Item B1
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: March 13.2001
Division:
County Administrator
Bulk Item: Yes No X Department: County Administrator
AGENOA ITEM WORDING:
Discussion concerning Monroe County employees and retirees group benefits and approval as
appropriate as per attached resolution.
ITEM BACKGROUND:
Please see attached report.
PREVIOUS RELEVANT BOCC ACTION:
Please see attached report.
CONTRACT/AGREEMENT CHANGES:
Please see attached report.
ST AFF RECOMMENDATIONS:
As determined by the Board of County Commissioners.
TOTAL COST:
BUDGETED: Yes
No
COST TO COUNTY:
REVENUE PRODUCING: Yes
No
AMOUNTPERMONTH_ Year
APPROVED BY: County Atty _ OMB/Purchasing _ Risk Management
DIVISION DIRECTOR APPROVAL: ya'VC'J) X tOl"1 t07Jd
( James L. Roberts
DOCUMENTATION:
Included X
To Follow_ Not Required_
AGENDAITEM#~
DISPOSITION:
Revised 2/27/01
Group Benefits Program
March 13,2001
. .
Group Insurance Message
Contents
Board of County Commissioners' Actions & Approvals
Programs Under Group Insurance Program
Medical
Dental
Vision
Prescription Benefits
Life Insurance
Employee Assistance Program
Specific & Aggregate Excess Insurance
Contractual Administrators
History of Claims Expense
How Rate is Developed
Group Insurance FY 2001 Budget
Coverage Comparison FY 1999-FY2001
Relationship to ad Valorem Tax
Actions Taken
Task Force
Recommendation Section
Exhibits:
The Key West Citizen
Resolution approved March 1999
Retiree Group Health Insurance Survey
WHP Presentation
KPHA Presentation
Arthur J. Gallagher (Long-Term Liability Issues)
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
A
B
C
D
E
F
GROUP BENEFITS MESSAGE
Over the last few years, the issue of Group Benefits and specifically, Retiree Health
Coverage has been to the Board on a rather frequent basis. It has caused great
concern among both retirees and active employees. To explore fully the problems
facing Monroe County in a fund that is approximately $13 million and expenses for
claims alone reach nearly $9 million, it is necessary to review the history of the
program.
Board of County Commissioners' Actions & Approvals
Year Coverage Company
1984 Major Medical-SelC- Insurance Gallagher Bassett Third-Party Administrator (TPA)
Program
Acordia National- TPA -1996-current
1987 Dental Benefits - Self-Insurance SunLife of Canada - TP A- 1987-1989
Program
Gallagher Bassett - TP A - 1989-1996
Acordia National- TPA -1996-current
1987 Vision Benefits- Self- Insurance Gallagher Bassett -TPA - 1987-1996
Program
1988
Free Retiree Insurance
1987
Precertification
1984
Prescriptions
1990
Surviving Spouse
1996
1997
1999
Prescription Card
Employee Assistance program
Rule of 70 Eligibility
Acordia National- TPA -1996-current
Prior to 1988:
Retirees under age 65 paid 60% of Department Rate
Retirees 65 & over paid 40% of Department Rate
Medical Foundation Services -1987-1994
Advanced Focus - 1994-1996
Keys Physician Hosptial Alliance - 1996-current
Gallagher Bassett - TPA -1989-1996
Covered under Indemnity Self-Insurance Program
Surviving Spouse of Retired Employees can keep ins.
Premium Rate must be paid.
WHP Health Initiatives - Administrator - Self Insured
Care Center of Mental Health
Requirement of Rule of 70 (age & years of service) or
minimum age of 60
The Group Insurance Program is a self-insured program with Insurance purchased
for excess claims and specific coverage, i.e., life insurance. The self-insurance
program was begun in 1983 after the rates quoted by Metropolitan Insurance
Company were deemed to be too high. (Copy of The Kev West Citizen article
attached, Exhibit A). In 1989, claims were $2,500,000 with an increase to
$8,600,000 in 2000.
Board Action of 1988. In July, 1988, the Board was asked if insurance could be
provided to retirees free under the County's policy. The answer was yes. There
was no impact study of future costs associated with this decision. At the time this
action was taken, the retirees paid a percentage of the premium rate of $170; if
under age 65, 60% of the premium rate ($170), resulting in a charge of $105 to the
retiree; and if over the age of 65, 40% of the premium rate, resulting in a charge of
$70 to the retiree. If that same percentage were charged to the retirees at this
time with the current premium rate of $470 the rates would be $282 for under age
65 and $188 for retirees over age 65.
