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LTC 100-2013 Health Care Costs
MIAMI BEAC OFFICE OF THE CITY MANAGER v NO. LTC # 100 -2013 LETTER TO COMMISSION X TO: Mayor Matti Herrera Bower and Members of the City Commission c. co , FROM: Kathie G. Brooks, Interim City Manager DATE: March 25, 2013' ('? � cx1 SUBJECT: Health Care Costs - January 1, 2012 through December 31, 2012 ` ` This purpose of this Letter to the Commission is to provide the status of the City's health care fund for its self- insured medical plan. Initial estimates provided by Gallagher Benefit Services (Gallagher Benefits), the City's benefits consultant as of September 6, 2012 projected total medical plan costs of $19 million with projected premium collection (both employee and City premium contributions) of $17.1 million. This resulted in plan underfunding of $1.072 million for the plan year `January 1 through December 31, 2013. This projection was based on the prior twelve months of actual claims experience from September 2011 through August 2012 and included the plan's fixed costs for administration, stop -loss premium, banking fees and staff salaries. To help offset the plan's ul nderfunding, the City contributed an additional $1.2 for the Fiscal Year 2011/12. Subsequently, on February 22, 2013, a revised quarterly review was provided by Gallagher Benefits, which assessed actual claims experience for the full plan year, (January 1, 2012 through December 31, 2012). Based on the updated report, the total projected medical plan costs were revised to $17.3 million, and a total plan funding of $17.8 million, resulting in a surplus of $503,700 for the 2012 plan year. The attached chart provides a comparison of plan costs by year. This projection reflects a significant reduction in total claim costs for the year, particularly for the months of August through December when compared with the same period of time in 2011. The issue of the medical plan funding and premium rates was referred to the Budget Advisory Committee (BAC) for review and recommendation. The Administration has been working with Gallagher Benefits to identify alternatives to the City's current medical plan options, including reviewing various components of the plan to determine opportunities for cost and risk reductions, such as considering changes in plan benefits and increasing cost- sharing with employees. In addition, the BAC will also be comparing the City's plans to other employers (both in the private and public sectors) to determine plan efficiencies. The BAC will be presenting their recommendations to the City Commission during a Special Commission Workshop this summer. Should you have any questions or need additional information please feel free to contact_ me. KGB /CG /sr F: \cmgr\$ALL \LTC 2013 \LTC CMB Healthcare Costs 3- 19- 13.docx We are committed to providing excellent public service and safely to all who live, work, and play in our vibrant, tropical, historic community. 