HEALTH AND WELFARE BOARD RETREAT 08.29.17 Presented by: Scott Price, Chief Financial Officer Office of the Chief Financial Officer Janice Sawyer, Chief Risk Officer Division of Risk Management and Insurance Services
HEALTH AND WELFARE
BOARD RETREAT08.29.17
Presented by:
Scott Price, Chief Financial OfficerOffice of the Chief Financial Officer
Janice Sawyer, Chief Risk OfficerDivision of Risk Management and Insurance Services
Agenda
Background
Budgetary Impact
Cost Reduction Initiatives
Cost Savings Scenarios
08.29.17 2Health & Welfare Board Retreat
BACKGROUND
08.29.17 3Health & Welfare Board Retreat
How It All BeganThe Evolution of Health & Welfare
08.29.17 4
1940’sBenefits offered to certificated employees
2006District receives a
vote on the HBC
2014OPEB Trust established
1966Retiree health benefits established
1969District pays full premium, eliminating employee contribution
1976Years of service rule (5 years) introduced
2006Board Retreat
1993HBC established
2002Eliminated mandatory 2 year HMO election for new hires
2015MOU renegotiated as an successor agreement to prior MOU
2020ACA’s excise tax becomes effective
198410 years of service rule
198715 years of service rule
1992Rule of 80
1992Eliminated cash-plan
and introduced HMO’s
2007Rule of 80 and 15 consecutive years
2009Rule of 85 and 25 consecutive years
2009MOU established baseline budget with increases based on per member contribution
1960 1990 202019801970 20102000
Health & Welfare Board Retreat
1992Sole authority given to labor partners for plan design changes
2010Enactment of ACA
Health Benefits Committee (HBC)
Structure• Comprised of bargaining units
• One vote per unit and one vote for the District
• Governing Document: Memorandum of Understanding
Roles• Responsible for plan design changes
• Contain cost within the annual budget for health and welfare
• Negotiate all health & welfare contracts
08.29.17 5Health & Welfare Board Retreat
LAUSD Benefits
08.29.17 6
BenefitsPaid By Benefit Provided To
District Employee Active Active Dep Retiree Retiree Dep
Health Care
Health (Medical, Dental, Vision)
Health Care Flexible Spending Account
Dependent Care Flexible Spending Account
Continuation of Health Coverage – COBRA
Life Insurance
Basic Life Insurance
Optional Life Insurance / Accidental Death (AD&D)
Retirement
STRS/PERS/PARS
403(b) / 457(b)
Health & Welfare Board Retreat
Benchmarks: Active How LAUSD compares to other public entities
Public Entity Medical Plan StructureActive Employee
Contribution
LAUSD District pays full premium for eligible employees and their dependents None
City of Los Angeles City pays full premium for eligible employees and their dependents None
Los Angeles County County pays monthly allowance for eligible employees and their dependents Varies
San Diego Unified School District District pays full premium for eligible employees and their dependents None
Long Beach Unified School District District pays annual maximum contribution. Currently all plans offered are under the annual max contribution
None
New York City, Dept. of Education Dept. of Education pays full premium for basic plans. Member required to pay additional premiums for upgraded plans.
Varies
Chicago Public Schools (CPS) Employees contribute 2-5% of salary depending on plan type and coverage level.
2-5%
City of Detroit City pays 80% of premium for eligible employees and dependents 20%
08.29.17 Health & Welfare Board Retreat 7
Benchmarks: Retiree How LAUSD compares to other public entities
Public Entity Medical Plan StructureRetiree
Contribution
LAUSD District pays full premium for eligible retirees and their dependents. None
City of Los Angeles City offers premium subsidy based on years of service. Retiree responsible for remaining balance.
Varies
Los Angeles County County contributes premium for retiree and dependents based on years of service. Members retired after 07/01/2014 responsible for dependent coverage.
Varies
San Diego Unified School District Retiree pays full premium. Depending on Bargaining Unit, subsidy may be offered. Varies
Long Beach Unified School District District pays annual maximum contribution to age 67 Varies
New York City, Dept. of Education Dept. of Education pays full premium for basic plans. Retiree required to pay additional premiums for upgraded plans.
Varies
Chicago Public Schools (CPS) Retiree pays full premium. Depending on Bargaining Unit, subsidy may be offered.Dependent coverage is not eligible for subsidy.