2
Programs under the Group Insurance Program:
MEDICAL INSURANCE:"
Maximums:
Major Medical Benefits
$1,000,000 Lifetime
Benefit for all Outpatient
Treatment by a Physician of a Mental/
Nervous Disorder 50% of charges
Benefit for Treatment of Chemical Dependency
(alcoholism or drug abuse) $25,000 lifetime (one
confinement per
lifetime)
Benefit for Inpatient or Partial
Hospitalization Treatment of a
Mental/nervous Disorder
30 days per year
Deductibles:
Calendar year Deductible
Family Maximum
Hospital- per period of confinement
$200 per individual
$400
$150
Co-payment Percentages
Covered Expenses 80% of first $10,000
100% thereafter per individual per calendar year
Claims Paid in FY 2000
$ 6,967,753
3
DENTAL INSURANCE:
Benefit: Dental
$2,000 per calendar year
Benefit: Treatment of Tempomandibular Joint
Disjuntion Syndrome
(subject to Deductible)
$1,000 per calendar year
Benefit: Orthodontia
(subject to Deductible)
$1,500 lifetime
Deductible:
Per Calendar Year
$50 per individual
$150 per family
Copayment percentages: (County pays after deductible)
Preventative Services 100%
Basic Services 80%
Major Services 50%
Orthodontia 50%
Claims Paid in FY 2000
$ 482,242
4
VISION:
Benefits: Complete visual examination including refraction $50 per year
Lens, other than Contact Lens, per pair and Frames $150 per single
purchase; limited to one purchase during anyone twenty-four month
period.
Contact Lens, per single purchase
$150
Claims Paid in FY 2000
$ 80..654
Claims Paid in Medical, Dental, Vision
Total Eligible Claims Submitted
$7,530,649
$13,144,986
Total Claims Paid to Total Eligible Claims Submitted 570/0
5
PRESCRIPTION BENEFITS:
You can obtain your prescriptions either at a participating retail
pharmacy by presenting an Identification Card and paying a co-pay at the time of
service or by using the mail service program.
Generic
Retail
(30 Day Supply)
$12.00
$ 6.00
Mail Service
Co-payments:
Brand
(90 day Supply)
$30.00
$12.00
Prescriptions have increased dramatically since the implementation of this program.
Attached find a listing of the top 25 pharmaceuticals used during the 3rd quarter of
1999 compared to the top 25 pharmaceuticals used during the 3rd quarter of2000; a
27% increase. Much of what has fueled this increase is the advertising of
"designer drugs." Patients are influenced by the advertisements and ask for
prescriptions by name when less costly prescriptions will treat the same ailments.
Prior to having the Pharmaceutical program, prescriptions were reimbursed under
medical coverage at 80% County/20% employee. The County's expenses prior to
1996 were approximately $250,000. The estimate to go to the prescription card
program was an annual expense of $500,000.
Amount in FY 2000
$ 1,109126
6
9900 COMPARISON
,:,~rl t.rJ,;'f~T>j,t:s"~;..;~~.lm ";:'j~1:r~i:4.~;;;:\~t~~}i'i.41;~r~~~~ Im;:)!i~lti}$~~m;~~!#<\~.lm.;~~\tf0't~.[~~~Jm,r" :- <":;11
.'
