Open Enrollment Kick-Off 2019 Presidents Message Background Coverage Changes in 2019 Networks The Difficult Premium Discussion Enrollment Deadline and Importance Communication Plan Future Meetings Questions

President’s Message Welcome and Introductions Why are we here? Benefit costs are the single most significant effect to the salary of a member M&P is a labor unit and has a voice Member participation allows us to have better information for decisions Benefits Committee Reviewing existing vs. new Reviewing how rates are established Reviewing how to get the information out to the members Looking to improve our future options and optimize our benefit dollars

Background - M&P Healthcare 2017-2021 Contract Process Representatives of M&P met with HR, Management, and Alliant to review the existing benefits and potential savings measures. Existing plans without changes would see significant cost increases. Just changing coverage (deductibles, out of pocket) had limited effect on costs. New benefit plans were developed. Contract Details Number of plans has been reduced to 2. Changes to network coverage Premera Preferred – lower cost program for same treatment, higher deductibles. Kaiser Permanente – minimal changes Understanding How We Got Here Benefits costs are increasing significantly each year (both to Members and City) City of Spokane is self-insured and establishes the rates Rates are based on historical claims for all employees Some employees use the Emergency Room as Primary Care - $$$ Prior rates were discovered to be inequitable between Premera and Kaiser.

Coverage Changes in 2019 - Premera

Coverage Changes in 2019 – Kaiser

Networks - HOSPITALS In-Network: Deaconess Hospital, Shriners Hospitals for Children, Valley Hospital, Spokane VA Medical Center, Kootenai Health, NW Specialty, N. Idaho Advanced Care, Rehab Hospital of NW. Out-of-Network: Sacred Heart Medical Center, Holy Family Hospital, Kootenai Health (Psych-only)

Networks - URGENT CARE Existing Providers (2018) Spokane – 26 facilities CdA – 8 facilities

Networks - URGENT CARE Heritage Prime (2019) Spokane – 19 facilities CdA – 3 facilities

Networks - EXAMPLE - Pediatrician Changes (2019)

Networks – No changes to Kaiser Permanente Hospital Network! Sacred Heart Medical Center and Holy Family Hospital are included in network.

Networks – No changes to Kaiser Permanente Urgent Care Network!

Networks – How to Find a Doctor? Premera https://premera.vitalschoice.com/?ci=premerawa&geo_location=99202,spokane,wa,city&network_id=13 Select “Heritage Prime” under highlighted menu Kaiser Permanente https://healthy.kaiserpermanente.org/oregon-washington/doctors-locations#/search-form

The Difficult Premium Discussion What’s happening this next year? As of July 2018, the City at-large is looking at ~10% increase in healthcare costs, regardless of bargaining unit or who pays this increase (City vs Employee). M&P’s plan changes in the 2017-2021 contract reduced the increase M&P would see in 2019 on their TOTAL rate (City + Employee) to about 4.5% instead.

The Difficult Premium Discussion M&P B 2017-2021 Contract Language 2019: The Association will determine the premium re-alignment. The premium re-alignment will result in no net impact on the total City contribution. 2020-2021: City contributions…will be capped at a 6% increase over the prior year’s City contributions.

The Difficult Premium Discussion

The Difficult Premium Discussion

The Difficult Premium Discussion Legacy Issues The City chose to charge Premera plans like they were 18-20% more expensive than Kaiser, when in reality they were much closer in cost. It is estimated Kaiser members citywide consistently have more claims than their premiums can cover. EE = Employee-Only ES = Employee-Spouse ESC = Employee-Spouse-Child EC(1,2) = Employee-Child

The Difficult Premium Discussion Total Rate Alignment Per our contract, M&P had the option to align rates in 2019 as appropriate. M&P Benefits Committee decided to match the ~4% difference in actual estimated cost and eliminate the artificial 18-20% gap between providers. EE = Employee-Only ES = Employee-Spouse ESC = Employee-Spouse-Child EC(1,2) = Employee-Child

The Difficult Premium Discussion Can we align ‘total’ rates without changing what employees are paying in 2018? Assume rates are aligned as shown previously. Assume the City increases their Total contribution for M&P B as much as they currently show (about $77,000). Assume Premera IV increases to Premera III rates and Kaiser 2 increases to Kaiser 1 rates because we only have two plans now. Result: We still need about $17,000

The Difficult Premium Discussion M&P 2019 Rate Alignment Philosophy Aligned: the result should assume 2019 ‘total’ rates between Premera and Kaiser are aligned to reflect the actual cost difference between plans. Equitable: employees need to be treated fairly regardless of network or number of dependents. Repeatable: the M&P Board wants to increase oversight of healthcare rates and having a repeatable process makes oversight possible. Straightforward: hidden incentives and rate calculations should not be part of healthcare.

The Difficult Premium Discussion EE = Employee-Only ES = Employee-Spouse ESC = Employee-Spouse-Child EC(1,2) = Employee-Child The existing system struggles to be equitable between employee types

The Difficult Premium Discussion The existing system has been difficult to hold the City accountable to a repeatable total contribution to M&P members.

The Difficult Premium Discussion The existing system is not straightforward for M&P members. EE = Employee-Only ES = Employee-Spouse ESC = Employee-Spouse-Child EC(1,2) = Employee-Child

The Difficult Premium Discussion M&P Solution: Equal Treatment Process Distribute City funds evenly to all M&P members, regardless of healthcare plan choice. If a tier group does not need their full subsidy allotment to cover their full premium, the remainder is split among other tier groups. Premera members should pay the premium difference between Premera and Kaiser, even if their allotted subsidy would cover the full premium. If you have a dependent, you should have a minimum premium Employee-Child (1,2) should receive the same subsidy as Employee- Spouse.

The Difficult Premium Discussion M&P Solution: Equal Treatment Results Majority of members in both Kaiser and Premera plans see decreases or a small increase in premium. Employee-spouse-child members will see significant increases. Premera IV and Kaiser 2 Employee-Spouse members will see moderate increases.

The Difficult Premium Discussion EE = Employee-Only ES = Employee-Spouse ESC = Employee-Spouse-Child EC(1,2) = Employee-Child

ACTION WILL BE REQUIRED!!! Enrollment Deadline and Importance ACTION WILL BE REQUIRED!!!   Am I required to Enroll in a new medical Plan? YES – if you want to be enrolled in a medical plan in 2019! Open Enrollment is November 5, 2018 through November 16, 2018 Employee Benefits will make no exceptions for you to enroll beyond this deadline! Your current Health Plan ends at midnight on December 31, 2018 Your new Health Plan will begins January 1, 2019

Communications Plan Web Page (www.spokanecitymp.org) Frequently Asked Questions (FAQ) – Coming Soon! Email Reminders (1st of each month) More Meetings!

Future Meetings Nelson Complex Field Office and Water Department Where: 901 N. Nelson, Large Conf. Room When: September 11, 2018 @ 12pm – 1:30pm Field Office and Water Department Where: 1225 E. Marietta Ave, Large Conf. Room When: October 4, 2018 @ 12pm – 1:30pm Downtown Library Where: Spokane Public Library Conf. Room When: October 17, 2018 (??)

Questions?