, given the
parameters the City has for managing these benefits under collective bargaining, a
substantial LEOFF 1 liability and very low participant turnover, there are few
employer- sponsored programs that share the same risks as this Plan.
As your independent consulting broker, I always keep in mind why the City has a
health plan . and what it means to those who are covered. There is much work to be
done, but I'm convinced this Plan will keep pace with the demands of those who pay
for it and all who depend on its coverage. I am proud to be associated with it.
I appreciate this opportunity to present this report to the Council and look forward to
any questions or instructions you may have.
Sincerel ,
•
an Fisher
attachments
III
Employee Benefits • Insurance Broker • HR Consulting
a Division of f islrir Consulting Group. Inc.
0 0 ®
•
CITY OF YAKIMA
Financial Summary 1/1/07 to 12/31/07
Trust Excess Admin 8 Dental Vision Caremark ' Medical Current Aggregate EE Dep Unit EE Dep Unit . # Total Avg Cost Avg Cost Per
Month Accrual Premium PPO Fees Pd Claims Pd Claims Pd Claims Pd Claims Balance Deduct Medical Medical Dental Dental Units Per Emp Total Units
+ - - - = + + =
Jan $686,349 $25,360 $28,759 $58,726 $8,129 $171,824 $264,324 $129,228 $878,808 879 519 731 493 1,398 $663.41 ' $398.51
Feb $684,571 $25,257 $28,759 $63,655 $7,323 $120,499 . $297,428 $141,651 8679,627 880 516 732 , 493 1,398 $647.63 $388.36
Mar $681,852 $25,166 $28,693 $69,816 $9,037 $128,481 $419,034 $1,626 $877,788 878 514 730 489 1,392 $806.98 $488.67
Apr $691,161 . $25,524 $29,115 $54,961 $7,867 $122,458 $567,872 ($116,636) ( $881,347 - 888 516 684 451 1,404 $944.05 $575.35
May $687,779 $71,795 $29,115 $56,592 $7,031 $127,373 $554,397 ($158,523) $887,748 888 512 738 486 1,400 $981.90 $604.50
Jun $689,497 $34,738 $29,216 $55,358 $8,823 $166,155 $505,889 ($110,681) $890,926 891 512 742 487 1,403 $926.40 $570.33
Jul $684,965 $34,478 $29,049 $63,882 $7,444 $104,764 $391,908 $53,441 $888,649 • 889 510 738 483 1,399 $740.97 $451.41
Aug $687,377 $34,667 $29,016 $55,088 $4,341 $135,690 8503,700 ($75,125) $889,005 889 513 741 488 1,402 $885.97 $543.87
Sep $691,111 $34,789 $29,264 $44,425 $7,093 $116,247 $321,334 . $137,958 , $896,143 896 514 748 490 1,410 $642.93 $392.31
Oct $697,053 $34,997 $29,381 $34,680 $8,886 $141,017 $538,106 • ($90,014) • $898,183 898 517 750 491 1,415 $899.82 $556.23
' Nov $694,165 $34,945 $29,343 $60,003 $7,497 $121,927 $555,054 ($114,605) $897,281 897 515 750 490 1,412 $930.50 ' $572.78
Dec $692,773 $34,794 $29,346 $61,006 $7,716 $180,926 $590,347 ($211,360) $895,242 895 513 748 488 . 1,408 $1,039.38 $642.14
Total $8,268,654 $416,510 $349,054 $678,192 $91,188 $1,637,361 $5,509,391 ($413,042) $10,660,947 10,668 6,173 8,832 5,829 . 16,841 $828.35 $515.51
Avg Claims Per Emp Per Month - 2007 $76.79 $8.55 - $153.48 $516.44 Last Year Average Total Cost $703.28 $392.88
Avg Claims Per Emp Per Month - 2006 $80.85 $8.49 $135.80 $409.51 Percentage Change in Cost 17.8% 31.2%
•
Percentage Change • -5.0% 0.7% 13.0% • 26.1%
Fund Coverage Effective 1/112007
Total paid claims all coverages $7,916,132 Balance •
Less claims excess of $150,000 individual excess deductible $169,512 Aggregate Claim Factors • Aggregate Deductible Analysis
Less Rx reimbursements Factors include M /DN /Rx
Net total claims $7,746,619 • ($243,529) Contract Basis: Paid Expected Claim Cost
Medical Composite $901.20 This plan year $799.47
•
Dental Composite $118.54 Protected Claim Cost Next Plan Year
Reserves needed (15% of annual paid claims) . $1,161,993 Average Claim Cost $726.15
Aggregate Premiums Claim Lag Adjust , 1.00
Beginning claim reserves $768,345 Per Emp Per Month $3.50 Trend ' 1.15
Plan Change 1.00
Plan reserves and surplus to date $768,345 $150,000 Indly Ex Loss Rates Exp Paid Claims $835.08
Contract Sails: Paid
Employee $18.23 25% Margin 1.25
Net total claims
•
$7,746,619 - Dependent $30.13 Aggr Claim Factor $1,043.85 .
