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Item 8E ~• AGENDA ITEM #8E JULY 12, 2004 CITY OF ATLANTIC BEACH CITY COMMISSION MEETING STAFF REPORT AGENDA ITEM: Change to Employee Health Insurance SUBMITTED BY: George Foster, Human Resource Manager DATE: July 6, 2004 BACKGROUND: On October 1, 1997 the City changed it health insurance from two- tiers (Employee or Family) to four-tiers (Employee; Employee- Children; Employee-Spouse; or Employee-Family) and changed the health insurance provider to AHL with a reduction in HMO premiums of 24.2%. Premiums have since increased by +6% (1998); +16.7% (1999); +50.2% (2000); and +108% (2001). In 2002, the City changed it's insurance provider to BC/BS with a +4% rate increase with no additional increases since. Major factors to the above rate increases were the small size of the City workforce and high experience utilization rates based upon several major medical situations. Based upon the large increases within the health insurance costs, the City "froze" the employee contribution rates at the 1998 ' premium levels with the City paying 100% of all rate increases since October 1998. As the City's experience utilization has improved, the City sent out a RFP for health insurance. The RFP requested that the City be provided with proposals for health insurance as similar to the City's current coverage as possible. Based upon this RFP, the City received bids from the following: - Aetna - BC/BS of Florida - Florida League of Cities - Humana - United +~ After an evaluation of RFPs received, it was determined that one resulted in an approximate 44% reduction in the overall HMO premium rates. The RFP was submitted by Aetna and is for an ~"" HMO and POS plan with benefits very similar; however, not identical, to the City's current plan. There are no changes proposed for the City's Health Care and Child Care Flexible Spending Accounts or the internal management and administration of COBRA. Approve changing the City's health insurance from an HMO/PPO to an HMO/POS. The City currently has 103 employees/retirees and COBRA participants within the HMO and 8 employees within the PPO. Approve changing the City's contribution rate to 100% of the HMO ~'"' employee only coverage plus 55% of the difference. Under this proposal, no employee within the HMO will have a rate increase; however, five of the eight employees within the PPO will have a monthly rate increase of $24.77 per month if they elect to remain within the POS plan and not switch to the HMO plan. ATTACHMENT: 1. 2. 3. 4. 5. Summary of Employee Cost Summary of Aetna HMO Co-Pays Summary of Aetna HMO Benefits Summary of Aetna POS Co-Pays Summary of Aetna POS Benefits CITY MANAGER: AGENDA ITEM #8E JULY 12, 2004 Following are some of the major comparisons for the proposed HMO: Physicians: We believe that all of the primary physicians within our current HMO participate within the Aetna HMO. Hospitals: We believe that all of the primary hospitals within our current HMO participate within the Aetna HMO. Emergency Room co-pay from $50 to $100 Prescriptions from $10/$25/$40 to $10/$30/$50 Diagnostic lab & X-rays from $0 to $25 co-pay Hospital charges remains at $150 day/ $750 max Maximum out-of-pocket remains at $1,500/$3,000 Benefits: Primary Care Physician co-pay remains at $15 per office visit Specialty Care Physician co-pay remains at $25 per office visit Urgent Care Facility is $50 per visit FUNDING: As this is a reduction to the overall cost to the City, funding included within the proposed 2004/2005 budget will be reduced accordingly. RECOMMENDATIONS: As Aetna has offered the City a 13-month rate guarantee; approve the change of City's health insurance to Aetna effective September 1, 2004. ~. AGENDA ITEM #8E JULY 12, 2004 EMPLOYEE COST OF HEALTH INSURANCE HMO Employee Only Employee + Child Employee + Spouse Employee + Family Number 71 5 19 8 Current $ 0.00 $ 107.28 $ 153.20 $ 317.60 Proposed $ 0.00 $ 107.23 $ 150.68 $ 236.55 Difference $ 0.00 - $ .OS - $ 2.52 - $ 81.05 PPO/POS Employee Only Employee + Child Employee + Spouse Employee + Family Number 5 0 2 1 Current $ 0.00 $ 195.34 $ 245.74 $ 509.28 Proposed $ 24.77 $ 153.55 $ 205.77 $ 308.80 + $ 24.77 - $ 41.79 - $ 39.97 - $ 200.48 ~* 11,, Aetna Aetna Health Inc.