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5.3 ERMUSR 10-13-2020UTILITIES COMMISSION MEETING TO:FROM: ERMU Commission Theresa Slominski - GeneralManager MEETING DATE: AGENDA ITEM NUMBER: October 13, 20205.3 SUBJECT: Wage & BenefitsCommitteeUpdate ACTION REQUESTED: 1) Approvean insurance plan, 2) Determine related percentage of premium share and deductible funding amounts. BACKGROUND: We have had our medical insurance through Resource Training & Solutions/Blue Cross Blue Shield (RTS) for many years. As a participant with RTS we were able to essentially have a large group insurance plan even as a small employer. Originally, we had a co-pay plan and then made the switch to an HSA plan, as the co-pay plan was going to be eliminated due to cost and we wanted to make a change before we were forced to. Currently, the employer shares in the cost of the insurance at 75% and the employees’ share is25%. Additionally, the employer contributes funds towards the deductible for the employee: $650 for single and $1,985 for family. Last fall it was asked if we could add an additional medical insurance plan option that would have a higher deductible with lower premiums for those employees willing to take the additional risk. Additional clarification was provided that the deductible was requested to be high enough (suggested to be around $2,800 single and $5,600 family) so the 25% employee share of the insurance premium for a family would be closer to $200 rather than the current $672. This request was based on what competitor electric employers are offering their employees. With the August insurance renewal this year, additional plan options were requested from RTS. DISCUSSION: Our current plan renewal is a 4.8% increase, for a family premium of $704. As requested, RTS provided five alternative additional plans ranging in deductibles from $2,800 for single and $5,600 for family, to $5,000 for single and $10,000 for family. The family premium range for these same plans ranged from $624 to $520, not a significant decrease, even with the highest deductible amounts. As the request was specific to the premium amount, a calculation was done to determine what the percentage share could be changed to for the family premium to be closer to $200 with our ______________________________________________________________________________ Page 1 of 3 65 current plan. Changing from 75%/25% to 90%/10% allowed the premium to change from $704 to $282, however at an annualcostincrease to the employer of $146,000. After conversations with our broker werequested quotes from the Small Group Market(SGM). With the SGM there were significant reduction in costs. These cost savings would allow us to lower the premiums however, it cannot be offered in addition to the plan we already have - it would have to be a new plan that everyone changes to. There are multiple providers offering different networks, different prescription drug coverage and pharmacy providers, and different deductible options. Since everyone would have to switch plans, it involved careful consideration as to what we might be able to offer. There is a Blue Cross Blue Shield SGM plan that has the same network of providers as our current plan, which is probably one of the biggest concerns changing plans would bring. While this is not the plan with the greatest amount of savings, there are still considerable savings, over $200,000. The deductible amounts are $2,500 single and $5,000 family, and monthly family premiums would be $504 with the 75%/25% share. With over $200,000 in savings, we can adjust the share to 85%/15% and bring the family premium down to $302 and still save $135,000. Please see attachment “Premium Share Options.” As stated before, all employees would need to change to the small group plan because we would not be able to offer it in addition to our current plan, it would be the only plan. While all employees would likely welcome a reduction in premium costs, not all are able to absorb an increased deductible as easily. Based on the remaining dollar amount the employees need to contribute to fully fund the deductible now($750 for single and $815 for family), our current percentage funding to the deductible is 70% single and 83.7% family. A series of options for additional funding has been determined, ranging from 75% up to 100% for both single and family, and there are still savings realized. Please see attachment “HSA Contribution and Savings Options.” A comparison of our current BCBS plan and the SGM BCBS plan is attached. The differences are the increasein the deductible, the pharmacies available, the Out of Network costs (pretty significant but can be controlled by the participant staying in network), bariatric surgery and infertility treatment not covered, no Omada program for diabetes, no Smart Shopper (participants could receive $20 to $300 for “shopping” a procedure or x-ray and using certain providers for plan savings), and no Wellness program dollars (however this could be funded internally.) Please see attachment “Plan Comparisons.” rth noting is the SGM does not rate based upon experience, but upon the age of your Wo participants, and is called “age banding.” Plan costs increase or decrease based on the age of your participants. The age banded costs are determined statewide and not specific to any particular employer, so there will not be huge annual increases to the age bands from year to year. With the SGM there is considerable savings and a great opportunity to offer a more affordable plan to all of our staff, with a lower monthly premium and a higher funding of the deductible. ______________________________________________________________________________ Page 2 of 3 66 Given the challenges we have had in recent years withretaining employees, and also the challenge with recruiting new employees, making changes to thepercentage share in the premiums and funding the deductible is a huge step in the right direction. And we can still save the company money while accomplishing this. This is a lot of information to process and a short timeline to make a decision (we need to provide RTS with a yes or no to continue their plan by October 15). After seeing that there are savings available, RTS doesn’t seem like a viable option any longer, but whether to continue with them or move to the SGM plan would be the first decision. If the Commission chooses the SGM, the remaining decision(s) is what percentage to share in the monthly premium costs, and what percentage to fund the deductible. ATTACHMENTS: Premium ShareOptions HSA Contributionand Savings Options Plan Comparisons ______________________________________________________________________________ Page 3 of 3 67 68 69 70 71 HANDOUT AT MEETING PROVIDED BY CHAIR DIETZ