2003 Open Enrollment Benefits Presentation
Presented By: Mark G. Cauthen
Effective: 1/1/2003
Topics of Discussion Self Insured Plan Overview of the Trust Fund Factors Driving Increase in Cost of
Health Care 2003 Plan Changes
Private Health Care Systems (PHCS) 2003 Rate Adjustments
What does it mean to be Self-Insured?
The employer assumes the role of the insurance company and assumes all of the risk.
Overview of the Trust Fund Joint fund between City and Colorado
Springs Utilities (CSU) Where all of the premiums go Where claims are paid from (similar to a
checking account) We need to bring in more revenue than
what is spent on claims Projected 2002 expenditures (City/CSU)
Medical: $16 million Pharmacy: $3.8 million Dental: $2.8 million
How is the Trust Fund Kept Viable?
Premium Rate Increases Cost Sharing with Employees Vendor Management
Audited Walgreen's As a result, we are renegotiating for
better rates Performed a Medicare Audit Collected funds from Memorial
Hospital as a result of the Medicare Audit
Factors Driving Rising Costs in Healthcare Premiums (2001-2002) Nationally
Litigation and Risk Management -- 7% Fraud and Abuse -- 5% General Inflation (CPI) -- 18% Increased Consumer Demand -- 15% Rising Provider Expenses -- 18% Legislation/Regulations -- 15% Rx, Medical Technology -- 22%
Source: PricewaterhouseCoopers analysis, April 2002
Factors Driving Increase in Cost for City Increasing Medical costs Increase in our Claims
Experience Low Reserve Level
because of Several Catastrophic Claims
Projected increase in cost of claims for 2003
2003 Rate Increases
State Employees -- 39% National -- 25% City -- 14.3%
2003 Plan Changes
Plans Affected: Medical Pharmacy Dental Vision
Medical Plans
We will have 3 Medical Plans Next Year EPO EPO Mid-Level CORE
The Swing Plan will be Eliminated There will be a new out-of-network
option available under the EPO Mid-Level Plan
Terms Out-of-Pocket Maximums
The maximum amount that you will spend annually for covered expenses, does not include co-pays.
After the out-of-pocket maximum is reached, the plan pays 100% for covered services
Annual Deductible The amount that must be paid by the
member before the plan pays anything Co-Insurance
The portion of Eligible Medical Expenses for which the Covered individual has financial responsibility
Hospital Pre-Admission Diagnostic Testing Subject to the Inpatient Hospital
diagnostic coinsurance EPO--Plan pays 90%, Employee
pays10% up to the out-of-pocket maximum
EPO Mid-Level (In-Network)--Plan pays 80%, Employee pays 20% up to the out-of-pocket maximum
EPO Mid-Level [Out-of-Network] and CORE Subject to deductible and co-insurance
EPO: Plan Change
Out-of-Pocket Maximums 2003
$750 per Individual per year $2,250 per Family per year
2002 Individual -- $500 Family-- $1,500
EPO: Plan Change
In-patient Hospital Stays 2003
10% Co-insurance (applies to the out-of-pocket maximum)
2002 $100 co-pay per day of
confinement, $500 maximum
EPO: Plan Change
Pharmacy Benefit Increase to Maximum Co-Pay on
Brand Named Prescriptions only Retail: From $35.00 to $50.00
per RX (30 day supply) Mail: From $40 to $60 for a 90
day supply Generic Pricing Stays the
Same
EPO Mid-Level: Plan Change
Plan Enhancement Two Features: In and Out-of-
Network Options (Replaces Swing Option)
In-Network option continues to function as it does today in that you have to use MHMN.