* MEDICA nON TTOTAL SALES I * of RXs I COST PER RX I USE
1 PRILOSEC , $20,378.00 ! 171 i $119.17 GASTRO INTF5TINAL/ULCER
2 LIPITOR , $9,664.00 I 153 , $63.16: CHOLESTEROL
I
3 PROZAC $8,720.001 78 $111.79: DEPRESSION
4 OXYCONTIN $5,079.001 35 : $145.11 j PAIN
.1 5'PREV ACID $5,026.001 46 $109.26: GASTROINlCSTINAL/ULCER
6~ZOLOFT I $4,963.00: 72 $68.93: DEPRESSION
7'INORV ASC $4,779.00 I 94 i $50.84 : BLOOD PRESSURE
8'CELEBREX $4,639.00 i 61 $76.051 ARlHRITIS
9 NEURONTIN : $4A51.oo1 29 I $153..181 SEIZURFS
10 AUGMENTIN , $3,727.001 66 ! $56..17j ANTIBIOTIC
11 CLARITIN $3,477.00 i 62 $56.081 ALLERGIES
121NEORAL $3,388.001 14 $242.00' ARlHRITIS/ORGAN RJC110N
13 PAXIL ! $3,372.001 51 i $66.121 DEPRESSION
141GLUCOPHAGE $3,290.00 I 73 $45.071 DIABETFS
15 !CIPRO $3,118.001 44 i $70.86 i ANTIBIOTIC
16~LEV AQUIN $3,071.00 i 37 $83.00 ! ANTIBIOTIC
17 AMBIEN $3,030.00 I 58 ! $52.24: INSOMNIA/SLEEP
18 REZULIN $2,914.00i 25 i $116.561 DIABETFS
I
19 NEUPOGEN $2,911.00 1 1 i $2,911.00 i BLOOD PROTEIN/CANCER
20. FAMVlR , $2,586.00; 91 $287.33 i HERPES
21 ZIlHROMAX $2,353.00 I 64 : $36.771 ANTIBIOTIC
22'SPORANOX $2,317.00 I 11 1 $210.641 ANTIFUNGAL
23' PREMARIN , $2,301.001 121 ! $19.02: HORMONE~LACEMENT
24 ZYPREXA 1 $2,221.001 31 $740.33! ANTIPSYCHOTIC
i
25 ZOCOR I $2,173.001 32 , $67.911 CHOLESTEROL
TOTAL $113,948.00 i I I
*
1 PRILOSEC
2 LIPITOR
3 VlOXX
40XYCONTIN
5 ZOLOFT
6 PREY ACID
7 GLUCOPHAGE
8 NORV ASC
9 PROZAC
10 PAXIL
11 CLARITIN
12 NEURONTIN
13 ZOMIG
14 CELEBREX
15 ZYPREXA
16 COMBIVlR
17 REBETRON 1000
18 EFFEXOR XR
19 AMBIEN
20 NEUPOGEN
21 PRA V ACHOL
22 AVANDIA
23 CIPRO
24 ACTOS
25 ZOCOR
TOTAL
TOTAL SALES
$27,539.00
$12,851.001
$10,521.001
$6,798.00
$6,528.00
$6,037.00
$5,980.00
$5,473.00
$5,115.001
$5,030.001
$4,354.00
$4,286.00 I
$3,959.001
$3,942.001
$3,903.001
$3,650.00 i
$3,615.001
$3,525.001
$3,244.001
$3,178.00 i
$3,053.001
$3,038.00 I
$3,017.00 I
$3,010.00 '
$2,921.001
$144,567.001
* of RXs
200 I
192
132
431
86
54
103
109
41
74
70
27 !
18 I
461
14 i
7'
3!
41 I
641
21
38 !
25,
38 i
26 '
35 i
project 01.?501 - 9900 3Q cOlll1parison.xls
Page 6h
COST PER RX
$137.70
$66.93
$79.70
$158.09
$75.91.
$111.801
$58.061
$50.211
$124.761
$67.97'
$6220 I
$158.741
$219.941
$85.70j
$278.791
$521,43;
$1,205.001
$85.981
$50.69 !
$1,589.00 i
$80.34,
$121.521
$79.391
$115.77'
$83..16
I
. .2,00(>
USE
GASTROINTESTINAL/ULCER
CHOLESTEROL
ANTIINFLAMMATORY
PAIN
DEPRESSION
GASTRO INlCSTINAL/ULCER
DIABETFS
BLOOD PRESSURE
DEPRESSION
DEPRESSION
ALLERGIES
SEIZURFS
MIGRAINE
ARlHRITIS
ANTIPSYCHOTIC
HIV / AIDS
HEPC
DEPRESSION
INSOMNIA/SLEEP
BLOOD PROTEIN/CANCER
CHOLESTEROL
DIABETFS
ANTIBIOTIC
DIABETFS
CHOLESTEROL
LIFE INSURANCE
Active Emulovees: Coveraee
Under 70 years of age $20,000
Age 70-74 13,400
75 and over 10,000
Active Employees covered under Accidental Death
and Dismemberment. The above coverage is paid
at double the stated amount. Dismemberment paid
per policy schedule.
Retirees:
Under 70 years of age
Age 70 and over
Coveraee
$20,000
10,000
Premium paid to Hartford Life
$146,000
7
EMPLOYEE ASSISTANCE PROGRAM
The EAP provides confidential, no cost professional
assistance to help employees and their families resolve
problems that adversely affect their personal lives and job
performance. The EAP also assists the County with problems
when issues arise that decrease productivity.
