HomeMy WebLinkAbout08/18/2015BAKERSFIELD
Staff:
Steven Teglia
Assistant City Manager
l. ROLL CALL
Committee Members:
Councilmember, Ken Weir - CI
Councilmember, Terry Maxwe
Vice Mayor, Harold Hanson
SPECIAL MEETING NOTICE
PERSONNEL COMMITTEE
of the City Council - City of Bakersfield
August 18, 2015
12:00 p.m.
City Hall North - Conference Room A
1600 Truxtun Avenue, First Floor
Bakersfield, California 93301
AGENDA
2. ADOPT OCTOBER 1, 2014 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. NEW BUSINESS
A. Discussion regarding 2016 Health Care Plan Renewals - Teglia
5. COMMITTEE COMMENTS
6. ADJOURNMENT
�
BAKERSFIELD
/�/ st�� r �
Staff: Steven Teglia
Assistant City Manager
Committee M�
Ken Weir, Cha
Terry Maxwell
Harold Hansor
SPECIAL MEETING OF THE PERSONNEL COMMITTEE
Wednesday, October 1, 2014
12:00 p.m.
City Hall North - Conference Room A
1600 Truxtun Avenue
Bakersfield, CA 93301
AGENDA SUMMARY REPORT
Meeting called to order at 12:05 p.m.
1. ROLL CALL
Committee members:
Councilmember Ken Weir, Chair
Councilmember Terry Maxwell
Councilmember Harold Hanson
City staff: Alan Tandy, City Manager
Steven Teglia, Assistant to the City Manager
Chris Huot, Assistant to the City Manager
Chris Gerry, Administrative Analyst III - City Manag
Caleb Blaschke, Management Asst. - City Manag
Nelson Smith, Finance Director
Virginia Gennaro, City Attorney
Andrew Heglund, Deputy City Attorney
Christi Tenter, Human Resources Manager
Ginger Rubin, Benefits Technician
Retired employees Florn Core, Fred Baugher, Bill Descary, Margaret Ui
--- -i n � ♦ r�r_ r� _.tt� r�i- - - - -- -
2. ADOPTION OF AUGUST 15, 2014 AGENDA SUMMARY REPORT
The Report was adopted as submitted.
3. PUBLIC STATEMENTS
There were no public statements.
4. NEW BUSINESS
A. Continued Discussion reqardinq 2015 Health Care Plan Renewals
Assistant to the City Manager Teglia reported that a recent mee
Insurance Committee resulted in a recommendation to move forv
changes that had been proposed. Appreciation of their efforts was E
Tom Morrison with Segal Company distributed information to the Cc
provided an overview. If no modifications to the original pro�
insurance companies for the different plans are made, there will be
$566,013, as the City had only budgeted an additional $714,667 anc
would have totaled $1,280,680. The plan changes agreed to by 1
Committee reduce the City's contribution overall to $988,840, ther�
the increase in the City's contribution to $274,173.
The changes are as follows:
Plan
• Anthem Blue Cross HMO
Increase/Decrease
10.7�o I ncrease
• Anthem Blue Cross PPO
Active Employees 5.0� Increase
Retirees 22.98% Increase
• Anthem Blue Cross Senior Secure
• Kaiser HMO
Active Employees
Retirees/Under 65
• Kaiser High Deductible
Active Employees
Retirees/Under 65
• Kaiser HMO Senior Advantage
4.6�o Increase
9.5� Increase
9.5� Increase
5.0� Increase
15.b�o Increase
1.2�o Increase
The rates for the MetLife Dental plan will increase by 7.2�. There arE
to the Pacific Union Dental, Employee Assistance (EAP), Medical
(MES), Section 125 Flexible Benefits, Life Insurance and Long-Term C
The five-year average for each medical plan is as follows:
• Kaiser HMO 1.7�
• Anthem HMO 6.3�
• Anthem PPO 4.6�
• Kaiser DHMO 4.3�
Committee Chair Weir asked about potential changes as a
Affordable Care Act (ACA).
Mr. Morrison said that there are trends to eliminate long-term c
physicians and hospitals; for physicians to relocate their offices to hos
resulting in a dual billing for the physician and the hospital; and loc
referring patients to medical facilities in Southern California. The 1
healthcare and the ability to predict rate actions is uncertain.
Assistant to the City Manager Teglia Steve reported that the Insuranc
will continue to meet. Discussions will include the topic of alternativE
strategies for how the City provides compensation for health car
employees.
Committee member Maxwell stated that employees may migrate
cost HMO in the future. He noted that some private companies c
option, and that is an HMO.
Mr. Morrison stated that the Insurance Committee will include that i
their discussions. Another option will be to perhaps put a limit on the
is willing to pay for each employee; and if the plan costs more than t
dollar amount, the employee pays the difference. The Commi
consider a possibility where the City's budgeted increase for medicc
be considered the maximum amount to be paid out; and if a plc
than what was budgeted, the employee will pay the difference.
Committee member Maxwell asked for the information, broken c
group. Employees of a younger age generally do not require rr
care, and therefore choose the lower cost plans. He is grateful thai
offer good plans, but recognizes that the organization must consider
Mr. Morrison agreed and noted that as public employers are filli
vacancies, solutions may be to offer a cafeteria benefit or offer
amount that the employee can use to purchase health care.
City Manager Tandy noted that any change to the current systei
Committee member Hanson made a motion to forward the 2015 pla
the full Council for review and approval. The motion was unanimousl
3. COMMITTEE COMMENTS
Committee member Maxwell apologized for arriving late to the meetinc
given a proclamation on behalf of the Mayor.
Committee Chair Weir thanked Mr. Morrison and the Segal Company, 1
Committee, and staff for their efforts in reaching a reasonable conclusioi
rates and opening up talks for future changes.
4. ADJOURNMENT
The meeting was adjourned at 12:35 p.m.
The following presentation
was distributed
at the
Special Meeting of the
Planning and Development Committ
on
Tuesday, August 18, 2015
City of Bakersfield
Tom Morrison
Johnn y Wu
August 18, 2015
Table of Contents
> Executive Summary
>2016 Plan Renewals
> Anthem PPO Loss Ratio History
>Anthem PPO Large Claims
> Anthem PPO Dashboard Reports
> Potential Plan Modifications
> Results of Request for Information Process
> Wellness Initiatives
>Appendix
• Medical Rate Increase History
nn�,�;,,,,i Cv�r�llrv��r�♦ �,., oi
Executive Summary
> The Anthem HMO and PPO plan renewals are significantly higher than the hist
due to:
• Higher number of large claims that fell below the stop loss threshold
• Increased utilization of high cost specialty medications
• Health condition (risk scores) of PPO participants compared to Anthem data
customers
• The Kaiser HMO increase is less than 4%
• The overall increase for active benefits is 13.3% and
• 13.4% for retiree plans
> Segal has performed a market check of other carriers and other plan designs tl
potentially reduce the increase through a Request for Information, (RFI). Resu
presented under separate cover
> Benefit alternatives are included in this report
• Reduction to benefits in the HMO and PPO Plans do not reduce premiums c�
the additional financial risk transferred to employees and retirees
• An alternative employee contribution scenario (75%/25%) is also presented
greater savings and lesser impact to the employees.
2016 Plan Renew als
2016 Active Total Cost Summary
Active
Current 2016 P�
Plan Enrollment Annual Premium Annual Premium Annual Increase
nthem
HMO 276 $3,589,600 $3,912,700 $323,100
PPO 700 $9,879,500 $11,954,100 $2,074,600
Sub Total 976 $13,469,100 $15,866,800 $2,397,700
Kaiser
HMO 431 $4,347,500 $4,504,000 $156,500
HDHP 3 $17,330 $17,960 $630
Sub Total 434 $4,364,830 $4,521,960 $157,130
MetLife Dental
PPO 901 $1,208,600 $1,241,300 $32,700
PUD Dental
Im eria11000 604 $351,800 $365,800 $14,000
Na a 800 4 $1,940 $2,020 $80
Sub Total 608 $353,740 $367,820 $14,080
MES Vision�2�
HMO
706 $63,300 $63,300 $0
PPO 710 $91,000 $91,000 $0
Sub Total 1,416 $154,300 $154,300 $0
Total Medical, Dental, Vision $19,550,570 $22,152,180 $2,601,610
80% Cit Contribution for 2016 $15 640 456 $17 721 744 $2 081 288
2016 Retiree Total Cost Summary
Retiree
Current 2016
Plan Enrollment Annual Premium Annual Premium Annual Increase
nthem
PPO 421 $6,614,427 $7,542,464 $928,037
Secure Horizon 15 $107,762 $125,777 $18,014
Sub Total 436 $6,722,190 $7,668,241 $946,052
Kaiser
HMO 6 $79,034 $90,889 $11,855
HDHP 0 $0 $0 $0
Senior Advanta e 113 $286,984 $287,472 $488
Sub Total 119 $366,018 $378,361 $12,343
PUD Dental
Trinit 28 $4,743 $4,933 $190
Re enc 169 $52,407 $54,502 $2,096
Sub Total 197 $57,149 $59,435 $2,286
MES Vision���
HMO 6 $315 $315 $0
2016 Anthem Monthly Rate Summary
em Blue Cross HMO
Active (Monthly)
Single
2-Party
Familv
em Blue Cross PPO
Percentage Co
Increase / 2016 City 2016 Employee I�
Enrollment 2015 Rate 2016 Rate (Decrease) Contribution Contribution (D
72
51
153
Enrollment
Active (Monthly)
Single 169
2-Party 142
Family 389
Retiree (Monthly)
Single 264
2-Party 146
Famil 11
hem Blue Cross Senior Secure
$479.35
$963.41
� 1.408.42
2015 Rate
$506.78
$1,015.30
$1, 525.64
$935.86
$1,871.60
$2.807.42
$522.47
$1,050.12
$1,535.19
2016 Rate
$613.19
$1,228.50
$1, 846. 02
$1,067.17
$2,134.19
$3.201.28
9.00%
9.00%
9.00%
Percentage
Increase /
(Decrease)
21.00%
21.00%
21.00%
14.03°/a
14.03°/a
14.03%
Dnrrnr�t�rvn
$417.98 $104.49
$840.10 $210.02
�1,228.15 $307.04
co
2016 City 2016 Employee Ir
Contribution Contribution �
$490.55 $122.64
$982.80 $245.70 �
$1,476.82 $369.20 �
Varies Varies
r.,
2016 Kaiser Monthly Rate Summary
iser HMO
Active (Monthly
Single
2-Party
Family
Under 65 Retiree (Monthly
Single
2-Party
Familv
Kaiser Deductible
Enrollment I 2015 Rate
125
82
224
5
1
0
$392.55
$785.10
$1,110.92
$940.88
$1,881.76
$2,662.69
Enrollment I 2015 Rate
2016 Rate
$406.68
$813.37
$1,150.91
$1,082.01
$2,164.02
$3,062.09
Percentage
Increase /
(Decreasel
3.6%
3.6%
3.6%
15.0%
15.0%
15.0%
Percentage
Increase /
2016 Rate (Decrease)
2016 City
Contribution
$325.34
$650.70
$920.73
Varies
Con
2016 Employee In�
Contribution De
$81.34 $
$162.67 $
$230.18 $
Varies �,
Cor
2016 City 2016 Employee In
Contribution Contribution (Di
Active (Monthly)
Single 2 $299.03 $309.79 3.6% $247.83 $61.96
2-Party 0 $598.06 $619.58 3.6% $495.66 $123.92 �
Family 1 $846.25 $876.71 3.6% $701.37 $175.34 �
Under 65 Retiree (Monthly)
Single 0 $814.09 $936.20 15.0% Varies Varies �
2-Party 0 $1,628.19 $1,872.42 15.0%
Famil 0 $2,303.88 $2,649.46 15.0%
Kaiser HMO Senior Advantaqe
2016 Dental Monthly Rate Summary
cific Union Dental Monthly Summa
'mperial 1000 - Active
Single
2-Party
Family
Vapa 800 - Active
Single
2-Party
Enrollment
189
136
279
��
2015 Rate
$22.81
$45.49
$67.44
$20.41
$40.70
fic Union Dental Optional Plan - Monthly Summ
Trinity Dental - Retiree
Single
2-Party
Family
Regency Dental - Retiree
Single
Enrollmeni
17
11
0
78
2015 Rate
$11.42
$18.28
$28.03
$19.23
2016 Rate
$23.72
$47.31
$70.14
$21.23
$42.33
2016 Rate
$11.88
$19.01
$29.15
$20.00
Percentage Con
Increase / 2016 City 2016 Employee In�
Decrease Contribution Contribution De
4.0% $18.98 $4.74 �
4.0% $37.85 $9.46 �
4.0% $56.11 $14.03 �
4.0% $16.98 $4.25 �
4.0% $33.86 $8.47 �
Percentage
Increase /
4.0%
4.0%
4.0%
4.0%
Con
2016 City 2016 Employee In�
�ontribution Contribution (De
Varies
Varies
2016 Dental Monthly Rate Summary
etLife Dental PPO
Active (Monthly)
Single
2-Party
Familv
Enrollment
239
204
, .