Varies
City of Detroit Members retired after 01/01/2015 are not eligible for medical coverage. Full amount
08.29.17 Health & Welfare Board Retreat 8
Health & Welfare (H&W) Population
08.29.17 9
Medical PlanActive
Employees
ActiveEmployees’ Dependents
Retirees <65Retirees <65 Dependents
Retirees >65Retirees >65Dependents
Anthem Blue Cross EPO 3,651 4,631 829 589 15,735 5,803
Anthem Blue Cross HMO 16,791 25,324 1,216 875 N/A N/A
Health Net HMO 6,736 9,820 480 327 1,028 511
Kaiser Permanente HMO 28,683 38,556 2,302 1,536 13,402 4,689
United Health Care HMO N/A N/A N/A N/A 1,061 302
Opt-Out 3,752 N/A N/A N/A N/A N/A
Total 59,613 78,331 4,827 3,327 31,226 11,305
Source: SAP Data as of 03/01/17 and the Office of Data and Accountability
Health & Welfare Board Retreat
Health & Welfare (H&W) Population
08.29.17 10
Medical PlanActive
Employees
ActiveEmployees’ Dependents
Retirees <65Retirees <65 Dependents
Retirees >65Retirees >65Dependents
Anthem Blue Cross EPO 3,651 4,631 829 589 15,735 5,803
Anthem Blue Cross HMO 16,791 25,324 1,216 875 N/A N/A
Health Net HMO 6,736 9,820 480 327 1,028 511
Kaiser Permanente HMO 28,683 38,556 2,302 1,536 13,402 4,689
United Health Care HMO N/A N/A N/A N/A 1,061 302
Opt-Out 3,752 N/A N/A N/A N/A N/A
Total 59,613 78,331 4,827 3,327 31,226 11,305
FUN FACT!Of all the Active Employees’Dependents, 12,529 are LAUSDstudents enrolled in a Districtsponsored plan.
Source: SAP Data as of 03/01/17 and the Office of Data and Accountability
Health & Welfare Board Retreat
Actives vs. Retirees
08.29.17 11
2010 2017
Source: SAP Data as of 01/01/10 and 03/01/17
Age Age
Act
ive
an
d R
etir
ee
Co
un
ts
Act
ive
an
d R
etir
ee
Co
un
ts
72,294
34,681
59,613
36,053
Retirees represent 32% of population
Actives Retirees
Retirees represent 38% of population
Health & Welfare Board Retreat
Retiree Population Distribution
08.29.17 12
By Region Count
Australia 1
Africa 2
Asia 7
Europe 7
North America* 4
U.S. Territories 5
10
WA - 273
93
50
32,272DC - 2
131
105 18
NJ - 17531
39315
284
99
453
1674
45
20
42
8
15
20
5074
120
1
35
37
45
69
36
2216
31
207
63
3
462046
38
6
33
4
5 CT – 9
DE – 226
Source: SAP as of 03/01/17 * Excludes United States
273
Health & Welfare Board Retreat
Major Medical Cost Drivers
08.29.17 13
Specialty Drugs
Chronic Diseases
Lifestyle
Americans’ unhealthy lifestyle choices are
linked to costly chronic conditions.
Treating chronic diseases accounts for
86% of U.S. healthcare costs.
Specialty drugs account for 1/3 of prescription drug
spending.
New Technology
21st century medicine highly reliant on
expensive technology
Health & Welfare Board Retreat
2015 Life Expectancy
08.29.17 14
81.2 76.3Source: U.S. Department of Health and Human Services, “Health, United States, 2016”
At Birth At 65 Years
85.6 83.0
Health & Welfare Board Retreat
Dialogue & Reflection
What fact was most compelling and what does this mean for the
work ahead?