® FLEX MEDICAL PLAN ATLANTIC BEACH CITY OF ' ~"'" Florida -Northern AGENDA ITEM #8E JULY 12, 2004 COAaVments PRIMARY CARE PHYSICL4N VISITS Office Hours $15 copay After Hours /Home Visits $15 copay SPECIALTY CARE Office Visits $25 copay Diagnostic Outpatient Testing $25 copay Phys,Occ,Speech Therapy $25 copay SPUSURGERY $150 copay HOSPITALIZATION $150/d to $750 max E~YIERGENCYROONI (copay waived if admitted) $100 copay URGENT CARE $50 copay MATERNITY First OB Visit $25 copay Hospital $150/d to $750 max MENTAL HEALTH Inpatient $150/d to $750/A, 30 days Outpatient $25 copayN, 20 visits SUBSTANCE ABUSE Detoxification $150/D to $750 max Inpatient Rehabilitation $150/d to $750/A, 30 days Outpatient Detox/Rehabilitation $25N, 30 rehab visits PREVENTIVE CARE Routine Eye Exam (per benefit schedule) $25 copay Routine GYN Exam $25 copay CHIROPRACTIC CARE $25 copayN, 20 visits PRESCRIPTIONS $10/$30/$50, 30 Day Contraceptives Covered 31-90 Day Supply (MOD only) ~ $20/60/100 copay DURABLE MEDICAL EQUIPMENT No copay MAX OUT OF POCKET (copay + coinsurance) Single/Family $1,500/$3,000 IN-NET LIFETIME MAXIMUM In-Net Lifetime Maximum Benefit N/A 9560195 All non-emergency specialty and hospital services require a written referral from the pprimary care physician. See Certificate of Coverage ~* for complete hst of terms, benefits and exclusions. Benefits are provided by Aetna Heath Inc ®. !""' City of Atlantic Beach AGENDA ITEM #3E JULY 12, 2004 Section [2] -Product Descriptions Health Maintenance Organization (HMO) ~ Product Traits . Provider Network Yes PCP Required/Role PCP selection required/PCP provides routine care and coordinates all ~. specialtyreferrals Member Cost Sharing Copay applies to all covered services rendered, coordinated or referred by a PCP "~"' Percentage copayment may be applied to inpatient hospitalization and outpatient surgery Plan deductible may apply to inpatient hospitalization and outpatient +~ surgery Annual out-of-pocket maximum limits may apply Claim Forms Required No Available Funding Options Full-risk prospectively rated, self-funded for 250+ life customers Standard Features '~' Alternative Health Care ,Provides three programs that offer savings on alternative types of Programs ;health-related services (such as chiropractors and massage therapists); over-the-counter vitamins and nutritional supplements; and health- ! related products (such as aromatherapy and natural body care). External Review Policy Supplements our internal review process by allowing members, or ~ their physicians on their behalf, to request external review when coverage is denied because it is deemed unnecessary, inappropriate, or ~* ;experimental. Fitness Program ; Offers reduced membership rates at health clubs and discounts on '~ certain home exercise equipment. '"" Healthy Outlook Program® ±. Helps coordinate the care for chronic conditions such as asthma, diabetes, coronary artery disease, heart failure, and low back pain. Informed Health® Line. .' .Provides 24-hour, toll-free access to current information on a variety ofhealth-related topics, including prevention, self-care, chronic conditions, and complex medical situations. Callers can talk to 'registered nurses or access information confidentially through our audio library, which offers 2000 topics in English and 1580 m ;Spanish. Member Health Education ;Offers outreach programs that provide preventive care, educational materials and reminders, as well as member-initiated educational ~. 