2015 Rate
$45.20
$92.94
154.93
2016 Rate
$46.42
$95.45
$159.11
Percentage
Increase /
(Decreasel
2.7%
2.7%
2.7
conti
2016 City 2016 Employee Inci
Contribution Contribution (Dec
$37.14
$76.36
127.29
$9.28
$19.09
31.82
�, �
�,
2016 EAP, and Vision Rate Summary
(Composite Rate) - All Employees
Active (Monthl
Percentage 2016 Con
Increase / 2016 City Employee Inc
Enrollment 2015 Rate 2016 Rate Decrease Contribution Contribution De
1436 $1.66 $1.71 3.0% 1.71 0.00 :
edical Eye Services (MES) Monthly Summary - Vision
MO
Active and Retiree*
Single
2-Party
Family
Active
Enrollment I 2015 Rate I 2016 Rate
211
165
336
$3.75
$7.50
$9.75
$3.75
$7.50
$9.75
Single 190 $5.25 $5.25
2-Party 176 $10.55 $10.55
Famil 344 13.75 13.75
*Retiree contribution varies based on the years of service
Percentage 2016 Con
Increase / 2016 City Employee Inc
(Decrease) Contribution Contribution (De
0.0%
0.0%
0.0%
0.0%
0.0%
$3.00
$6.00
$7.80
�� � 1
;,; ,.
$0.75
$1.50
$1.95
$1.05
$2.11
2016 Flexible Benefits, Life and LTD Rate Summary
ealthComp - Section 125 Flexible Benefits (per participant per month)
Enrollment
Heal th Co m
NG - Life Insurance (Rate per $1,000
Enrollment
Basic Life
AD&D
num - Long Term Disability (Rate per $100)
Enrollment
Un um
2015 Rate
2015 Rate
$0.102
$0.02
2015 Rate
$0.55
2016 Rate
2016 Rate
$0.102
$0.02
2016 Rate
Pendina
Percentag
Chanae
Percentag�
Change
0.0%
0.0%
Percentag
Chanae
Anthem PPO Claim Experience
Active PPO Plan Ratio of Claims to Premium
(Excludes Administration Expense)
Zoo.oro -
Zso.oi
160.0%
140.0 %
120.0%
100.0 %
80.0%
60.0%
40.0% _�. ,- , � � , _-,. �- -,-�- -r-,- �
N N N N N N N N N M M M M M M M M M M ('�'I M � � � � � � � � d' � �
�-I �-I c� �-I c--I �-I r-I r-I c-I r-I �-I c-i �-I r-I c-�I r-I �-I �-I r-I r-I r-I r-I r-I �—I c-I r-I i—I r-I rl r-I r-I r-I
i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i
Q� C hA Q }' > U C � L L- �^ C t]A Q }' > U C � i '- � C 4A Q. }' >
_ � � � N � O � co N � � � � � � N � O 41 co N � � � � � � N � O
Retiree PPO Plan Ratio of Claims to Premium
(Excludes Administration Expense)
Zoo.oro -
Zso.oi
160.0%
140.0 %
120.0%
100.0 %
80.0%
60.0%
40.0% _! . � � _ � _ � � ��, �,- ��- ;�� . , �
N N N N N N N N N M M M M M M M M M M ('�'I M � � � � � � � � d' � �
�-I �-I c� �-I c--I �-I r-I r-I c-I r-I �-I c-i �-I r-I c-�I r-I �-I �-I r-I r-I r-I r-I r-I �—I c-I r-I i—I r-I rl r-I r-I r-I
i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i
Q� C hA Q }' > U C � L L- �^ C t]A Q }' > U C � i '- � C 4A Q. }' >
_ � � � N � O � co N � � � � � � N � O 41 co N � � � � � � N � O
PPO Large Claims in Excess of $25,000
Active PPO - Large Claims in Excess of $25,000
04/2014 to 03/2015
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
$
Amount Paid
315, 850.81
289,592.83
211,437.52
186,787.28
152,223.93
125,551.85
113, 700.43
110, 790.98
104,746.63
102,881.43
100,264.67
98,074.93
85,784.55
77,552.57
74,364.76
59,746.71
58,432.12
56, 910.29
54,795.00
52,004.91
49,606.82
48,905.31
46, 319.18
46,067.73
45,979.56
44,390.00
40,165.19
40,131.41
39,923.51
39,422.85
38,500.92
37,771.80
37, 373.12
36,027.55
34,593.91
34,253.10
33,837.83
32,542.50
31,486.59
30,045.19
29,694.50
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125, 000.00
125, 000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125, 000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125, 000.00
125,000.00
125,000.00
Amount Pooled
$ 190,850.81
164,592.83
86,437.52
61,787.28
27,223.93
551.85
Diag Code
5070
V5811
V5811
5762
5849
V3101
4271
V5811
7248
99932
V3101
193
7851
V580
82009
V3000
71515
7384
29900
7483
6826
52689
99683
1749
486
3570
56211
65101
72402
65421
71536
7244
27801
7220
25060
71536
490
5921
V580
55320
41401
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
I C D-0
ICD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
ICD-0
I C D-0
ICD-0
ICD-0
ICD-0
I CD-0
I CD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
Pneumonitis due to inhalation of food or vomitus
Encounter for antineoplastic chemotherapy
Encounter for antineoplastic chemotherapy
Obstruction of bile duct
Acute kidney failure, unspecified
Twin, mate liveborn, born in hospital, delivered b
Paroxysmal ventricular tachycardia
Encounter for antineoplastic chemotherapy
Other symptoms referable to back
Bloodstream infection due to central venous
Twin, mate liveborn, born in hospital, delivered b
Malignant neoplasm of thyroid gland
Palpitations
Encounter for radiotherapy
Other transcervical fracture of femur, closed
Single liveborn, born in hosp, delivered without c
Osteoarthritis, localized, primary pelvic region/thigh
Acquired spondylolisthesis
Infantile autism current/active
Other congenital anomalies of larynx, trachea, and bronch
Cellulitis and abscess of leg, except foot
Other specified diseases of the jaws
Complications of heart transplant
Malignant neoplasm of breast (female), unspecified
Pneumonia, organism unspecified
Acute infective polyneuritis
Diverticulitis of colon
Twin pregnancy delivered with/without mention antepartun
Spinal stenosis, lumbar region, without neurogenic claudic
Previous cesarean section complicating pregnancy deliver
Osteoarthritis, localized, not specified primary or secondar
Thoracic or lumbosacral neuritis or radiculitis, unspecified
Morbid obesity
Cervical disc displacement
Diabetes with neurological manifestations, type ii or unspe
Osteoarthritis, localized, not specified primary or secondar
Bronchitis, not specified as acute or chronic
Calculus of ureter
Encounter for radiotherapy
Ventral hernia nos
Coronary atherosclerosis of native coronary vessel
Active PPO - Large Claims in Excess of $25,000
04/2013 to 03/2014
Rank
1 $
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Amount Paid
522,795.17
477,984.08
465,799.18
444,750.89
177,502.84
164,413.69
148,974.39
130,282.62
97,549.67
94,089.23
88,289.86
84,391.67
83,633.73
79,146.91
69,098.73
55,480.99
50,040.87
49,489.12
48,788.38
48,560.00
45,541.11
43,912.72
39,029.02
38,572.68
38,121.73
37,318.29
35,610.46
32,611.67
32,365.63
31,007.78
29,878.53
28,023.98
27,268.02
26,665.59
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
Amount Pooled
$ 397,795.17
352,984.08
340,799.18
319,750.89
52, 502.84
39,413.69
23,974.39
5,282.62
Diag Code
99749
5845
51884
5168
V3001
5758
1550
72281
99669
1749
7140
V5811
53460
V3101
3570
V3100
2252
185
V3001
V3100
2148
7100
2148
5989
71535
5921
1748
486
42731
71596
5716
65421
64251
2521
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
I C D-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
Other digestive system complications
Acute kidney failure with lesion of tubular necrosis
Acute and chronic respiratory failure
Other specified alveolar and parietoalveolar pneumc
Single liveborn, born in hospital, delivered by c-
Other specified disorders of gallbladder
Malignant neoplasm of liver, primary
Postlaminectomy syndrome of cervical region
Infection and inflammatory reaction due to other inte
Malignant neoplasm of breast (female), unspecified
Rheumatoid arthritis
Encounter for antineoplastic chemotherapy
Chronic/unspecified gastrojejunal ulcer with hemorrl-
Twin, mate liveborn, born in hospital, delivered b
Acute infective polyneuritis
Twin, mate liveborn, born in hosp, delivered witho
Benign neoplasm of cerebral meninges
Malignant neoplasm of prostate
Single liveborn, born in hospital, delivered by c-
Twin, mate liveborn, born in hosp, delivered witho
Lipoma of other specified sites
Systemic lupus erythematosus
Lipoma of other specified sites
Urethral stricture, unspecified
Osteoarthritis, localized, not specified primary or sec
Calculus of ureter
Malignant neoplasm of other specified sites of femal
Pneumonia, organism unspecified
Atrial fibrillation
Osteoarthritis unspecified whether generalized or loc
Biliary cirrhosis
Previous cesarean section complicating pregnancy c
Severe pre-eclampsia delivered with/without mentior
Hypoparathyroidism
Retiree PPO - Large Claims in Excess of $25,000
04/2014 to 03/2015
G�i17
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Totals
$
$
Amount Paid
609,571.40
453,392.69
415,588.23
151,867.99
137,828.57
136,969.95
120,714.86
111,432.76
107,920.50
99,021.94
92,661.62
62,976.85
59,141.60
55,931.56
49,024.88
47,318.66
46,507.65
37,476.66
34,892.72
34,089.87
32,596.86
31,682.74
31,141.93
30,448.51
28,165.59
25,167.99
3,043,534.58
Pooling Point
$ 125,000.00 $
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
�
Amount Pooled
484,571.40
328,392.69
290,588.23
26,867.99
12,828.57
11,969.95
1,155, 219.00
Diag Code
V5811
V5811
4659
72889
28521
7140
25042
1125
49391
55221
2250
73028
41519
185
72402
3842
7231
51881
71536
7211
41401
27651
53909
71516
1961
71536
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
Diagnostic Description
Encounter for antineoplastic chemotherapy
Encounter for antineoplastic chemotherapy