Less claims not covered under aggregate excess loss policy $0
Net claims covered by aggregate excess loss $7,746,619 Accruals Current aggregate factor on a
• Med /Den Employee $515.53 composite basis $999.34
Net Claims to Aggregate Deductible Loss Ratio' 0.727 All Dependents $425.77 • % change expected 4.5%
Average claims covered by aggregate per employee per month $728.15 Leoff 1 .
•
Average total claim cost per employee per month $726.15 Med. Employee $788.81 Carrier: Sun Lite
Last year average total claim cost per employee per month $620.83 All Dependents • $418.23 Group 80101
Percentage change In average cost per employee 17.0%
"Information on this Financial Summary Is for illustrative purposes only. Actual claims and enrollment figures covered by the Excess Loss contract may be different."
•
•
•
CITY OF YAKIMA
•
Financial Summary 1/1/08 to 12/31/08
, st .- e7Excess : AdmInt -,, �n.,D z t , t
a .„ enta! . Vision ,Caremark , Medical ;�. Current Total Aggregate °; ' Mad , ; # Mad,. -' Den > #Den ?: #Total:-..::,,,,.:Avg ' ost ?"'%':,:','C'7' ,y . . .: ,
x -.T1u � . .;;,� lam; _,,_ .r �' -, ,, ,�
, ' e :.ti .. Vtri: � t a i s , P x C ,. . G Blip ;
Month Accrual,,.,.,# Premlum<: PPO, F. ees P. d ;GlafmsrPd:Ctalmsr „;PdCielms,F1 PdGlalms,. Bala nce.„ ?C , r ,_ Deduct. < ° 'r. Single Fam - ; Smgle . ;Pe
p + = = + + =
Jan $739,968 $32,793 $33,470 $28,255 $17,566 $135,983 $290,914 $200,987 538,981 5922,766 373 516 263 477 889 $606.28
Feb?1z 5744,825 $33,139 $35,777 575,312 $12,212 5120,670 . 5311,430 5156,284 588,541 $931,330 374 525 255 478 899 $654.66
Mar f :` $749,247 $33,255 $36,058 $71,467 $9,661 $130,182 $336,387 $132,237 617,010 $943,102 379 529 269 492 908 $679.53
•
Ap! #DIV /01
M.00 #DIV /0l
Jun .' #DIV/0l
Jul #DIV /01
•
Aug : #DIV/01
40 #DIV /01
Oct'VS`y`
#DIV/01
Nopw "e #DIV /01
Dec`j
#DIV /01
Total 52,234,041 599,188. $105,305 $175,034 $39,439 $386,836 $938,731 5489,509 1,744,532 $2,797,198 1,126 1,570 787 1,447 2,696 $647.08
Avg Claims Per Emp Per Month - 2008 578.35 514.63 $143.48 5348.19 Last Year Average Total Cost $828.35
Avg Claims Per Emp Per Month - 2007 $76.79 58.55 $153.48 $516.44 Percentage Change in Cost - 21.88%
Percentage Change 2.03% 71.10% -6.51% - 32.58%
Fund Coverage Effective 1/1/2008
Total paid claims all coverages $1,540,039 Balance
Less claims excess of $175,000 individual excess deductible Aggregate Claim Factors Aggregate Deductible Analysis
Less Rx reimbursements Factors Include M/DN/Rx
Net total claims $1,540,039 $489,509 Contract Basle: Paid Expected Claim Cost
Medical Composite 5939.31 This plan year $830.03
Dental Composite $118.54 Projected Claim Cost Next Plan Year
Reserves needed (15% of annual paid claims) $924,024 Average Claim Cost $571.23
Aggregate Premiums Claim Lag Adjust 1.00
•
Beginning claim reserves 5768,345 Per Emp Per Month $3.42 Trend 1.15
Plan Change 1.00
Plan reserves and surplus to date i
•
$768,345 5178,000 Indly Ex Loss Rates Exp Paid Claims $656.92
' Contract Basis: Paid M /Rx
Single $17.00 25% Margin 1.25
Net total Balms . $1,540,039 Family $45.10 Aggr Claim Factor $821.14
Less claims not covered under aggregate excess loss policy 50
Net claims covered by aggregate excess loss 51,540,039 Accruals Current aggregate factor on a
Med /Den Employee 5530.04 composite basis $1,037.54 •
