PORTER COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING THURSDAY, MARCH 21, 2017 10:00 A.M. (The entire meeting is available to watch on the Porter County website.) The Special meeting of the Porter County Board of Commissioners convened at 10:00 a.m. on Thursday, March 21, 2017 in the Commissioners Chambers of the Administration Center. Those present were: Commissioners Jeff Good, Laura Blaney, Jim Biggs, County Attorney Scott McClure; Administrative Assistant Rhonda Young and Recording Secretary Kathy Merle. Call to Order/Pledge Com. Good, Good Morning, thank you for attending this Special Meeting of the Board of Commissioners for March 21 st, 2017. With that let s move right into the agenda. Shall we have Tony come up? Tony why don t you come up, state your name, who you re with and we ll move right into the BAS contract. Mr. Bontrager, Tony Bontrager from RE Sutton Associates. Atty. McClure, So on the BAS agreement to lay it all out we have the providers that are involved here are Magellan pharmaceutically. We have INETICO and we also have BAS which is our 3 rd party administrator. The Magellan contract has one more year on it so that does not need to be renewed today or entered into a new contract. INETICO s contract had an auto renew clause in it. That auto-renew clause triggered in December of 2016. So the BAS contract which is our 3 rd party provider does expire April 1 st so we ve been happy with their results and with their service and through this process we ve learned that their information was of such a state that it has allowed us, maybe you could speak of that a little bit as to having BAS and having that information and our benefits administrator what that allowed us to do this year. Mr. Bontrager, As stated BAS your current 3 rd party administrator they took over your plan January of 2016 and really what that allowed for and will allow for moving forward is much cleaner and better data as you look at options in the future whenever that may be. The data that was received prior to that from your previous TPA while there was some data there it wasn t the best detailed data to have. BAS definitely came in and did a good job of picking that up and being able to provide better reporting, better claims data all of the things that you would need to make it a little easier to take things to market and everything moving forward. Atty. McClure, Do you believe that 1 year of data that the underwriters were comfortable with do you think that had an effect on some of our quotes this year? Mr. Bontrager, Yes I would say generally speaking whenever we go to market you want at least 2 years of really good data. One year could either be the high point or the low point. When you look at at least 2 you kind of get a little bit better feel. Having only 1 one carrier was a little bit skittish about bidding on the plan overall. So having 2 would definitely help with that moving forward. Com. Blaney, So when there isn t good data they re kind of forced to look at worse case scenarios? Mr. Bontrager, Yes, I mean underwriters tend to be pretty conservative people. So I always tell groups if you ve got the data whether you think it s good or not provide it because they re just going to assume its worse case any way. We always try to get the data good, bad or indifferent you want the data so you can really see. And you want them to have good data so they can make accurate projections. It s one thing as a selffunded plan they are your claims so it doesn t necessarily help for a group to come in 1
and have bad projections. It doesn t help you at the end of the day. You might get a good bid to say we expect your cost to be here, but if that was done on data that is no good that is not going to change what is actually going to (Inaudible). So whether your data is good or bad you want them to have it so they can make accurate projections. Com. Good, So based on our discussions as we ve met and worked through all of this it s probable very safe to say that we get another year of quality data under our belt that our health insurance program is going to be in a much better position to take to the market next year to where we can start finally competitively bidding us and getting out in the market place to where we can start looking at more options then what we ve had to deal with over the last years here. Mr. Bontrager, Yes, I think that having more data will always bring down the red flags a little bit from others that are looking at us. Especially those that don t operate under the same structure that you have today. Good, bad news it s just different structure, it s not to say it s the wrong structure. It s just a different structure and so when they don t understand the structure and they don t understand the previous data that just makes for more hurdles. Atty. McClure, So your recommendation would be to do another year contract with BAS with no auto-renewal effective April 1 st with an ending date of March 31 st of 2018 at this point. Com. Good, And no auto-renewals? Atty. McClure, And no auto-renewals. Com. Good, Any questions about the BAS contract right because that is what is front of us now. Any questions for the Board or additional clarifications? Com. Blaney, He answered the most important question. Com. Good, I think so. I ll open the floor. Com. Blaney, moved to approve the BAS contract effective April 1 st, Com. Biggs, seconded, motion carried. AIG Organ Transplant Policy Atty. McClure, Could you walk us through so we all understand what this is and if we didn t do this where it would go back to etc. Mr. Bontrager, So you currently have a fully insured human organ transplant policy. Sometimes some people have these covered under their general stop/loss policy. Sometimes they re carved out. Pros and cons to each of those situations. I would recommend at this time to go ahead and renew that. When we check with Sun Life to come back will you cover this they will cover it under theirs but the pricing point for them to start excepting that risk didn t quite weigh out as much as what we may have thought. So whether you pay for it out of this policy versus this policy. I don t think today makes a real large difference so I think in the name of keeping everything moving forward renew that AIG policy and then again that is a one year policy so as you are reviewing everything for future renewals that comes up on the table again to be reviewed. Com. Good, So in essence for all of you in the audience this contract policy is right around $100,000.00 a year and if we were to not have it then it would be picked up on the Sun Life stop/loss which we ve already executed but we could go back and add it. It s about the same or more of a price increase of the $100,000.00 if we moved it over to the other one. We re trying to decide which way to go. I think for where we re at in our contract terms and everything I think the 1 year out makes sense for us to go ahead and execute that. 2
