CENTRAL JERSEY HEALTH INSURANCE FUND OPEN MINUTES MARCH 21, 2012 MEETING BRIELLE BOROUGH MUNICIPAL BUILDING 1:30 PM Meeting called to order by Chairman Thomas Nolan. The Open Public Meeting notice read into record. PLEDGE OF ALLEGIANCE MEETING OF EXECUTIVE COMMITTEE CALLED TO ORDER ROLL CALL OF 2012 EXECUTIVE COMMITTEE: CHAIRPERSON Thomas Nolan Borough of Brielle SECRETARY Adeline Schmidt Township of Shrewsbury EXECUTIVE COMMITTEE Richard Bethea Borough of Ship Bottom Jerome Cevetello Manasquan River RSA William Rieker Township of Lakewood Joseph Gilsenan Township of Brick Diane Lapp Township of Manchester ALTERNATES: Adam Hubeny Atlantic Highlands Twp Absent APPOINTED OFFICIALS PRESENT: Executive Director/Administrator PERMA Risk Management Services Paul Laracy Emily Koval Program Manager Conner Strong Diane Peterson Jason Edelman Joseph DiBella Lisa Frappolli Attorney Berry, Sahradnik, Kotzas & Jack Sahradnik Benson Treasurer Stephen Mayer Absent Network & Medical Claims Service Qualcare Inc. Sharon Seitzman Jerry Eisenberg Gary Epstein Network & Medical Claims Aetna Gary Lopez Service Dental Claims Service Delta Dental Don Hickey Absent 1
Rx Administrator Express Scripts Kelly Depcik Absent Katty Mercado Absent Auditor Green, Holman, Frenia & Co. Rodney Haines Absent OTHERS PRESENT: Eva Biviano, Red Bank Colleen Lapp, Red Bank Jane L. Gillespie, Spring Lake Borough Susan Smith, Montgomery Township Michael Dupont, Red Bank Angela Morin, Twp of Aberdeen John Kennedy, West Long Branch Cindy Lisa, Danskin Charles Casagrande, Danskin CORRESPONDENCE: None APPROVAL OF MINUTES: JANUARY 18, 2012 OPEN: MOTION TO APPROVE OPEN MINUTES OF JANUARY 18, 2012: Commissioner Cevetello Commissioner Gilsenan EXECUTIVE DIRECTOR: Executive Director thanked the board for the reappointment and reported on the following items: PRO FORMA REPORTS The agenda included the Fast Track Financial Report as of November 30, 2011; the Indices and Ratios Report as of November 30, 2011; the Budget Reconciliation as of January 2012; and the Regulatory Compliance Checklist as of January 11, 2012. Executive Director said the Financial Fast Track illustrates a surplus of $7.7 million. The IBNR is slightly high, which will be reflected in the annual audit next meeting. QUALCARE CLAIMS AUDIT (page 11) MRHIF has agreed to pay 50% of the cost of this $20,000 audit by Northshore International. The audit is scheduled to begin on March 26 th and we could have a report as early as mid April according to the project plans. Qualcare is also continuing to evaluate the causes of the claims cost increase and has updated their file feeds to us with more complete information. We will provide an update on this process at the meeting. 2
Minutes from the Finance/Contracts meeting prior to the last meeting were included for your reference. Mr. Dupont and Ms. Lapp from the Borough of Red Bank introduced themselves. Ms. Lapp said that she has had ongoing conversations with Mr. DiBella and Ms. Peterson from the Program Management. She said the Qualcare increases in 2012 were extraordinary from a budgeting perspective with a 2% cap. She asked for an explanation of this increase so it can be related to the Red Bank residents. Mr. Dupont said that the increase has yet to be justified to the members. The increase occurred in January and he is just seeing this increase in March. Executive Director said that the Fund has been seeking out answers with Qualcare, as well. He said a claim and operational audit is almost complete and hopefully the findings will quantify the increase. A sub committee has met a few times to focus on these matters. He requested that Ms. Lapp be added to the sub committee. Chairman Nolan said that the 22% increase was presented in October when the budget process began. Mr. Dupont said he has only seen this increase recently. Commissioner Cevetello said that the October agenda included the increase, and again in November when the Budget was passed. The agendas are sent to each Fund Commissioner. In response to Mr. Dupont, Executive Director said that there is an opportunity for the members and the public to