1. FUTURE HEALTH CARE LIABILTY AND CITY BENEFITS

2. STAYWELL FUND RESOURCES

3. The City spends approximately $18
The City spends approximately $18.8 million annually on health benefits
39% is directed to retiree premiums (Pre-65 and Medicare Eligible)
37% of members are Medicare eligible (856)
BUDGET IMPACT

4. UNDERSTANDING FUTURE HEALTH INSURANCE LIABILITY

6. WHAT THE CITY OWES IN FUTURE HEALTH CARE COSTS

7. FUTURE HEALTH CARE LIABILTY AS PERCENT OF PAYROLL

8. PER CAPITA HEALTH CARE LIABILITY OWED
Population would need to grow to 2M to be comparable to metro cities

9. WHAT DOES THIS LOOK LIKE IN REAL WORLD TERMS
Employee making $85,000 annually
Independence will owe $391,000 in future health care costs

10. WHAT’S NOT CHANGING-CURRENT EMPLOYEES AND PRE-65 RETIREES
Plan Design and Carrier
OAP 1
Deductible-$800 individual/$2,000 family (in network)
Copays for many services
Out of Pocket - $3,000 individual/$7,500 family (in network)
Current premium split (City/employee)
OAP 2
Deductible - $1,500 employee only coverage / $3,000 if any dependents enrolled
All costs go towards deductible except preventive

11. MEDICAL PLAN SUMMARIES

12. RECOMMENDATION-CURRENT ACTIVE EMPLOYEES AND PRE-65 RETIREES
Request Stay Well Committee evaluate and recommend strategies to incent enrollment in Qualified High Deductible Health Plan (QHDHP)
Rationale
QHDHPs incent consumerism from participants, which over time bends the claim cost trend line
QHDHPs offer participants the opportunity to save tax–free for current or future health expenses
Methodology
Add HSA seed for QHDHP participants

13. RECOMMENDATION-NEW EMPLOYEES STARTING WITH 2020 PLAN YEAR
Request Stay Well Committee evaluate and recommend strategies to encourage enrollment in OAP2
Rationale:
QHDHPs incent consumerism from participants, which over time bends the claim cost trend line
QHDHPs offer participants the opportunity to save tax–free for current or future health expenses
Methodology:
Add HSA seed for QHDHP participants
Move to defined contribution approach for OAP1
~70/30 split based on OAP1 for new employees
City pays the same amount for OAP 1 and OAP 2 employees

14. WHAT IS A HEALTH SAVINGS ACCOUNT?
A Health Savings Account (HSA) that can help you manage your expenses today and in the future.
It’s yours to:
Own. The HSA is always yours, even if you change jobs, become unemployed or retire.
Grow. Your unused balance rolls over from year to year.
Save. HSA’s provide tax-free contributions and tax-free withdrawals and tax- free earnings from investment options.
Choose. Use for current expenses, save for the future or explore investment options.

16. HOW MUCH CAN I CONTRIBUTE?

17. RECOMMENDATION-MEDICARE ELIGIBLE RETIREES
Work with Special Health Insurance Review Committee (SHIRC) to develop coverage recommendations for Medicare eligible retirees and dependents
Rationale
856 Medicare eligible retirees, representing 37% of all members enrolled
Potential for lower monthly costs for retirees with similar coverage
Methodology
Work with SHIRC to develop financially sustainable recommendations that address the City’s financial challenges and mitigate long-term health care liability
Recommendations presented to City Council by October 14, 2019
Changes effective for 2020 Plan Year

18. CURRENT PREMIUM STRUCTURE