Out-of-Network: Separate Benefit Schedule, deductible, and coinsurance
EPO Mid-Level: Plan Change
Annual Deductible Out-of-Network:
$1,000 per individual $2,000 maximum for a family
Plan pays 70% for most services after the annual deductible is met
Plan pays 100% for eligible medical expenses once the out-of-pocket maximum is reached
In-Network: No Annual Deductible
EPO Mid-Level: Plan Change
Out-of-Pocket Maximums In Network
Individual--$1,000 Family--$3,000
2002 Individual--$750 Family--$2,250
EPO Mid-Level: Plan Change
Out-of-Pocket Maximums Out-of-Network
Individual--$3,250 Family--$9,750 These amounts are above the
deductible Plan pays 100% for covered
services after out-of-pocket maximum is reached
EPO Mid-Level: Plan Change
Inpatient Hospital Stays 2003
In-Network• 20% Co-insurance (applies to the
out-of-pocket maximum) Out-Of-Network
• 30% Co-insurance (applies to out-of-network out-of-pocket maximum
2002• $300 co-pay per day of
confinement, $750 maximum
EPO Mid-Level: Plan Change
Pharmacy Benefit Increase to Maximum Co-Pay on
Brand Named Prescriptions only Retail: From $35.00 to $60.00
per RX [30 day supply] Mail: From $40 to $75 for a 90
day supply
Swing Medical Plan Will be discontinued in
2003 Enhancement of EPO Mid-Level
Plan Features an out-of-network
benefit option
Core Medical: Plan Change
Out-of-Pocket Maximums 2003
Increased to $7,750 per individual
2002 $7500 per individual
Core Medical:
Annual Deductible $1,500 per individual per year,
no family limitation No change from 2002
Private Healthcare Systems (PHCS)
New Option for 2003 PHCS
New Wrap Around Network Nearly 370,000 providers and 3,500
facilities We have Pre-Negotiated Network
Discounts Eligibility
Members who are enrolled in a City Medical Plan (EPO, EPO Mid-Level, or CORE) can take advantage of the PHCS in Certain Circumstances
Private Healthcare Systems (PHCS) National Network
Enables members to choose providers from within a national network
In-Network Benefit All plan participants receive the in-
network benefit for emergency situations
Discounts All emergency situations, all plans EPO Mid-Level plan participants who
use the out-of-network benefit and use PHCS services
EPO Participants - PHCS
Can only be used for out-of-area emergency situations As defined in the Medical Summary Plan
Description (SPD) Non Emergency out-of-area
services will not be paid by the plan
EPO Mid-Level Participants - PHCS
PHCS enables EPO Mid-Level out-of-network participants to take advantage of discounts Emergency and Non-Emergency
situations
Core Participants - PHCS
PHCS enables CORE indemnity plan to take advantage of discounts
New Generic Medical Cards
To be distributed by January 1, 2003
Will include PHCS information
Alternative Medicine
Pilot Program for 2003 Applies to all Medical Plans No additional premium Must be enrolled in a
medical plan New Option for 2003
Alternative Medicine
Services must be provided by a licensed provider
Covers: Acupuncture Nutritionist Chiropractic Massage therapy Homeopathic Services
Alternative Medicine
All plans pay 50% of each claim
Maximum amount paid by plan is $300 per family
50% co-insurance does not apply to the plans out-of-pocket maximum or deductible
Dental Plans Delta Hi-Option DPO Dental
Plan Formerly Delta Premier Dental Plan
(Springs Dental)
Enhanced by including the DPO provider Network
When DPO provider is used, employee and plan receive discounts
DPO Providers will be shown in Red Lettering in the provider directory
Dental Plans
Delta Standard-Option DPO Dental Plan Formerly Delta Preferred DPO
Dental Plan No change in deductible (In or Out-
of-Network) $50 per individual $150 per family
DPO Providers will be shown in Red Lettering in the provider directory
Dental Plans - Calendar Year Deductibles Delta Hi-Option DPO Dental Plan
$50 Per Individual $100 Family
Delta Standard-Option DPO Dental Plan $50 Per Individual $150 Per Family
Core Dental $75 Per Individual
Vision Benefit Enhancement
Frames: In-Network Frame allowance increased to $130 retail ($50 Wholesale)
Service Enhancements Contact Lenses:
Member Preferred Pricing Direct delivery to your home Other Incentives
Contact VSP at 1-800-877-7195 to learn more
Rate Increases
Medical Prescription (RX)
Dental
Funding the Medical Plan Due to an increase in
medical plan costs and increased claims experience, there will be a 14.3% increase in overall funding for 2003
Rate Re-Structuring
The rate structure was realigned to more accurately reflect the claims experience and industry standards.
Creates greater equity for the participants
Rate Re-Structuring
Tier2002 Premium
Structure2003 Premium
StructureEmployee Only 1 1Employee & Spouse 2.5 2.0Employee & Child(ren) 2.3 1.9Employee & Family 3.1 2.9
Dental Rate increase of 13.1%
Vision
Rate Increase is zero
After Hours Clinic
Effective Sept 30, Memorial Hospital After-Hours Clinic Moved
Location: 2502 E. Pikes Peak Ave (North side of building)
Open 7 days a week: 11 a.m. to 11 p.m.
Closed Holidays Phone: 365-2888 Call ahead to decrease waiting time
Benefit Enhancement Recap
Medical PHCS Wrap Around Network EPO Mid-Level, Out-of-Network Option Alternative Medicine
Dental DPO Provider Network Discount
Added to Delta Hi-Option DPO Dental Plan
Vision Frame Allowance Increase
Questions Benefits Line: 385-5904,
Press 2 at the Prompt.