HomeMy Public PortalAbout2024-03-18 work session minutes1
COUNCIL WORK SESSION, MARCH 20, 2024
CALL TO ORDER
Mayor Ron Fitzwater called the March 20, 2024 City Council work session to order at 5:31 P.M.
ROLL CALL
The f ollowing Councilmembers were present for roll-call:
Present: Ahlers, Deeken, Hensley, Lester, Mealy, Schwartz, Spencer, Spicer, and Wright
Absent: Spicer and Wiseman
OPPORTUNITY FOR PUBLIC COMMENT
There was no public comment at this time.
City HEALTH INSURANCE DISCUSSION
Councilmember Wiseman joined the meeting at 5:32 P.M.
City Administrator opened the discussion and introduced Randy Lueckenotte, Cassie
Laemmli, and Judy Dawson with Acrisure, operating as Wallstreet, the City’s health insurance
broker. Mr. Luekenotte introduced Deborah Hyde, Acrisure Deputy General Counsel &
Director of Benefits Consulting. Ms. Hyde joined the meeting virtually.
Materials were distributed to the Mayor, City Council, and City Staff (see attached
presentation).
After the presentation with questions and answers, Mr. Crane said no action is required at this
time, but will be necessary soon as the budget season approaches.
ADJOURN
Councilmember Wiseman motioned and Councilmember Schwartz seconded the motion to
adjourn the meeting. The motion passed unanimously at 7:05 P.M.
CITY OF JEFFERSON
Council Work Session
March 20, 2024
Table of Contents
1. Introduction
2. Funding Options
3. Cost & Risk Containment
4 Recommendations
5 Compliance Solutions
6 Q&A and Next Steps
1: Introduction
Advantage
Acrisure Wallstreet Partners
Randy Lueckenotte | Cassie Laemmli | Judy Dawson
March 20, 2024
An Extraordinary
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Sweden
England
Scotland
Netherlands
Germany
Poland
France
SpainPortugal
Switzerland
Italy
Czech Republic
Slovakia
Moldova
21 1,000+ 17,000+
Countries Offices Colleagues
Romania
Croatia
Bulgaria
Bermuda
Brazil
Existing Geographies
Signed LOIs
UAE
Puerto Rico
Location
Note: Information is as of 9/30/23 and includes acquisitions closed and LOIs signed since 10/1/23 5
Our Insurance solutions help clients
manage an evolving risk landscape.
•Personal and Commercial offerings
•Industry-leading resources and expertise backed by
powerful proprietary technology
•Consultative approach
•Risk mitigation that controls insurance expenses and
promotes workplace safety
•Largest Property/Casualty Agency in
the U.S.(2) and 6th largest global broker(3)
Insurance and Reinsurance
1)According to 17th annual Insurance Journal Top 100 Independent Property/Casualty Agencies report
2)According to AM Best Top Global Insurance Brokers — 2023 Edition
•Trusted (re)insurance intermediary and capital
management advisor
•Expert global teams dedicated to providing
tailored risk transfer solutions
•Skilled analysts and catastrophe modelers deliver
data-centric, technology-enabled and impactful
analytics and advisory services
•Learn more at acrisurere.com
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4,061
CLIENTS IN
HEALTHCARE
843
DEALS
(2013– 2023
SIGNED LOI’s)
$4.3B
PRO FORMA
REVENUE
$1.4B
EBITDA
73%
ACRISURE
COLLEAGUE
OWNED 59%
EBITDA
57%
REVENUE
Acrisure Overview
INSURANCE BROKERAGE | PREMIUM PLACED
Commercial Property & Casualty $13,355,000,000
Employee Benefits $7,535,000,000
Personal Lines Property & Casualty $3,212,000,000
All Other $2,500,000,000
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Acrisure offers multiple financial products and solutions underpinned by powerful technology. Organized by region
and specialty, our sales professionals are conveniently located within our clients’ communities, and are dedicated to
helping clients find solutions to grow their businesses.
Solutions for Businesses and Individuals
CYBER SERVICES
Acrisure Cyber Services’
comprehensive solution
delivers unsurpassed
speed-to- value by leveraging
modern AI techniques and
cloud-native architecture to
ensure you’re protected.
