HomeMy WebLinkAboutIR 7534 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7534
X04 saaT�o To the Mayor and Members of the City Council July 9, 1991
Subject: GROUP HEALTH INSURANCE PROGRAM FOR FISCAL YEAR 1991/92
RECOMMENDATION
It is recommended that the City Council authorize the City Manager to enter into
a one year contract, with four annual options to renew, with Harris Methodist
Health Plan (HMHP) effective October 1, 1991 to provide group health insurance
benefits to the City's active and retired employees and their eligible depen-
dents through a program of insured and self-insured plans for the following rea-
sons:
0 A major portion of the City's liability is fully-insured with future years'
cost increase guarantees which make this proposal slightly less costly over
a two year period from that of the current administrator's cost guarantees
for the period.
0 There is a large panel _of physicians and facilities to serve the Tarrant
County area and areas south and west of Tarrant County.
0 The employee committee advising the City Manager (and to a lesser degree
the retiree committee) overwhelmingly selected this finalist as the choice
of the committee members and the departmental or association employees they
were charged to represent.
0 Information received from the State Board of Insurance and contacts with
local benefits managers where this program is offered provided positive
responses regarding Harris Methodist Health Plan.
It is recommended that the program for fiscal year 1992 be financed through
transfers from City funds budgeted, and employee and retiree contributions as
described below and in Attachment 4. It is estimated that an additional
$1,583,401 in City funds (an increase of 14.24% over estimated actual expendi-
ture in the current year) and additional contributions from employees of
$571,602 (14.92%) will be required to finance the active employee program for FY
1992.
0 All employees who select the network option will be required to contribute
an additional $3.00 per pay period ($6.50 per month) toward the cost of
their own coverage (Employees selecting the Low Option in the current year
contribute nothing toward the cost of their coverage. ) Employees will not
be asked to contribute additional funds toward the cost of their dependent
coverage above current year levels.
0 All employees who enroll in the indemnity program will contribute at a rate
that is 150% of the High Option HMO rate.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7534
�'pTCgFA
To the Mayor and Members of the City Council
i.al Page 2
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.) July 9, 1991
For retired employees, an increase in the City funding requirement of $85,419
(2.18%) occurs. Total retiree contributions decrease $216,585 (-15.84%) as
costs are shifted from Medicare-eligible retirees to non-Medicare-eligible re-
tirees, and non-Medicare-eligible retirees are not required to make contribu-
tions for managed care alternatives above that required for the current year.
0 Medicare-eligible employees will have administration of their program per-
formed in coordination with Medicare such that reimbursement of eligible
expense will be 'made in a manner calculated to provide the Medicare-eligi-
ble retirees and/or dependent with protection but designed to prohibit pay-
ment in excess of actual , eligible loss (Medicare supplement).
0 In all cases, retirees, whether Medicare-eligible or not, will pay no more
for their own network coverage or for that of their dependents than they
are paying in the current year.
0 To finance the indemnity program, all retirees who select the indemnity
option will pay' a higher contribution rate than for either of the two net-
work choices.
All of these financial estimates are contingent upon actual enrollment in each
of the three options.
ORRENT PROGRAM
The City of Fort Worth began offering its group health insurance program for
active employees and their eligible dependents through one carrier in a managed
care environment (with an opt-out to traditional indemnity coverage) via a
fully-insured contract with Sanus Texas Health Plan, Inc. , on January 1, 1989.
That original twelve month contract was extended for an additional nine months.
Effective October 1, 1990, the City offered a two-tiered benefit plan (Low Op-
tion and High option) on a self-insured basis with Sanus Texas Health Plan,
Inc. , as its administrator of that program for the term October 1, 1990 to Octo-
ber 1, 1991. Effective January 1, 1991, the administration of the group health
insurance program for retired employees and their eligible dependents was moved
to the two-tiered benefit program administered by Sanus Texas Health Plan, Inc. ,
from Aetna's administration of a traditional indemnity program. The contract
for administration for both the active employee program and the retired employee
program expires September 30, 1991.