Acute upper respiratory infections of unspecified :
Other disorder of muscle, ligament, and fascia
Anemia in chronic kidney disease
Rheumatoid arthritis
Diabetes with renal manifestations, type ii or unsK
Disseminated candidiasis
Asthma, unspecified with status asthmaticus
Incisional hernia with obstruction
Benign neoplasm of brain
Unspecified osteomyelitis other specified site
Acute pulmonary heart disease - other
Malignant neoplasm of prostate
Spinal stenosis, lumbar region, without neurogeni
Septicemia due to escherichia coli (e. coli)
Cervicalgia
Respiratory failure
Osteoarthritis, localized, not specified primary or �
Cervical spondylosis with myelopathy
Coronary atherosclerosis of native coronary vesse
Dehydration
Other complications of gastric band procedure
Osteoarthritis, localized, primary lower leg
Secondary malignant neoplasm lymph nodes, intr�
Osteoarthritis, localized, not specified primary or �
Retiree PPO - Large Claims in Excess of $25,000
04/2013 to 03/2014
Rank
1 $
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Amount Paid
651,197.05
520, 289.51
431,732.61
231,111.86
153,846.26
101,704.26
96,510.57
90,494.13
82,197.96
80,033.91
78,480.21
67,176.85
64,731.48
64,483.49
58,334.19
56,107.18
55,327.50
48,523.53
46,372.58
41,848.89
40,140.20
38,505.75
35,969.57
32,071.02
31,680.33
29,699.80
29,082.24
28,404.97
28,232.72
27,355.40
26,956.73
26,219.24
26,152.70
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
Amount Pooled
$ 526,197.05
395,289.51
306,732.61
106,111.86
28,846.26
Diag Code
20400
1539
53140
2252
V5811
55221
99709
7140
72252
71596
40391
5363
55321
51889
87200
72210
V560
41401
6825
71535
41071
7140
57410
72252
5921
71596
7213
1748
71536
7350
72271
72769
185
ICD-09
I CD-09
I CD-09
I CD-09
ICD-09
ICD-09
ICD-09
I CD-09
ICD-09
ICD-09
ICD-09
I CD-09
ICD-09
ICD-09
I CD-09
I CD-09
I CD-09
I CD-09
ICD-09
I CD-09
I CD-09
ICD-09
ICD-09
I CD-09
I CD-09
I CD-09
ICD-09
I CD-09
ICD-09
I CD-09
ICD-09
I CD-09
I CD-09
Diagnostic Description
Lymphoid leukemia, acute, without mention of having
Malignant neoplasm of colon, unspecified
Chronic/unspecified gastric ulcer, with hemorrhage wi
Benign neoplasm of cerebral meninges
Encounter for antineoplastic chemotherapy
Incisional hernia with obstruction
Other nervous system complications
Rheumatoid arthritis
Degeneration of lumbar or lumbosacral intervertebral
Osteoarthritis unspecified whether generalized or locz
Hypertensive kidney disease, unspecified, with chroni�
Gastroparesis
Incisional hernia without mention of obstruction or ga
Other diseases of lung, not elsewhere classified
Open wound of external ear, unspecified site, uncomp
Displacement of lumbar intervertebral disc without m�
Encounter for extracorporeal dialysis
Coronary atherosclerosis of native coronary vessel
Cellulitis and abscess of buttock
Osteoarthritis, localized, not specified primary or seco
Acute myocardial infarction, subendocardial infarctior
Rheumatoid arthritis
Calculus of gallbladder with other cholecystitis withou
Degeneration of lumbar or lumbosacral intervertebral
Calculus of ureter
Osteoarthritis unspecified whether generalized or locz
Lumbosacral spondylosis without myelopathy
Malignant neoplasm of other specified sites of female
Osteoarthritis, localized, not specified primary or seco
Hallux valgus (acquired)
Intervertebral disc disorder with myelopathy, cervical
Nontraumatic rupture of other tendon
Malignant neoplasm of prostate
Anthem PPO Dashboard Reports
PPO Clinical Dashboard — Health Risk Index — Active a
Reti ree
Health Risk Index
The Risk Index is based on Incurred and Paid Claims
_ �' F' '- • - � • �_,• �,� '
Group 1.66 1.64 1.2%
Commercial Benchmark 1.00 1.00 0.0%
Variance to Commercial Benchmark 65.7% 63.7%
The Health Risk Index is a diagnostic and age/sex adjusted projection of the population's likely level of risk for the period indicated. The Benchmark is prese
for comparison The comparison population reflects the healthcare experience of employees and dependents from a large national dataset. A score higher
1.0 indicates a higher level of risk as compared to the national dataset.
Financial and Utilization Dashboard - PPO Paid Amoui
Setting - Active and Retiree
����rn y ,� � Current Period
111 �ri7 Prior Period 1
B1i���rOSS - Prior Period 2
�
a
�
a
�
�
0
�
Q
�
.�
n.
:1
.1�
140
120
100
.� .�
.�
.�
20
0
■
■
Financial and Utilization Dashboard - PPO Pharmacy H
Pharmacy Utilization — Top Medications by Cost - Active and Retiree
HARVONI
ENBREL
CRESTOR
NEXIUM
ADVAIR DISKUS
ANDROGEL
HUMIRA
VALSARTAN
OXYCONTIN
COPAXONE
Top Ten Subtotal
All Other Drugs
otal
$191,892
$154,209
$136,878
$110,967
$60,868
$50,760
$46, 595
$45,028
$42,775
$39,762
$879,732
$3,108,769
$3,988,501
�
6
38
537
308
163
97
16
1
�•'�/
:
1,425
35,652
37,077
,
$31,982
$4,058
$255
$360
$373
$523
$2,912
$231
$750
$4,970
$617
$87
$108
Top Five Target Program Conditions - PPO - Active ar
Top Five Target Program Conditions Compared to Benchmark (Based on Paid Amount)
Prevalence per 1000 for Target Program Conditions
160.0
140.0
120.0
100.0
:� /
.1 1'
�11
20.0
��
Cancer Maternity Low Back Pain Diabetes Coronary ArtE
Top Five Target Program Conditions - PPO - Active ar
Top Five Target Program Conditions Compared to Benchmark (Based on Paid Amount)
Percent of Paid Amount for Target Program Conditions
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Potential Plan Modifications
Anthem HMO Plan Modifications
Deductible
Single
Family
nual Out-of-Pocket Maximum
Single
Familv
Hospital
Inpatient
Outpatient
Primary Care Visits
Specialty Care Visits
Diagnostic X-Ray and Lab
Preventive Care
Durable Medical Equipment
Emergency Room
Prescription Drug Retail
Tier 1
Tier 2
Tier 3
T�...- A
Current HMO
$0
$0
$3,000
$6,000
Option 1
(Change the Outpatient
to 20% Coinsurance)
$0
$0
$3,000
$6,000
$250/day, up to 3 day max $250/day, up to 3 day max
$125/admit 20%
$20 $20
$40 $40
$0 $0
$0 $0
50% 50%
$150 (waived if admitted) $150 (waived if admitted)
$10
$25
$45
�noi . ,.. +„ Q � �n
$10
$25
$45
�noi ,.., +„ Q�cn
Option 2
(Change the Rx to
Exclusion Formulary)
$0
$0
$3,000
$6,000
$250/day, up to 3 day max
$125/admit
$20
$40
$0
$0
50%
$150 (waived if admitted)
$10
$25
30% up to $150
(D
(Inpa
0°�
0°�
150 �
PPO Active Plan Modifications
Current Plan Design Modifications Med Adjust Rx Adjust Med/R�
In-Network Out-of-Pocket $2,000/$6,000 $2,500/$7,500 -0.44% -
Maximum (Single/Family) -�'`
In-Network Out-of-Pocket $2,000/$6,000 $3,000/$9,000 -0.82% - -O.F
Maximum (Single/Family)
In-Network Out-of-Pocket $2,000/$6,000 $4,000/$12,000 -1.32% - -1.(
Maximum (Single/Family)
In-network Co-insurance 90% 80% -2.44% - -1.�
Medical Deductible (single/family) $750/$2,250 $1,000/$3,000 -2.99% - -2.�
Emergency copay $100 (waived if admitted) $250 (waived if admitted) -0.36% - -0.�
Retail: $10/$20 Exclusion Formulary
Prescription Drug Mail: $20/$30 Retail: $10/$25/30% (Up to $150) - -18.41 % -3.4
Mail: $10/$50/30% (Up to $300)
PPO Retiree Plan Modifications
In-Network Out-of-Pocket
Maximum (Single/Family)
In-Network Out-of-Pocket
Maximum (Single/Family)
In-Network Out-of-Pocket
Maximum (Single/Family)
In-network Co-insurance
Medical Deductible
(single/family)
Emergency copay
Prescription Drug
urrent Plan Design
$2,000/$6,000
$2,000/$6,000
$2,000/$6,000
90%
$750/$2,250
$100 (waived if admitted)
Retail: $10/$20
Mail: $20/$30
Modifications
$2,500/$7,500
$3,000/$9,000
$4,000/$12,000
80%
$1,000/$3,000
$250 (waived if admitted)
Exclusion Formulary
Retail: $10/$25/20% (Up to $150)
Mail: $10/$50/20% (Up to $300)
Med Adjust Rx Adjust Med/Rx �
-0.44% - -0.25'
-0.82% - -0.47'
-1.32% - -0.76'
-2.44% - -1.41'
-2.99% - -1.73'
-0.36% - -0.21 '
- I -18.6% I -7.8°,
Health Coverage Terms and Definitions
> Deductible - The amount you owe for health care services your health insurancE
covers before your health insurance or plan begins to pay. For example, if your c
$1000, your plan won't pay anything until you've met your $1000 deductible for c
care services subject to the deductible. The deductible may not apply to all servic
> Out-of-Pocket Limit - The most you pay during a policy period (usually a year) k
health insurance or plan begins to pay 100% of the allowed amount. This limit nE
your premium, balance-billed charges or health care your health insurance or pl�
cover. Some health insurance or plans don't count all of your co-payments, dedu
insurance payments, out-of-network payments or other expenses toward this lim
> Co-insurance - Your share of the costs of a covered health care service, calcul�
percent (for example, 20%) of the allowed amount for the service. You pay co-in;
any deductibles you owe. For example, if the health insurance or plan's allowed ;
office visit is $100 and you've met your deductible, your co-insurance payment o�
be $20. The health insurance or plan pays the rest of the allowed amount.