1 City Of Miami Beach MEDICAL AND RX CLAIM STATUS - GROSS CLAIMS January 1, 2008 - December 31, 2012 MEDICAL & OTHER PEPM YTD PEP Q RX CLAIMS TOTAL CLAIMS /o CHANGE MONTH ENROLLEES CLAIMS CLAIMS Claims Jan -08 1,629 $ 260,871 $ 570,462 S 831,333 $ 510.33 $ 510.33 Feb -08 1,625 S 231,907 $ 661,486 $ 893,393 $ 549.78 $ 530.03 Mar -08 1,627 $ 260,076 $ 668,888 $ 928,964 $ 570.97 $ 543.68 Apr -08 1,644 $ 261,372 $ 877,720 $ 1,139,092 $ 692.88 $ 581.27 May -08 1,641 $ 283,567 $ 753,494 S 1,037,061 $ 631.97 $ 591.46 Jun -08 1,642 $ 273,397 $ 495,849 $ 769,246 $ 468.48 $ 570.87 Jul -08 1,644 $ 273,155 $ 612,844 $ 885,999 $ 538.93 $ 56628 Aug -08 1,645 S 281,051 $ 721,430 $ 1,002,481 $ 609.41 $ 571.70 Sep -08 1,641 S 278,251 $ 789,802 $ 1,068,053 $ 650.85 $ 580.51 Oct -08 1,646 $ 305,497 $ 805,205 S 1,110,702 $_ 674.79 $ 589.99 Nov -08 1,643 $ 289,477 $ 675,277 $ 964,754 $ 587.19 $ 589.73 Dec -08 1,640 $ 294,843 $ 703,341 $ 998,184 $ 608.65 $ 591.31 Jan -09 1,674 $ 258,193 $ 201,969 $ 460,162 $ 274.89 $ 274.89 Feb -09 1,652 $ 268,480 $ 595,233 S 863,713 $ 522.83 $ 398.04 Mar -09 1,645 $ 292,930 S 742,507 $ 1,035,437 $ 629.44 $ 474.62 Apr -09 1,645 S 286,029 $ 1,007,809 $ 1,293,838 $ 786.53 $ 552.17 May -09 1,643 $ 287,017 $ 842,146 $ 1,129,163 S 687.26 $ 579.04 Jun -09 1,643 $ 292,511 $ 1,100,675 $ 1,393,186 $ 847.95 $ 623.66 Jul -09 1,636 S 279,773 $ 930,652 $ 1,210,425 $ 739.87 $ 640.14 Aug -09 1,633 $ 282,483 S 906,994 $ 1,189,478 $ 728.40. $ 651.08 Sep -09 1,629 S 265,927 $ 743,612 $ 1,009,539 $ 619.73 $ 647.63 Oct -09 1,616 S 304,911 S 1,223,701 $ 1,528,611 $ 945.92 $ 677.00 Nov -09 1,619 S 273,453 $ 1,054,942 $ 1,328,394 $ 820.50 $ 689.88 Dec -09 1,613 $ 290,093 S 816,043 $ 1,106,136 $ 685.76 $ 689.54 Jan -10 1,658 $ 276,826 S 669,370 $ 946,196 $ 570.68 $ 570.68 Feb -10 1,657 S 281,298 S 810,796 $ 1,092,094 $ 659.08 $ 659.08 Mar -10 1,638 S 291,608 S 1,054,611 $ 1,346,219 $ 821.87 $ 740.00 Apr -10 1,635 S 308,768 $ 994,522 $ 1,303,290 $ 797.12 S 758.95 May -10 1,631 $ 287,161 $ 863,036 $ 1,150,197 $ 705.21 $ 745.59 Jun -10 1,628 S 291,880 $ 761,037 $ - 1,052,917 $ 646.75 $ 725.94 Jul -10 1,621 S 290,191 $ 724,458 $ 1,014,649 $ 625.94 $ 709.42 Aug-10 1,618 S 301,434 $ 905,948 $ 1,207,382 $ 746.22 $ 714.63' Sep -10 1,609 S 285,811 $ 1,009,175 $ 1,294,986 $ 804.84 $ 725.76 Oct -10 1,606 S 300,222 $ 852,500 $ 1,152,722 $ 717.76 $ 724.88 Nov -10 1,597 S 291,526 S 1,111,306 $ 1,402,832 $ 878.42 $ 739.98 Dec -10 1,593 S 305,607 $- 1,230,525 $ 1,536,132 $ 964.30 $ 760.02 Jan -11 1,609 S 296,224 $ 799,660 $ 1,095,883 $ 681.10 $ 681.10 Feb -11 1 $ 264,929 $ 913,235 $ 1,178,164 $ 73820 $ 709.53 Mar -11 1,597 $ 325,659 $ 1,089,166 $ 1,414,825 $ 885.93 $ 768.19 Apr -11 1,597 S 323,540 $ 1,451,736 S 1,775,276 $ 1,111.63 $ 853.91 May -11 1,591 $ 