'programs. National Medical Excellency Helps eligible members access appropriate, covered treatment for ' Program s Institutes of ;solid organ® rid tissue transplants using Aetna Excellence network; may also include travel expenses for the ~"' member and a companion. Coordinates specialized treatment needed by members with certain rare or complicated conditions and assists members who are admitted to a hospital for emergency medical care when they are traveling temporarily outside the United States. Vision One® discount Offers discounts on specific eye care services, from Vision One program participating providers and facilities, including discounts on lasik surgery (the laser vision corrective procedure). ~. 06/15/2004 www.aetria.com Page 1 '"" AGENDA ITEM #8E JULY 12, 2004 °" City of Atlantic Beach Section [2] -Product Descriptions Women's Health for Life Offers direct access to network Ob/Gyres, genetic testing for Programs :hereditary breast and ovarian cancers, mfertihty and breast cancer case management programs, maternity management, and more. Optional Features Employee Assistance Provides three programs (assessment and referral, solution-focused Program therapy, and telephone assessment) that customers can purchase !~"" ~ directly from our preferred mental health vendors. 06/ 15/2004 www.aetna.com Page 2 ~• Aetna AGENDA ITEM #8E JULY 12, 2004 AETNA HEALTH INC. POINT-OF-SERVICE PROGRAM Aetna Choice HMO Fles / POS Flex Plan ATLANTIC BEACH CITY OF ' FL In-Network FL Out-of-Netrvork* FINANCIAL Deductible: Single/Family Coinsurance Coinsurance Limit: Single/Family Lifetime Maximum Benefit PRIMARY CARE PHYSICIAN VISITS Office Hours After Hours /Home Visits SPECIALTY CARE Office Visits Diagnostic Outpatient Testing Phys,Occ,Speech Therapy SPUSURGERY HOSPITALIZATION SKILLED NURSING FACILITY EMERGENCY ROOM (copay waived if admitted) URGENT CARE HOME CARE MATERNITY First OB Visit Hospital MENTAL HEALTH Inpatient Outpatient SUBSTANCE ABUSE Detoxification Inpatient Rehabilitation Outpatient Detox/Rehabilitation PREVENTIVE CARE Routine Eye Exam (per benefit schedule) Routine Physicals Immunizations Routine Mammography Routine GYN Exam Pediatric Preventive Dental Exam CHIROPRACTIC CARE PRESCRIPTIONS Contraceptives 31-90 Day Supply (MOD only) ~. or N/A $500/$1,500 N/A 70% N/A $2,000/$4,000 N/A $5,000,000 $15 copay 70% after deductible $15 copay 70% after deductible $35 copay 70% after deductible $35 copay 70% after deductible $35 copay 70% after deductible $50 copay 70% after deductible $300/d to $1500 max 70% after deductible $300/d to $1500 max 70% after deductible $100 copay $100 copay $50 copay No copay 70% after deductible, 120 visits $35 copay 70% after deductible $300/D to $1500 max 70% after deductible $300/d to $1500/A, 30 days70% after deductible, 30 days $35 copayN, 20 visits 50% after deductible, 20 visits $300/D to $1500 max 70% after deductible $300/d to $1500/A, 30 days70% after deductible, 30 days $35N, 30 rehab visits 70% after deductible, 44 visits $35 copay $15 copay $15 copay $35 copay $35 copay Not Covered $35 copayN, 20 visits $10/$30/$50, 30 Day Covered $20/60/100 copay Not covered See Insurance Certificate See Insurance Certificate Covered (state-specific guidelines) Not covered Not covered 70% after ded, $1000/yr (no limit in NY) ~ To receive maximum benefits, In-Network services must be provided by participating providers. In-Network benefits are provided by Aetna Health Inc ®. Out-of-Network benefits are provided by Corporate Health Insurance Company: All benefits, exclusions and limitations are provided in accordance with the applicable Schedule of Benefits, Certificate of Coverage, Group Agreement, Group Insurance Certificate, and Group Policy. ~• e~. Aetna AETNA HEALTH INC. POINT-OF-SERVICE PROGRAM Aetna Choice H1VI0 Fles / POS Flex Plan ATLANTIC BEACH CITY OF ' AGENDA ITEM #8E JULY 12, 2004 FL In-Network FL Out-of Network* DURABLE MEDICAL EQUIPMENT No copay 70% after deductible NIAX OUT OF POCKET (copay + coinsurance) Single/Family $1,500/$3 ,000 OPENACCESS No referrals needed * Member precertification required or benefits paid will be substantially reduced. 9560196 To receive maximum benefits, In-Network services must be provided by participating providers. ~, In-Network benefits are provided by Aetna Health Inc.