REQUEST FOR PROPOSAL (REP) PROCESS
Development and Obiectives
In late winter of 1990-91, the City staff began planning the process to solicit
proposals from providers/administrators/carriers to offer a group health insur-
ance program for the City's active and retired employees and their dependents.
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7534
To the Mayor and Members of the City Council Page 3
July 9, 1991
rExAy Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
Informal Report 7510 (February 12, 1991) informed the Council of the staff's
plan and advised that the solicitation would be for a duplication of current
services.
The staff decided to solicit proposals for the following reasons:
0 There is currently more representation in the local marketplace by compa-
nies able to offer managed-care products/services; and
0 A public solicitation had not occurred since 1988 (for a program effective
January 1, 1989) .
The objectives of the RFP were to look at a managed care approach with cost ef-
fective providers helping to maintain and manage claims expenses through their
Network, and to try to maintain a high level of service by directing employees
and retirees to the most cost-effective provider who can offer the full comple-
ment of services.
The RFP was crafted by the City's consultant, Asset Protection Agency, Inc. ,
(APA) based on the City staff's and committees' input and was designed to allow
for the widest possible participation by interested proposers. The RFP asked
for proposals based on the following basic plan design guidelines:
0 Duplication (to the extent possible) of the plan of benefit offered to ac-
tive and retired employees currently;
0 The proposer's recommended program to meet the needs of the City's popula-
tions as described demographically in the RFP; and
0 Quantification of the financial and administrative effect(s) of making cer-
tain specified changes in the current plan of benefit. Many of these sug-
gestions were put forward by the committees and some were requested by the
staff.
A pre-bid conference was advertised and held on March 7, 1991, prior to the re-
lease of the RFP on March 25, 1991. Proposals were received on April 25, 1991.
Committee Involvement
A committee of nineteen employees representing all of the departments and each
of the employee organizations was asked by the City Manager to assist the staff
and its consultant, APA, in the development of the Request for Proposal and to
provide input throughout the entire process. The active employee committee se-
lected Ms. Minnie Nealy representing the Association for City Employees (ACE) to
serve as its chairperson. Each committee member was assigned a specific depart-
ment or departments and was charged with assisting the staff and consultant by
communicating with the departmental personnel throughout the entire process and
in obtaining their specific input and feedback on issues which were discussed.
Employees were informed of their representatives by the committee members them-
selves and through the March, 1991 issue of the Voice.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7534
To the Mayor and Members of the City Council Page 4
July 9, 1991
���
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
In addition, a group of self-selected retirees agreed to undertake this respon-
sibility for the retired population of covered members. This committee elected
Mr. Benny Squyres to act in this capacity. Retirees were notified of the re-
sponsibilities of this committee, its members and their addresses and telephone
numbers via a special direct mailing.
Responses And Analysis
Proposals were received from eleven (11) separate companies although only five
were considered fully responsive. The other proposers desired to propose on
only a portion of the City's program. The proposers determined to be fully re-
sponsive were:
CIGNA
Healthcare Benefits Inc.
Harris Methodist Health Plan
North Texas Healthcare Network
(Medco OR Restat pharmacy program)
The Hartford (Medicare supplement policy)
Sanus Texas Health Plan, Inc.
Proposers offering partial proposals or who wished to be considered as optional
offerings included:
Southwest (optional only to selected provider/administrator for HMO only)
Kaiser Permanente (optional , stand-alone HMO product)
Trinity Health Network (Preferred referral Network-behavioral health only)
The City's consultant, Mr. Ron Soltau, performed an initial financial comparison
of each program for the first year's cost based on the City's maximum financial
liability. He then met with each of the proposers to review his methodology and
results in order to clarify any potential misunderstanding of the information
which had been presented via the written proposals. Information regarding the
City's maximum financial liability, the composition and location of the network
providers, and the plan of benefit for each of the five responsive proposers was
provided to the employee and retiree committees. Additionally, all of the pro-
posals were available for inspection by committee members and proposers for
three weeks.