08.29.17 Health & Welfare Board Retreat 15
08.29.17 Health & Welfare Board Retreat 16
BUDGETARY IMPACT
Independent Financial Review Panel Report
08.29.17 Health & Welfare Board Retreat 17
Health Care and Benefit Costs
• 27% of Average Daily Attendance (ADA) revenues are used for health care, other post employment benefits (OPEB), and pension benefits (pg.13)
• Benefit payments are 9.4% over statewide average (pg. 13)
• Health care cost savings placed on the “Immediate Action” list (pg. 58)
• Health care modifications generate significant ongoing savings (pg. 58)
Source: Report of the Independent Financial Review Panel, November 10, 2015
Independent Financial Review Panel Recommendations
08.29.17 Health & Welfare Board Retreat 18
Source: Report of the Independent Financial Review Panel, November 10, 2015
Implement drug
formulary options
Align retiree benefits to Affordable
Care Act
Implement 90/10
contribution rate
Offer employees lump sum in lieu
of retiree benefits
Review eligibility of
employees and dependents
Negotiate cap on
healthcare expenditures
Refine & accelerate dependent verification
Renegotiate benefit
agreement
Cost sharing for dependent
coverage
Create incentives to
reduce dependent coverageFreeze healthcare
expenditures for five years
LAUSD Budget and Local Control Funding Formula
08.29.17 Health & Welfare Board Retreat 19
• LAUSD has a structural deficit
• LAUSD has had to provide and implement a fiscal stabilization plan to the County Office for over 5 years
• Local Control Funding Formula (LCFF) is currently funded at 97%
• LCFF is projected to be fully funded in 2020-21
• LAUSD continues to experience declining enrollment of over 2% annually
• Pension and health care costs continue to rise
Health Benefits Committee
(HBC)
Negotiates Health Care
Average Amount
Budget Division Informed
Process for Funding Health Benefits
08.29.17 Health & Welfare Board Retreat 20
District General Fund
$$$
Budget Moves Negotiated Average
Amount
Health Care Fund (67)
Vendors Paid Exact Amount $$$
Employee Compensation and H&W Components
08.29.17 Health & Welfare Board Retreat 21
Salary$3.8B
Pension$0.8B
Other Statutory Benefits$0.2B
Active "Pay-As-You Go"
$726.8M
Current Retiree"Pay-As-You-Go"
$255.5M
Future Portion for Active & Retiree
$104.9M
H&W$1.1B
Source: 2017-18 Adopted Final Budget* Includes $104.9 million contribution to OPEB Trust Only (not the Annual Required Contribution)
Employee Compensation Represent $5.9B or 79%
General Fund Expenditure Budget General Fund Health & Welfare
H&W Costs and Enrollment
08.29.17 Health & Welfare Board Retreat 22
General Fund H&W expenditures increased by 250% since 1991-92
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
$0
$200
$400
$600
$800
$1,000
1991-92 2001-02 2011-12 2016-17*
(in
Mill
ion
s)
Health &Welfare EnrollmentSource: 1991-92, 2001-02, and 2011-12: Annual Budget Books*2016-17 Third Interim
Active Employee Workforce Data
08.29.17 Health & Welfare Board Retreat 23
Average age of active employee
Active employees over age 50
Fully qualified life-time health benefits
Source: AON Hewitt Actuarial Valuation Report as of July 1, 2015Represents all participants (not just General Fund)
<5053%
>800%
50-5415%
55-5914%
60-6411%
65-695%
70-742%
75-790%
DISTRIBUTION BY AGE GROUP
47
47%
33%
Benefit Participants Over Time
08.29.17 Health & Welfare Board Retreat 24
0
20,000
40,000
60,000
80,000
100,000
120,0002
01
6
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
20
41
20
42
20
43
20
44
20
45
20
46
20
47
Current Retirees Count Future Retirees Count Remaining Active New Hires
37,308
2,371
Source: AON Hewitt Actuarial Valuation Report as of July 1, 2015Includes all participants from all funds. Assumes that 85% of the actives are replace as they retire.
57,629
9,816
45,778
2,015
50,184
3,133
Benefit Cost Illustration
08.29.17 Health & Welfare Board Retreat 25
Retiree@61 Participant A = $378,000
$18.6K x 4 years =
$74K
$7.5K x 20 years = $150K
$14K x 11 years =$154K
$7.5K x 20 years = $150K
Retiree @65 Participant C = $360,000$14K x 15 years =
$210K
Status/Age50 61 65 8555
$14K x 5 years =
$70K
$7.5K x 20 years = $150K
Retiree @55 Participant B = $406,000$18.6K x 10 years =
$186K
Source: Rates are based on Memorandum of Understanding (MOU) contribution rates for actives, pre-medicare retiree, and medicare retiree.