> Co-payment - A fixed amount (for example, $15) you pay for a covered health c
usually when you receive the service. The amount can vary by the type of coverE
service.
Insurance Coverage Example
How You and Your Insurer Share Costs - Example
Jane's Plan Deductibie: $1,500 Co-insurance: 20°� Out-of-Pocket Limit: $5,000
January 1" D�'
Beginning of Coverage End of Cover',
Period
,
. � .
j:nic ��:�ti�: 1 i,.�r pla�i }�;��, .
I00% 0°/a
Jane hasn't reached her
$1,500 deductible yet
( i,•, ..�..��, ,I;�����,'� ��;�:, .��,�, ,,f �1�, � ,:�>.
Office visit costs: � 1.;�
Janc pays: 5 T? �
Hcr plan pays: �(�
m�
costs
�
�
T
. � .
J:,n�• ��.��r; I I��r ��1:,,, }�:�•,�:
?0% �0%
�Jane reaches her $1,500
deductible, co-insurance begins
�:i�!,� 1::.. .,, i: ., ,io�ror s�•�•��r:il tini� �. .�:i,l
t�.�i�l 51,SUU ui �otal. Her plau },,�r, ,;,,iu��
, t i I��� cosrs fon c�r nexe visir.
Officc vuit costs: $75
1anc pays: ?0°�, of ti75 ti 1;
Hcr plan pays: �i )"�, �, t ti? � ti i�i �
m�
costs
�
�
�
�
. .
J.�n�� },.a•,�•; 1 I��r }�l,�n ��:it•s
0% I00%
Jane reaches her $5,000
out-of-pocket limit
I.�i,�• h:�� s��,�i, tl�,• ,io;ro� �>t�t,•i� „i,,3
�'�.UUO ui total. Hrr plan pays c}ir
�;,;r of h� r covc:red heal�h care ser,
I�>, thc res� oI tlic }�car.
��ffice visit costs: �200
Jane pays: ti(�
Her plan pays: � �+'t �
Active PPO Employee Contribution Change Compared
Potential Exposure of Changing Benefits
20% to 25% Employee
Contribution Annual Maximum PPO BE
•-'�
Two-Pa
Increase
re-tax
367.91 $
737.10
Change Expos�
(post-tax)
2,0OO.00
4,0OO.00
Familv 1,107.61 6,0OO.00
Active HMO Employee Contribution Change Comparec
Potential Exposure of Changing Benefits
20% to 25% Employee
Contribution Annual
Increase
Sinale
Two-Pa
Familv*
*Assuming family of 3 people
** $750 deductible plan
re-tax
$ 313.48
630.07
921.11
Maximum Ber
Change Expo:
(aost-tax
�,
1.
2.,
w
Wellness
General Principles
�
� �,
� � �
r.
_..
a.
�
\
a • �=
���
. �
_
,� _ �
iI
� ��� � ���
`�'�� " � � p�' j
-
f�i������l:�r�i��i ��l
.�
_ .��
Wellness �''�
� General Principles
�-_
q
11�"'
�
�
�_
_� _ _ ��
In other words, wellness programs:
> Keep healthy people healthy
> Help unhealthy people change their behavior to be healthier
> Enable people to be more productive and satisfied in their
work and home life
�
�� t
��.
;�;.,. .
� .�.. ` '
� ``' �l
i�„ .1�A~
� _.., �, ��
�: :�` ���_
. �� ��
�-
0
_ �y,
�
�
\ ��
E��1►rr�rn��
�
_ ��
� =:n4m�;..,�� - �
-a�k.i�.•ns�,j'^�`.�fn.,� -
Avoidable and Unnecessary Medical Care
Contributes Substantially to Healthcare System Costs
e
> Behavioral $493 bi I I ion (18.9%)
> Clinical $312 billion (11.9%)
>Operational $134 billion (5.1 %)
Total Avoidable Cost: $939 billi
Total Spent on Care: $2.6 trilli�
!�ai���a���•�■��=�:�r���«t:�r=
35.9% of
Obesityl
Overweight
��
�III� I
BIIIIOn
�
Smoking
�r ��
Billion
Non-adherence
to d ru g
regimens
�
�
Billion
Alcohol
abuse
�
�
�
Billion
con
with
Over 50% of waste and unnecessarv healthcare
p r�
�
�
.
0 .
Moving Toward Behavioral Changes
Key Behaviors That Can Be Altered
Excess Alcohol
Consumption
Poor Standard-of-
Care Compliance
Insufficient Sleep
Diabetes
CAD
Hypertension
�
Back Pain
Obesity
Cancer
Poor Diet
�
�
Physical
Inactivity
Asthma
Arthritis
Allergies
��,
�
Smoking
Poor StrE
,� Managem
� Lack of HE
Screenii
Sinusitis
Depression
CHF
COPD
CKD
High C
A Proven Model
GET THEM INTO
THE PROGRAM
• Health Risk
Appraisals
• Biometric
Screenings
• Self-Referrals
• Predictive
Modeling
• Medical and
Pharmacy
data triggers
KEEP THEM IN THE PROGRAM
Health Coaching Modules
Tools and wearables
Health information content
Promote personal health and well-being
Phone based / in-person
Health education
Motivation
Access to providers
Encourage compliance with medication
adherence
Certain OTC supplies made available free:
e.g., Nicotine patches, gum, lozenges
Monitor medication adherence
Offer incentives (or disincentives) to
participate in:
H RAs
Start Measuring
Sample Wellness Performance Targets
CLINICAL MEASURES
Criteria: Clinical Goals
1. Personal Health Assessment Survey Completion rate
2. Percent workforce with one annual primary care visit
3. Smoking Cessation
�
�
.
Engagement rates
Quit rates
4. Reduction in BMI for targeted obese participants
5. Cancer Screenings
•% of targeted enrollees obtaining breast cancer
screening
•% of targeted enrollees obtaining colonoscopy
6. Well Baby Care Activity
• Patient(s) attend well baby care education session.
• At risk patients assigned personal coach and
engaged in prenatal program.
Targeted Standard
80% of workforce
completed PHA
65% of workforce
No less than 25% of smokei
actively engaged in prograr
20% or greater quite
rate after 6 months
At least 5% reduction
in BMI for target populatior
after 12 months
Improve percentage by
no less than 10% per year
over current levels for age appropriat�
Lower than industry averag
rates of premature deliverie
and complications
Appendix
Active Plan Rate History
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
Active Plan Rate History
1 2
2012 2013 2014 2015 2016
Active Plan Rate for Single Employee - Rate History
$�oo.00
$600.00 �
Active Rate History
:�
$soo.00
$400.00
$300.00
$ZOO.00
__�- -_ - -
� _„ -.
,_ , ,��,. «
S1oo.o0
$o.00 i
2012 2013 2014 2015
Kaiser HMO $317.45 $330.14 $358.50 $392.55
� -Anthem HMO $356.03 $386.92 $432.97 $479.35
Non Medicare Retiree Plan Rate History
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
-25.0%
Non Medicare Retiree Plan Rate History
1 2
2012 2013 2014 2015 2016
Non Medicare Retiree Plan Rate for Single Retiree - R�
H istory
$Z,ZOO.00
$1,000.00
:�� ��
C.�� ��
$400.00
$200.00
Retiree Rate History
$ � 2012 2013
Kaiser HMO $737.35 $739.56
Antham PPC) fi7f11 17 � CR�� RS
2014
$859.25
���n a�
—
i
2015
$940.88
tA�� RF, �
Enrollment for Active Plans
2014 Enrollment - Actives
Kaiser DHMO, 2, �
0.1%
Kaiser HMO, 361,
27%
Anthem HMO,
289, 21%
Anthem PPO, 709,
52%
,
2015 Enrollment - ActivE
Kaiser DHMO, 3,
0.2 %
Kaiser HMO, 431,
30%
Anthem PPO, 700,
50%
Non Medicare Retiree Enrollment
2014 Enrollment - Non Medicare Retirees
Kaiser DHMO, 0,
Kaiser HMO, 6, 1% � 0.0%
Anthem PPO, 408,
99%
2015 Enrollment - Non Medicare I
Kaiser HMO, 6, Kaiser DHMO,
1 % 0, 0.0%
��
Anthem PPO,
421, 99%
� �� �,I �����ult�n
� �
330 North Brand Boulevard Suite 1100 Glendale, CA 91203-2308
T 818.956.6777 www.segalco.com
To:
From:
Date:
Re:
Christi Tenter
City of Bakersfield
Thomas M. Morrison, Jr.
August 4, 2015
2016 Renewals — Financial Ratings
MEMORANDUM
Tr,omac
Senior �
tmorriso
Segal believes it is important to consider the financial strength of insurance companies and managed care organizatio
candidates for initial selection or renewal as insurers or service providers to employee benefit plans. Therefore, we a
current claims paying ability rating that was available to us on the date this document was prepared for the insurance
managed care organization under consideration:
Company
Anthem BC Life and Health Insurance Co.
Kaiser Foundation Health Plan Inc.