Finalists
Based on the results of the financial analysis, the proposal review and weight-
ing criteria included in the RFP, three proposers were deemed to have the high-
est ranking and were thus afforded closer scrutiny as "finalists" in the selec-
tion process. All have complied with the City's DBE policy. All offered to
deliver managed care with access to indemnity opt-out in different ways. (See
Attachment 1. ) These three are:
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7534
."AT
�`4isaar,�� To the Mayor and Members of the City Council Page 5
July 9, 1991
�tEXPh*
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
'073
0 Harris Methodist Health Plan offers a fully-insured High-Low HMO product
and a self-insured indemnity program. In-Service-Area members make an an-
nual election to select among the three. out-Of-Service Area (OOSA) mem-
bers must enroll in the indemnity.
0 North Texas Healthcare Network offers a self-insured High-Low preferred
provider organization with differing co-insurance and co-payment structures
with an opt-out to reduced non-network benefits from either High or Low.
0 Sanus Texas Health Plan, Inc. offers continuation of the current program
with a Low Option of HMO benefits and a High Option which couples enhanced
HMO benefits (lower co-payments) with an indemnity opt-out.
The estimated total cost of the group health insurance program for active and
retired employees and their dependents (based on maximum financial liability)
under each of these programs ranges from $22,297,294 for the Harris Methodist
Health Plan to $19,565,302 for the proposal of the North Texas Healthcare Net-
work for the first year. This represents a range of 12.3 percent difference
separating the most costly to least costly of these programs for the first
year. Consideration of future years' costs as influenced by cost increase guar-
antees, differing financing mechanisms (fully-insured versus self-insured), and
the potential effects of availability and cost of reinsurance in future years
require that significant emphasis be placed on future years' cost implications
OPI of the three finalists.
These three finalists met with the City Council Insurance Committee on May 24,
1991 to describe their respective programs and to respond to specific questions
which had been posed to them in writing prior to the meeting. After that pre-
sentation, staff requested clarification on some of the information which had
been presented orally in that meeting.
The employee committee and retiree committee met jointly on June 6 to discuss
the relevant features of each plan and to review financial scenarios represent-
ing cost-sharing proposals as developed by the staff. The committees discussed
the plan features in-depth and developed a list of additional questions which
they wished answered prior to a vote on June 13.
The employee committee was presented three possible financing scenarios for the
three finalist programs. This information, along with the major plan design
features, a "question and answer" section, a feature article on the selection
process, and the employee committee names, telephone numbers and departmental
assignments, appeared in a special June issue of the Voice which was distributed
to all City employees on June 11. This informed all City employees that the
employee and retiree committees were to register their preference for
provider/administrator at the next meeting on June 13.
The retiree committee was presented one financial scenario at its meeting on
June 6 for the Harris and Sanus programs (No premium rates for Me'dicare-eligible
I versus not-medicare-eligible retirees was available from North Texas Health Plan
Op*' for the committee meeting on that date.)
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7534
To the Mayor and Members of the City Council Page 6
July 9, 1991
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
Isis
At the meeting on June 13, the requested information was provided to the commit-
tees*, meeting jointly. The members were then requested to vote their prefer-
ences by written ballot. Of the twenty-five ballots cast, Harris Methodist
Health Plan received eighteen (18) first place votes, North Texas Healthcare
Network received six (6) first place votes and Sanus Texas Health Plan received
one (1) first place vote.
Throughout the entire process, staff has communicated that the committees' in-
put, although representing a valuable and significant element of the decision
process, would not be binding upon the staff's recommendation nor the City Coun-
cil 's final decision on the program. Ultimately, the staff, acting with knowl-
edge of the committees' preferences, and with the assistance of the professional
advice it has sought through its consulting arrangement with APA (currently pro-
vided by Mr. Jim Mosley) must evaluate and recommend the most cost-effective,
fiscally responsible program to provide group health insurance benefits to the
City's active and retired employees consistent with Council 's directions.
HARRIS METHODIST HEALTH PLAN
The proposed plan of benefits offered by Harris Methodist Health Plan has three
options for persons living within the defined Service Area and one option for
those persons who live outside of the defined Service Area. Persons living
within the Service Area may select a High option HMO product, a Low option HMO
product or an indemnity product. Persons living outside the defined Service
Area must select the indemnity option.
