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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 4 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 6 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 7 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. 8 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 9 2: Funding Options Fully-Insured | Consortium | Partial Self Funded Health Plan Funding Options 11 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 12 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) 13 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 15 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 16 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 17 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 18 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 19 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 21 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 23 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. 24 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 25 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. 26 27 Compliance Example Refer to Supporting Document D for full Compliance Overview. 6: Q&A | Next Steps 28