HIGH NET WORTH
Private Risk Advisors,
our high-net-worth
resource group possess
the necessary product,
carrier and service
knowledge to address
the specialized needs
and requirements of
high-net-worth clientele.
RISK RESOURCES
Through the collective expertise
of our talented advisors and
cutting-edge technology, we
have built a powerful platform
for Risk Intelligence that is
unsurpassed in the market.
PAYROLL SERVICES
We partner with leading payroll
service providers like to provide
our clients’ HR teams with access
to payroll software to help
streamline their processes.
COMPLIANCE SOLUTIONS
Acrisure Compliance Solutions
provide sophisticated
compliance resources to
navigate complexities and
meet growing needs.
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We’re proud to partner with globally recognized brands, entrepreneurs and
entertainment venues as we work to make an impact in communities across the globe.
Brand Partnerships
Legendary recording
artist and entrepreneur
Lionel Richie is an official
Acrisure Brand
Ambassador
Acrisure Stadium is
home to the NFL’s iconic
Pittsburgh Steelers
One of the newest
entertainment venues in
Southern California,
Acrisure Arena is also
home to the AHL’s
Coachella Valley Firebirds
Home to the NHL’s New
York Islanders, the main
entrance of UBS Arena is
the Acrisure Great Hall
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2: Funding Options
Fully-Insured | Consortium | Partial Self Funded
Health Plan Funding Options
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Fully-Insured & Consortium Options – 2024 Renewal Strategies:
Anthem Declined, not competitive
United Healthcare Declined, not competitive
Cigna Declined, not competitive
Aetna Declined, not competitive
Missouri Consolidated
Healthcare Plan
Provided proposal; not recommended due to potential financial risks and
demographics of other members; The City of Jefferson would have been the
largest company in the consortium based on number of lives.
Missouri Public Risk (MPR)Declined, not competitive
Health Plan Funding Options
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Self-Funded with Reinsurance
Partial self-funding, with reinsurance, allows an employer to break out all pieces of a plan: administration, network, reinsurance. Aside from fixed costs required to administer the plan, health plan funds remain in the employer’s account until such time a claim is incurred, processed with a network discount, and approved for payment. Employers traditionally purchase reinsurance which steps in to pay for claims once they reach a certain threshold (deductible).
Carrier Renewal/Proposal Notes
Sun Life (Current Carrier)Renewal 15.9% (specific); 5%
(Aggregate); 1 laser at $900,000
Renewal option with increased Specific Deductible: 0% (specific) 5%
(aggregate); 1 laser at $900,000
Anthem Declined to quote
Acrisure Maverick Declined to quote
Alt Risk Competitive Proposal received from Gerber
with great savings proposed; 3 lasers
proposed totaling $1,150,000
Alt Risk is a Managing General Underwriter we work with and will
provide options from nearly a dozen carriers. They are still waiting
response from three carriers.
Pareto Captive Proposal matches Sun Life’s renewal + 3%
load and $900,000 Laser
No New Lasers going forward + 30% rate cap every year; requires
capital contribution for years 1 and 2 (10% of premium)
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Stop Loss Marketplace
Refer to Supporting Document A for full News Brief & Document B “Understanding Self Insured Group Health Plans”
3: Cost & Risk Containment
Providing group health and pharmacy benefits to attract and retain employees is a
substantial part of the overall employee compensation package versus competition.
Long-term, cost containment and risk management solutions must be continually
evaluated and implemented, when necessary, for long-term sustainability.
Network Discounts
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United Healthcare
2022 and Prior: City of Jefferson’s partial-self funded plan was administered by UHC to access the UHC Choice Plus
network. Network discounts were as follows:
2021: average 45.8%; 98.9% in-network claims
2022: average 46.3%; 98.9% in-network claims
Anthem
With the benchmarking, review, and recommendation made by Wallstreet Group, the Council voted for the plan to move to Anthem January 1, 2023 to administer the health plan, in pursuit of better network discounts. This move has proven to be successful with the plan discounts averaging 62.4% in 2023, with 99.8% in-network claims.