Net Claims to Aggregate Deductible Loss Ratio 0.551 All Dependents $446.26 % change expected -20.9%
Average claims covered by aggregate per employee per month $571.23 Leoff I
Average total claim cost per employee per month 5571.23 Med. Employee $737.31 Carrier '....Sun Life :: _
Last year average total claim cost per employee per month $726.15 All Dependents 5446.26 Group - , 2 130101
Percentage change In average cost per employee - - 21.33% .
**Information on this Financial Summary is for illustrative purposes only. Actual claims and enrollment figures covered by the Excess Loss contract may be different.**
. . .
City of Yakima
® January 1 2008 Employee Health Plan Changes
The New Year brings with it several positive changes to our medical, dental and vision bene-
fits. Your Employee Benefits Board and Plan Administrator have approved these changes to
add unlimited preventive care, a $15 copay to physician office visits, and improve our vision
and dental programs. New ID cards and plan booklets are forthcoming!
Medical Plan Changes:
Current Benefit Benefit Changes Eff. 1/1/08
Physician Visit r ' °a
(inpatie :office and home visits) f _..
First 5 Visits 100 %, Deductible Waived 100 %, Deductible Waived
6 -25 Visits 100 %, Deductible Waived $15 Copay then 100 %, Deductible Waived
Subsequent Visits 80 %, Deductible Applied $15 Copay then 100 %, Deductible Waived
Preventive •Care
Preventive Mammograms 80 %, 1 Exam with Limitations 100 %, unlimited benefit
Preventive Pap /Gynecological Exams 80 %, 1 Exam with Limitations $15 Copay then 100 %, unlimited benefit
4,--eventive Prostate Exams 80 %, 1 Exam with Limitations $15 Copay then 100 %, unlimited benefit
Other Adult Preventive Care No Coverage $15 Copay then 100 %, unlimited benefit
Child Preventive Care Exams No Coverage $15 Copay then 100 %, unlimited benefit
Preventive Diagnostic Lab and Xray No Coverage 100 %, unlimited benefit
Vision Plan Changes:
Current Benefit • Benefit Changes Effective 1/1/08
No Network Outside •VSP Network` In VSP Network
Vision Exams 100% to $60 per calendar 100% to $60 per calendar year 100% every 12 months
year Providers can Balance Bill No Balance Billing
Providers can Balance Bill
Vision Hardware ' 1,00% to $200 every 24 100 %, to $200 every 24 months =100 %° to $200 every 24 months `
Lenses /Frames months Providers can Balance Bill 2Q% D mpl ete Set
Contact Lenses Providers can Balance Bill µNo Balance Bilking
Extra Discounts None None Laser Vision Correction
20% off additional Lens Options
20% off additional Glasses and
Sunglasses
• 15% off cost of contact Tens fitting
To verify if your Vision Provider is, in the VSP network, visit www vsp com or call' - 877 7195 •
Dental Plan Changes:
Coverage through Washington Dental Service (WD
Delta Dental
Benefit Changes Effective 1/1/08
Current Benefit . Non-Participating Delta DentaINVDB: • Dental Dental/WDS WDS Dentist meMber/PAR Preferred/PP:0
Dentist Dentist
Class 1—Preventive 100% 100 100% 100%
Exams, Prophys, Dentist may balance bill Dentist may balance bill No Balance Billing No Balance Billing
Flouride, X-rays,
Sealants
Class Il—Restorative 80% 80% 80% 90%
Restorative Dentist may balance bill Dentist may balance No o No Balance BiIIing
Restorations
Endodontics
Periodontics,
. . .