Metropolitan Life Insurance Company
Pacific Union Dental, an affiliate of
United HealthCare (UHC) of California
Rating Agency
A.M. Best
Standard & Poor's
A.M. Best
� _ u. : -
,
Rating
Au
A+
A+
A
Christi Tenter
July 29, 2015
Page 2
Optum is an affiliate of UHC of California. For Medical Eye Services (MES) and HealthComp, the rating was not a�
rating is not available, you may wish to consult other rating services that also provide financial strength evaluations c
companies and managed care organizations before making a decision regarding the renewal of an insurance company
organlzation.
When available, we select Standard & Poor's because of its excellent overall reputation as a rating service. In additic
more insurance companies than any of the other comparable rating services. Several other rating services (e.g., Duff
Moody's, and A.M. Best) also provide claims paying ability evaluations of insurance companies and managed care o
which we provide when a rating from Standard & Poor's is not available. You may wish to consult other services bef
decision regarding the initial selection or renewal of an insurance company or managed care organization.
Insurance company and managed care organization rating categories explanations are shown below. For example, A
range from "Vulnerable" to "Secure". In particular, they regard "vulnerable" companies (i.e., ratings of B and lower
relatively serious risk in terms of ineeting both claims and creditor obligations. Insurance companies in this category
researched carefully before being selected.
Following is a chart, which explains the Standard & Poor's rating categories. (Duff & Phelps uses the same rating system
Poor's; A.M. Best's rating system is shown in parentheses).
Investment Grade or Secure:
AAA (A++) Companies rated AAA have the highest rating assigned. Capacity to pay interest and repay princi�
extremely strong.
AA (A+) Companies rated AA have a very strong capacity to pay interest and repay principal and differ from
rated issuers only to a small degree.
A(A, A-) Companies rated A have a strong capacity to pay interest and repay principal, although they are sc
more susceptible to adverse changes in economic conditions than those in higher rated categories.
ggg (g++, g+) Companies rated BBB are regarded as having an adequate capacity to pay interest and repay prin�
however, adverse economic conditions or changing circumstances are more likely to lead to a weal
capacity to pa interest and repay principal.
Below Investment Grade or Vulnerable:
BB (B) � Companies rated BB, B, CCC and CC are regarded, on balance, as speculative with respect to the
Christi Tenter
July 29, 2015
Page 3
The rating R is reserved for companies who "have experienced a REGULATORY ACTION regardir
solvency." The rating NR indicates that the insurer's financial solvency is not rated.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to r
standing within each category.
S&P uses a suffix of `pi' "based on an analysis of published financial information and additional information i
domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less
information than ratings without a`pi' subscript."
Finally, Segal does not itself perform insurance company or managed care organization credit quality evaluations anc
any warranty as to the scope or reliability (e.g., with respect to an organization's ability to meet future obligations) oi
company or managed care organization evaluations performed by AM Best or any other rating service.
We will not be responsible for providing monitoring on an ongoing basis.
cc: Steven L. Teglia
5382319v1/10632.001
The following presentation
was distributed
at the
Special Meeting of the
Personnel Committee
��
Tuesday, August 18, 2015
City of Bakersfield
Tom Morrison
Johnn y Wu
August 18, 2015
Table of Contents
> Executive Summary
>2016 Plan Renewals
> Anthem PPO Loss Ratio History
>Anthem PPO Large Claims
> Anthem PPO Dashboard Reports
> Potential Plan Modifications
> Results of Request for Information Process
> Wellness Initiatives
>Appendix
• Medical Rate Increase History
nn�,�;,,,,i Cv�r�llrv��r�♦ �,., oi
Executive Summary
> The Anthem HMO and PPO plan renewals are significantly higher than the hist
due to:
• Higher number of large claims that fell below the stop loss threshold
• Increased utilization of high cost specialty medications
• Health condition (risk scores) of PPO participants compared to Anthem data
customers
• The Kaiser HMO increase is less than 4%
• The overall increase for active benefits is 13.3% and
• 13.4% for retiree plans
> Segal has performed a market check of other carriers and other plan designs tl
potentially reduce the increase through a Request for Information, (RFI). Resu
presented under separate cover
> Benefit alternatives are included in this report
• Reduction to benefits in the HMO and PPO Plans do not reduce premiums c�
the additional financial risk transferred to employees and retirees
• An alternative employee contribution scenario (75%/25%) is also presented
greater savings and lesser impact to the employees.
2016 Plan Renew als
2016 Active Total Cost Summary
Active
Current 2016 P�
Plan Enrollment Annual Premium Annual Premium Annual Increase
nthem
HMO 276 $3,589,600 $3,912,700 $323,100
PPO 700 $9,879,500 $11,954,100 $2,074,600
Sub Total 976 $13,469,100 $15,866,800 $2,397,700
Kaiser
HMO 431 $4,347,500 $4,504,000 $156,500
HDHP 3 $17,330 $17,960 $630
Sub Total 434 $4,364,830 $4,521,960 $157,130
MetLife Dental
PPO 901 $1,208,600 $1,241,300 $32,700
PUD Dental
Im eria11000 604 $351,800 $365,800 $14,000
Na a 800 4 $1,940 $2,020 $80
Sub Total 608 $353,740 $367,820 $14,080
MES Vision�2�
HMO
706 $63,300 $63,300 $0
PPO 710 $91,000 $91,000 $0
Sub Total 1,416 $154,300 $154,300 $0
Total Medical, Dental, Vision $19,550,570 $22,152,180 $2,601,610
80% Cit Contribution for 2016 $15 640 456 $17 721 744 $2 081 288
2016 Retiree Total Cost Summary
Retiree
Current 2016
Plan Enrollment Annual Premium Annual Premium Annual Increase
nthem
PPO 421 $6,614,427 $7,542,464 $928,037
Secure Horizon 15 $107,762 $125,777 $18,014
Sub Total 436 $6,722,190 $7,668,241 $946,052
Kaiser
HMO 6 $79,034 $90,889 $11,855
HDHP 0 $0 $0 $0
Senior Advanta e 113 $286,984 $287,472 $488
Sub Total 119 $366,018 $378,361 $12,343
PUD Dental
Trinit 28 $4,743 $4,933 $190
Re enc 169 $52,407 $54,502 $2,096
Sub Total 197 $57,149 $59,435 $2,286
MES Vision���
HMO 6 $315 $315 $0
2016 Anthem Monthly Rate Summary
em Blue Cross HMO
Active (Monthly)
Single
2-Party
Familv
em Blue Cross PPO
Percentage Co
Increase / 2016 City 2016 Employee I�
Enrollment 2015 Rate 2016 Rate (Decrease) Contribution Contribution (D
72
51
153
Enrollment
Active (Monthly)
Single 169
2-Party 142
Family 389
Retiree (Monthly)
Single 264
2-Party 146
Famil 11
hem Blue Cross Senior Secure
$479.35
$963.41
� 1.408.42
2015 Rate
$506.78
$1,015.30
$1, 525.64
$935.86
$1,871.60
$2.807.42
$522.47
$1,050.12
$1,535.19
2016 Rate
$613.19
$1,228.50
$1, 846. 02
$1,067.17
$2,134.19
$3.201.28
9.00%
9.00%
9.00%
Percentage
Increase /
(Decrease)
21.00%
21.00%
21.00%
14.03°/a
14.03°/a
14.03%
Dnrrnr�t�rvn
$417.98 $104.49
$840.10 $210.02
�1,228.15 $307.04
co
2016 City 2016 Employee Ir
Contribution Contribution �
$490.55 $122.64
$982.80 $245.70 �
$1,476.82 $369.20 �
Varies Varies
r.,
2016 Kaiser Monthly Rate Summary
iser HMO
Active (Monthly
Single
2-Party
Family
Under 65 Retiree (Monthly
Single
2-Party
Familv
Kaiser Deductible
Enrollment I 2015 Rate
125
82
224
5
1
0
$392.55
$785.10
$1,110.92
$940.88
$1,881.76
$2,662.69
Enrollment I 2015 Rate
2016 Rate
$406.68
$813.37
$1,150.91
$1,082.01
$2,164.02
$3,062.09
Percentage
Increase /
(Decreasel
3.6%
3.6%
3.6%
15.0%
15.0%
15.0%
Percentage
Increase /
2016 Rate (Decrease)
2016 City
Contribution
$325.34
$650.70
$920.73
Varies
Con
2016 Employee In�
Contribution De
$81.34 $
$162.67 $
$230.18 $
Varies �,
Cor
2016 City 2016 Employee In
Contribution Contribution (Di
Active (Monthly)
Single 2 $299.03 $309.79 3.6% $247.83 $61.96
2-Party 0 $598.06 $619.58 3.6% $495.66 $123.92 �
Family 1 $846.25 $876.71 3.6% $701.37 $175.34 �
Under 65 Retiree (Monthly)
Single 0 $814.09 $936.20 15.0% Varies Varies �
2-Party 0 $1,628.19 $1,872.42 15.0%
Famil 0 $2,303.88 $2,649.46 15.0%
Kaiser HMO Senior Advantaqe
2016 Dental Monthly Rate Summary
cific Union Dental Monthly Summa
'mperial 1000 - Active
Single
2-Party
Family
Vapa 800 - Active
Single
2-Party
Enrollment
189
136
279
��
2015 Rate
$22.81
$45.49
$67.44
$20.41
$40.70
fic Union Dental Optional Plan - Monthly Summ
Trinity Dental - Retiree
Single
2-Party
Family
Regency Dental - Retiree
Single
Enrollmeni
17
11
0
78
2015 Rate
$11.42
$18.28
$28.03
$19.23
2016 Rate
$23.72
$47.31
$70.14
$21.23
$42.33
2016 Rate
$11.88
$19.01
$29.15
$20.00
Percentage Con
Increase / 2016 City 2016 Employee In�
Decrease Contribution Contribution De
4.0% $18.98 $4.74 �
4.0% $37.85 $9.46 �
4.0% $56.11 $14.03 �
4.0% $16.98 $4.25 �
4.0% $33.86 $8.47 �
Percentage
Increase /
4.0%
4.0%
4.0%
4.0%
Con
2016 City 2016 Employee In�
�ontribution Contribution (De
Varies
Varies
2016 Dental Monthly Rate Summary
etLife Dental PPO
Active (Monthly)
Single
2-Party
Familv
Enrollment
239
204
, .
