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HomeMy WebLinkAboutPR 19456: ADOPTION OF A BLUE CROSS MEDICARE ADVANTAGE PPO AND PRESERIPTION DRUG PLAN City of Port Arthur Human Resources Department MEMO To: Brian McDougal, City Manager From: Patricia Davis,Human Resources Training Manager Lisa Cohen,Acting Assistant Director of Human Resources Date: July 28,2016 Re: Adoption of Proposed Resolution No. 19456 Amending the Current Major Medical Plan Offered Through Blue Cross and Blue Shield of Texas, Whereby Authorizing the Adoption of A Blue Cross Medicare Advantage PPO and Prescription Drug Plan for its Existing Medicare Eligible Retirees and/or Medicare Dependent(s), and Authorizing the City Manager to Execute All the Documents Necessary for this Transition Effective on 11/1/2016 Recommendation: We recommend that the City Council adopt Proposed Resolution No. 19456, which will amend the City's current major medical plan offered through Blue Cross and Blue Shield of Texas whereby authorizing the adoption of a Blue Cross Medicare Advantage PPO and Prescription Drug Plan for its existing Medicare eligible retirees and/or Medicare dependent(s), and authorizing the City Manager to execute all the documents necessary for this transition effective on 11/1/2016. Background: Subsequent to a City Council Work Session held on 7/26/2016 to present the proposal of this Blue Cross Medicare Advantage PPO and Prescription Drug Plan to Mayor and Council, and after answering questions relative to the pros and cons of such, staff feels it prudent and in the overall best interest of the City to transition its existing Medicare eligible retirees and Medicare eligible dependent(s), affecting approximately 175 plan participants effective on 11/1/2016. Staff supports this recommendation based on the fact that impacted Medicare eligible retirees and/or Medicare eligible dependent(s)' summary of benefits will be improved, monthly costs reduced, and more importantly, the overall savings to the City's health insurance fund will result in a substantial savings of over one million dollars($1,000,000)annually [See Attachment"Al. As you are aware, staff along with you, the Assistant City Manager/Operations, the Director of Finance, and the City's Insurance Consultant along with representatives from Brian McDougal,City Manager/Memo July 28,2016 Blue Cross and Blue Shield of Texas met to gain a better understanding of the proposal as presented with regard to offering a Blue Cross Medicare Advantage PPO and Prescription Drug Plan to its Medicare eligible retirees and/or Medicare eligible dependent(s) effective on 11/1/2016. Key salient points worthy of mentioning are as follows: 1. 175 Medicare Eligible Retirees and/or Dependent(s)Impacted generating savings of over one million dollars annually to the City's overall health insurance fund 2. Benefits changes equal to or better than current levels • $0 Annual Deductible • Maximum Out of Pocket Lowered to$1,500 • Reduced Copays • SilverSneakers Program (i.e. YMCA, Curves, World Gym,etc.) • Hearing Aid Benefits • Incentives totaling$100/per year for Wellness Benefits 3. Premium Cost Savings to Impacted Medicare Retirees and/or Medicare Dependent(s.)—[Reduction of current monthly premium for all Medicare Eligible Retirees and/or Dependent(s)] 4. Reduction to the City's GASB 45 Funding Liability Staff views the health insurance benefit as an earned as well as deserved benefit for its City retirees, and will continue to strive to provide the best health plan available at the best price to all of its plan participants. However,the proposal offered by Blue Cross and Blue Shield to transition its existing Medicare Eligible Retirees and/or Dependent(s) to the Blue Cross Medicare Advantage PPO and Prescription Drug Plan effective on 11/1/2016 will allow the City to accomplish these goals for the reasons stated herein. Staff will continue to work with Blue Cross through the transition period and will play an integral role in the initial enrollment as well as educational/informational process to make this transition as smooth as possible. NOTE: Inasmuch as all impacted Medicare eligible retirees and Medicare dependent(s) will be required to pay 100% of their premium cost, staff further recommends that the current payment process be continued through the Finance/Accounting Division. The City will remit payment to Blue Cross for all impacted members on a monthly basis on their behalf. "Remember, we are here to serve the citizens of Port Arthur." Brian McDougal,City Manager/Memo July 28,2016 Budgetary/Fiscal Effect: Approval of proposed Resolution No. 19456 will require funding the following amounts: [Note: Amounts are estimated. Actual costs will depend on plan utilization, and number of plan participants,etc.]