speak on the budget during the Public Hearing, held in October or November. The Fund Actuary was in attendance at the public hearing to verify the increase and helped explain possible explanations. Mr. DiBella said that the HIFs have always been stable. PERMA has access to all the data and for now it is showing that utilization, across the board, has increased. He said the traditional, richer plans are mostly still in Qualcare. There is a significant population difference between Qualcare and Aetna s plans, along with risk and plan design. He thanked Red Bank for its cooperation. In response to Mr. Dupont, Ms. Peterson said that a plan design meeting with the Borough was held in January. Although there were contract negotiations to consider, she said they provided changes that could be done immediately. In addition, Conner Strong provided quotes outside of the HIF, along with a side by side comparison with the State Health Benefits Plan, where the HIF remained to be a better plan. Executive Director said the Borough s best chance of saving money would be to make plan design changes. Ms. Peterson said there is a potential 18-28% savings by changing the plan. Currently, Red Bank is breaking even in cost vs. claims. Mr. Dupont said he understands that an appeal on the budget can only occur during a public hearing of the budget, but requested an appeal process on the fact that there has been little justification on the sudden increase. Commissioner Bethea said he sympathized with Red Bank. Ship Bottom was also alarmed by the increase. He said the 2011 dividend was used against the 2012 budget, which helps. He was told that his utilization was above average and hopes that Chapter 78 employee contributions will help. 3
In response to Mr. Dupont, Mr. DiBella said that retiree benefits are a large portion of Health Insurance costs for many towns, but they can only be modified when the retiree s contract language at the time of retirement allows for modifications. He said PERMA will be happy to assist. Eliminating Medicare reimbursement is not a solution because there is a subsidy that the entity is given. Chairman Nolan said that he believes the HIF has always been below the State Health Benefits, with the inclusion fo the dividend. The Executive Committee was shocked by the increase and has delegated an Ad Hoc committee to research the problem. In response to Commissioner Lapp, Chairman Nolan said hopefully this will not be a problem next year. Commissioner Cevetello said that Health Care Reform has had some effect on this rate increase. He suggested using the dividend to reduce the next year s premium. He encouraged Red Bank to continue its involvement in the HIF. Commissioner Kennedy said he is the new commissioner from West Long Branch. He said the transition from the State Health Benefits to the HIF was a lot of work and appreciated the professional s efforts. BOARD OF EDUCATION 7-1-2012 RATE RENEWALS - The fund actuary, John Vataha, recommended medical rate increases for school members as follows Spotswood BOE +13.18% Keansburg BOE +10.68% He is recommending that the same increase be applied to their Qualcare and Aetna plans. In response to Commissioner Cevetello, Executive Director said that at the time when the school boards entered the Fund, the Executive Committee asked that they carry more of their own weight, which is why their rates are different from the entities that renewed on January 1. MOTION TO ADOPT RESOLUTION #13-12 RATE INCREASE FOR KEANSBURG BOARD OF EDUCATION AND SPOTSWOOD BOARD OF EDUCATION AS PRESENTED BY THE FUND ACTUARY FOR THE PERIOD 7/1/2012 6/30/2013 Commissioner Cevetello Commissioner Schmidt 7 Ayes, 0 Nays ADMINISTRATION 2012 MEL & MRHIF EDUCATIONAL SEMINAR - Attached is the agenda and registration form for the MEL & MRHIF Educational Seminar scheduled for Monday, April 16, 9:00 to 4:00 at the National Conference Center, Holiday Inn, 399 Monmouth St., East Windsor, NJ, Turnpike Exit 8. The seminar is designed for commissioners, municipal personnel, risk managers, vendor personnel and attorneys and is eligible for the following continuing educational credits: 4