2015 Rate
$45.20
$92.94
154.93
2016 Rate
$46.42
$95.45
$159.11
Percentage
Increase /
(Decreasel
2.7%
2.7%
2.7
conti
2016 City 2016 Employee Inci
Contribution Contribution (Dec
$37.14
$76.36
127.29
$9.28
$19.09
31.82
�, �
�,
2016 EAP, and Vision Rate Summary
(Composite Rate) - All Employees
Active (Monthl
Percentage 2016 Con
Increase / 2016 City Employee Inc
Enrollment 2015 Rate 2016 Rate Decrease Contribution Contribution De
1436 $1.66 $1.71 3.0% 1.71 0.00 :
edical Eye Services (MES) Monthly Summary - Vision
MO
Active and Retiree*
Single
2-Party
Family
Active
Enrollment I 2015 Rate I 2016 Rate
211
165
336
$3.75
$7.50
$9.75
$3.75
$7.50
$9.75
Single 190 $5.25 $5.25
2-Party 176 $10.55 $10.55
Famil 344 13.75 13.75
*Retiree contribution varies based on the years of service
Percentage 2016 Con
Increase / 2016 City Employee Inc
(Decrease) Contribution Contribution (De
0.0%
0.0%
0.0%
0.0%
0.0%
$3.00
$6.00
$7.80
�� � 1
;,; ,.
$0.75
$1.50
$1.95
$1.05
$2.11
2016 Flexible Benefits, Life and LTD Rate Summary
ealthComp - Section 125 Flexible Benefits (per participant per month)
Enrollment
Heal th Co m
NG - Life Insurance (Rate per $1,000
Enrollment
Basic Life
AD&D
num - Long Term Disability (Rate per $100)
Enrollment
Un um
2015 Rate
2015 Rate
$0.102
$0.02
2015 Rate
$0.55
2016 Rate
2016 Rate
$0.102
$0.02
2016 Rate
Pendina
Percentag
Chanae
Percentag�
Change
0.0%
0.0%
Percentag
Chanae
Anthem PPO Claim Experience
Active PPO Plan Ratio of Claims to Premium
(Excludes Administration Expense)
Zoo.oro -
Zso.oi
160.0%
140.0 %
120.0%
100.0 %
80.0%
60.0%
40.0% _. ,- , � � , _-,. �- -,-�- -r-,- �
N N N N N N N N N M M M M M M M M M M ('�'I M � � � � � � � � d' � �
�-I �-I c� �-I c--I �-I r-I r-I c-I r-I �-I c-i �-I r-I c-�I r-I �-I �-I r-I r-I r-I r-I r-I �—I c-I r-I i—I r-I rl r-I r-I r-I
i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i
Q� C hA Q }' > U C � L L- �^ C t]A Q }' > U C � i '- � C 4A Q. }' >
_ � � � N � O � co N � � � � � � N � O 41 co N � � � � � � N � O
Retiree PPO Plan Ratio of Claims to Premium
(Excludes Administration Expense)
Zoo.oro -
Zso.oi
160.0%
140.0 %
120.0%
100.0 %
80.0%
60.0%
40.0% _! . � � _ � _ � � ��, �,- ��- ;�� . , �
N N N N N N N N N M M M M M M M M M M ('�'I M � � � � � � � � d' � �
�-I �-I c� �-I c--I �-I r-I r-I c-I r-I �-I c-i �-I r-I c-�I r-I �-I �-I r-I r-I r-I r-I r-I �—I c-I r-I i—I r-I rl r-I r-I r-I
i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i i
Q� C hA Q }' > U C � L L- �^ C t]A Q }' > U C � i '- � C 4A Q. }' >
_ � � � N � O � co N � � � � � � N � O 41 co N � � � � � � N � O
PPO Large Claims in Excess of $25,000
Active PPO - Large Claims in Excess of $25,000
04/2014 to 03/2015
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
$
Amount Paid
315, 850.81
289,592.83
211,437.52
186,787.28
152,223.93
125,551.85
113, 700.43
110, 790.98
104,746.63
102,881.43
100,264.67
98,074.93
85,784.55
77,552.57
74,364.76
59,746.71
58,432.12
56, 910.29
54,795.00
52,004.91
49,606.82
48,905.31
46, 319.18
46,067.73
45,979.56
44,390.00
40,165.19
40,131.41
39,923.51
39,422.85
38,500.92
37,771.80
37, 373.12
36,027.55
34,593.91
34,253.10
33,837.83
32,542.50
31,486.59
30,045.19
29,694.50
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125, 000.00
125, 000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125,000.00
125, 000.00
125,000.00
125, 000.00
125,000.00
125,000.00
125,000.00
125,000.00
125, 000.00
125, 000.00
125,000.00
125,000.00
Amount Pooled
$ 190,850.81
164,592.83
86,437.52
61,787.28
27,223.93
551.85
Diag Code
5070
V5811
V5811
5762
5849
V3101
4271
V5811
7248
99932
V3101
193
7851
V580
82009
V3000
71515
7384
29900
7483
6826
52689
99683
1749
486
3570
56211
65101
72402
65421
71536
7244
27801
7220
25060
71536
490
5921
V580
55320
41401
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
ICD-0
ICD-0
ICD-0
ICD-0
I C D-0
ICD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
ICD-0
I C D-0
ICD-0
ICD-0
ICD-0
I CD-0
I CD-0
ICD-0
ICD-0
ICD-0
I CD-0
ICD-0
Pneumonitis due to inhalation of food or vomitus
Encounter for antineoplastic chemotherapy
Encounter for antineoplastic chemotherapy
Obstruction of bile duct
Acute kidney failure, unspecified
Twin, mate liveborn, born in hospital, delivered b
Paroxysmal ventricular tachycardia
Encounter for antineoplastic chemotherapy
Other symptoms referable to back
Bloodstream infection due to central venous
Twin, mate liveborn, born in hospital, delivered b
Malignant neoplasm of thyroid gland
Palpitations
Encounter for radiotherapy
Other transcervical fracture of femur, closed
Single liveborn, born in hosp, delivered without c
Osteoarthritis, localized, primary pelvic region/thigh
Acquired spondylolisthesis
Infantile autism current/active
Other congenital anomalies of larynx, trachea, and bronch
Cellulitis and abscess of leg, except foot
Other specified diseases of the jaws
Complications of heart transplant
Malignant neoplasm of breast (female), unspecified
Pneumonia, organism unspecified
Acute infective polyneuritis
Diverticulitis of colon
Twin pregnancy delivered with/without mention antepartun
Spinal stenosis, lumbar region, without neurogenic claudic
Previous cesarean section complicating pregnancy deliver
Osteoarthritis, localized, not specified primary or secondar
Thoracic or lumbosacral neuritis or radiculitis, unspecified
Morbid obesity
Cervical disc displacement
Diabetes with neurological manifestations, type ii or unspe
Osteoarthritis, localized, not specified primary or secondar
Bronchitis, not specified as acute or chronic
Calculus of ureter
Encounter for radiotherapy
Ventral hernia nos
Coronary atherosclerosis of native coronary vessel
Active PPO - Large Claims in Excess of $25,000
04/2013 to 03/2014
Rank
1 $
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Amount Paid
522,795.17
477,984.08
465,799.18
444,750.89
177,502.84
164,413.69
148,974.39
130,282.62
97,549.67
94,089.23
88,289.86
84,391.67
83,633.73
79,146.91
69,098.73
55,480.99
50,040.87
49,489.12
48,788.38
48,560.00
45,541.11
43,912.72
39,029.02
38,572.68
38,121.73
37,318.29
35,610.46
32,611.67
32,365.63
31,007.78
29,878.53
28,023.98
27,268.02
26,665.59
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
Amount Pooled
$ 397,795.17
352,984.08
340,799.18
319,750.89
52, 502.84
39,413.69
23,974.39
5,282.62
Diag Code
99749
5845
51884
5168
V3001
5758
1550
72281
99669
1749
7140
V5811
53460
V3101
3570
V3100
2252
185
V3001
V3100
2148
7100
2148
5989
71535
5921
1748
486
42731
71596
5716
65421
64251
2521
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
I C D-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
Other digestive system complications
Acute kidney failure with lesion of tubular necrosis
Acute and chronic respiratory failure
Other specified alveolar and parietoalveolar pneumc
Single liveborn, born in hospital, delivered by c-
Other specified disorders of gallbladder
Malignant neoplasm of liver, primary
Postlaminectomy syndrome of cervical region
Infection and inflammatory reaction due to other inte
Malignant neoplasm of breast (female), unspecified
Rheumatoid arthritis
Encounter for antineoplastic chemotherapy
Chronic/unspecified gastrojejunal ulcer with hemorrl-
Twin, mate liveborn, born in hospital, delivered b
Acute infective polyneuritis
Twin, mate liveborn, born in hosp, delivered witho
Benign neoplasm of cerebral meninges
Malignant neoplasm of prostate
Single liveborn, born in hospital, delivered by c-
Twin, mate liveborn, born in hosp, delivered witho
Lipoma of other specified sites
Systemic lupus erythematosus
Lipoma of other specified sites
Urethral stricture, unspecified
Osteoarthritis, localized, not specified primary or sec
Calculus of ureter
Malignant neoplasm of other specified sites of femal
Pneumonia, organism unspecified
Atrial fibrillation
Osteoarthritis unspecified whether generalized or loc
Biliary cirrhosis
Previous cesarean section complicating pregnancy c
Severe pre-eclampsia delivered with/without mentior
Hypoparathyroidism
Retiree PPO - Large Claims in Excess of $25,000
04/2014 to 03/2015
G�i17
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Totals
$
$
Amount Paid
609,571.40
453,392.69
415,588.23
151,867.99
137,828.57
136,969.95
120,714.86
111,432.76
107,920.50
99,021.94
92,661.62
62,976.85
59,141.60
55,931.56
49,024.88
47,318.66
46,507.65
37,476.66
34,892.72
34,089.87
32,596.86
31,682.74
31,141.93
30,448.51
28,165.59
25,167.99
3,043,534.58
Pooling Point
$ 125,000.00 $
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
�
Amount Pooled
484,571.40
328,392.69
290,588.23
26,867.99
12,828.57
11,969.95
1,155, 219.00
Diag Code
V5811
V5811
4659
72889
28521
7140
25042
1125
49391
55221
2250
73028
41519
185
72402
3842
7231
51881
71536
7211
41401
27651
53909
71516
1961
71536
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
ICD-09
Diagnostic Description
Encounter for antineoplastic chemotherapy
Encounter for antineoplastic chemotherapy
Acute upper respiratory infections of unspecified :
Other disorder of muscle, ligament, and fascia
Anemia in chronic kidney disease
Rheumatoid arthritis
Diabetes with renal manifestations, type ii or unsK
Disseminated candidiasis
Asthma, unspecified with status asthmaticus
Incisional hernia with obstruction
Benign neoplasm of brain
Unspecified osteomyelitis other specified site
Acute pulmonary heart disease - other
Malignant neoplasm of prostate
