Wednesday, September 24, 2003
The meeting was called to order at 8:30 a.m. Committee members present were Alderman Lampe and Alderman Kopplin. Also present was Robert Kufrin, Dan Siettmann, Cathy Leranth, RoseAnn Underberg, Marie Pellett, and Dan Burkwald and Scott Schultz of Burkwald & Associates, Inc.
The Personnel Committee met with the Health Insurance Study Committee for the 2003 mid-year report from Burkwald & Associates, Inc.
The city is currently 27% below the expected liability for 2003. In referring to the report, although page I-7 looks like 2003 is a bad year, there was $373,000 in run-out claims from 2002 carried over into the first three months of 2003. This large group of run-out claims skew the annualized estimates for 2003. The high run-out claims was partially due to the increased lag time for higher cost claims that came in near the end of 2002. In 2002, only $131,000 was carried over from 2001.
Claims against the 2003 stop loss look good for now. There has been $51,000 paid out in claims from lasered individuals from January through August ’03. There was also an inordinate bubble of claims paid in the first three months of 2003. When taking into account the 2002 run-out claims paid in the first three months of 2003, Dan indicated that it takes a managed strategic process to create the type of results we’ve had.
Bob asked if historical demographics for our group are available. The issue of reaching the under age 65 retirees in regard to wellness is a concern. The use of an HRA would be a low cost approach and would be of great benefit to the city for them to participate in and would help focus the overall efforts of the Wellness Program.
Although our health insurance plan has been doing well so far this year, Dan estimated that “bad years” occur in approximately 1 in 5 or 2 in 6 years.
In the Medicare supplement plan, Member Health paid out 13% more in prescription drugs than we paid them. With inflation, Scott indicated we should expect to see prescription drug rates increase.
Dan added that a consortium of employers is not as effective as consumer responsibility/knowledge. He expects the renewal numbers to be available in early to mid-October.
The meeting ended at 9:50 a.m.