Contract Price
$ 66,288
8
SPECIFIC & AGGREGATE EXCESS INSURANCE
Specific Excess - All claims over $100,000 per individual per
year are covered 1000/0 by excess policy.
Aggregate Excess - When total claims exceed $10,000,000 per
year, excess pays 1000/0 of all remaining claims.
Premium Paid FY 2000
$ 635,000
9
CONTRACTUAL ADMINISTRATORS
Medical, Dental, Vision
Acordia National
Third-Party Administrator - Claims processing is
currently handled on a direct submission basis. Claims are sent directly to Acordia
National which reviews them for eligibility and processes them for payment along
with the Explanation of Benefits (EOBs). Acordia prints claim checks for the
County on its local checking account and forwards the checks directly to the
employee. The claim registers are then forwarded to the County for monitoring.
Periodic claim audits are performed by the County and separately by the TP A.
Acordia maintains a thirty (30) day claim turn around.
Keys Physician-Hospital Alliance
Utilization Review and Large Case Management.
Provide network of hospitals and physicans in the Keys to
obtain discounted rates.
Dimension Health, Inc.
Provide network of hospitals and physicians in Miami-
Dade and Broward County to obtain discounted rates.
Excess (Specific & Aggregate) Insurance
Lincoln Re/Arms (Alden Risk Management Services
Life Insurance
Hartford Life
Pharmaceuticals
WHP Health Initiatives
Employee Assistance Plan
Care Center for Mental Health
10
History of Claims Expense:
The following details how the actual dollars for claims have
increased since 1989, along with the number, of enrollees split
between active employees and retirees. It also shows the
premium rate that is charged the department for each active
employee. It also gives the rate charged for dependant
coverage. More about how this rate is developed in a later
section.
Year Enrollees Active Retirees % of
(Oct) Employees Retirees
to Total
Enrollees
$ Claims
Increase from
Prior Year
Premium
Rate per
Month
Dependant
Single per
pay period
Dependant
Rate Family
per pay
period
1988 24 $190.50 $57,90
1989 1,040 990 50 4.81% $2,514,461 $237.00 $63.69
1990 1,217 1,147 70 5.75% $3,213,994 28.00% $285.00 $76.43
1991 1,226 1,140 86 7.01 % $3,495,272 9.00% $300.00 $80.25
1992 1,319 1,222 97 7.35% $3,809,723 9.00% $300.00 $80.25
1993 1,306 1,197 109 8.35% $4,170,660 9.000(q $250.00 $80.25
1994 1,424 1,306 118 8.29% $4,824,782 16,00% $410.00 $80.25
1995 1,481 1,355 126 8.51% $6,769,588 40.00% $410.00 $90.00
1996 1,492 1,340 152 10.19% $6,396,551 -6.00% $380.00 $90.00 $110.00
1997 1,529 1,360 169 11.05% $6,831,941 7.00% $451.00 $100.00 $120.00
1998 1,575 1,394 191 12.10% $7,039,738 3.00% $470.00 $100.00 $120.00
1999 1,585 1,354 227 14.36% $7,248,064 3.00% $470.00 $100.00 $120.00
2000 1,596 1,360 236 14.80% $8,639,775 18.00% $470.00 $100.00 $120.00
Actives covered under group insurance program unavailable for 1988.
In October 1994, the Group Insurance Premium Rate was set at $310 per month.
During the year, there was a mid-year special billing raising the rate to $410. This
amount was needed to cover the claims experience of the period 1994-95 and to
rebuild the fund that was severely harmed by the reduction of the premium rate.
11
How Rate is developed:
Since the County is a self-insured fund, it must raise from the departments sufficient
money to cover all anticipated claims, expenses and reserves.
Expenses and
revenue sources are reviewed and an amount that needs to be funded through
departmental charges is established by the Board of County Commissioners.
Budget for Fiscal Year 2001
Expenses to Cover: Administration
Operations/Insurance
Claims
Asserted Claims & Reserves
Outside Revenue to Off-set above
Dependent Contributions
Excess
Interest
COBRA Payments
Fund Balance Forward adjusted 5% FI. Statute
Remainder Needed to Fund Program
Number of Active Employees -10-1-2000 1352
$7,906,429 shared by
1352
Amount being Billed
$186,819
$1,153,788
$8,376,465
$3,197,284
$12,914,356
-$1,331,000
-$400,000
-$100,000
-$18,330
-$3,158,597
-$5,007,927
$7,906,429
$5,848 annually
$487 monthly
$470 monthly
The County pays 100% of the premium for the employees through departmental
billings and subsidizes the dependant rates approximately 30%.