Spinal stenosis, lumbar region, without neurogeni
Septicemia due to escherichia coli (e. coli)
Cervicalgia
Respiratory failure
Osteoarthritis, localized, not specified primary or �
Cervical spondylosis with myelopathy
Coronary atherosclerosis of native coronary vesse
Dehydration
Other complications of gastric band procedure
Osteoarthritis, localized, primary lower leg
Secondary malignant neoplasm lymph nodes, intr�
Osteoarthritis, localized, not specified primary or �
Retiree PPO - Large Claims in Excess of $25,000
04/2013 to 03/2014
Rank
1 $
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Amount Paid
651,197.05
520, 289.51
431,732.61
231,111.86
153,846.26
101,704.26
96,510.57
90,494.13
82,197.96
80,033.91
78,480.21
67,176.85
64,731.48
64,483.49
58,334.19
56,107.18
55,327.50
48,523.53
46,372.58
41,848.89
40,140.20
38,505.75
35,969.57
32,071.02
31,680.33
29,699.80
29,082.24
28,404.97
28,232.72
27,355.40
26,956.73
26,219.24
26,152.70
Pooling Point
$ 125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
125,000.00
Amount Pooled
$ 526,197.05
395,289.51
306,732.61
106,111.86
28,846.26
Diag Code
20400
1539
53140
2252
V5811
55221
99709
7140
72252
71596
40391
5363
55321
51889
87200
72210
V560
41401
6825
71535
41071
7140
57410
72252
5921
71596
7213
1748
71536
7350
72271
72769
185
ICD-09
I CD-09
I CD-09
I CD-09
ICD-09
ICD-09
ICD-09
I CD-09
ICD-09
ICD-09
ICD-09
I CD-09
ICD-09
ICD-09
I CD-09
I CD-09
I CD-09
I CD-09
ICD-09
I CD-09
I CD-09
ICD-09
ICD-09
I CD-09
I CD-09
I CD-09
ICD-09
I CD-09
ICD-09
I CD-09
ICD-09
I CD-09
I CD-09
Diagnostic Description
Lymphoid leukemia, acute, without mention of having
Malignant neoplasm of colon, unspecified
Chronic/unspecified gastric ulcer, with hemorrhage wi
Benign neoplasm of cerebral meninges
Encounter for antineoplastic chemotherapy
Incisional hernia with obstruction
Other nervous system complications
Rheumatoid arthritis
Degeneration of lumbar or lumbosacral intervertebral
Osteoarthritis unspecified whether generalized or locz
Hypertensive kidney disease, unspecified, with chroni�
Gastroparesis
Incisional hernia without mention of obstruction or ga
Other diseases of lung, not elsewhere classified
Open wound of external ear, unspecified site, uncomp
Displacement of lumbar intervertebral disc without m�
Encounter for extracorporeal dialysis
Coronary atherosclerosis of native coronary vessel
Cellulitis and abscess of buttock
Osteoarthritis, localized, not specified primary or seco
Acute myocardial infarction, subendocardial infarctior
Rheumatoid arthritis
Calculus of gallbladder with other cholecystitis withou
Degeneration of lumbar or lumbosacral intervertebral
Calculus of ureter
Osteoarthritis unspecified whether generalized or locz
Lumbosacral spondylosis without myelopathy
Malignant neoplasm of other specified sites of female
Osteoarthritis, localized, not specified primary or seco
Hallux valgus (acquired)
Intervertebral disc disorder with myelopathy, cervical
Nontraumatic rupture of other tendon
Malignant neoplasm of prostate
Anthem PPO Dashboard Reports
PPO Clinical Dashboard — Health Risk Index — Active a
Reti ree
Health Risk Index
The Risk Index is based on Incurred and Paid Claims
_ �' F' '- • - � • �_,• �,� '
Group 1.66 1.64 1.2%
Commercial Benchmark 1.00 1.00 0.0%
Variance to Commercial Benchmark 65.7% 63.7%
The Health Risk Index is a diagnostic and age/sex adjusted projection of the population's likely level of risk for the period indicated. The Benchmark is prese
for comparison The comparison population reflects the healthcare experience of employees and dependents from a large national dataset. A score higher
1.0 indicates a higher level of risk as compared to the national dataset.
Financial and Utilization Dashboard - PPO Paid Amoui
Setting - Active and Retiree
����rn y ,� � Current Period
111 �ri7 Prior Period 1
B1i���rOSS - Prior Period 2
�
a
�
a
�
�
0
�
Q
�
.�
n.
:1
.1�
140
120
100
.� .�
.�
.�
20
0
■
■
Financial and Utilization Dashboard - PPO Pharmacy H
Pharmacy Utilization — Top Medications by Cost - Active and Retiree
HARVONI
ENBREL
CRESTOR
NEXIUM
ADVAIR DISKUS
ANDROGEL
HUMIRA
VALSARTAN
OXYCONTIN
COPAXONE
Top Ten Subtotal
All Other Drugs
otal
$191,892
$154,209
$136,878
$110,967
$60,868
$50,760
$46, 595
$45,028
$42,775
$39,762
$879,732
$3,108,769
$3,988,501
�
6
38
537
308
163
97
16
1
�•'�/
:
1,425
35,652
37,077
,
$31,982
$4,058
$255
$360
$373
$523
$2,912
$231
$750
$4,970
$617
$87
$108
Top Five Target Program Conditions - PPO - Active ar
Top Five Target Program Conditions Compared to Benchmark (Based on Paid Amount)
Prevalence per 1000 for Target Program Conditions
160.0
140.0
120.0
100.0
:� /
.1 1'
�11
20.0
��
Cancer Maternity Low Back Pain Diabetes Coronary ArtE
Top Five Target Program Conditions - PPO - Active ar
Top Five Target Program Conditions Compared to Benchmark (Based on Paid Amount)
Percent of Paid Amount for Target Program Conditions
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Potential Plan Modifications
Anthem HMO Plan Modifications
Deductible
Single
Family
nual Out-of-Pocket Maximum
Single
Familv
Hospital
Inpatient
Outpatient
Primary Care Visits
Specialty Care Visits
Diagnostic X-Ray and Lab
Preventive Care
Durable Medical Equipment
Emergency Room
Prescription Drug Retail
Tier 1
Tier 2
Tier 3
T�...- A
Current HMO
$0
$0
$3,000
$6,000
Option 1
(Change the Outpatient
to 20% Coinsurance)
$0
$0
$3,000
$6,000
$250/day, up to 3 day max $250/day, up to 3 day max
$125/admit 20%
$20 $20
$40 $40
$0 $0
$0 $0
50% 50%
$150 (waived if admitted) $150 (waived if admitted)
$10
$25
$45
�noi . ,.. +„ Q � �n
$10
$25
$45
�noi ,.., +„ Q�cn
Option 2
(Change the Rx to
Exclusion Formulary)
$0
$0
$3,000
$6,000
$250/day, up to 3 day max
$125/admit
$20
$40
$0
$0
50%
$150 (waived if admitted)
$10
$25
30% up to $150
(D
(Inpa
0°�
0°�
150 �
PPO Active Plan Modifications
Current Plan Design Modifications Med Adjust Rx Adjust Med/R�
In-Network Out-of-Pocket $2,000/$6,000 $2,500/$7,500 -0.44% -
Maximum (Single/Family) -�'`
In-Network Out-of-Pocket $2,000/$6,000 $3,000/$9,000 -0.82% - -O.F
Maximum (Single/Family)
In-Network Out-of-Pocket $2,000/$6,000 $4,000/$12,000 -1.32% - -1.(
Maximum (Single/Family)
In-network Co-insurance 90% 80% -2.44% - -1.�
Medical Deductible (single/family) $750/$2,250 $1,000/$3,000 -2.99% - -2.�
Emergency copay $100 (waived if admitted) $250 (waived if admitted) -0.36% - -0.�
Retail: $10/$20 Exclusion Formulary
Prescription Drug Mail: $20/$30 Retail: $10/$25/30% (Up to $150) - -18.41 % -3.4
Mail: $10/$50/30% (Up to $300)
PPO Retiree Plan Modifications
In-Network Out-of-Pocket
Maximum (Single/Family)
In-Network Out-of-Pocket
Maximum (Single/Family)
In-Network Out-of-Pocket
Maximum (Single/Family)
In-network Co-insurance
Medical Deductible
(single/family)
Emergency copay
Prescription Drug
urrent Plan Design
$2,000/$6,000
$2,000/$6,000
$2,000/$6,000
90%
$750/$2,250
$100 (waived if admitted)
Retail: $10/$20
Mail: $20/$30
Modifications
$2,500/$7,500
$3,000/$9,000
$4,000/$12,000
80%
$1,000/$3,000
$250 (waived if admitted)
Exclusion Formulary
Retail: $10/$25/20% (Up to $150)
Mail: $10/$50/20% (Up to $300)
Med Adjust Rx Adjust Med/Rx �
-0.44% - -0.25'
-0.82% - -0.47'
-1.32% - -0.76'
-2.44% - -1.41'
-2.99% - -1.73'
-0.36% - -0.21 '
- I -18.6% I -7.8°,
Health Coverage Terms and Definitions
> Deductible - The amount you owe for health care services your health insurancE
covers before your health insurance or plan begins to pay. For example, if your c
$1000, your plan won't pay anything until you've met your $1000 deductible for c
care services subject to the deductible. The deductible may not apply to all servic
> Out-of-Pocket Limit - The most you pay during a policy period (usually a year) k
health insurance or plan begins to pay 100% of the allowed amount. This limit nE
your premium, balance-billed charges or health care your health insurance or pl�
cover. Some health insurance or plans don't count all of your co-payments, dedu
insurance payments, out-of-network payments or other expenses toward this lim
> Co-insurance - Your share of the costs of a covered health care service, calcul�
percent (for example, 20%) of the allowed amount for the service. You pay co-in;
any deductibles you owe. For example, if the health insurance or plan's allowed ;
office visit is $100 and you've met your deductible, your co-insurance payment o�
be $20. The health insurance or plan pays the rest of the allowed amount.
> Co-payment - A fixed amount (for example, $15) you pay for a covered health c
usually when you receive the service. The amount can vary by the type of coverE
service.
Insurance Coverage Example
How You and Your Insurer Share Costs - Example
Jane's Plan Deductibie: $1,500 Co-insurance: 20°� Out-of-Pocket Limit: $5,000
January 1" D�'
Beginning of Coverage End of Cover',
Period
,
. � .
j:nic ��:�ti�: 1 i,.�r pla�i }�;��, .
I00% 0°/a
Jane hasn't reached her
$1,500 deductible yet
( i,•, ..�..��, ,I;�����,'� ��;�:, .��,�, ,,f �1�, � ,:�>.
Office visit costs: � 1.;�
Janc pays: 5 T? �
Hcr plan pays: �(�
m�
costs
�
�
T
. � .
J:,n�• ��.��r; I I��r ��1:,,, }�:�•,�:
?0% �0%
�Jane reaches her $1,500
deductible, co-insurance begins
�:i�!,� 1::.. .,, i: ., ,io�ror s�•�•��r:il tini� �. .�:i,l
t�.�i�l 51,SUU ui �otal. Her plau },,�r, ,;,,iu��
, t i I��� cosrs fon c�r nexe visir.
Officc vuit costs: $75
1anc pays: ?0°�, of ti75 ti 1;
Hcr plan pays: �i )"�, �, t ti? � ti i�i �
m�
costs
�
�
�
�
. .
J.�n�� },.a•,�•; 1 I��r }�l,�n ��:it•s
0% I00%
Jane reaches her $5,000
out-of-pocket limit
I.�i,�• h:�� s��,�i, tl�,• ,io;ro� �>t�t,•i� „i,,3
�'�.UUO ui total. Hrr plan pays c}ir
�;,;r of h� r covc:red heal�h care ser,
I�>, thc res� oI tlic }�car.
��ffice visit costs: �200
Jane pays: ti(�
Her plan pays: � �+'t �
Active PPO Employee Contribution Change Compared
Potential Exposure of Changing Benefits
20% to 25% Employee
Contribution Annual Maximum PPO BE
•-'�
Two-Pa
Increase
re-tax
367.91 $
737.10
Change Expos�
(post-tax)
2,0OO.00
4,0OO.00
Familv 1,107.61 6,0OO.00
Active HMO Employee Contribution Change Comparec
Potential Exposure of Changing Benefits
20% to 25% Employee
Contribution Annual
Increase
Sinale
Two-Pa
Familv*
*Assuming family of 3 people
** $750 deductible plan
re-tax
$ 313.48
630.07
921.11
Maximum Ber
Change Expo:
(aost-tax
�,
1.
2.,
w
Wellness
General Principles
�
� �,
� � �
r.
_..
a.
�
\
a • �=
���
. �
_
,� _ �
� _�,,�� � �
�������Y:�
iI
������
��
.�
_ .��
Wellness �''�
� General Principles
�-_
q
11�"'
�
�
�_
_� _ _ ��
In other words, wellness programs:
> Keep healthy people healthy
> Help unhealthy people change their behavior to be healthier
> Enable people to be more productive and satisfied in their
work and home life
�
�� t
��.
;�;.,. .
� .�.. ` '
� ``' �l
i�„ .1�A~
� _.., �, ��
�: :�` ���_
. �� ��
�-
0
_ �y,
�
�
\ ��
E��1►rr�rn��
�
_ ��
� =:n4m�;..,�� - �
-a�k.i�.•ns�,j'^�`.�fn.,� -
Avoidable and Unnecessary Medical Care
Contributes Substantially to Healthcare System Costs
e
> Behavioral $493 bi I I ion (18.9%)
> Clinical $312 billion (11.9%)
>Operational $134 billion (5.1 %)
Total Avoidable Cost: $939 billi
Total Spent on Care: $2.6 trilli�
!�ai���a���•�■��=�:�r���«t:�r=
35.9% of
Obesityl
Overweight
��
�III� I
BIIIIOn
�
Smoking
�r ��
Billion
Non-adherence
to d ru g
regimens
�
�
Billion
Alcohol
abuse
�
�
�
Billion
con
with
Over 50% of waste and unnecessarv healthcare
p r�
�
�
.
0 .
Moving Toward Behavioral Changes
Key Behaviors That Can Be Altered
Excess Alcohol
Consumption
Poor Standard-of-
Care Compliance
Insufficient Sleep
Diabetes
CAD
Hypertension
�
Back Pain
Obesity
Cancer
Poor Diet
�
�
Physical
Inactivity
Asthma
Arthritis
Allergies
��,
�
Smoking
Poor StrE
,� Managem
� Lack of HE
Screenii
Sinusitis
Depression
CHF
COPD
CKD
High C
A Proven Model
GET THEM INTO
THE PROGRAM
• Health Risk
Appraisals
• Biometric
Screenings
• Self-Referrals
• Predictive
Modeling
• Medical and
Pharmacy
data triggers
KEEP THEM IN THE PROGRAM
Health Coaching Modules
Tools and wearables
Health information content
Promote personal health and well-being
Phone based / in-person
Health education
Motivation
Access to providers
Encourage compliance with medication
adherence
Certain OTC supplies made available free:
e.g., Nicotine patches, gum, lozenges
Monitor medication adherence
Offer incentives (or disincentives) to
participate in:
H RAs
Start Measuring
Sample Wellness Performance Targets
CLINICAL MEASURES
Criteria: Clinical Goals
1. Personal Health Assessment Survey Completion rate
2. Percent workforce with one annual primary care visit
3. Smoking Cessation
�
�
.
Engagement rates
Quit rates
4. Reduction in BMI for targeted obese participants
5. Cancer Screenings
•% of targeted enrollees obtaining breast cancer
screening
•% of targeted enrollees obtaining colonoscopy
6. Well Baby Care Activity
• Patient(s) attend well baby care education session.
• At risk patients assigned personal coach and
engaged in prenatal program.
Targeted Standard
80% of workforce
completed PHA
65% of workforce
No less than 25% of smokei
actively engaged in prograr
20% or greater quite
rate after 6 months
At least 5% reduction
in BMI for target populatior
after 12 months
Improve percentage by
no less than 10% per year
over current levels for age appropriat�
Lower than industry averag
rates of premature deliverie
and complications
Appendix
Active Plan Rate History
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
Active Plan Rate History
1 2
2012 2013 2014 2015 2016
Active Plan Rate for Single Employee - Rate History
$�oo.00
$600.00 �
Active Rate History
:�
$soo.00
$400.00
$300.00
$ZOO.00
__�- -_ - -
� _„ -.
,_ , ,��,. «
S1oo.o0
$o.00 i
2012 2013 2014 2015
Kaiser HMO $317.45 $330.14 $358.50 $392.55
� -Anthem HMO $356.03 $386.92 $432.97 $479.35
Non Medicare Retiree Plan Rate History
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
-20.0%
-25.0%
Non Medicare Retiree Plan Rate History
1 2
2012 2013 2014 2015 2016
Non Medicare Retiree Plan Rate for Single Retiree - R�
H istory
$Z,ZOO.00
$1,000.00
:�� ��
C.�� ��
$400.00
$200.00
Retiree Rate History
$ � 2012 2013
Kaiser HMO $737.35 $739.56
Antham PPC) fi7f11 17 � CR�� RS
2014
$859.25
���n a�
—
i
2015
$940.88
tA�� RF, �
Enrollment for Active Plans
2014 Enrollment - Actives
Kaiser DHMO, 2, �
0.1%
Kaiser HMO, 361,
27%
Anthem HMO,
289, 21%
Anthem PPO, 709,
52%
,
2015 Enrollment - ActivE
Kaiser DHMO, 3,
0.2 %
Kaiser HMO, 431,
30%
Anthem PPO, 700,
50%
Non Medicare Retiree Enrollment
2014 Enrollment - Non Medicare Retirees
Kaiser DHMO, 0,
Kaiser HMO, 6, 1% � 0.0%
Anthem PPO, 408,
99%
2015 Enrollment - Non Medicare I
Kaiser HMO, 6, Kaiser DHMO,
1 % 0, 0.0%
��
Anthem PPO,
421, 99%
� �� �,I �����ult�n
� �
330 North Brand Boulevard Suite 1100 Glendale, CA 91203-2308
T 818.956.6777 www.segalco.com
To:
From:
Date:
Re:
Christi Tenter
City of Bakersfield
Thomas M. Morrison, Jr.
August 4, 2015
2016 Renewals — Financial Ratings
MEMORANDUM
Tr,omac
Senior �
tmorriso
Segal believes it is important to consider the financial strength of insurance companies and managed care organizatio
candidates for initial selection or renewal as insurers or service providers to employee benefit plans. Therefore, we a
current claims paying ability rating that was available to us on the date this document was prepared for the insurance
managed care organization under consideration:
Company
Anthem BC Life and Health Insurance Co.
Kaiser Foundation Health Plan Inc.
Metropolitan Life Insurance Company
Pacific Union Dental, an affiliate of
United HealthCare (UHC) of California
Rating Agency
A.M. Best
Standard & Poor's
A.M. Best
� _ u. : -
,
Rating
Au
A+
A+
A
Christi Tenter
July 29, 2015
Page 2
Optum is an affiliate of UHC of California. For Medical Eye Services (MES) and HealthComp, the rating was not a�
rating is not available, you may wish to consult other rating services that also provide financial strength evaluations c
companies and managed care organizations before making a decision regarding the renewal of an insurance company
organlzation.
When available, we select Standard & Poor's because of its excellent overall reputation as a rating service. In additic
more insurance companies than any of the other comparable rating services. Several other rating services (e.g., Duff
Moody's, and A.M. Best) also provide claims paying ability evaluations of insurance companies and managed care o
which we provide when a rating from Standard & Poor's is not available. You may wish to consult other services bef
decision regarding the initial selection or renewal of an insurance company or managed care organization.
Insurance company and managed care organization rating categories explanations are shown below. For example, A
range from "Vulnerable" to "Secure". In particular, they regard "vulnerable" companies (i.e., ratings of B and lower
relatively serious risk in terms of ineeting both claims and creditor obligations. Insurance companies in this category
researched carefully before being selected.
Following is a chart, which explains the Standard & Poor's rating categories. (Duff & Phelps uses the same rating system
Poor's; A.M. Best's rating system is shown in parentheses).
Investment Grade or Secure:
AAA (A++) Companies rated AAA have the highest rating assigned. Capacity to pay interest and repay princi�
extremely strong.
AA (A+) Companies rated AA have a very strong capacity to pay interest and repay principal and differ from
rated issuers only to a small degree.
A(A, A-) Companies rated A have a strong capacity to pay interest and repay principal, although they are sc
more susceptible to adverse changes in economic conditions than those in higher rated categories.
ggg (g++, g+) Companies rated BBB are regarded as having an adequate capacity to pay interest and repay prin�
however, adverse economic conditions or changing circumstances are more likely to lead to a weal
capacity to pa interest and repay principal.
Below Investment Grade or Vulnerable:
BB (B) � Companies rated BB, B, CCC and CC are regarded, on balance, as speculative with respect to the
Christi Tenter
July 29, 2015
Page 3
The rating R is reserved for companies who "have experienced a REGULATORY ACTION regardir
solvency." The rating NR indicates that the insurer's financial solvency is not rated.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to r
standing within each category.
S&P uses a suffix of `pi' "based on an analysis of published financial information and additional information i
domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less
information than ratings without a`pi' subscript."
Finally, Segal does not itself perform insurance company or managed care organization credit quality evaluations anc
any warranty as to the scope or reliability (e.g., with respect to an organization's ability to meet future obligations) oi
company or managed care organization evaluations performed by AM Best or any other rating service.
We will not be responsible for providing monitoring on an ongoing basis.
cc: Steven L. Teglia
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