Oral Surgery
Class HI—Major 50% 50% 50% 50%
Crowns, Dentures, Dentist may balance bill Dentist may balance bill No Balance Billing No Balance Billing
Partials, Bridges,
Implants
ClasilyOrtliodantia' 50% to $2,000 50% to $2,000 50% to $2 boo .50% to $2 000
Adult and C hildren Dentist may balance bilk Dentist may balance bill No Balance Billing No Balance Bil -
Benefit does not apply,
to the annual maximum
Annual Maximum $1,000 $1,000 $1,000 $1,000
Benefit
Annual Deductible • None None None None
TMJ $300 $300 $300 $300
To verify if iour Denia!'prOyjd:e(:is:;ip::*he.Was,hington Dental Service (WDS)/Delta Dental network, visit
. w*4:.deltade ntalvva. com oi`Oaltl-scio=454-1907.
Please note: The New Washington Dental Service (WDS)/Delta Dental dental plan and
the Vision Service Plan (VSP) utilize preferred provider networks. There are modest im-
provements in coverage if you use a VSP or WDS participating or preferred provider.
However, there is no requirement to do so. Like our medical plan, you are still free to
choose any provider!
HEALTHCARE MANAGEMENT ADM
D 05/02/2008 B e n e f i t A y s i s Page: 1
Friday May 0 8 rbal
BO101 CITY OF YAKIMA
Period: 01/2007- 12/2007
Mem Total copay * - -- Deductibles - - -* C.O.B. - Inel Total
Code Description Type Days Charge Amount Co -ins Benefit Savings Amount Paid
AAMB AIR AMBULANCE 96.00 12204.00 0.00 0.00 0.00 5919.69 4804.39 1479.92
ABOR ABORTION SERVICES (VOLUNTARY 5.00 10370.50 0.00 0.00 0.00 0.00 10370.50 0.00
ALLI ALLERGY INJECTIONS 1374.00 20269.00 0.00 706.24 0.00 1052.37 3366.99 12974.64
ALLT ALLERGY TESTING 837.00 7500.50 0.00 113.66 0.00 0.00 1420.18 . 5221.92
AMB AMBULANCE 446.00 42178.36 0.00 0.00 0.00 5925.00 18181.02 16460.79
ANES ANESTHESIA SERVICES . 9429.00 243823.41 0.00 0.00 . 0.00 11382.19 95000.74 134227.37
ASST ASSISTANT SURGEON 148.00 197083.05 0.00 0.00 0.00 672.13 136040.95 59990.24
AUDR BILL AUDIT REVENUE 0.00 541.11 0.00 0.00 0.00 0.00 0.00 541.11
BIOF BIOFEEDBACK SERVICES 1.00 69.00 0.00 0.00 0.00 0.00 69.00 0.00
CHEM CHEMOTHERAPY. 447.00 13350.48 0.00 0.00 0.00 132.04 4505.48. 8605.62
CHIR CHIROPRACTIC SERVICES 2701.00 126211.90 0.00 11466.98 0.00 3046.82 42218.99 59039.42
CNR MEDICAL - INELIGIBLE SERVICES 218.00 14185 0.00 0.00 0.00 0.00 141854.25 .0.00
CONS CONTRACEPTIVE MGMT SURGERY 10.00 2430.60 0.00 0.00 0.00 0.00 2430.60 0.00