The HMO offerings are fully-insured, and the indemnity program is self-insured
with an aggregate stop-loss provision. Long-term rate guarantees are made on
the HMO program (in which an enrollment of eighty-nine percent (89%) is pre-
dicted by Harris' underwriters) for the first two years of the agreement (not to
exceed 12.5%) with a third year guarantee based on actual City trend. None of
the proposers would commit to a cost-increase limitation beyond three years. If
the enrollment projections of the program prove to be sound, a large portion of
the City's liability will be insured and subject to known cost increases for at
least two years except the self-insured indemnity plan. Its future costs will
be predicated upon its identifiable loss pattern together with costs emerging
from the stop-loss market.
Because of these long-term cost increase guarantees, positive references pro-
vided by other benefits managers in organizations where Harris Methodist Health
Plan is a carrier, overwhelming employee perceived value in the program, and
strong panel of physicians and facilities to serve the Tarrant County area and
beyond, the staff recommends that the City Council authorize the City Manager to
enter into a contract with Harris Methodist Health Plan for insurance (and ad-
ministration) of its group health insurance program for the 1992 fiscal year
with four, one year options to renew.
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7534
To the Mayor and Members of the City Council
Page 7
July 9, 1991
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
FINANCING
Each of the programs maintaining the current level of benefits requires addi-
tional funds to finance the City's maximum liability for the forthcoming year.
Additionally, there are special financing issues which relate to the cost and
cost-sharing to finance the retiree program, which will be discussed below.
Active Employees
In order to maintain the current level of benefits while providing a program of
benefits with high perceived value to employees, it is recommended that employ-
ees be assessed a portion of the cost for their own coverage regardless of the
option selected. In the current year, the City contributes $121.98 toward the
cost of employee coverage. This contribution is sufficient to pay the estimated
entire cost of the monthly Low Option (HMO only) coverage. Employees selecting
the High Option pay the difference for this coverage.
For FY 1992, it is recommended that each employee pay three dollars ($3) per pay
period or $6.50 per month toward the cost of his/her own coverage for the Low
Option or High Option and NO ADDITIONAL cost above that paid in the current fis-
cal year for his/her dependent coverage. The City's contribution toward the
cost of the employees' coverage increases $6.99 per month for Low Option cover-
age, $10.90 per month for High option coverage, and $70.13 per month for those
employees who make an optional In-Service-Area election of the indemnity plan.
The estimated monthly cost, proposed employee contribution, and remaining City
contribution are described in Attachment 2.
For those active employees who chose to select the indemnity program or for whom
this option is the only choice by virtue of their place of residence outside of
the eighteen county service area of the Harris HMO, it is recommended that em-
ployees pay a fifty percent (50%) rate above that paid by the employee selecting
the High option coverage. The reason for that is that the City's required con-
tribution to finance this program is significantly higher than that to support
the HMO offerings. Again, refer to Attachment 2 for a complete listing of the
costs and required contributions to finance the three program elements of the
Harris plan for the 1992 fiscal year.
Retirges.
Financing of the retiree program (as it affects the retiree population) is
greatly influenced by the Medicare-eligibility of the retirees and their spous-
es. The retiree program is administered and financed as follows in the current
year:
0 Consistent with staff's understanding of the Council 's direction, the re-
tiree program coordinates benefits on the indemnity component of the plan
on a Medicare carve out basis. For those retirees who opt to use the in-
demnity (New York Life) benefits of the plan's current High Option, the
City's plan is designed to pay up to the plan maximum (usually 80%) for
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 2534
Voi? To the Mayor and Members of the City Council Page 8
op
July 9, 1991
rFxAy
Z
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
allowable expenses not otherwise paid by Medicare until the retiree has
incurred his/her maximum out-of-pocket cost ($1700) . Retirees electing to
use network benefits pay only the required co-payments. For many retirees
using indemnity benefits, the City's plan pays little, if anything toward
medical costs until the retiree has paid his/her maximum out of pocket ex-
pense. (The City's plan does pay 80% of allowable charges not covered by
Medicare, including pharmaceutical charges from non-participating pharma-
cies. ) All retirees also have access to a low cost mail order pharmaceuti-
cal benefit, as do active employees.