Total Health & Welfare
08.29.17 Health & Welfare Board Retreat 26
Age 50 61 65 85
60,982 Active 31,955 Over 65 Retirees
55
Source: AON Hewitt Actuarial Valuation Report as of July 1, 2015; Represents all participates (not just general fund).
Increasing Health & Welfare Costs
08.29.17 Health & Welfare Board Retreat 27
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
SC1 Current Retirees PP$ SC1 Future Retirees PP$ Remaining Actives New Hire Actives
in M
illio
ns
Source: AON Hewitt Actuarial Valuation Report as of July 1, 2015. Based on Actuarial Report Cashflow.Represents all participates (not just General Fund). Assumes that 85% backfilling of actives that retired.
Current Retirees PP$ Future Retirees PP$
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2017 2018 2019 2020 2021
SC1 Current Retirees PP$ SC1 Future Retirees PP$ Remaining Actives New Hire ActivesCurrent Retirees PP$ Future Retirees PP$
in M
illio
ns
Increase by 68.9 M
Increase by $63.2 M
Increase by $66.0 M
Increase by $76.5 M
Rising Benefit Costs Increase Total Employee Cost
08.29.17 Health & Welfare Board Retreat 28
H&W $18K
Pension and other Fringe
Benefits $15K
$80K
H&W $21K
Pension and other Fringe
Benefits $21K
$80K
CURRENT YEAR 5
Total Compensation increases before any salary increase
Increasing Benefit Costs Impact Available Funds
08.29.17 Health & Welfare Board Retreat 29
28.4%
18.5%
13.8%
7.6%
9.2%
22.4%
19.0%
10.0%
3.7%
4.1%
49.3%
62.5%
76.2%
88.7%
86.8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2031-32
2021-22
2011-12
2001-02
1991-92
H&W Pension Total
Dialogue & Reflection
Given the rising cost of health care, how do we best engage our stakeholders to address this
important issue?
08.29.17 Health & Welfare Board Retreat 30
08.29.17 31
COST REDUCTION INITIATIVES
Health & Welfare Board Retreat
What is it?Group Medicare Part D prescription drug plan
Who is affected?Medicare eligible retirees and their dependents enrolled in Anthem Blue Cross plans
When did it start?January 2016
Why did we implement?To leverage rebates & subsidies to reduce Rx cost
Fiscal YearEstimated
Savings
2015-16 $10.9M
2016-17 $39.4M
2017-18 $36.8M
2018-19 $38.4M
2019-20 $23.1M
Est. Total $148.6M
Employee Group Waiver Plan (EGWP)
08.29.17 32
How much did we save?
Source: CVS as of 06/30/17
Health & Welfare Board Retreat
Dependent Eligibility Audit
08.29.17 33
What is it?Audit to verify dependent eligibility
Who is affected?Active employees, retirees, and their dependents
When did it start?First phase implemented April 2013
Why did we change?To remove ineligible dependents & contain costs
From Inception to date
AuditedDependents
Termed Dependents
92,858 7,643
Cost Avoidance $22.9M
How much cost avoidance did we potentially save?
Source: Dependent Audit Status as of 06/01/17
Health & Welfare Board Retreat
Medical Claims Audit
08.29.17 34
TypeEstimated
Savings
Eligibility TBD
Claims Processing $152K
Total Estimated Savings
$152K
How much did we save? What is it?Independent audit of self-insured medical plan
When was the audit period?Calendar year 2015
Why did we implement?To verify contract compliance
Source: Claims Technology Inc. Executive Summary 02/10/17; pending finalization from Anthem Blue Cross
Health & Welfare Board Retreat
08.29.17 35
COST SAVING OPPORTUNITIES
Health & Welfare Board Retreat
Cost Saving Opportunities
08.29.17 36
Description
1 Employee / Retiree Coverage Only
2 Employee / Retiree + 1 Dependent Coverage
3 20% Premium Sharing
4 Lowest Cost Plan
5 50 State Medicare Plan
Health & Welfare Board Retreat
1. Employee / Retiree Coverage Only