COSM COSMETIC INEL SERVICES 3.00 4997.90 0.00 0.00 0.00 0.00 4997.90 0.00
D &A DRUG /ALCOHOL INPT R &B PREAUT 6.00 1128.00 0.00 0.00 0.00 0.00 163.40 964.60
D &AO DRUG & ALCOHOL OUTPT 274.00 8997.17 0.00 309.12 0.00 0.00 2184.04 4935.46
DANE LOCAL /BLOCK /I.V. ANESTHESIA 64.00 14480.00 0.00 0.00 0.00 750.40 4041.04 7600.78
DBW BITEWING XRAYS - 846.00 41365.65 0.00 0.00 0.00 2112.97 2784.22 36468.46
DCDL DENTURES LOWER 6.00 8691.00 0.00 0.00 0.00 26.00 3979.61 2329.70
DCDU DENTURES UPPER 5.00 5749.00 0.00 0.00 0.00 31.00 1619.54 2033.73
DCL DENTAL PROPHYLAXIS 1446.00 123594.72 0.00 0.00 0.00 6347.35 11013.87 106233.50
DCON DENTAL CONSULTATIONS 10.00 1167.00 0.00 0.00 0.00 25.20 250.50 708.00
DCR DENTAL CROWNS 253.00 221952.00 0.00 0.00 0.00 1882.28 89982.42 64102.54
DDGC DIAGNOSTIC CAST 4.00 269.00 0.00 0.00 0.00 15.00 155.00 42.00
DEN2 DENTAL TYPE II SERVICES 1307.00 283415.02 0.00 0.00 0.00 11153.76 63024.83 165158.33
DEN3 TYPE III MAJOR SERVICES 136.00 42381.00 0.00 0.00 0.00 339.50 14075.81 13813.12
DEP EMERGENCY /PALLIATIVE TREATME 223.00 13368.00 0.00 0.00 0.00 471.96 2370.38 8326.14
DEX DENT EXAMS NO SPEC /NO CONSUL 1628.00 82559.90 0.00 0.00 0.00 3706.42 6690.32 72163.16
DFL. FLUORIDE TREATMENT 659.00 21453.00 0.00 0.00 0.0.0 747.00 1699.91 19006.09
DFM FULL MOUTH OR PANORAMIC XRAY 222.00 22469.20 . 0.00 0.00 0.00 1241.88 4427.20 16800.12
DGQ GINGIVECTOMY /GINGIVOPLASTY F 4.00 587.00 0.00 0.00 0.00 0.00 151.00 348.80
DIAB DIETARY /DIABETIC EDUCATION 128.00 1427.84 0.00 0.00 0.00 50.40 421.83 906.60_
DIAL KIDNEY DIALYSIS 64.00 617628.51 0.00 0.00 0.00 27283.35 340644.99 249658.70
DIMP DENTAL IMPLANTS 17.00 20093.00 . 0.00 0.00 0.00 0.00 12212.17 3940.42
DINL INELIGIBLE DENTAL SERVICES 148.00 3208.02 0.00 0.00 0.00 0.00 3208.02 0.00
DME DURABLE MEDICAL EQUIPMENT 874.00 140577.58 0.00 1222.33 0.00 21694.80 58249.96 55728.83
DMQ OSSEOUS MUCOGINGIVAL SURG FM 1.00 910.00 0.00 0.00 0.00 0.00 910.00 0.00
DNG MOUTHGUARDS (NOT TMJ OR ORTH 22.00 7688.00 0.00 0.00 0.00 0.00 7688.00 0.00
DNO DENTAL NITROUS OXIDE 92.00 2760.00 0.00 0.00 0.00' 0.00 2760.00 0.00
DOCC OCCLUSAL XRAYS 1.00 39.00 0.00 0.00 0.00 0.00 0.00 31.20
DOMS DOCTORS OFFICE MISCELLANEOUS . 236.00 80989.35 0.00 377.81 0.00 22025.05 47450.37 10582.86
DOQ OCCLUSAL ADJUSTMENT FULL MOU 11.00 511.00 0.00 0.00 0.00 0.00 511.00 0.00