0 Because it was impossible to identify accurately those Medicare-eligible
retirees and their Medicare-eligible spouses prior to enrollment, an inter-
nal financing inequity exists in the current year. Rather than having a
separate premium and contribution structure for Medicare-eligibles versus
non-Medicare-eligibles, an estimate was made of the total savings which
would accrue to the program due to the coordination of benefits on a carve
out basis, and then these total savings were passed along equally to all
retirees. In effect, the savings from Medicare carve out were passed to
all retirees rather than just to those to whom it was attributable. Cou-
pled with this is the requirement that Medicare-eligible retirees and de-
pendents have Part B Medicare coverage which currently costs approximately
$29.90 per month for the 1991 calendar year. Thus a Medicare-eligible cou-
ple was paying approximately $60 per month to Medicare for Part B coverage
and an additional $173.44 per month for High Option coverage. The non-
Medicare-eligible retired couple paid $173.44 for essentially the same ben-
efit.
During meetings with the retiree committee, the Medicare-eligible retirees' dis-
satisfaction with the decision to move the administration of the retiree plan
from a Medicare supplement plan (which is how the plan had been administered by
Aetna according to the City's instruction) to a Medicare carve out adjudication
became a regular point of discussion and request for reconsideration.
Essentially, the issue becomes one of cost-shifting. In order to finance the
plan in a manner that does not disadvantage Medicare-eligible retirees and de-
pendents, it is necessary that either the City's financial liability must in-
crease to fully support at least one non-contributory plan of benefit for these
non-Medicare-eligible retirees and provide a substantial subsidy of dependent
costs, or pass along the entire cost of dependent coverage for non-Medicare-
eligible dependents, making participation in the City's program cost-prohibitive
for some.
To address these concerns, the staff recommends the contributions as described
in Attachment 3A and 3B for retirees. This program will require the commitment
of an estimated additional $85,419 beyond the FY 1991 City contribution of $3.9
million. The salient features of the financing of the program are as follows:
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No.— 7534
To the Mayor and Members of the City Council Page 9
July 9, 1991
Subject: GROUP HEALTH INSURANCE PROGRAM (Cont.)
0 Administration of the program is performed on a Medicare supplement basis
wherein reimbursement of eligible expenses will be made in a manner calcu-
lated to provide the Medicare eligible retiree with protection, but de-
signed to prohibit payment in excess of actual, eligible loss.
0 Non-Medicare eligible retirees will pay no more for the cost of their own
and their dependent coverage than they are paying in the current year for
High and Low Option HMO. (They are "held harmless" from the cost shifting
occasioned within the "network" choices. )
0 Again, for enrollment in the indemnity program, all retiree will be re-
quired to pay an amount of contribution above the contribution required for
High Option HMO.
CONCLUSION
The staff has placed an action item on the City Council agenda today for a rec-
ommended action to authorize the City Manager to enter into a contract with Har-
ris Methodist Health Plan for one year with four annual options to renew.
OOW Please let me know if you require additional information.
ory
avid A. '
City Manager
-ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
ATTACHMENT 1
GROUP HEALTH PROPOSALS - BASIC FEATURES
HARRIS METHODIST NORTH TEXAS SANDS/
HEALTH PLAN HEALTHCARE PLAN NEW YORK LIFE PLAN
HMO sdrawwi Sa iow"
ii.mih is olr-iasmd No ar Law R.twwi T4wiiw Oryrdamsa wao HMO pia m
T&k1LswNbio pi- OR
mus%"in we+iss ma lbs arewsd LAw 1Dio mty
3MbaiaMa
+#ssairld far as wb Drs mot ormo arw
(aa aplia ar dl sacs)
Aye t aatioa for io patiaat ad am-padem bospW pmced�k MUMM FOR ALL TWM PLANS.