12
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Coverage comparison FY 1999 vs. FY 2001
Enrollment by Constitutional Officer Comparison I
I
Oct-98 Oct-OO
I Office: (/l 1Il I
en - en 'E
Q) c: Q)
I Q) Q) "0 Q) Q) "C I
I >. "C >. "0
Q) Q) !
0 c: ..... 0 c: .....
a. Q) Q) a. Q) Q)
E a. > 1Il E a. > 1Il
Q) o Q) Q) o Q)
w a u> W a u>
:r:l: :r:l: :r:l::.::i :r:l: :r:l: :r:l::.:i
IClerks Office 104 74 178 106 65 171
Property Appraiser 41 23 64 43 24 67
Tax Collector 46 31 77 47 34 81
Supervisor of 13 8 21 12 10 22
Elections
Sheriffs Dept 542 351 893 563 397 960
Court Administration 29 24 53 26 28 54
Subtotal 775 511 1286 797 558 1355
SOCC 32 13 45 32 10 42
Mgmt Services 36 35 71 32 38 70
Community Services 146 40 186 145 45 190
Public Safety 69 41 110 65 43 108
Growth Management 51 29 80 40 25 65
Public Works 162 99 261 167 108 275
Solid Waste 26 9 35 17 6 23
Subtotal 522 266 788 498 275 773
Mosquito Control 47 32 79 52 34 86
Retirees 233 56 289 236 61 297
Other: 11 4 15 19 8 27
Subtotal 291 92 383 307 103 410
I
1
Total 1588 869 2457 1602 936 2538
I
I BOCC includes The Board, County Attorney's Office, County Administrator's office, Veteran's Affairs
Office; and Healthcare Taxing District
14
A look at the contribution to the Group Health Insurance Program in relationship
to the ad Valorem tax levied in FY 2001.
General Fund
F&F
F&A District 1
F&A District 6
Parks & Beaches
Planning/Building/Code
Municipal Policing
Subtotal
Health Dept.
Billed for
Group Ins.
2,419,831
2,464,860
253,800
5,640
94,244
451,200
383,520
6,073,095
o
ad Valorem
Per Fund
13,607,015
28,223,639
4,057,015
740,924
1,168,355
1,515,852 '
3,656,499
52,969,299
281,000
53,250,299
Group as % of
ad Valorem
17.78%
8.73%
6.26%
0.76%
8.07%
29.77%
10.49%
11.47%
Total Amount of Fund
42,104,928.0
40,514,893.0
5,518,225.0
1,018,458.0
1,651,848.0
8,316,570.0
5,591,535.0
104,716,457.0
The $6,073,095 budgeted for group insurance in ad Valorem funds is approximately
66% of the amount billed out in Departmental charges.
15
ACTIONS TAKEN BY THE BOARD OF COUNTY COMMISSIONERS REGARDING RETIREE
HEALTH INSURANCE AND GROUP INSURANCE ISSUES:
Date
Agenda Item Wording
. August 1998 Approval to change the eligibility for group health program benefits for
retirees, to lower the number of years of exposure for the County, NO ACTION TAKEN
. September 1998 Approval to change the eligibility for group health program benefits
for retirees, to lower the number of years of exposure for the County, Presentation by Lawton Swan,
President ofInterisk, Inc, the County's insurance consultant, and Jeff Angelo, Area President of
Arthur 1. Gallagher & Company, NO ACTION TAKEN,
. October 1998 Approval to change the eligibility for group health program benefits for
retirees, to lower the number of years of exposure for the County, Directed to explain this issue to
employees.
Eight Sessions held by Employee Benefits in four locations in
September 1998 (Harvey Government Center, Chapel, Marathon EOC
and Key Largo Library),
..
Three Sessions held by County Administrator and Human Resources
Director on January 8, 1999
January 199y f Approval to change the eligibility for group health program benefits for
retirees, to lower the number of years of exposure for the County. TASK FORCE APPOINTED
.