DORT ORTHODONTIA SERVICES 417.00 152009.88 0.00 0.00 0.00 605.50 80021.56 35388.67
DORX DOCTORS OFFICE PRESCRIPTION 2111.00 7549.21 0.00 1.05 0.00 1444.94 3704.17 2399.05
DOSG DOCTORS OFFICE SURGERY 865.00 190927.68 0.00 6906.75 0.00 10851.83 76162.20 86946.84
DOSP DOCTORS OFFICE SUPPLY 266.00 13585.28 0.00 21.07 0.00 1553.83 5580.86 6065.06
DOV DOCTORS OFFICE VISIT 7731.00 850841.57 0.00 . 0.00 0.00 66021.61 195032.97 589786.99
HEALTHCARE MANAGEMENT ADM
Date: 05/02/2008 B e n e f i t A n a l y s i s Page: 2
Friday May 02, 2008 rbal
Group: BO101 CITY OF YAKIMA
Period: 01/2007- 12/2007
Mem Total copay * - -- Deductibles - - -* C.O.B. Inel Total
Code Description Type Days Charge Amount Co -ins Benefit Savings Amount Paid
DOV1 DOCTORS OFFICE VISIT 71.00 7250.87 0.00 0.00 0.00 748.62 1698.00 . 4804.25
DOVP ROUTINE GYNECOLOGICAL EXAM 172.00 31341.68 0.00 0.00 0.00 1377.92 8858.73 21105.03
DPAT DENTAL PATHOLOGY SERVICES 15.00 1140.00 0.00 0.00 0.00 25.90 706.42 320.95
DPEP PERIO PROPHY 367.00 49693.95 0.00 0.00 0.00 1254.85 5673.22 33961.74
DPER PERIODONTICS 32.00 2351.00 0.00 0.00 0.00 63.20 826.93 1156.05
DPQ PERIO SCALING /PLANING FM 120.00 13058.50 0.00 0.00 0.00 546.10 1122.88 9002.39
DPX PERIAPICAL XRAY 521.00 11125.45 0.00 0.00 0.00 252.26 2091.36 6974.92
DRG HOSPITAL PPO DRG AMOUNT 11.00 9600.78 0.00 0.00 0.00 0.00 0.00 9600.78
DRP REPAIR TO DENTURE /BRIDGE /CRO 24.00 2852.00 0.00 , 0.00 0.00 16.50 838.86 1594.01
DSL SEALANTS *NO AGE LIMIT* 225.00 9665.00 0.00 0.00 0.00 99.20 1645.45 6316.47
DSPC SPACE MAINTAINERS 1.00 325.00 0.00 _0.00 0.00 0.00 18.63 245.10
DTCU TISSUE CONDITIONING -UPPER DE 1.00 100.00 0.00 0.00 0.00 0.00 0.00 50.00
DTMJ DENTAL TMJ /MPDS SERVICES 8.00 16280.00 0.00 0.00 0.00 0.00 13000.00 1640.00
DXRY DENTAL XRAY SERVICES 6.00 779.00 0.00 0.00 0.00 0.00 255.00 419.20
DXT DIAGNOSTIC TESTING 2169.00 369647.77 0.00 8712.14 0.00 24048.34 192471.43 128720.86
EMER EMERGENCY ROOM SERVICES 495.00 870468.74 8875.00 4581.06 0.00 31987.47 624152.96 177569.52
HEAR ROUTINE HEARING SERV INEL 18.00 558.00 0.00 0.00 0.00 0.00 558.00 0.00
HH NURSING VISITS IN HOME 77.00. 15090.78 0.00 0.00 0.00 1397.74 8681.14 5011.90
HH1 NURSING VISITS IN HOME 13.00 5807.00 0.00 0.00 0.00 0.00 2791.20 3015.80
HMAU BILL AUDIT SAVINGS 0.00 7135.77 0.00 0.00 0.00 0.00 7135.77 0.00