wo ss par r3dt tryb slo pw sbit ■tab u pr silt
Law SlOpsrrisit Lw$10prrddt LAW Stopovidt
h&wnky Mom dlw sloe Mond*w w" xm wwasMA 7ari0 save 5700 ooMt#a bin iisst7>tiN10 altar s2o0 sontt iiaetHis
Moaloos slabl0%aaws20omaadisaMwibb skbumosloo
tAw nos tress sto0o Asa loos tAw s0%aasr smo mmd 4okdmM tAw HMO x275
baommitysomahwsm Mond aw is Nweatw%k7WJ0shwS7o0mwddmAwhWs.i200 ia6mdtysomsitarsm0wwadAwswais
pr adwbim
sW u5s►!a slab W06-aeddst fths/opwwmk
2#0 90%+8200atm i i.denlis rrr its
bw20%aspsy tomb SO%.acewou tow S10pwvidt
LAw oos Mar sm0 asmd ism sw Glom
IdaswieyaolrJOdfrS7ooammtaei.rdbb Mokowt ad7ofl0+S7o0wswtasisdbt+ bdmm*yDOM+smo Mond isitedbts
Turin clonesdwears pin*few arSlo
par tuft ar Flab K LAW owdmr.PMdmt pas
sn lm bm ilmaaaF�mimi swawt b loos bw
$lo ss pay.
mo sssa pq so lox aasr 5200 mot"S" Flab sw om p"
law s10 op?w LAW 20%saw smo WNW asimdbb tAw$loe as p"
,Aay� bdO=Wtr 20%OAK OW MMd ttraraa7ab lys..st sdc 7wic aAr am�l i+s�itr am al►r s20o smart i.iaaMobla
810 or Low W or Lw Ekb ar LAw
35 EACH O"AY iit Slo v 70%wude.asr is liatsr,Oowiv--$i Or 82 padK V Wool
an wbiebmw is Now.
NO AWAIN is NO idsdbb. S75 Msmd ieiaaibis
Umio-70 dw mipply Qmm*TR iseaw o Mr I QsOm4 po isawets Mein
birarity Mmsd x700 isiwdbie 70%rsr tlssrrk Not awwsda owso Haar Mamd x700
aftpow"M7si aWbodamW1ta
Lapp' -i 7 so brlsiw Skaap.Bdwei. tarp mom -Tswa A Com ry boal pssp hr sdwd.TMmrmwi.Taws A Caaay
K-Naa.Tam Thook Kwsa Mai soma Wo- Tamm Cmdr..swap.Tam 4lasie.Know.
Smiwr Mao. Wb"Xm Mai lads m A=K arimwids
Sol'Mbw.bsw.
11113 191 OR v A%3
NO aril Mdsr Geode-100%whb m erg mi m asaardlia; Ns asisMdiis;S2 wlay bar sp 0904wr wpoy
semi pay for spwlam%MawUmopq
LlfpsS00TMrtRw:sN00tnridly soSm+/sisadbpsrpwmmC Slow+iaiadYs stoumpmpwam;s150op-io4
SI bully
bsw sowmebm tAwSIND#iidMrpsrpwsm;S7000.i&modkb
t.iewtyu5oo+iaa.aill. sasai+ PW bony
!wp'w*m: lrmaswsts]000+Masaiiaprrpsswsgsi000. #sis�rf sl7po.iaisaoMisparpawm:S4.400.
6060"par MOODY daho"s pm Samly dMio ods par hmly
All lams beMdow(10) AD 61 1M is Wmw V0) ARM— ' berbmr
All SMitlrsw bewbm bbdteiiO4)l lr lieiiael Tlwa
1108,y F.pby >aaadly
Adbao tdMmrid Adbara lie.obt Adb oma liowatd
Wdb almond lwMipwlm41MMs amsspaib us"cleaver
Cisriof%n Werth c3adma's awblFwt sass tsdtiem5e Caokfto Wsalr ChAdmWr
vOwppat rrMtb*M d
Cmp"Mswwid
>lsmn
TLis brW aompmimn is for idrotmatien purposes**.For a doweled and precise aasam o or ibe bewrag araD"to you,aou rlaiot p mce-
dmta,or tae oampeoim'tm icW ataaw,ask your tastttaooe Depaspmeot for a tw"of tat taneat baaafit lira.