CFO/CMFO, Public Works and Clerks: Five Credits plus One Ethics Credit Insurance Producers and Purchasing Agents: Five Credits Accountants (CPA s) and Lawyers (CLE): approval pending GASB 45 AUDIT - PERMA will be administering the GASB 45 Audit for all members this year through UHY Advisors. Requests for information will be sent to each member s enrollment benefits contact this week. These requests will be handled on a first come, first serve basis. The actuary approximates a 4-6 week turnaround time. ON-LINE ENROLLMENT SYSTEM - We have been offering webinars on use of the on-line enrollment system. Because of the significant investment made by the Funds in the system, we recommend that use of the system be mandatory. We are currently implementing mandatory system use for two funds and will bring a recommendation back to the CJ fund after we gain more experience with those transitions. Additionally, the new system allows for electronic mailing bills. We seek your authorization to implement this feature on April 1. MOTION TO AUTHORIZE MANDATORY ELECTRONIC MONTHLY BILLING EFFECTIVE APRIL 1, 2012. Commissioner Cevetello 7 Ayes, 0 Nays NJ COMPTROLLER S REPORT ON FULLY INSURED LOCAL ENTITY PLANS - On March 7, the Chairs of each of the four Funds and the MRHIF, issued a letter in response to the recent NJ Comptroller report on the State Health Benefits Plan. This letter is included in the agenda. PERMA also followed up with a response on the importance of the Health Funds, which was sent to all Fund Commissioners. In response to Commissioner Cevetello, Executive MUNICIPAL REINSURANCE HIF - The MRHIF met on February 1, 2012 for their annual reorganization meeting. Commissioner Schmidt s report is included in the agenda. Starting in June, the MRHIF will be meeting at the Saddle River Borough Hall at 2pm. STATE SURCHARGE FOR SCHOOL BOARDS Ms. Koval said there is an annual surcharge of 2.5% to the school board members for the retirees that are sent to the State plan. The surcharge was illustrated in Resolution 16-12. IN response to Commissioner Schmidt, Executive Director said that the Fund has tried on many occasions to eliminate this surcharge, to no avail. MOTION TO AUTHORIZE PROCESS OF PAYMENT OF STATE SURCHARGE FOR SCHOOL BOARD MEMBERS 5
Commissioner Schmidt 7 Ayes, 0 Nays PRIMA CONFERENCE - The next PRIMA convention will take place in Nashville, TN from June 3 th to June 6 th, 2012. Resolution #14-12 authorizing conference related expenses only. MOTION TO ADOPT RESOLUTION #14-12 AUTHORIZING CONFERENCE RELATED EXPENSES FOR ATTENDANCE OF TWO MEMBERS AT THE ANNUAL RISK MANAGEMENT CONFERENCE. Commissioner Cevetello MEETING DATE CHANGE - The September 19 meeting date falls on the same week as the GFOA annual conference. We suggest moving the meeting to September 26, 2012. MOTION TO ADOPT CHANGE THE SEPTEMBER MEETING DATE TOT SEPTEMBER 26, 2012 Commissioner Schmidt 2012 PROFESSIONAL CONTRACTS - The Professional Services Agreements have been sent to the various Fund Professionals for 2012. Upon completion of the Professional Service Agreements, the Chair will be asked to execute the Agreements. The Regulatory checklist includes a status of these contracts. FINANCIAL DISCLOSURE STATEMENT - Included with your agenda is the Financial Disclosure form. Please remember to add your position as a Fund Commissioner of the Central Jersey HIF when completing your form. Also note fill in forms are also available online at http://www.state.nj.us/dca/lgs/ethics/pdfs/fds_fill-in_form.pdf. We encourage all Fund Commissioners to complete these forms and provide two copies with original signatures to your local Fund office on or before April 2, 2012. In accordance with State regulations, the Fund must file these disclosures with the Department of Community Affairs. 6