HOME HOME HEALTH MISC SERVICES 9522.00 44191.22 0.00 1149.46 0.00 4353.63 17533.95 19147.24
HRB HOSPITAL ROOM & BOARD PREAUT 618.00 803309.27 0.00 1169.28 0.00 59782.03 367701.19 362787.42
ICU INTENSIVE CARE UNIT PREAUTH 148.00 253483.61 0.00 0.00 0.00 47016.23 133085.46 72212.20
IMX IMMUNIZATION SERVICES 1014.00 21287.31 0.00 0.00 0.00 213.06 3845.21 14299.14
INEL MEDICAL - INELIGIBLE SERVICES 1273.00 73757.87 0.00 0.00 0.00 0.00 73757.87 0.00
INFR INFERTILITY INELIGIBLE 4.00 251.14 0.00 0.00 0.00 0.00 251.14 0.00
INFT INFUSION THERAPY 91.00 16030.35 0.00 0.00 0.00 79.88 6062.59 9739.33
INJT INJECTIONS 11170.00 155542.20 0.00 1700.48 0.00 1742.37 53898.06 96464.05
IPD1 INPATIENT DOCTORS VISIT 79.00 27785.50 0.00 0.00 0.00 303.96 12436.38 14574.44
IPDV.INPATIENT DOCTORS VISIT 491.00 101344.47 0.00 0.00 0.00 11754.67 42055.72 47534.08
IPMM MENT /NERV INPT MISC PREAUTH 8.00 1823.65 0.00 0.00 0.00 608.27 883.32 332.06
IPMS INPATIENT MISC PREAUTH 159.00 2595792.65 0.00 0.00 0.00 170455.39 1701407.78 721049.71
IPNP INPATIENT MISC NO PREAUTH 28.00 343099.79 5000.00 0.00 0.00 6527.93 308235.59 22528.26
IPSG INPATIENT SURGERY 225.00 443917.09 0.00 108.10 0.00 28972.47 273569.65 133489.61
LAB LABORATORY 11009.00 437139.43 0.00 24516.12 0.00 9944.59 224204.67 157780.19
LCMS HMA LARGE CASE HOURLY MGMT 8.00 39398.77 0.00 0.00 0.00 0.00 39398.77 0.00
MAM ROUTINE MAMMOGRAMS AGE 0 -35 200.00 8618.10 0.00 2026.35 0.00 143.62 3104.02 2831.84
MAMM ROUTINE MAMMOGRAM - 2ND CHAR 413.00 23632.93 0.00 2304.63 0.00 433.03 6928.69 11543.60
MASS MASSAGE THERAPY 51.00 1478.00 0.00 0.00. 0.00 0.00 1478.00 0.00
MATD MATERNITY DEPENDENTS 152.00 48354.74 0.00 0.00 0.00 0.00 48354.74 0.00
MRCT MRI OR CT -SCAN 332.00 243078.33 0.00 2901.96 0.00 14813.91 123439.84 88400.93
MRX PRESCRIPTION INVOICES 0.00 1457012.70 0.00 0.00 0.00 0.00 27.67 1456985.03,
NEGS NEGOTIATED SAVINGS 1.00 1556.25 0.00 0.00 0.00 0.00 1556.25 0.00
NEUR NEURODEVELOPMENTAL THERAPY 121.00 9520.10 0.00 200.00 0.00 0.00 3006.98 6043.10
NIPM MENT /NE NPT R &B NO- PREAUT 2.00 3030.00 0.00 0.00 0.00 1591.62 1193.80 2 8
NOTC NOT CO 40.00 1779.00 0.00 0.00 0.00 0.00 1779.00
OBES OBESIT 171.00 43500.14 0.00 * 46.10 0.00 0.00 20332.63 224
•
. HEALTHCARE MANAGEMENT ADM
D 05/02/2008 B e n e f i t A11111a s i s Page: 3 111/1
Friday May 0 rbal
G BO101 CITY OF YAKIMA
Period: 01/2007- 12/2007 .