285,873 $ 1,076,228 $ 1,362,101 $ 856.13 $ 854.35 Jun -11 .1,588 $ 304,530 $ 1,020,688 S 1,325,218 $ 834.52 $ 851.06 Jul -11 1,586 $ 316,059 $ 1,067,555 S 1,383,614 $ 872.39 $ 854.09 Aug -11 1,580 $ 328,944 $ 1,351,737 $ 1,680,681 $ 1,063.72 $ 880.08 Sep -11 1,574 $ 299,949 $ 1,451,518 $ 1,751,467 $ 1,112.75 $ 905.66 Oct -11 1,573 $ 307,176 $ 1,338,927 $ 1,646,103 $ 1,046.47 $ 919.60 Nov -11 1,572 $ 366,770 $ 1,107,984 $ 1,474,754 $ 938.14 $ 921.27 ' Dec -11 1,573 $ 335,933 $ 1,874,194 $ 2,210,127 $ 1,405.04 $ 961.24 Jan -12 1,563 $ 335,052 $ 1,080,833 $ 1,415,885 $ 905.88 $ 905.88 Feb -12 1,564 $ 346,819 $ 918,490 $ 1,265,309 S 809.02 $ 857.43 Mar -12 1,560 $ 331,060 $ 1,022,739 $ 1,353,799 $ 867.82 $ 860.89 Apr -12 1,552 $ 340,152 S 998,832 $ 1,338,984 $ 862.75 $ 861.35 May -12 1,550 S 347,234 $ 1,103,937 $ 1,451,171 S 93624 $ 876.25 Jun -12 1,545 S 318,482 $ 966,327 $ 1,284,809 S 831.59 $ 868.86 Jul -12 1,542 $ 359,094 $ 1,324,546 $ 1,683,640 S 1,091.85 $ 900.48 Aug -12 1,540 S 344,089 $ 1,316,793 $ 1,660,882 S 1,078.49 $ 922.56 Sep -12 1,535 $ 306,730 S 735,798 $ 1,042,528 $ 679.17 $' 895.78 Oct -12 1,539 $ 335,202 S 802,933 $ 1,138,135 $ 739.53 $ 880.25 Nov -12 1,539 S 303,005 $ - 1,109,110 $ 1,412,115 $ 917.55 $ 883.63 Dec -12 1,535 $ 332,002 $ 902,216 $ 1,234,218 $ 804.05 $ 877.05 2008 19,667 $ 3,293,464 $ 8,335,798 $ 11,629,262 $ 591.31 2009 19,648 $ 3,381,800 $ 10,166,283 $ 13,548,083 $ 689.54 16.6 °a 2010 19,491 $ 3,512,331 $ 10,987,285 $ 14,499,616 $ 743.91 7.9% 2011 19,036 $ 3,755,584 $ 14,542,629 $ 18,298,213 $ 9612a 29.2% 2012 18,564 $ 3,998,921 $ 12,282,552 $ 16,281,473 $ 877.05 -8.8% FY 2009/101 19,543 $ 3,483,433 $ 10,887,639 $ 14,371,071 $ 735.36 FY 2010/11 19,114 $ 3,643,060 $ 13,415,855 $ 17,058,915 $ 892.48 21.4% FY 2011/12 18,669 $ 4,038,591 $ 13,789,399 $ 17,827,990 $ 954.95 1 7.0% Page 3 City of Miami Beach Health Plan Experience by Plan and Enrollee Class Average Enrollees Premium Rate Fixed Total Plan Class Period EE Family EE Family Premium Claims Costs Expense Loss Ratio Standard HMO Active 2010 505 364 $ 357.59 $ 886.31 $6,044,617 $5,718,301 $742,583 $6,460,884 106.9% 2011 485 375 $ 393.35 $ 974.94 $6,670,677 $8,664,637 $802,399 $9,467,036 141.9% 2012 493 378 $ 458.76 $1,137.07 $7,868,362 $6,287,034 $971,622 $7,258,655 92.3% Subtotal 494 372 $20,583,657 $20,669,971 $2,516,603 $23,186,575 112.6% Pre 65 Retiree 2010 48 24 $ 357.59 $ 886.31 $462,629 $362,160 $59,616 $421,777 91.2% 2011 50 36 $ 393.35 $ 974.94 $652,498 $1,277,341 $79,260 $1,356,601 207.9% 2012 62 41 $ 458.76 $1,137.07 $898,043 $1,458,062 $113,215 $1,571,276 175.0% Subtotal 53 34 $2,013,169 $3,097,563 $252,091 $3,349,654 166.4% Premium HMO Active 2010 67 53 $ 590.59 $1,463.86 $1,400,842 $1,892,387 $102,803 $1,995,190 142.4% 2011 61 48 $ 649.65 $1,610.25 $1,402,398 $1,535,101 $101,872 $1,636,973 116.7% 2012 52 32 $ 757.68 $1,878.02 $1,195,862 $1,581,059 $92,107 $1,673,166 139.9% Subtotal 60 44 $3,999,102 $5,008,547 $296,782 $5,305,329 132.7% Pre 65 Retiree 2010 76 42 $ 590.59 $1,463.86 $1,279,897 $1,642,260 $98,631 $1,740,892 136.0% 2011 70 40 $ 649.65 $1,610.25 $1,311,197 $2,373,096 $99,354 $2,472,450 188.6% 2012 64 35 $ 757.68 $1,878.02 $1,371,819 $1,829,782 $107,267 $1,937,050 141.2% Subtotal 70 39 $3,962,913 $5,845,139 $305,253 . $6,150,392 155.2% Standard PPO Active 2010 33, 11 $ 698.90 $1,714.73 $507,489 $202,216 $35,422 $237,638 46.8% 2011 31 17 $ 768.79 $1,886.20 $663,579 $851,407 $43,018 $894,425 134.8% 2012 27 8 $ 896.63 $2,199.86 $502,998 $751,856 $36,019 $787,874 156.6% Subtotal 30 12 $1,674,065 $1,805,479 $114,459 $1,919,937 114.7% Pre 65 Retiree 2010 25 16 $ 698.90 $1,714.73 $529,943 $395,265 $34,129 $429,394 81.0% 2011 21 16 $ 768.79 $1,886.20 $554,419 $283,729 $34,505 $318,235 57.4% 2012 24 14 $ 896.63 $2,199.86 $631,309 $1,090,946 $41,488 $1,132,434 179.4% Subtotal 23 15 $1,715,671 $1,769;940 $110,122 $1,880,062 109.6% Post 65 Retiree 2010 37 33 $ 534.63 $1,155.88 $689,410 $427,301 $60,385 $487,686 70.7% 2011 42 39 $ 588.09 $1,283.58 $891,174' $527,086 $76,554 $603,640 67.7% 2012 42 43 $ 685.89 $1,489.89 $1,114,236 $578,635 $97,549 $676,184 60.7% Subtotal 40 38 $2,694,820 $1,533,021 $234,489 $1,767,510 65.6% Premium PPO Active 2010 19 5 $1,186.35 $2,910.64 $441,567 $574,683 $18,808 $593,491 134.4% 2011 14 3 $1,304.99 $3,201.70 $326,670 $101,324 $13,927 $115,251 35.3% 2012 8 3 $1,522.00 $3,734.12 $271,408 $131,596 $11,051 $142,6471 52.6% Subtotal 13 4 $1,039,645 $807,603 $43,787 $851,390 81.9% Pre 65 Retiree 2010 36 11 $1,186.35 $2,910.64 $886,789 $992,858 $37,230 $1,030,088 116.2% 2011 31 8 $1,304.99 $3,201.70 $767,084 $559,523 $32,348 $591,871 77.2% 2012 26 4 $1,522.00 $3,734.12 $662,950 $511,457 $29,764 $541,220 81.6% Subtotal 31 8 $2,316,824 $2,063,837 $99,342 $2,163,179 93.4% Post 65 Retiree 2010 110 61 $ 907.46 $1,962.05 $2,636,644 $1,687,539 $143,047 $1,830,587 69.4% 2011 102 53 $ 998.21 $2,178.82 $2,614,255 $1,410,978 $139,827 $1,550,805 59.3% 2012 96 45 $1,164.21 $2,529.03 $2,694,801 $1,223,380 $149,729 $1,373,109 51.0% Subtotal 103 53 $7,945,701 $4,321,897 $432,604 $4,754,501 59.8% POS Active 2010 5 6 $ 658.12 $1,632.95 $161,958 $137,926 $10,060 $147,986 91.4% 2011 2 8 $ 723.93 $1,796.25 $186,249 $273,620 $10,567 $284,187 152.6% 2012 4 6 $ 844.31 $2,094.95 $175,416 $239,695 $10,880 $250,575 142.8% Subtotal 4 6 $523,624 $651,240 $31,507 $682,747 130.4% Pre 65 Retiree 2010 8 5 $ 658.12 $1,632.95 $166,055 $352,731 $11,222 $363,953 219.2% 2011 9 4 $ 723.93 $1,796.25 $161,509 $308,157 $11,290 $319,446 197.8% 2012 9 4 $ 844.31 $2,094.95 $186,677 $413,320 $13,340 $426,659 228.6% Subtotal 8 4 $514,241 $1,074,207 $35,852 $1,110,059 215.9% Post 65 Retiree 2010 12 7 $ 511.15 $1,105.17 $168,816 $113,989 $16,035 $130,023 77.0% 2011 14 8 $ 562.27 $1,227.27 $215,961 $132,215 $20,263 $152,478 70.6% 2012 15 12 $ 655.77 $1,424.54 $319,554 $184,653 $29,988 $214,641 1 67.2% Subtotal 14 9 $704,332 $430,857 $66,286 $497,143 70.6% City of Miami Beach Health Plan Experience by Plan and Enrollee Class Average Enrollees Premium Rate Fixed Total Plan Class Periodi EE Familyl EE Familyl Premium Claims Costs Ex ense Loss Ratio City of Miami Beach Health Plan Experience by Plan and Enrollee Class Total 2010 2010 979 639 $15,376,656 $14,499,616 $1,369,971 $15,869,586 103.2% Total 2011 2011 931 653 $16,417,671 $18,298,213 $1,465,185 $19,763,398 120.4% Total 2012 2012 921 624 $17,893,437 $16,281,473 $1,704,019 $17,985,493 100.5% 2010 - 2012 YTD Total 944 639 $49,687,764 $49,079,302 $4,539,175 $53,618,477 107.9% Subtotal By Plan Standard HMO 2010 553 389 $6,507,246 $6,080,461 $802,199 $6,882,660 105.8% 2011 535 410 $7,323,175 $9,941,978 $881,659 $10,823,637 147.8% 2012 555 418 $8,766,405 $7,745,095 $1,084,836 $8,829,932 100.7% Subtotal 548 406 $22,596,826 $23,767,534 $2,768,695 $26,536,229 117.4% Premium HMO 2010 142 95 $2,680,739 $3,534,647 $201,434 $3,736,082 139.4% 2011 131 88 $2,713,595 $3,908,197 $201,227 $4,109,423 151.4% 2012 117 67 $2,567,682 $3,410,842_ $199,374 $3,610,215 140.6% Subtotal 130 83 $7,962,015 $10,853,686 $602,035 $11,455,720 143.9% Standard PPO 2010 94 60 $1,726,841 $1,024,782 $129,935 $1,154,717 66.9% 2011 94 71 $2,109,172 $1,662,222 $154,078 $1,816,300 86.1% 2012 93 65 $2,248,543 $2,421,437 $175,057 $2,596,493 115.5% Subtotal 94 65 $6,084,557 $5,108,440 $459,070 $5,567,510 91.5% Premium PPO 2010 165 77 $3,965,001 $3,255,081 $199,085 $3,454,166 87.1% 2011 146 64 $3,708,009 $2,071,825 $186,102 $2,257,928 60.9% 2012 129 52 $3,629,160 $1,866,432 $190,544 $2,056,977 56.7% Subtotal 147 64 $11,302,170 $7,193,338 $575,732 $7,769,070 68.7% POS 2010 25 19 $496,830 $604,645 $37,317 $641,962 129.2% 2011 25 20 $563,719 $713,992 $42,119 $756,111 134.1% 2012 27 21 $681,648 $837,667 $54,208 $891,876 130.8% Subtotal 26 20 $1,742,197 1 $2,156,304 1 $133,6441 $2,289,948 1 131.4% Total By Enrollee Class Active 2010 628 440 $8,556,474 $8,525,513 $909,675 $9,435,188 110.3% 2011 593 450 $9,249,573 $11,426,088 $971,784 $12,397,872 134.0% 2012 584 426 $10,014,047 $8,991,239 $1,121,678 $10,112,918 101.0% Subtotal 601 439 $27,820,093 $28,942,840 $3,003,137 $31,945,978 114.8% Pre MC Retirees 2010 192 98 $3,325,313 $3,745,274 $240,829 $3,986,103 119.9% 2011 180 103 $3,446,707 $4,801,845 $256,758 $5,058,604 146.8% 2012 185 98 $3,750,798 $5,303,567 $305,073 $5,608,640 149.5% Subtotal 186 100 $10,522,818 $13,850,686 $802,660 $14,653,346 139.3% MC Retirees 2010 159 101 $3,494,870 $2,228,829 $219,467 $2,448,296 70.1% 2011 158 100 $3,721,391 $2,070,279 $236,643 $2,306,923 62.0% 20121 153 99 $4,128,592 $1,986,667 $277,267 $2,263,935 1 54.8% Subtotall 157 100 $11,344,853 1 $6,285,775 1 $733,378 1 $7,019,1 31 61.9%