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Health Insurance Update November, 2009

Health Insurance Update November, 2009. Goals of Franciscan University’s Health Insurance Program. Protect University employees and their families from the financial consequences of catastrophic health care claims Provide reasonable access for routine family health care

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Health Insurance Update November, 2009

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  1. Health Insurance UpdateNovember, 2009

  2. Goals of Franciscan University’s Health Insurance Program • Protect University employees and their families from the financial consequences of catastrophic health care claims • Provide reasonable access for routine family health care • Provide health care services that are compatible with Catholic moral teaching • Encourage employees to participate as good stewards of their own health care

  3. Franciscan University’s health insurance program should balance the following objectives with the overall goals: • Manage health care costs and cost increases • Provide employees with a quality health care provider network • Encourage employees to participate in the control of health care costs • Recognize and support the health care needs of large families • Recognize and support the health care needs of individuals on the lower end of the pay scale

  4. Benchmarking • Milliman (MMMS) • 2009 plan designs • 3,563 companies • 1.8 million employees • Milliman Industry (Higher Ed Services) • 2009 plan designs • 51 organizations • 97,506 employees • Peer Comparison • 2008 plan designs • 7 schools

  5. Self-funded Health Insurance • Fully insured vs. self-insured • University responsible for all claims • Pay Third Party Administrator (TPA) to pay claims and use network • Pay for stop-loss insurance (high deductible) • Assumes risk for claims • Admin fees + stop loss insurance + claims =TOTAL COST

  6. 2009 • 269 Employees on health insurance coverage • About 880 lives • Project to spend about $2.4 million on doctors and facilities and drugs 14% increase from 2008 (following 22% increase last year) • At least one large claim • Administrative fees will increase 8% • Stop loss insurance will increase 12% (66% cumulative increase in 2007 and 2008) • Overall 2009 rates projected to increase 8.5%

  7. Prescriptions • Prescription costs increasing rapidly (45% from 2006 – 2008) • Large dollar amounts (over $400,000 in 2008) • $8/$20/$40 design has not changed for many years, and is now falling behind medians • Generic/brand gap is not adequate to encourage preferred behavior • No financial incentive to consider different formulary brand options

  8. Prescription Change 2010 • 80/20 Coinsurance with floors and ceiling • $5 generic floor • $25 brand formulary floor • $50 brand non-formulary floor • $100 ceiling • Reduces projected premium increase by a little more than 1%

  9. Prescription Change 2010 • Example: Generic costs $21 • Employee pays: $5 • Example: Generic costs $3 • Employee pays: $3 • Example: Formulary costs $80 • Employee pays: $25 • Example: Formulary costs $300 • Employee pays: $60 • Example: Formulary costs $1,000 • Employee pays: $100

  10. 2010 • NO INCREASE in BC/BS deductibles, copays, out-of-pocket maximums, and co-insurance levels for medical on either plan • PPO access to BC/BS network (Pittsburgh & nationwide) continues for both plans • HRA maintained at same funding schedule for both plans • Maintain vision benefit for employees on both plans; option for dependent vision coverage will require additional contribution of $17

  11. Projected 2010 Monthly Employee Contributions • PPO Core Single: $52/month Increase of $15/month • PPO Core Family: $119/month Increase of $45/month • Dependent vision coverage may be added for a contribution of $17/month

  12. Some Good News! • Private College and University Consortium • 7 private schools in western PA • Highmark BC/BS • Greater leverage in negotiating admin fees and stop loss insurance (1700 members) • $5 million lifetime maximum • Level out self-insured risks • Maintain control over plan design

  13. 2010 Monthly Employee Contributions • Consortium: PPO Core Single: $43/month Increase of $6/month • Consortium: PPO Core Family: $78/month Increase of $4/month • Dependent vision coverage may be added for a contribution of $17/month

  14. 2010 Monthly Employee Contributions • Higher benefit level for PPO Buyup • PPO Buyup Single: $115/month • PPO Buyup Family: $281/month • Dependent vision coverage may be added for a contribution of $17/month • Employee contributions will be pre-tax payroll deductions

  15. 6 Year Comparisons • Core Monthly Contributions2005: $24 sgl / $46 family2006: $18 sgl / $34 family2007: $28 sgl /$63 family2008: $15 sgl/ $45 family2009: $37 sgl/ $74 family2010: $43 sgl/ $78 family • Deductibles2005: $02006: $250/$5002007: $350/$7002008: $500/$1,0002009: $500/$1,0002010: $500/$1,000

  16. Committee Membership David Schmiesing Chair Janine Stasiulewicz Secretary Sue Dukich Robert Filby Kevin Harris Catherine Heck John Herrmann Patrick Lee Mary Lynn Lewis Adam Mitchell Brenan Pergi Adam Scurti Mary Salter Patti Scheel Dave Skiviat

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