Anthem is achieving roughly 50% discounts off billed charges for the high-cost subject drug.
Case Study: High-Cost Infusion Therapy
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City of Jefferson has a high-cost claimant (HCC) taking a specialty infusion drug (“subject drug”) resulting in a $1 million dollar+ per year
impact to the plan.
-City of Jefferson Member is approved for a high dose equal to 4x of what is standard.
-Medical Necessity has been reviewed and approved based on current condition, prognosis, and continuation of therapy through 10/15/2024.
-Mid-2023, the member’s site of care moved to an outpatient hospital setting which resulted in a higher per-infusion cost. Currently, the
member is receiving the infusions in a home setting, however, due to dosage increases, the cost continues to rise.
-Subject drug is the only FDA approved therapy for the HCC.
-Applying Medicare pricing to this drug would still financially impact the plan. At the current dosage, annual plan cost would be $1.4MM+.
-Surge in price of high-cost pharmaceuticals is driven by a concurrent increase in the approval of high-cost drugs.
-Median price for new drugs approved by the U.S. Food and Administration’s (FDA) Center is over $222,000 in 2022 and expected to be
in the high single or double digits from 2023 to 2024.
High-Cost Claimants
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Claimants with over $50,000 in paid claims:
•2023 – 15 claimants; 6 with direct Pharmacy spend over $50,000; 9 with Medical spend over $50,000.
•2024 YTD – 1 claimant with primary spend under Medical.
Claimants currently taking specialty medications: 7 specialty medications YTD
Claimants currently receiving infusions: approximately 6 claimants YTD.
Cost Containment for HCC Infusion Therapy
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1.Carve-out the coverage of infusion therapy to an outside vendor: Carve-Out vendors review medications, review alternative funding
programs, evaluate the acquisition cost, site of care and rebate optimization which can result in savings to the member and to the plan.
We reviewed the following at the current dosage and frequency the member is taking now:
•Optimed: Approximately $30,000 per fill plus remote nursing services, pump, and ancillary supplies
•Ascella Health (through Leaf Health): does not provide a solution for the subject drug.
•Benefit Smart (through Acrisure Health Strategy): does not provide an option for HCC.
•InfuCareRx (Through Acrisure Health Strategy): Approximately $32,000 per fill plus remote nursing services, supplies (if applicable).
2.Patient Assistance Program (PAP): PAP takes advantage of charitable foundations and grants for certain high-cost specialty medications.
Taking advantage of these drugs provides cost relief to the member and to the plan. Anthem has restrictions on how these programs
are accessed under their administration platform and there are concerns for long-term success:
-PAP program ends or runs out.
-Member does not qualify (household income restrictions).
-PAP is not available for certain infusions.
3. Plan Design: the plan’s design could be changed to exclude coverage for specialty drugs or therapies such as this, which would impact
any participant who now or later requires use of such drug or therapy.
Overall Health Plan Elimination – Last Resort Options
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1.The City of Jefferson can choose to eliminate the employee health plan. This approach will potentially create a hurdle for employee
attraction and retention. In addition, as an ALE under the ACA, the City could be subject to ongoing penalties for not offering coverage
to employees.
2.Individual Coverage Health Reimbursement Arrangement:
•As an alternative to traditional group health plan coverage, employers may offer an individual coverage HRA (ICHRA) to reimburse eligible employees for insurance policies purchased in the individual market or Medicare premiums.
•There are some strict design requirements for ICHRAs. For example, employees and dependents who are covered by an ICHRA
must be enrolled in individual insurance coverage or Medicare coverage. Also, an employer cannot offer employees a choice
between a traditional group health plan and an ICHRA.
•Some additional guidelines apply. Under an ICHRA, the ACA’s shared responsibility rules are met. However, to avoid a penalty,
the City of Jefferson would need to contribute a sufficient amount to the ICHRA for the individual coverage to be considered
affordable to full-time employees.
•See Supporting Document C for a Compliance Brief on ICHRAs.