®. Out-of-Network benefits are provided by Corporate Health Insurance Company°D: All benefits, exclusions and ltmitations are provided in accordance with the applicable Schedule of Benefits, Certificate of Coverage, Group Agreement, Group Insurance Certifcate, and Group Policy. AGENDA ITEM #8E JULY 12, 2004 "~" City of Atlantic Beach Section [2] -Product Descriptions Aetna ChoiceTM Point Of Service® (POS®) ~.,, :Products Traits Provider Network Yes PCP Required/Role PCP selection encouraged; but not required; PCP provides routine +~- care; members can seek in-network covered services directly from their selected PCP, directly from other participating providers without a PCP referral, or by going out-of-network to licensed non- participating providers ~* Member Cost Sharing PCP copay applies to all covered services rendered by the members selected PCP Specialist copay applies to all covered services rendered by a participating provider including anon-selected PCP In-network percentage copayment may be applied to inpatient hospitalization and outpatient surgery In-network plan deductible may apply to inpatient hospitalization and outpatient surgery .Annual out-of-pocket maximum limits may apply Deductible/coinsurance applies to all out-of-network covered services Claim Forms Required :Only for out-of-network services ~"' Available Funding Options 'Full-risk prospectively rated, self-funded for 250+ life customers Standard Features +~ Alternative Health Care ;Provides three programs that offer savings on alternative types of Programs health-related services (such as chiropractors and massage therapists); over-the-counter vitamins and nutritional supplements; and health- ; related products (such as aromatherapy and natural body care). '~ External Review Policy Supplements our internal review process by allowing members, or their physicians on their behalf, to request external review when coverage is denied because it is deemed unnecessary, inappropriate, or ~ ;experimental. Fitness Program ;Offers reduced membership rates at health clubs and discounts on certain home exercise equipment. ,~ Healthy Outlook Program `Helps coordinate the care for chronic conditions such as asthma, diabetes, coronary artery disease, heart failure, and low back pain. Informed Health® Line :: Provides 24-hour, toll-free access to current information on a variety ~. ofhealth-related topics, including prevention, self-care, chronic conditions, and complex medical situations. Callers can talk to registered nurses or access information confidentially through our audio library, which offers 2000 topics in English and 1580 in 'Spanish. Member Health Education Offers outreach programs that provide preventive care, educational materials and reminders, as well as member-initiated educational programs. 06/15/2004 www.aetna.com Page 1 ~. ""' City of Atlantic Beach AGENDA ITEM #8E JULY 12, 2004 Section [2] -Product Descriptions National Medical Excellency Program Helps eligible members access appropriate, covered treatment for ~ e the travel expenses fo Excellence® network; may also includ member and a companion. Coordinates specialized treatment needed by members with certain rare or complicated conditions and assists members who are admitted to a hospital for emergency medical care when they are traveling temporarily outside the United States. Vision One® discount Offers discounts on specific eye care services, from Vision One program participating providers and facilities, including discounts on lasik surgery (the laser vision corrective procedure). Women's Health for Life Offers direct access to network Ob/Gyns, genetic testing for Programs 'hereditary breast and ovarian cancers, mfertihty and breast cancer case management programs, maternity management, and more. ` Optional Features Employee Assistance Provides three programs (assessment and referral, solution-focused Program therapy, and insight telephone assessment) that customers can purchase directly from our preferred mental health vendors. ~. 06/15/2004 www.aema.com Page 2