08.29.17 37
Covers employee / retiree only, premium free
Flexibility to choose from available plans
Member contribution required for dependent coverage
Total Members Affected: Active: 33,970 | Retiree: 13,476
COST SAVINGS
$434M / year
Health & Welfare Board Retreat
1A. Employee Coverage Only
08.29.17 38
Employee Only Employee + 1 Dep Employee + Family
Medical Plan District Contribution Monthly Employee Contribution
Kaiser Permanente $475.82 $0 $475.82 $870.75
Anthem Blue Cross HMO $499.27 $0 $499.27 $998.54
Anthem Blue Cross EPO $574.71 $0 $574.70 $1,149.41
Health Net HMO $723.88 $0 $832.44 $1,411.52
Total Savings: 345.9M / year
Health & Welfare Board Retreat
1B. Retiree Coverage Only
08.29.17 39
Retiree Only Retiree + 1 Dep Retiree + Family
Medical Plan District Contribution Monthly Retiree Contribution
Kaiser Permanente (<65) $798.30 $0 $798.31 $1,460.90
Anthem Blue Cross HMO (<65) $808.92 $0 $808.92 $1,617.84
Anthem Blue Cross EPO (<65) $1,096.28 $0 $1,096.28 $2,192.56
Health Net HMO (<65) $868.01 $0 $998.19 $1,692.60
Kaiser Permanente Senior Adv. (>65) $202.73 $0 $202.73 $865.32
United HealthCare (>65) $343.00 $0 $343.00 N/A
Health Net Seniority Plus (>65) $390.25 $0 $390.25 $780.50
Anthem Blue Cross EPO (>65) $538.61 $0 $538.61 $1,077.22
Total Savings: 88.1M / year
Health & Welfare Board Retreat
2. Employee / Retiree +1 Dependent Coverage
08.29.17 40
Covers employee / retiree, and up to 1 dependent, premium free
Flexibility to choose from available plans
Employee contribution required for additional dependent
coverage
Total Members Affected: Active: 23,069 | Retiree: 1,230
COST SAVINGS
$138.3M / year
Health & Welfare Board Retreat
2A. Employee +1 Dependent Coverage
08.29.17 41
Employee Only Employee + 1 Dep Employee + Family
Medical Plan District Contribution* Monthly Employee Contribution
Kaiser Permanente $951.64 $0 $0 $394.93
Anthem Blue Cross HMO $998.54 $0 $0 $499.27
Anthem Blue Cross EPO $1,149.41 $0 $0 $574.71
Health Net HMO $1,556.32 $0 $0 $579.08
* Contribution will vary up to amount shown
Total Savings: 128M / year
Health & Welfare Board Retreat
2B. Retiree +1 Dependent Coverage
08.29.17 Health & Welfare Board Retreat 42
Retiree Only Retiree + 1 Dep Retiree + Family
Medical Plan District Contribution* Monthly Retiree Contribution
Kaiser Permanente (<65) $1,596.61 $0 $0 $662.59
Anthem Blue Cross HMO (<65) $1,617.84 $0 $0 $808.92
Anthem Blue Cross EPO (<65) $2,192.56 $0 $0 $1,096.28
Health Net HMO (<65) $1,866.20 $0 $0 $694.41
Kaiser Permanente Senior Adv. (>65) $405.46 $0 $0 $662.59
United HealthCare (>65) $686.00 $0 $0 N/A
Health Net Seniority Plus (>65) $780.50 $0 $0 $390.25
Anthem Blue Cross EPO (>65) $1,077.22 $0 $0 $538.61
* Contribution will vary up to amount shown Total Savings: 10.3M / year
3. 20% Premium Sharing
08.29.17 43
District pays 80% of premium
Employee / Retiree pays 20% of premium
Flexibility to choose from available plans
Dependent coverage allowedTotal Members Affected:
Active: 55,861 | Retiree : 35,945
COST SAVINGS
$195M / year
Health & Welfare Board Retreat
3A. 20% Premium Sharing
08.29.17 44
Employee Only Employee + 1 Dep Employee + Family
Medical Plan District Contribution Monthly Employee Contribution (20%)
Kaiser Permanente 80% $95.16 $190.33 $269.31
Anthem Blue Cross HMO 80% $99.85 $199.71 $299.56
Anthem Blue Cross EPO 80% $114.94 $229.88 $344.82
Health Net HMO 80% $144.78 $311.26 $427.08
Total Savings: 138.8M / year
Health & Welfare Board Retreat
3B. 20% Premium Sharing
08.29.17 45
Retiree Only Retiree + 1 Dep Retiree + Family
Medical Plan District Contribution Monthly Retiree Contribution (20%)
