Minuteman Nashoba Health Group
MNHG Steering Committee, December 4, 2013
MINUTEMAN NASHOBA HEALTH GROUP
Steering Committee Meeting
Bolton Public Library
Bolton, Massachusetts
Meeting Minutes Wednesday, January 29, 2014 at 10:00 a.m.
Steering Committee Members Present:
Donna Madden, Chair Town of Bolton
Tony Logalbo Town of Concord
Melisa Doig Town of Ayer
Margaret Dennehy Town of Boxborough
Lorraine Leonard Town of Harvard
John Flaherty Concord-Carlisle RSD
Larry Barton Town of Carlisle
Patrick McIntyre Town of Clinton
Guests Present:
Michael Hartnett Town of Groton
Bill Hickey Harvard Pilgrim Health Care (HPHC)
Jason Fortin Fallon Community Health Plan (FCHP)
Erin Hayes Tufts Health Plan (THP)
Fred Winer Tufts Health Plan (THP)
Carol Cormier Group Benefits Strategies (GBS)
Chair, Donna Madden, called the meeting to order at 10:06 a.m.
Approval of the minutes of the December 4, 2013 meeting:
John Flaherty moved to approve the Steering Committee minutes of the December 4, 2013 meeting.
Larry Barton seconded the motion. The motion passed by unanimous vote.
Wellness Committee Report:
Melisa Doig, Wellness Committee member, said that there were three responses to the RFP for a Wellness Coordinator. She said all three candidates were interviewed and that the interviews went well. She said two respondents were companies and that their responses were not complete. She said the third respondent was a woman who has performed the requested services for employers in Florida. Ms. Doig said that the Committee is recommending Marcie Morrison. Ms. Doig said the Committee hopes that Ms. Morrison can be introduced to the Board at the Feb. 6th meeting.
Donna Madden said that she thanks Robert Pontbriand, Ayer Town Administrator, for his work on the RFP and throughout the process.
GBS Reports:
Carol Cormier said that she had checks totaling almost $300,000 in reinsurance reimbursements for CY13
from National Union Fire which she turned over to Treasurer Tony Logalbo.
Ms. Cormier reviewed the Funding Rate Analysis with data through December 2013 and said the expense to funding ratio was 95.0%. She reviewed the Level Monthly Funding Quarterly Reconciliation report and said that MNHG owes Harvard Pilgrim $505,605 for the last quarter.
Ms. Cormier reviewed the CY12 reinsurance reports. She said that the Excess Report was complete. She said there were $691,304 in claims over the specific deductible of $275K. She said the MNHG received $240,093 in reimbursements after meeting the $450K Aggregating Specific Deductible. She said $1,211 in claims were denied as being experimental RX.
Ms. Cormier reviewed the CY13 reinsurance reports, noting excess claims through December of $1,560,806. She said that the $450K ASD has been met and there are outstanding reimbursements due of $1,110, 805. She said that the reinsurance checks that she gave Mr. Logalbo were part of that amount owed.
Treasurer’s Report:
Treasurer’s Report:
Tony Logalbo said that the financial statements (unaudited) of November 30, 2013 were not ready yet and said that he will email them to the Committee. He noted that he was notified of a FCHP large loss claim.
Multi-Level Reinsurance Pooling Arrangement (MLRPA) – Tracey May, Gallagher Benefits and Manjusha Sheobaran, Berkley Insurance:
Carol Cormier introduced Tracey May and Manjusha Sheobaran.
Tracey May said that since meeting with the Steering Committee last year, improvements were made to the original model of the reinsurance pooling arrangement. Mr. May said that he believes that the captive, i.e. reinsurance pooling model will be beneficial to the JPGs. He explained that Artex, a subsidiary of Gallagher Benefits Services, will manage the captive and Berkley Insurance will provide the stop loss insurance at the third tier of the multi-level program. Mr. May said that Gallagher vetted the top reinsurance carriers through an RFP and chose Berkely Insurance based on financial and reporting capabilites. He said that in the previous model discussed last year, the reinsurance carrier would have managed the captive. Mr. May said the new arrangement allows the Joint Purchase Groups (JPGs) the option to switch carriers if Berkley is not favorable in subsequent years. He said that representatives from CCMHG, WSHG and MNHG were part of a small advisory committee that worked extensively on this project. He said that Donna Madden and Tony Logalbo represented MNHG.