Mr. Bontrager, And when you add that back under the Sun Life stop/loss policy you do accept some risk as well on that. So if someone goes and gets a transplant you do pay up to your specific threshold and everything. That is where some of that counter balance weighs out. With the fully insured you re offloading some of the risk of those claims. When you bring it back to Sun Life you still pay a premium for them to cover but you also accept some risk as well. Com. Good, Exactly, it s not really a cap amount so to speak. Mr. Bontrager, Yes, you re excepting up to your stop/loss threshold of $150,000.00 but then you re also picking up that risk of up to $150,000.00. Com. Good, Is that clear to everyone? Com. Blaney, Yes. Com. Good, I am going to open up the floor here for the AIG organ transplant policy is there any other addition questions or comments from the Board? Com. Biggs, Yes Tony we received the document that spelled out the total number of I don t know if this correct describing them to be programs but the organ transplant policy was one of them. There were 9 different companies involved. BAS was one of them and so on and so forth the servicing agent Anton and R&R. Out of that list of 9 that you listed I understand that BAS is still on board who is being dropped to lessen that administrative cost. Mr. Bontrager, I m trying to think of who all was on that list. Com. Good, That is the next agenda item Jim. Com. Biggs, I know but it s not just the servicing, I m talking about the overall administrative cost. Com. Good, In the organ transplant policy? Com. Biggs, That was one of them. There were 7 others. I would ask the question, are all of these necessary and I was told no they are not? Mr. Bontrager, I think moving forward as you review looking at your overall plan are all necessary possibly not no they may not be, but with keeping the plan in place and structured as it is today is AIG 100% necessary no we could offload that risk to someone else but the price point I would say doesn t necessarily make a big difference in whether or not. Com. Blaney, moved to approve the AIG organ transplant policy, Com. Biggs, seconded, motion carried. Com. Good, So far what everybody has heard is it sounds like the insurance plan for Porter County that we ve had the last two years will continue another year with most of our insured providers. Now we re going to move into probably where there will be some changes here, well I know there will be changes here on servicing agent discussion and the contract there. Scott do you want to give us a little re-cap on that? Atty. McClure, Yes the Commissioners received a letter of resignation from Anton Insurance on I believe the 17 th, Friday resigning as the servicing agent for the Porter County health benefits plan that would be effective April 1 st. Obviously with the tight time constraint it kind of put us in a situation where we were needed to make some decisions as to who would be the servicing agent. At that point we reached out to RE Sutton and discovered that they would do this and they do do this for other municipalities or corporations or school corporation etc. So we also talked about the fact that this would be a one year bridge type of agreement to get us to 2018 when we can dive back into this. Again it kind of goes back in with having 2 years of data and 3
being able to go back into the market, having all of the contracts lined up and being able again to go test the market maybe with some slightly better results simply because we have better data. And have a much better understanding of the health insurance program that had gotten put together a couple of years ago. So with that being said we asked you if you were a business that does this type of work and you guys did. You understood that it is a 1 year bridge agreement it s not something that we would want to stay with moving forward. Then want don t you run us through what your fees would be to provide that service. Mr. Bontrager, Our structure that we operate out of is similar but yet does have some differences. We tend to be fee base consultants as you know we did the project fee. A fee based consultant so one of the first processes that I would do would be to go through some of different line items to kind of speak to your point on some of the fees that might be being paid outside of the fee you pay directly to us and do everything I can to pull those out. The back end contractuals I don t know for sure but to pull out some of those fees that you currently pay, pull those out. Our proposed fee is $3.75 PEPM. Com. Biggs, As opposed to what we re paying now? Mr. Bontrager, I believe currently as a PEPM you pay $12.50. Com. Blaney, What is the difference between those two? abbreviations. You used Mr. Bontrager, Per Employee Per Month, I m sorry. Com. Blaney, That s alright. Mr. Bontrager, Insurance lingo, Per Employee Per Month is PEPM. I would say that our structure as you kind of spoke of as a bridge to whatever you would decide moving forward will be heavy on the consultative side, analyzation side. The day to day structure might be a little different then what you have today. Not that we can t do the day to day structure that you have today in conversations and stuff that is just not how we structure it on our end, which is probably why at least part of that