Kaiser Permanente (<65) 80% $159.66 $319.32 $451.84
Anthem Blue Cross HMO (<65) 80% $161.78 $323.57 $485.35
Anthem Blue Cross EPO (<65) 80% $219.26 $438.51 $657.77
Health Net HMO (<65) 80% $173.60 $373.24 $512.12
Kaiser Permanente Senior Adv. (>65) 80% $40.55 $81.09 $213.61
United HealthCare (>65) 80% $68.60 $137.20 N/A
HealthNet Seniority Plus (>65) 80% $78.05 $156.10 $234.15
Anthem Blue Cross EPO (>65) 80% $107.72 $215.44 $323.17
Total Savings: 56.2M / year
Health & Welfare Board Retreat
4. Lowest Cost Plan
08.29.17 46
Covers employee / retiree and eligible dependents
Flexibility to choose from available plans
Member contribution required for alternate plans
Total Members Affected: Active: 27,178 | Retiree: 21,423
COST SAVINGS
$161.2M / year
Health & Welfare Board Retreat
4A. Lowest Cost Plan
08.29.17 47
Medical Plan District Contribution Employee Contribution
Kaiser Permanente $967.46 $0
Anthem Blue Cross HMO $967.46 $128.18
Anthem Blue Cross EPO $967.46 $214.01
Health Net HMO $967.46 $455.31
Total Savings: 72M / year
Health & Welfare Board Retreat
4B. Lowest Cost Plan
08.29.17 48
Medical Plan District Contribution Retiree Contribution
Kaiser Permanente (<65) $1,265.55 $281.22
Anthem Blue Cross HMO (<65) $1,265.55 $0
Anthem Blue Cross EPO (<65) $1,265.55 $557.27
Health Net HMO (<65) $1,265.55 $440.52
Kaiser Permanente Senior Adv. (>65) $273.98 $0
United HealthCare (>65) $273.98 $69.02
HealthNet Seniority Plus (>65) $273.98 $156.77
Anthem Blue Cross EPO (>65) $273.98 $372.25
Total Savings: 89.2M / year
Health & Welfare Board Retreat
5. 50 State Medicare Advantage Plan
08.29.17 49
Covers Medicare eligible retirees and their eligible dependents
Premium fully covered by the District
Total Retirees Affected: 15,716
COST SAVINGS
$40.6M / year
Anthem Blue Cross EPO not offered. Flexibility to choose from
available Medicare advantage plans
Health & Welfare Board Retreat
5. 50 State Medicare Advantage Plan
08.29.17 50
Medical Plan District Contribution Retiree Contribution
Health Net Seniority Plus $430.75 $0
Anthem Blue Cross EPO (>65) No longer offered
Kaiser Permanente Senior Advantage No change
United HealthCare No change
Total Savings: 40.6M / year
Health & Welfare Board Retreat
Medicare 101
08.29.17 Health & Welfare Board Retreat 51
Part A
Hospitalization
Part B
Outpatient Care
Part C
Medicare Advantage Plans
Part D
Prescription Drugs
Cost Saving Opportunity Comparison
08.29.17 52
DescriptionPlan
Flexibility?Potential Member
Contribution?DependentCoverage?
# of Affected Members
Annual Cost Savings
1 Employee / Retiree Coverage Only 47,446 $434.0M
2 Employee + 1 Dependent Coverage 24,299 $138.3M
3 20% Premium Sharing 91,806 $194.9M
4 Lowest Cost Plan 48,601 $161.2M
5 50 State Medicare Advantage Plan 15,716 $40.6M
Health & Welfare Board Retreat
Status UpdateIndependent Financial Review Panel Recommendations
08.29.17 Health & Welfare Board Retreat 53
Source: Report of the Independent Financial Review Panel, November 10, 2015
Implement drug
formulary options
Align retiree benefits to Affordable
Care Act
Implement 90/10
contribution rate
Offer employees lump sum in lieu
of retiree benefits
Review eligibility of
employees and dependents
Negotiate cap on
healthcare expenditures
Refine & accelerate dependent verification
Renegotiate benefit
agreement
Cost sharing for dependent
coverage
Create incentives to
reduce dependent coverageFreeze healthcare
expenditures for five years
Final Reflections
08.29.17 Health & Welfare Board Retreat 54
THANK YOU!
08.29.17 Health & Welfare Board Retreat 55