. Funding will be from Fund No. 614—Health Insurance Fund TOTAL RECOMMENDED FUNDING FROM FUND NO. 614 HOSPITAL INSURANCE FUND $340,830/yr. This cost will be entirely covered by those participating members paying the premiums. Staffing/Employee Effect: Adoption of the proposed resolution would have no impact on staffing levels. Summary: We recommend that the City Council adopt Proposed Resolution No. 19456, which will amend the City's current major medical plan offered through Blue Cross and Blue Shield of Texas whereby authorizing the adoption of a Blue Cross Medicare Advantage PPO and Prescription Drug Plan for its existing Medicare eligible retirees and/or Medicare dependent(s), and authorizing the City Manager to execute all the documents necessary for this transition effective on 11/1/2016. "Remember, we are here to serve the citizens of Port Arthur." P.R. No. 19456 07/19/2016—LC/pd RESOLUTION NO. A RESOLUTION AMENDING THE CURRENT MAJOR MEDICAL PLAN OFFERED THROUGH BLUE CROSS AND BLUE SHIELD OF TEXAS, WHEREBY AUTHORIZING THE ADOPTING OF A BLUE CROSS MEDICARE ADVANTAGE PPO AND PRESCRIPTION DRUG PLAN FOR ITS EXISTING MEDICARE ELIGIBLE RETIREES AND/OR MEDICARE DEPENDENT(S), AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY FOR THIS TRANSITION EFFECTIVE ON 11/1/2016 FUND NO. (S): 614-1701-583.54-00 (HEALTH INSURANCE FUND) WHEREAS, the City Council of the City of Port Arthur deems it necessary and appropriate to continue to offer major medical health care benefits along with a prescription drug benefit to its existing City Medicare Retirees and/or Medicare Dependent(s); and, WHEREAS, the City Council deems it to be a significant cost savings to the overall health insurance plan (approximately $1 million dollars savings annually) to accept the proposal as offered by Blue Cross and Blue Shield of Texas to transition its existing retired Medicare eligible plan participants (approximately 175 impacted plan participants) by amending the existing contract to a Blue Cross Medicare Advantage PPO and Prescription Drug Plan effective on 11/1/2016 as delineated in Exhibit "A"; and; WHEREAS, the Blue Cross and Blue Shield of Texas will take the necessary actions to comply with the Centers for Medicare and Medicaid Services' P.R. No. 19456 07/19/2016—LC/pd Page 4 of 4 APPR ED ASA-10 FORM: ttik. ��ci Valecia Tizeno`, City A rney i APPROVED FOR ADMINISTRATION: Lisa Colten, Acting Assistant Director of Human Resources Brian McDougal, City Manager APPROVED AS TO AVAILABILITY OF FUNDS: Jerry Dale, Director of Finance AGREED TO: BLUE CROSS BLUE SHIELD OF TEXAS By: Print Name: Title: EXHIBIT "A" CO CD 70 n O Sc L - c v) ,,\,,,\,:-,1 i,,illisiii, i_.1 C 0 'L.__---:::"-::.4 I-. 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As we look to the 11/01/2016 plan year renewal figures and current level of benefits, and in an effort to provide optimal health care coverage, as well as increased health plan savings to your group, Blue Cross welcomes the opportunity to offer a Blue Cross Medicare Advantage PPO Prescription and Drug Plan for all of your existing Medicare-eligible retirees and Medicare-eligible dependents. This proposal is being offered for this populated group at a significant cost saving to the City. A Medicare Advantage plan replaces the current plan which is essentially a supplement plan that coordinates with Traditional Medicare. This offering is a replacement plan for the retiree population. We look forward to meeting with you and your healthcare team to finalize this exciting offering for your 11/01/2016 plan year. Brian J. Boe Group Medicare Sales/Account Executive Blue Cross Blue Shield of Texas 1800 West Loop South, Ste. 600 Houston, TX 77027 (713) 354-7284 Terry Villiva Sr. Manager Client Management Blue Cross Blue Shield of Texas 1800 West Loop South, Ste. 600 Houston,TX 77027 (713) 663-1125 A Division of Health Care Service Corporation,a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association HE, ����'# flfl1fIJI ng�' o.'3 Sr y. Ii i ,3r,, 3§ o3 2 3 .. gT g81101k, It g 5@ lab SS3t . g5P, q4$ � 9 a $ aa "g '�4i.M-a J ul a' o{� S R: •t ' +' g22 {z 0 8 m`^ o° {:� ; pa % 2 . 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