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Home My WebLink About03/11/2009 B A K E R S F I E L D Staff: City Council members: John W. Stinson, Assistant City Manager Ken Weir, Chair Steven Teglia, Administrative Analyst Irma Carson Zack Scrivner SPECIAL MEETING NOTICE PERSONNEL COMMITTEE of the City Council - City of Bakersfield Wednesday, March 11, 2009 1:30 p.m. City Hall North — Conference Room A 1600 Truxtun Avenue, First Floor Bakersfield, California 93301 AGENDA 1. ROLL CALL 2. ADOPT JULY 23, 2008 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Discussion regarding Health Insurance Renewals and Health Plan Cost Reduction Options — Stinson, Lozano 5. COMMITTEE COMMENTS 6. ADJOURNMENT DRAFT B A K E R S F I E L D City Council members: Ken Weir, Chair Stafr John W. Stinson David Couch Assistant City Manager Harold Hanson SPECIAL MEETING OF THE PERSONNEL COMMITTEE Wednesday, July 23, 2008 3:00 p.m. City Manager's Conference Room 1501 Truxtun Avenue Bakersfield, CA 93301 AGENDA SUMMARY REPORT Meeting called to order at 3:10:29 PM 1. ROLL CALL Committee members present: Councilmembers David Couch and Harold Hanson Committee members absent: Councilmember Ken Weir, Chair City staff present: Alan Tandy, City Manager John W. Stinson, Assistant City Manager Rhonda Smiley, Assistant to the City Manager Steven Teglia, Administrative Analyst— City Manager's Office Rick Kirkwood, Management Assistant— City Manager's Office Virginia Gennaro, City Attorney Pamela McCarthy, City Clerk Nelson Smith, Finance Director Javier Lozano, Human Resources Manager Ginger Rubin, Benefits Technician Bill Macauley, Firefighter - Bakersfield Fire Department Brian West, Detective - Bakersfield Police Department Todd Dickson, Detective - Bakersfield Police Department Retired employees: Margaret Ursin Others present: Chuck Waide and Marlene Valdez, SEIU Local 521 Priyesh Shah, Bobby Mitchell, Chris Kim, Gita Raghavan and Tom Morrison — Segal Company S:\Council Committees\2008\08 Personnel\July 23\July 23 ASR.doc JWS:al Page 1 DRAFT 2. ADOPTION OF DECEMBER 19, 2007 AGENDA SUMMARY REPORT Adopted as submitted 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Introduction of Segal Company Health Care Consultants and Discussion of Insurance Renewal Information — Stinson, Lozano Tom Morrison, Sr., Vice President of Segal Company, distributed copies of a document detailing the proposed renewal rates. He gave an overview of the proposed 2009 rate increases contained within the handout. The information also includes impacts of any plan changes that may reduce any rate increases. The Cost Trend Survey is updated quarterly, but produced annually. It is a collection of what future trends might be anticipated by level of coverage by type of plan. The information is collected from major insurance carriers, HMO providers, and drug manufacturers as to what they are using in their forecasting trends. All trends are uncertain as to what may actually materialize. Trends are more directed by utilization, and regional and other factors that influence cost increases. City Manager Tandy stated that while staff has asked for productive ways to reduce rate increases, they are not recommending any at this time unless employees or the Insurance Committee wants to discuss them. The amounts shown in the handout are within budget. Employee groups have asked for a study of PERS and SISK insurances, which will take place during the upcoming year. An actuarial study to fully understand policy implications of implementing any new plans will be required. Committee member Couch asked for a study that would allow for employees to choose a lower premium based on a higher deductible. Mr. Morrison said that this information can be provided by October 1, 2008. Human Resources Manager Lozano stated that the information should be ready to present to Council in November, 2008. Mr. Morrison said that he would like to commit to the numbers as final. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting was adjourned at 3:29:11 PM S:\Council Committees\2008\08 Personnel\July 23\July 23 ASR.doc JWS:al Page 2 SEGAL THE SEGAL COMPANY Thomas M. Morrison, Jr. 330 North Brand Boulevard Suite 1 100 Glendale, CA 91203-2376 Senior Vice President T818.956.6777 F818.956.6790 www.segalco.com tmorrison @segalco.com MEMORANDUM To: City of Bakersfield From: Thomas M. Morrison, Jr. Date: February 13, 2009 Re: City of Bakersfield-Benefit Strategies Benefit Strategies—Shorter Term: > Reduce Cost of Drug Benefit: o Bid Prescriptions Benefit Manager function which Anthem Blue Cross currently provides with other vendor, such as Caremark/CVS, Express Scripts, Medco, etc. > Consider Drug Benefit Modification to Anthem and Kaiser Plans: o Implement 3-tier level of copayments in drug benefit, (generic/brand/non- formulary) o Modify mail order to retail copayments from current three-month supply for one copayment to two times the retail copayment for a three-month supply o Implement mandatory mail requirement for maintenance medications > Implementing low cost plan options with incentives—Consumer Driven Health Plan (CDHP) with Heath Savings Account or Health Reimbursement Account > Implement $0 premium plan for Medicare eligible retirees such as United Health Care/AARP Plans and Secure Horizons, as alternatives to City Sponsored plans > Offer alternative plans through Joint Purchasing Agreements, for example County of Riverside Exclusive Care Select Plans Benefits,Compensation and HR Consulting ATLANTA BOSTON CHICAGO CLEVELAND DENVER HARTFORD HOUSTON LOS ANGELES MINNEAPOLIS NEW ORLEANS NEW YORK PHILADELPHIA PHOENIX SAN FRANCISCO TORONTO WASHINGTON,DC Multinational Group of Actuaries and Consultants BARCELONA BRUSSELS DUBLIN GENEVA HAMBURG JOHANNESBURG LONDON MELBOURNE MEXICO CITY OSLO PARIS City of Bakersfield February 13, 2009 Page 2 > Automatically index co-payments and deductibles in current plans to reflect the inflation of the medical plans, for example: o Out-of-Pocket o Deductibles o Doctor's office and other copayments o Drug copayments o Emergency Room and Hospital Copayments and Deductibles > Bid Dental Plans > Eliminate dual coverage for City employees or insist employees to drop City coverage of spouse if it duplicates the spouse's plans Benefit Strategies—Longer-Term Solutions: > Implement Total Compensation, Defined Contribution Plan: Provide participants set cash amount through negotiations, and institute "Total Flexible Benefits" to allow employees to elect the health and other benefit plans they want or keep the cash or to defer it into a qualified savings plan > Total Health Management: highly controlled disease management programs 50253220110632-001