Mr. May said that the percent of reinsurance expense on average is 1.5% of of total operating spend. He said the major expense is health claims.
Tracey May compared the current reinsurance process with that of the proposed MLRPA and said that MNHG demonstrated good risk this year. Mr. May reviewed the fee structure and said any money left over after paying the claims would be retained in the pool. Mr. May said all of the initial three participating JPGs would have the same policy terms and the same rates.
Tony Logalbo said that the pool will be owned by all three JPGs and each group will pay the same rates according to their enrollments for the same level of coverage. He said that the surplus in the captive pool will be distributed proportionally based on each JPG’s payments which will be based on enrollments.
Manjusha Sheobaran said that in essence, the JPGs will be creating a mini insurance company. She said Donna Madden and Tony Logalbo worked on all of the financial information and governance documents along with the representatives of CCMHG and WSHG. Ms. Sheobaran said that the MLRPA will work similar to what the JPGs are doing to purchase their health benefits. She reviewed the slides in the handout explaining that there were three levels: the risk assumed by each JPG, i.e. the cost of claims under $300K, the claims between $300K and $800K that will be paid from the captive pool, and the claims above $800K that will be paid by Berkley Insurance through its fully insured reinsurance policy with each of the three JPGs. Ms. Sheobaran said that the collateral will be paid up front and will be pooled.
Carol Cormier said that Berkley Insurance is the current MNHG reinsurance carrier and said that MNHG will be able to be transitioned into the pool for an effective date of July 1, 2014. She said that the Steering Committee will need to vote on the reinsurance carrier and rates for January 1, 2014 to June 30, 2014.
Tracey May said that Berkley Insurance will not change the premium for the 12-month policy period and 24-month runout.
Manjusha Sheobaran said that the Aggregating Specific will not be part of the new pooling arrangement. She said that the MLRPA advisory committee also asked that no new lasers be included.
Carol Cormier said that the new rates will look higher because of the elimination of the $450K Aggregating Specific and laser. She said the group will also pay for collateral.
Tracey May said that he will contact Mike Madden at Artex, who will be the fiduciary and manager of the pool to see if the collateral can be paid over a 3 month time frame or if it will need to be paid up front.
Carol Cormier said that all three JPGs said that they would prefer to pay the collateral all at once and it will be based on enrollments.
Manjusha Sheobaran said that she hopes to have the rates by January 15, 2014.
Carol Cormier asked Ms. Sheobaran to add the individual and family rate breakdown to the exhibit.
Ms. Sheobaran reviewed the flowchart.
Donna Madden said that if other groups would like to join the MLRPA, the Board of the MLRPA will review their claims experience and make a decision as to whether or not to accept them into the pool. She said it is similar to how new entities are considered for entry into MNHG.
There was a discussion.
Larry Barton said that he is supportive of the concept and is comfortable with the knowledge that Donna Madden and Tony Logalbo have fully vetted the new arrangement. He asked if there would be any way of making a comparison of the costs of the current process with the new pooling arrangement.
Tracey May said that when the analysis of the arrangement was prepared using the collective claims experience of the three JPGs, the outcome was that the collateral was not utilized and they saw the pool at $660K. He said that the rates that the groups are paying now for reinsurance are gone. He said with this arrangement, any monies in the pool not used will remain in the pool and can be applied to future year payments.
John Flaherty made a motion to recommend the MLRPA to the Board and to move forward with the pooling arrangement.
Larry Barton seconded the motion. The motion passed by a unanimous vote.
Tony Logalbo made a motion to approve the Berkley Insurance reinsurance quote for CY14 submitted through Gallagher Benefits Services.
Margaret Dennehy seconded the motion. The motion passed by a unanimous vote.
GBS Reports:
Carol Cormier, GBS, reviewed the FY14 Funding Rate Analysis Report with data through October 30, 2013. She said the expense-to-funding ratio through August was 89.9%. She said the funding exceeded the expenses by $1.65M at the end of October. Ms. Cormier reviewed the Retiree Drug Subsidy (RDS) received to date and noted that all of the senior plans are now fully insured plans and are not eligible for the RDS.
She said that the new HPHC level monthly deposit is $1.057M and said that MNHG has a debit balance with HPHC of $162,230K.
myMedicationAdvisor® (MMA) Report – Linda Loiselle reviewed the MMA report through September 30, 2013 comparing the budget to actual cost and utilization. Ms. Loiselle said that the international buying program scripts are exceeding projections, while the generic program is not. She noted that the health plans are doing an excellent job promoting the use of generic drugs and said that may be the reason for the lower generic scripts utilization through MMA. Ms. Loiselle said that MNHG and its employees enrolled are still seeing savings, and she reported total net savings of $159,737. She reported employee savings of $26,534.
Stop Loss Reports- Karen Carpenter reviewed the Stop Loss reports for CY12. She said that there are two claimants with claims exceeding the CY12 Stop Loss Specific Deductible of $275K with total excess claims of $691,304. She said that the $450K Aggregating Specific Deductible has been met and said that MNHG has received reimbursements of $240,092. Ms. Carpenter said there is a total of $1,202 of denied claims for experimental drugs. She said that there are 12 claimants on the 50% report with claims totaling $2.3M. Ms Carpenter reviewed the Stop Loss reports for CY13. She said that there are 3 claimants with claims exceeding the CY13 Stop Loss Specific Deductible of $275K with total excess claims of $609,708. She said that the $450K Aggregating Specific Deductible has been met and said the reimbursements of $159,708 due the group. Ms. Carpenter said there are 8 claimants on the 50% report with claims totaling $1.45M.
GBS Contract – 1 year extension – Carol Cormier said that the GBS contract with MNHG expires on December 31, 2013. She said that the contract includes a 12-month renewal clause. Ms. Cormier said GBS proposes the extension with no changes to the fees and services.
John Flaherty made a motion to approve the 12-month renewal of the GBS Contract with no changes to its fees and services.
Margaret Dennehy seconded the motion. The motion passed by a unanimous vote.
Wellness Program discussion continued:
Melisa Doig said that the Wellness Coordinator RFP deadline for receiving applications was extended until December 27, 2013 due to a lack of response. She said that Karelia Health requested a copy of the RFP and may submit a quote.
Donna Madden thanked the Wellness Committee, Ayer’s Town Manager, and GBS for their work regarding the RFP.
Fallon Community Health Plan and myMedicationAdvisor® (MMA): Carol Cormier said that members of FCHP are currently not able to participate in the MMA program due to the low pricing of prescriptions and high generic utilization that FCHP currently obtains. She said that the Abacus Group completed an analysis in the past which showed that savings would not be realized. Ms. Cormier said that she consulted with Ms. Loiselle who said that Abacus would expect a new analysis to reflect the same result.
Jason Fortin said that FCHP is researching a possible alternative for the FCHP members which may provide prescription discounts. He said that he will keep MNHG updated on its progress.
Health Plan Reports:
Fallon Community Health Plan (FCHP) – Jason Fortin said that due to the cost of administering the Affordable Care Act (ACA) requirements, FCHP made the decision to lay off 62 of its employees. Unfortunately, he said Rob Anderson was one of those affected. Mr. Fortin said that FCHP is moving strong into 2014 and has upgraded its technical systems.
Tufts Health Plan – Fred Winer said that the 2013 senior plan enrollment forms and packets will need to be recycled and replaced with the new ones for January 2014. He said that THP is seeing that there has been an increase of delinquent members who make their Medicare Part B payments directly to Medicare. He said members will need to submit a new application if they do not pay by the date requested.
Erin Hayes said that the THP has opened a location in downtown Worcester, MA. She said that she will discuss the ACA impact on certain benefits during the renewal discussions at the next meeting.
Harvard Pilgrim Health Care (HPHC) – Bill Hickey said that HPHC is focusing on the ACA and legislative requirements and making system conversions to meet those requirements. He said that HPHC is expanding its business to Connecticut for 2015.
Other Business:
Donna Madden said that MIIA is contacting members of MNHG and said that they would like to take over the group. She said that MIIA offers BCBS plans exclusively. Ms. Madden said that MIIA asked her to bring the topic up for discussion at the Steering Committee meeting and asked if there was any interest.
The Steering Committee had a brief discussion and it was concluded that there was no interest.
Carol Cormier said that a BCBS representative said that during their reach out to the MNHG units, they found a number of employees are unhappy with the deductible plans. She said that BCBS has a deductible plan with tiers. Ms. Cormier said that with the BCBS deductible plan, the deductible can be waived when a member seeks services from a Tier 1 provider. She asked if the committee has any interest in further information.