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Home My WebLink AboutIR 9663 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9663 To the Mayor and Members of the City Council August 26, 2014 h�T�i7 Page 1 of 5 �i �i7 Y *a SUBJECT: 2015 HEALTH PLAN CHANGES #qrF rn YO,?5 This Informal Report is intended to provide you with an overview of a number of changes are planned for the City's health plan and wellness program for 2015. Changes in Plan Designs A number of changes are planned to facilitate cost savings or improve member health. In the Basic and Basic Plus plan two changes are being made. 1. Drug copays are going to be reduced to $5 for all levels (generic, non-preferred and brand) if the prescription is filled at Walmart. This action will allow the City to obtain preferred pricing from Walmart and it is estimated that this will decrease pharmacy cost by at least $1 M in 2015 but could be much higher if utilization with Walmart increases from its current level of 5%. This arrangement is possible because of the change in Pharmacy Benefit Managers from Aetna to Envision and is in addition to the $2.5 - $3M in savings that is estimated from that new partnership. 2. Members on the Basic and Basic Plus plans will now have access to free physicals and associated lab work, if obtained through a USMD physician. USMD is our near-site clinic partner and this is an expansion of that partnership to encourage members to develop a primary care physician relationship. If you recall, it is estimated that as many as 70% of members on the City's health plan do not have a primary care physician monitoring their health. Better monitoring of members health should lead to early diagnosis of conditions and more effective preventative results. 3. Also, in an effort to extend our partnership with USMD, co-pays for primary care office visits at USMD will be reduced from $25 to $10 — same as the near-site clinic. The purpose of this benefit improvement is to encourage employees and dependents to use USMD. USMD's Patient Center Medical Home model is designed to deliver the right care at the right time and utilizes a very sophisticated system to track patients for compliance to ensure better health. Through this model they have a proven track record of better outcomes including lowering emergency room visits, readmissions after hospital visits and unnecessary utilization (i.e., imaging, testing, etc.) which will reduce the City's health plan costs. For the Consumer Choice plan, two changes are scheduled relating to the pharmacy portion of the plan. 1 . Generic, maintenance medications (i.e., cholesterol lowering, high blood pressure, etc.) are scheduled to be free to members, if filled at Walmart, in an effort to encourage medication compliance. 2. Also, a fourth tier co-insurance for specialty drugs is to be implemented that will increase the co-insurance level (after deductible) from 20% to 25% to encourage use of alternative medications. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9663 To the Mayor and Members of the City Council August 26, 2014 h�T�i7 Page 2 of 5 �i �i7 Y *a SUBJECT: 2015 HEALTH PLAN CHANGES #qrF rn f e'?5 Wellness Program Changes Employees/retirees will be notified that they must obtain a physical from a primary care physician by October 31 , 2015. If they do obtain such a physical, they will be eligible for a discount of up to a $23.08 a paycheck/$50 a month in 2016. Again, this is to encourage members to develop a primary care physician relationship that is regularly monitoring their health. This will be expanded to spouses and domestic partners in 2016. The City of Fort Worth will institute a tobacco cessation program in 2015. During open enrollment in 2015, employees/retirees, under age 65, on the City's health plan will be required to certify that they are not a tobacco user to earn a $23.08 per pay check/$50 a month discount on their healthcare premium for 2016. To earn the discount, employees/retirees that do use tobacco may complete a tobacco cessation counseling prior to October 31 , 2015. This program will be expanded to spouses and domestic partners in 2016. Health Plan Premium Increases Below are the planned cost increases for the various employee and retiree health plan designs. There is no proposed premium increased for the Consumer Choice Plan and a moderate increase (5%) for the Basic and Basic Plus plans. The lack of any proposed increase in the Consumer Choice Plan is to encourage more employees and retirees to consider this plan and claim costs for this plan are below contribution levels. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9663 To the Mayor and Members of the City Council August 26, 2014 h�T�i7 Page 3 of 5 �i �i7 Y *a SUBJECT: 2015 HEALTH PLAN CHANGES #qrF rn ye,?5 Consumer Choice/Health Savings Account Plan: Health premium for employees on the Consumer Choice/Health Savings Account plan will not rise for 2015. Employee Monthly Premium Coverage (unchanged) Employee Only $0.00 Employee & Spouse $266.05 Employee & Child(ren) $250.83 Employee & Family $375.78 Rates for retirees vary by date of hire and years of service. Basic Plan Over eighty percent of employees are on the Basic plan, Premiums for the Basic plan are proposed to rise 5% for 2015. While the employee/retiree share of these plan's costs are below the targeted 30% contribution level, a number of measures have been put into effect for 2015 to lower or mitigate costs increases for 2015. Employee Employee Monthly Premium Monthly Premium Coverage (Current) 2( 015) Employee Only $67.81 $71.20 Employee & Spouse $424.63 $445.86 Employee & Child(ren) $366.99 $385.34 Employee & Family $573.46 $602.13 Rates for retirees vary by date of hire and years of service. Therefore, for a typical participant in the City's health plan with employee only coverage will see a $40.68 increase in cost for 2015. Conversely, the lowest rate of pay for a full-time position in the City will see at least a $922.68 increase in wages for 2015 due to pay increases next month. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9663 To the Mayor and Members of the City Council August 26, 2014 h�T�i7 Page 4 of 5 �i �i7 Y *a SUBJECT: 2015 HEALTH PLAN CHANGES #qrF rn 10,?5 Basic Plus Plan Premiums for the Basic Plus plan is proposed to rise 5% for 2015. While the employee/retiree share of these plan's costs are below the targeted 30% contribution level, a number of measures have been put into effect for 2015 to lower or mitigate costs increases for 2015. Employee Employee Monthly Premium Monthly Premium Coverage (Current) 2( 015) Employee Only $169.50 $177.98 Employee & Spouse $632.14 $663.75 Employee & Child(ren) $557.19 $585.05 Employee & Family $885.46 $929.73 Rates for retirees vary by date of hire and years of service. Medicare Advantage The Medicare Advantage plan for retirees is a fully-insured product through Aetna. Aetna is currently projecting an 8 — 10% increase. This increase is mainly being driven by the requirement that we can no longer separate the medical and pharmacy portions of the coverage. This will result in the discontinuance the Employer Group Waiver Plan that includes CMS reimbursements and rebates will go to Aetna since this is a fully-insured plan. This may also cause changes to pharmacy benefit levels. The exact amount of increase will be provided later this month and any needed design changes will be considered at that time. However, rates continue to be significantly lower than the City's traditional plan that ended last year. 2014 Retiree Medicare Advantage HMO Monthly Premium Based on Years of Service (Current) Coverage (>25 Years) (15 to < 24 Years) (5 to <14 Years) Retiree Only $0.00 $99.36 $201 .72 Retiree & Spouse $180.65 $280.00 $352.26 Retiree & Adult Child(ren) $180.65 $280.00 $352.36 Retire & Family (all on Medicare) $361.30 $460.66 $502.80 ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9663 To the Mayor and Members of the City Council August 26, 2014 h�T�i7 Page 5 of 5 �i �i7 Y *a SUBJECT: 2015 HEALTH PLAN CHANGES #qrF rn 10,?5 2014 Retiree Medicare Advantage PPO Monthly Premium Based on Years of Service (Current) Coverage (>25 Years) (15 to < 24 Years) (5 to <14 Years) Retiree Only $0.00 $103.35 $209.83 Retiree & Spouse $219.23 $291.26 $366.42 Retiree & Adult Child(ren) $219.23 $291.26 $366.42 Retire & Family (all on Medicare) $438.45 $479.17 $523.01 Brian Dickerson, Human Resources Director, will provide a Council briefing on August 26, 2014 to answer any questions you may have. Additionally, there are several other initiatives under development by Human Resources to make the City's health plan more efficient and effective that will be presented at future Council meetings as they are fully developed. David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS