Proposed 2011 Medical Plan Design June 8, 2010. Background Recommended Strategy Summary Next...
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Proposed 2011 Medical Plan Design June 8, 2010
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Proposed 2011 Medical Plan Design
June 8, 2010
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
BCC Comptroller Tax Collector Supervisor of Elections Expressway Authority Housing Finance Authority OBT Development Board Metroplan Orlando Property Appraiser Lynx Clerk of Courts Research and Development I-Ride Trolley
Background
8,344Covered Employees
Total Plan Members:18,536
Background
Claim and administrative expenses for 2010 are expected to reach $96 million
Overall cost of claims is trending at 10.4% and is expected to increase without major plan design changes
Unable to sustain funding for large increases year after year
Need to address total cost of plan and increase share of cost paid by employees
Background
Keep Current
Plan
Major Plan Restructur
e
Background
$17.3 Million Deficit
Revenues / Expenditures
If current plan is kept…
Million
s
$107.8M
$90.5M
Background
Premiums will increase by at least 50%
Bi-weekly premium increase as much as $100 for family coverage
Coinsurance and deductibles would need to be added
Financial challenges will continue to compound
If current plan is kept…
Background
Implementing a Major Plan Restructure will…
Lessen premium increases
Focus on Wellness and Preventive care
Create informed consumers
Begin to reverse the trend
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
Recommended Strategy
Implement a Consumer Driven Health Plan for 2011
Preventive Care at 100%
Preventive Medications
outside of deductible
Individual Health Savings
Account (HSA)
High-Deductible Health Plan
Recommended Strategy
Nationally there are over 9 million individuals participating in Consumer Driven Health Care
Within the first year, the trend generally decreases 4-5%
Savings after the first year indicates trend rates lower than traditional plans by 3-5%
Cost savings are not generated by avoidance of appropriate care
Recommended Strategy
A recent survey of HSA account holders by Buck Consultants found:
52% of respondents more closely monitor their health care costs since becoming HSA account holders
46% better understand costs before using services, and 25% choose less costly services
20% are better monitoring their diet and engaging in fitness and exercise
83% completed doctor recommended surgeries at the same rate as before, and 6% completed surgeries more than before
Recommended Strategy
Two Major Plan Components HSA Account
Funding Vehicle/Partially Funded
$750/$1,250 County contribution
High Deductible Health Plan Deductible: $1,500/$3,000 20% Coinsurance Out of Pocket Max:
$3,000/$6,000
Recommended Strategy
Deductible $1,500 Employee Only $3,000 Family
Amount paid by covered member before plan begins
Member pays full cost of the negotiated rate, until deductible
Can be paid from the HSA
Recommended Strategy
20% Co-Insurance
Starts after deductible is met
20% to be paid by member each time a medical service is accessed
80% remaining is paid by the Medical Plan
Can be paid from the HSA
Recommended Strategy
Out of Pocket Maximum $3,000 for Employee only
$6,000 for Family
Designed to protect member in the event of a catastrophic illness (safety net)
Once the out of pocket max is met, all services are covered at 100% by the Plan
Recommended Strategy
Proposed 2011 Premium Schedule
Coverage Total $
Orange County
$Employee
$
Bi-Weekly Employee
$
Employee Only 5,490 5,490 0 0
Employee + Child(ren) 11,290 9,470 1,820 70
Employee + Spouse 12,246 10,244 2,002 77
Full Family 16,739 12,709 4,030 155
Premium Schedule
Percent of Premium Paid by EmployerAgency Employee Only Full Family
Broward County 95% 80%
Orange County Sheriff’s Office 100% 79%
Pinellas County 97% 78%Orange County (Proposed) 100% 76%
City of Orlando 100% 73%Orange County Public Schools 100% 55%
Miami-Dade County 100% 48%
Recommended Strategy
Premium Comparison
Bi-Weekly Premiums Paid by EmployeeAgency Employee Only Full Family
Miami-Dade County $0 $245.80City of Orlando $0 $236.11
Orange County Public Schools $0 $216.69Orange County (Proposed) $0 $155.00
Pinellas County $5.90 $128.18Broward County $10.15 $126.00
Orange County Sheriff’s Office $0 $122.10
Recommended Strategy
Premium Comparison
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
Summary
10.4% annual increase in healthcare cost is not sustainable
Fundamental changes to the health plan are needed
Recommend fully funding employee only coverage
Recommend transitioning to a Consumer Driven Health Plan to control costs, change behavior, and begin to reverse the trend
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
Next Steps
Communication campaign beginning in June
Open Enrollment in October 2010
Implement health plan changes and fund HSA accounts in January 2011
Evaluate plan success going forward and make further adjustments annually
Background
Recommended Strategy
Summary
Next Steps
Action Requested
Presentation Outline
Action Requested
Approval of the 2011 Employee Health Plan and Premium Schedule as outlined in the staff report to include:
Consumer Driven High-Deductible Health Plan
Health Savings Accounts
Bi-Weekly Premium Schedule
Proposed 2011 Medical Plan Design
June 8, 2010