ATTACHMENT 2
Proposed Cost Sharing for the Active Employee Program
LOW OPTION HMO*
Proposed Current Proposed Current
Total Dependent Employee Employee City City City City
Monthly Monthly Monthly Monthly Monthly Monthly Subsidization Subsidizatic
Cost Cost Contribution Contribution Contribution Contribution (Total) (Dependent)
Employee $135.47 $.00 $6.50 $.00 $128.97 $121.98 95.20% N/A
Employee & Spouse $369.69 $234.22 $109.83 $103.33 $259.86 $229.66 70.29% 98.054
Employee and Child(ren) $327.81 $192.34 $90.65 $84.15 $237.16 $211.11 72.35% 109.76%
Employee and Family $436.64 $301.17 $123.87 $117.37 $312.77 $275.33 71.63% 91.42%
HIGH OPTION HMO*
Proposed Current Proposed Current
Total Dependent Employee Employee City City City City
Monthly Monthly Monthly Monthly Monthly Monthly Subsidization Subsidizatio
Cost Cost Contribution Contribution Contribution Contribution (Total) (Dependent)
Employee $162.56 $.00 $29.68 $23.18 $132.88 $121.98 81.74% N/A
Employee 5 Spouse $443.63 $281.07 $179.53 $173.03 $264.10 $229.66 59.53% 81.71%
Employee and Child(ren) $393.37 $230.81 $146.77 $140.27 $246.60 $211.11 62.69% 91.46%
Employee and Family $523.98 $361.42 $198.49 $191.99 $325.49 $275.33 62.12% 76.18%
I, �INIW
Proposed Current Proposed Current
Total Dependent Employee Employee City City City City
Monthly Monthly Monthly Monthly Monthly Monthly Subsidization Subsidizatio
Cost Cost Contribution Contribution Contribution Contribution (Total) (Dependent)
Employee $236.64 $74.08 $44.53 N/A $192.11 N/A 81.18% N/A
Employee & Spouse $622.15 $459.59 $269.30 N/A $352.85 N/A 56.718 76.77%
Employee and Child(ren) $585.34 $422.78 $220.16 N/A $365.18 N/A 62.398 86.38%
Employee and Family $755.04 $592.48 $297.73 N/A $457.31 N/A 60.574 77.198
* A deferral of $300,000 of FY 1992 costs will be made until the subsequent year. The
effect of this deferral has not been reflected in this cost exhibit. Those
reductions will be taken from the figures in column 5 "Proposed City Monthly
Contribution."
ATTACHMENT 3A
Proposed Cost Sharing Between City Funds and Medicare-Eligible Retirees
LOW OPTION HMO
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
Cost Cost Contribution Contribution Contribution Contribution
Retiree $114.40 $.00 $.00 $.00 $114.40 $162.16
Retiree d Spouse (1) $350.19 $235.79 $112.95 $112.95 $237.24 $219.48
Retiree b Spouse (2) $228.80 $114.40 $114.40 $112.95 $114.40 $219.48
Retiree and Child(ren) $219.66 $105.26 $82.87 $82.87 $136.79 $217.13
Retiree and Family (1) $455.45 $341.05 $123.98 $123.98 $331.47 $240.88
Retiree and Family (2) $334.06 $219.66 $123.98 $123.98 $210.08 $240.88
Surviving Spouse (1) $114.40 $114.40 $114.40 $112.95 $.00 $57.32
Surviving Family (1) $215.68 $215.68 $123.98 $123.98 $91.70 $78.72
HIGH OPTION HMO
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
Cost Cost Contribution Contribution Contribution Contribution
Retiree $118.21 $.00 $3.81 $36.00 $114.40 $164.52
Retiree d Spouse (1) $428.74 $310.53 $173.44 $173.44 $255.30 $237.63
Retiree 6 Spouse (2) $236.42 $118.21 $122.02 $173.44 $114.40 $237.63
Retiree and Child(ren) $242.95 $124.74 $127.25 $127.25 $115.70 $243.71