dollar difference there as well. I will say though if you call and say hey we need this done I will do it. I hate to give the impression that the $12.50 versus the $3.75 you re just paying way too much. I think that they offer a lot of good benefit services, and we can offer those but in working with Scott a little bit I think the approach that you re looking for along the way here is more of a consultative approach to over the next year where do we want to sit and where do we want to be moving forward. Com. Good, And that is the window dressing that we re going to be doing for the event next year when we can go back out to the market. Mr. Bontrager, Correct. Com. Biggs, And you will not be receiving any additional compensation from any of the other companies that we re working with. Mr. Bontrager, No sir. Com. Biggs, Okay, because as we know that can be said with the agents we just replaced. Mr. Bontrager, Understand. Com. Biggs, That is why that $12.50 seems rather high to me, actually very high to me knowing that they were compensated on that back end from at least one of the companies that we re associated with which was Magellan. My understanding is and you can clarify this for me if they weren t receiving that compensation that would be compensation that we would receive in the way of rebates. 4
Mr. Bontrager, From my understanding of that, that was a per prescription fee that was being charged. So I just don t think that fee would have every really been charged in that. So when someone goes and fills a prescription there would not have been an extra fee in the dispensing of that. Com. Biggs, So at the end of the day our costs were higher because of that? Mr. Bontrager, I would agree with that. Com. Biggs, Thank you. Atty. McClure, What would be the breakdown of some of those fees, we have some issues to deal with that you re going to tackle with the Magellan contract. I think Jim just touched on that. Then we re also going to tackle the issue of the Sun Life renewal and we have a little bit more work to do on that. Also the price difference between the $12.50 and the $3.75, we don t have an exact number but it looks like potentially there could be about another $150,000 or so in savings. Mr. Bontrager, Right with those fees and then again looking at the Sun Life structure and stuff which may or may not be something you want to address this year, but ongoing but really just laying those out for you all to make the decision on what you would like to do with those. Atty. McClure, Well ultimately I think obviously we need to take action on this consultant service agreement but I think ultimately what this exercise has done is obviously got all of us into a much different understanding of what we currently have and then also to set the table to move forward next year. That doesn t necessarily mean that we definitely have to make a change. It just means that we want to put ourselves in a position to be able to fully test the market. Take the non-traditional plan that we have now with the cost plus. To be able to compare it to more traditional plans that people would be more used to and be able to go to the market and get good data and actual be able to compare apples to apples next year. I think all of these actions are putting us in a position to be able to do that. At that point it s what the best price and provider prevail, but I think we needed this to be able to kind of clear the cobwebs and get us in a situation where we can actually put ourselves in that position in 2018. So I do think a lot got accomplished through this process and continuing to set the table so to speak for next year to be able to ensure basically that we are getting the best bang for our buck in our health insurance and we are making sure that the cost and the plans are in line with the reality with what is happening out there in the market. Com. Biggs, I think that our policy to dissolve all auto-renewal contracts is going to be a huge benefit to us. I think that this board s willingness to at the very least every 24 months re-vet all of this out again and make sure and qualify that we are doing the right thing. Com. Blaney, We tried to do away with auto-renewals already, glad that we re going to be certain this time that it s not happening. Com. Biggs, I think the benefits can help up here in managing it in that way. Com. Good, Yes and just to follow up with that probably within the next 2 weeks we will be submitting our notifications to not renew. So we re going to go on record real early, because we feel very confident that this is going to trend the right way for Porter County. I would also just like to follow up and say thank you and I think the other Board members I think I can honestly say to the citizens of Porter and the employees of Porter County that we have our hands on the steering wheel of the health insurance program in Porter County finally. I think this thing is going to trend the right way. I m very confident that it will, but it gets back to doing all of the blocking and tackling and doing all of the right things the way that they are supposed to be done. We are now on that path. I feel very confident as to where we re at right now. It s been a very exhausting process. I want to thank Atty. Scott McClure for his deep dive into this because he spent a ton of time and I think we have a true champion there with him too leading the 5
charge for County government. I m very pleased with the outcome. I want to get there quicker, but that is me, but I do feel confident that we re trending the right way right now. We re heading in the right direction. I guess that is some form of confidence that we have up here. That is really all I wanted to say about that. Laura do you have any comments? Com. Blaney, moved to approve a 1 year consulting service agreement with no auto-renewals for RE Sutton & Associates, Com. Biggs, seconded, motion carried. Com. Good, Welcome aboard. Mr. Bontrager, Thank you! With no further business the meeting was adjourned at 10:29 a.m. BOARD OF COMMISSIONERS PORTER COUNTY, INDIANA Jeffrey J. Good Laura M. Blaney Jim Biggs Attest: Vicki Urbanik, Auditor 6