4: Recommendations
Recommendations
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2024
For the remainder of 2024, we would recommend implementing the OptiMed program through Sun Life’s stop loss relationship. Result will
be lower cost per fill for the remainder of the year. Anthem has approved this carve-out. All specialty (J-Code – those that process
through the medical plan) drugs will be required to be evaluated by OptiMed. If the OptiMed program can achieve savings, the member
will be required to utilize this program. This change will not result in a hard dollar savings for the City of Jefferson but will result in lower
stop loss reimbursements and a lower loss ration, which will result in a more favorable renewal for 2025 and future rate stability.
2025
Acrisure/Wallstreet will evaluate the marketplace options for a TPA partner that will work to provide long-term solutions to tackle the
current high-cost claimant, and any that arise in the future, while still providing access to the deep network discounts achieved through
the Anthem network.
Future of Cost Containment:
1.Continual Network Discount evaluation.
2.Cell and Gene Therapy carve-out policies.
3.Monitoring of the evolution of high-cost medical spend: Patient Assistance, carve-out programs, etc.
4.Third Party Administrator partners and programs.
5.Marketplace cost containment to allow for more in-depth plan monitoring, cost shifting,
5: Compliance Solutions
Human Resources | Compliance Solutions Team | Employee Benefits
JEREMY HERTZ, J.D.
HR Consulting
Sr. Deputy General Counsel &
Director of HR Consulting
DEBORAH HYDE, J.D.
Benefits Consulting
Deputy General Counsel &
Director of Benefits Consulting
CRAIG WELLER, J.D.
HR Consulting
Senior Human
Resources Consultant
COLLEEN GOLE, J.D.
Benefits Consulting
Senior Associate
General Counsel
DEVAN LEVANDOSKI
Benefits Consulting
Senior Director of
Programs & Projects
ROSALIND THOMPSON
Benefits Consulting
Compliance Services Coordinator
ASH PHILLIPS
Administration
Project Administration
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Sophisticated Resources
for Today’s Challenges
The legislative and regulatory landscapes of employee benefits and
human resources have never been more complicated.
Acrisure Compliance Solutions provides sophisticated compliance
resources to navigate these complexities and meet your growing needs.
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Compliance Solutions Services
Benefits Consulting Services
•ERISA
•Affordable Care Act
•COBRA and Other Coverage Continuation Laws
•HIPAA Portability, Privacy, and Security
•Section 125 Cafeteria Plans
•Section 105(h) and Other Discrimination Issues
•Medicare Secondary Payer Rules
•Wellness Plans
•Health Savings Accounts
•Other State and Federal Benefit Mandates
Human Resources Consulting Services
•FMLA and Other Employee Leaves of Absence
•Discrimination, Harassment, and Retaliation
•ADA and Disabilities Accommodations
•FLSA and Other Wage and Hour Rules
•Recruiting, Hiring, Discipline, and Discharge
•I-9 Compliance
•Reductions in Force and WARN Act
•Workers’ Compensation
•Occupational Safety and Health
•Unions and NLRA
Educational Tools and Resources
•Monthly Webinar Series for Clients, Prospects and
Agency Partners
•Regulatory and Legislative Updates
•Weekly Digest of Relevant News, Trends, and
Legal Updates
•Monthly Compliance Communication Pieces
•Comprehensive Compliance Guide
•Various Compliance Checklists, Charts, Toolkits
Specific Compliance Services*
•Wrap Plan, SPD, and POP Document Preparation
•Form 5500 Reporting
•HIPAA Privacy and Security Training
•Non-Discrimination Testing
•HR Special Projects (e.g., employee reward and
recognition programs, succession planning
strategies, compensation surveys)
•Preferred Vendor Relationships (e.g., benefits/HR
technology and administrative services)
•IRS Letters 226J
*Fees may apply
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HR Leaders Compliance Summit
A virtual gathering of transformational HR and operational
leaders from organizations across the country.
During this summit, you’ll hear from subject matter experts
who specialize in various HR-related disciplines: labor and
employment regulations, employee benefits compliance, talent
management, training, recruiting, workplace technology and
emerging trends in HR.
Three days of
forward-looking
educational
content delivered
by respected
industry leaders.
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Compliance Example
Refer to Supporting Document D for full Compliance Overview.
6: Q&A | Next Steps
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