Mem Total copay * - -- Deductibles - - -* C.O.B. Inel Total
Code Description Type Days Charge Amount Co -ins Benefit Savings Amount Paid _
OONS OUT OF NETWORK SAVINGS 0.00 2171.16 0.00 0.00 0.00 0.00 0.00 2171..16
OPDV OUTPATIENT DOCTORS VISIT 483.00 130153.42 0.00 2936.11' 0.00 5852.94 71628.79 43592.75
OPMN OUTPATIENT MENTAL & NERVOUS 1046.00 133961.19 0.00 4456.34 0.00 4093.98 30085.12 75930.48
OPMS OUTPATIENT MISCELLANEOUS 8866.00 757220.01 0.00 1527.26 0.00 43264.45 341650.90 356277.36
OPRH OUTPATIENT REHABILITATION 1791.00 104986.39 0.00 2287.84 0.00 8564.59 40324.76 49022.08
OPRM OUTPATIENT REHAB - MULT SVCS 2929.00 118911.23 0.00 1052.51 0.00 5670.36 45286.65 61553.43
OPSG OUTPATIENT SURGERY 595.00 609580.31 0.00 2106.89 0.00 20768.53 316573.94 247141.82
PAP ROUTINE PAP SMEAR LAB TEST 205.00 10068.49 0.00 2145.06 0.00 111.04 3630.08 3454.54
PROS PROSTHETICS ' '8.00 954.50 0.00 0.00 0.00 0.00 310.94 643.56 .
RADT RADIATION THERAPY 52.00 16087.00 0.00 0.00 0.00 0.00 9837.32 5914.63
SACC SUPPLEMENTAL ACCIDENT 78.00 • 21365.71 0.00 0.00 0.00 323.37 9752.33 11290.01
SGCT SURGICAL FACILITY FEE PREAUT 355.00 1140678.37 0.00 613.57 0.00 46046.37 636145.23 438107.06
SMOK SMOKING CESSATION 9.00 610.08 0.00 0.00 0.00 0.00 122.90 422.81
SNF SKILLED NURSING FACILITY 10.00 1950.00 0.00 0.00 0.00 0.00 1950.00 0.00
SPEC OUT OF PLAN PAYMENT' 0.00 180.00 0.00 0.00 0.00 0.00 0.00 180.00
SUP MEDICAL SUPPLY • 24.00 2191.86 0.00 100.00 0.00 137.78 495.78 1427.50
TMJ MEDICAL TMJ SERVICES 7.00 965.31 0.00 0.00 0.00 0.00 965.31 0.00
TRAN TRANSPLANTS 61.00 7826.23 0.00 198.73 • 0.00 649.28 1493.24 5303.93
VEXM ROUTINE VISION EXAM 402.00 34269.93 0.00 0.00 0.00 527.55 15009.53 18732.85
VEXS VISION EXAM - 2ND CHARGE 295.00 13925.69 0.00 0.00 0.00 262.16 12653.64 1009.89
VHDW VISION HARDWARE 0.00 115031.61 0.00 0.00 0.00 1885.49. 49640.72 63505.40
VINL VISION - INELIGIBLE SERVICES 263.00 9336.14 0.00 0.00 0.00 0.00 9336.14 0.00
WELL ROUTINE /WELLNESS SERVICES 1217.00 107090.88 0.00 0.00 0.00 286.29 100942.01 5862.58
WORK WORKMANS COMPENSATION CLAIMS 17.00 3308.15 0.00 0.00 0.00 0.00 3308.15 0.00 .
XRAY X -RAY SERVICES 2414.00 459802.92 0.00 15042.08 0.00 19230.91 277326.92 132846.51
cobr not on file 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3148.82
*Totals120 Benefit codes 98595.00 13875.00 0.00 7828957.53
• 16233869.12 103007.08 786742.12 • 7060483.91
•