Retiree and Family (1) $553.17 $434.96 $190.38 $190.38 $362.79 $260.19
Retiree and Family (2) $361.16 $242.95 $190.38 $190.38 $170.78 $260.19
Surviving Spouse (1) $118.21 $118.21 $118.21 $173.44 $.00 $37.11
Surviving Family (1) $434.96 $434.96 $190.38 $190.38 $244.58 $60.07
INDEMNITY
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
Cost Cost Contribution Contribution Contribution Contribution
Retiree $186.93 $186.93 $3.72 N/A $183.21 N/A
Retiree b Spouse (1) $659.16 $659.16 $208.64 N/A $450.52 N/A
Retiree 5 Spouse (2) $373.86 $373.86 $159.01 N/A $214.85 N/A
Retiree and Child(ren) $381.39 $381.39 $153.08 N/A $228.31 N/A
Retiree and Family (1) $845.13 $845.13 $229.01 N/A $616.12 N/A
Retiree and Family (2) $568.32 $568.32 $229.01 N/A $339.31 N/A
Surviving Spouse (1) $186.93 $186.93 $155.30 N/A $31.63 N/A
Surviving Family (1) $381.39 $381.39 $229.01 N/A $152.38 N/A
ATTACHMENT 3B
Proposed Cost Sharing Between City Funds and Non-Medicare Eligible Retirees
LOW OPTION RHO
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
Cost Cost Contribution Contribution Contribution Contribution
Retiree $235.79 $.00 $.00 $.00 $235.79 $162.16
Retiree and Spouse $471.58 $235.79 $112.95 $112.95 $358.63 $219.48
Retiree and Children) $341.05 $105.26 $82.87 $82.87 $258.18 $217.13
Retiree and Family $576.84 $341.05 $123.98 $123.98 $452.86 $240.88
Surviving Spouse $235.79 $235.79 $112.95 $112.95 $122.84 $57.32
Surviving Child $105.26 $105.26 $82.87 $82.87 $22.39 $54.97
Surviving Family $341.05 $341.05 $123.98 $123.98 $217.07 $78.72
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
HIGH OPTION RHO Cost Cost Contribution Contribution Contribution Contribution
Retiree $310.52 $.00 $36.00 $36.00 $274.52 $164.52
Retiree and Spouse $621.05 $310.53 $173.44 $173.44 $447.61 $237.63
Retiree and Children) $435.26 $124.74 $127.25 $173.44 $170.00 $243.71
Retiree and Family $745.49 $434.97 $190.38 $127.25 $140.00 $260.19
Surviving Spouse $310.52 $310.52 $173.44 $190.38 $137.08 $37.11
Surviving Child $124.73 $124.73 $124.73 $190.38 $.00 $43.19
Surviving Family $434.96 $434.96 $190.38 $173.44 $244.58 $60.07
INDEMNITY
Proposed Current Proposed Current
Total Dependent Retiree Retiree City City
Monthly Monthly Monthly Monthly Monthly Monthly
Cost Cost Contribution Contribution Contribution Contribution
Retiree $474.75 $474.75 $35.10 N/A $439.65 N/A
Retiree and Spouse $946.98 $946.98 $208.64 N/A $738.34 N/A
Retiree and Children) $669.21 $669.21 $150.62 N/A $518.59 N/A
Retiree and Family $1,132.95 $1,132.95 $229.01 N/A $903.94 N/A
Surviving Spouse $472.23 $472.23 $208.64 N/A $263.59 N/A
Surviving Child $194.46 $194.46 $150.62 N/A $43.84 N/A
Surviving Family $658.20 $658.20 $229.01 N/A $429.19 N/A
Attachment 4
Op►,
FY 1991 FY 1992 Difference
Total Cost $20,230,871 $22,254,708 $2,023,837 10.00%
Actives $14,954,195 $17,109,198 $2,155,003 14.41%
Retirees $5,276,676 $5,145,510 ($131,166) -2.49%
Contributions
Actives $3,831,959 $4,403,561 $571,602 14.92%
Retirees $1,367,006 $1,150,421 ($216,585) -15.84%
Net City Cost
Actives $11,122,236 $12,705,637 $1,583,401 14.24%
Retirees $3,909,670 $3,995,089 $85,419 2.18%