COMMITTEES Chairman Nolan suggested a sub committee structure, including 3 committees: Wellness & Plan Design, Claims Committee and Finance Committee. He asked that Commissioners join in at least one committee. MOTION TO ADD A WELLNESS & PLAN DESIGN COMMITTEE, A CLAIMS COMMITTEE AND FINANCE COMMITTEE UNDER THE DIRECTION OF THE EXECUTIVE COMMITTEE. Commissioner Cevetello BENEFITS MANAGEMENT ONLIFE MAKES POSITIVE CHANGE IN EMPLOYEES HEALTH - Onlife Health will be sponsoring a new Challenge: MoveOn Olympic Challenge. This program will provide employees to track activity during the month and based on earned points; the employee can be entered into a drawing for two airline tickets (restrictions apply). Detailed information have been provided to all of the Wellness Ambassadors. Ms. Frappolli reviewed the Move On Olmpic Challenge, along with other iniatives the Fund is working on through Onlife. She said that employees can also complete an online Health Risk Assessment and receive a $25 gift card incentive. Over the last month, the Central Jersey Fund has seen increase in utilization of 24 employees. MEMBER VISITS - The HIF Team presented cost savings options to the following members: Borough of Ship Bottom Township of Holmdel Borough of Red Bank Township of Hazlet Spotswood Board of Education PLAN / ENROLLMENT CHANGES - Atlantic Highlands will be transferring the final segment of their population from the QualCare PPO network to the QualCare POS network effective 4/1. NEW QUALCARE ID CARDS - It will be necessary to recard all Qualcare participants to comply with federal and state mandates as well as to add the PHCS logo. The PHCS is an expansion to the current out of state network. The card is in final approval stage and the cards should be mailed during the months of April and May. A payroll stuffer will be provided to the groups with the date of mail to advise employees to be on the lookout for the new ID card. 7
DELTA DENTAL ID CARDS - Effective 8/1, Delta Dental will convert the Central Jersey Health Insurance Fund to the new system of ID cards. Currently, members have a generic card that does not contain any unique information. However, this change will assign members a unique identification member as well as the name of their group on the card. Closer to the mailing date, a payroll stuffer will be provided to the groups to advise employees to be on the lookout for the new ID card. CLAIM APPEALS - There is one claim appeal that needs to be determined at this meeting Executive Director's Report and Attachments made part of the Minutes. TREASURER: Fund Treasurer was absent, Executive Director read the report that was included in the agenda. Bills lists: February 2012 Confirmation of Payment March 2012 Resolution 15-12 FUND YEAR 2011 $32.01 FUND YEAR 2012 $407,993.59 TOTAL ALL FUND YEARS $408,025.60 MOTION TO ADOPT RESOLUTION 15-12 TO PAY MARCH 2012 BILLS LIST AND TO APPROVE BALANCE OF TREASURER S REPORTS AS SUBMITTED: Commissioner Schmidt Commissioner Bethea 7 Ayes, 0 Nays ATTORNEY:No report QUALCARE: Mr. Epstein presented the claim payments and high dollar claims through February 29, 2011. Ms. Seitzman said she has been spending time reviewing possible reasons for the increase. Currently, Qualcare is working with the auditors. She said they are taking this very seriously. Commissioner Gilsenan said it may be possible that the reason for the ER visits increase could be that members are using the ER as a primary visit. Ms. Peterson agreed saying that if there 8
is a small copay for ERs, there is no incentive not to go the Emergency room for non-emergency visits. AETNA: CLAIM PAYMENTS Mr. Lopez said that 30% of the Emergency Visits for Aetna occur on the weekend, when primary physician offices are closed. He suggested making a much higher deductible for ER visits to discourage this usage. He reviewed the claim payments for 2011 and January 2012. In addition, he distributed a key statistics report which showed network utilization trending well. Mr. Lopez said this was his last meeting, as he is retiring. He encouraged members to be engaged. EXPRESS SCRIPTS: Ms. Depcik thanked the committee for reappointment. DELTA DENTAL: No report. NEW BUSINESS: None OLD BUSINESS: None. PUBLIC COMMENT: None MOTION TO ENTER EXECUTIVE SESSION FOR CERTAIN SPECIFIED PURPOSES Commissioner Gilsenan Commissioner Reicker MOTION TO ADJOURN MEETING: 9 Commissioner Gilsenan
MEETING ADJOURNED: 3:20 PM 10