Task Force comprised of Monroe County Personnel Policies &
Procedures Review Board and Appointment of employee or retiree
from each of the Constitutional Officers, Commissioners and Mosquito
Control. Task Force met February 1 and 22, 1999. Submitted
proposal to BOCC in March 1999,
. March 1999 Approval to change the eligibility for group health insurance for group
health benefits for retirees, to lower the number of years of exposure and lower outstanding liability for
the County, Approval of resolution recommended by Task Force on Retiree Insurance. Potential
liability lowered from $65 million to $25 million, MOTION PASSED.
. May 24, 1999 Not an agenda item: Commissioner Williams asked what we were
going to do regarding the $25 million liability for retiree health insurance,
. December 8, 1999 Discussion of Retiree Health Insurance Program and discussion of
possible options for reduction of liability, DISCUSSION ITEM ONLY, NO ACTION REQUESTED,
Motion made to notify retirees and employees of any agenda item discussing group insurance,
. June 14,2000 Not an agenda item: Mr, Roberts notified employees that the Task
Force was being reactivated to discuss Insurance Liability,
. July 2000
recommendations,
Not an agenda item: Task force met twice and arrived at five
16
Issues leading to Presentations to BOCC and Task Force Review:
As early as February 1997 the County's Insurance Consultant, Interisk, pointed out that our retiree
base was receiving benefits in the amount of $500,000 (excluding prescriptions) without an offsetting
revenue source. In the summer of 1998, we had an alert from our excess carrier that our claims were
running very high, especially our retiree claims. They had an actuarial study completed to see what
our current and potential liability would be. The actuarial study, provided in July 1998 pointed out
that there was a potential $65 million liability. The Administration proposed a plan to increase the
age of free health care in conjunction with retirement from anytime after the age of 42 with 10 years
of service to a minimum of age 55 with 10 years of service. Together with this, it was proposed that
the retiree return to the county the amount received in health insurance subsidy from the state to
cover a portion of their insurance expense. This was not accepted by the BOCC and after several
board presentations, the task force was appointed and reviewed many options.
Task Force Participants:
Representing
First Task Force
pppl Review Board Member
PPP Review Board Member
PPP Review Board Member
PPP Review Board Member
PPP Review Board Member
PPP Review Board Member
PPP Review Board Member
PPP Review Board Member
District One Commissioner
District Two Commissioner
District Three Commissioner
District Four Commissioner
District Five Commissioner
Clerk of the Court
Property Appraiser
Sheriff
Supervisor of Elections
Tax Collector
Mosquito Control
Dave Owens
Sheila Barker
James Paros
Anne Rioseco
Patty Frazier (Alternate)
Beth Leto
Bill Kelly
Paul Patterson
Tom Brown
Lisa Druckemiller
Nancy Cohen
Sylvia Murphy
Kay Gissendaner
Jackie Clynes
Leonard Knowles
Beth Barnes
Joyce Griffin
Phyllis Pita
Billy Southcott
2 Personnel Policies and Procedures Review Board Members
17
Second Task Force
Jackie McLain
Sheila Barker
James Paros
Sally Smith
Sandy Molina
Beth Leto
Ken Perryman
Pat Reeder
Gib Peters
Lisa Druckemiller
Nancy Cohen
Sylvia Murphy
Tom Brazil
Jackie Clynes
Leonard Knowles
Mike Rice
Joyce Griffin
Don Gates
Ed Fussell
Recommendations of First Task Force:
The Task Force made a recommendation that was passed at the March 10, 1999, Board Meeting.
That resolution implementing the Rule of 70 is attached, along with a grid showing its effect. Exhibit
B.
What other entities are doing: During both Task Force processes, the County
surveyed what other entities were doing in reference to retiree coverage. The latest
survey is attached. Exhibit C.
18
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"'cJ~~
Board of County Commissioners
Rf...5.Q.LUTION NO,
104 -199Q
A RESOLUTION AMENDING RETIREMENT ELIGIBILITY REQUIREMENTS FOR GROUP HEALTH
INSURANCE COVERAGE FOR MONROE COUNTY EMPLOYEES,
WHEREAS, group health insurance expenses have been steadily increasing; and
WHEREAS, the number of retired County employee continues to increase dramatically each
year; and , ~ -n
:to \.D-
WHEREAS, it is the intent of the Monroe County Board of County Commi~on~r.s t~llo~
;:0 (""') - ,- -.-. c:J
or -- -"
County employees, including employees of the Constitutional Officers and the M~~~o ~tr@
,0(""')' ;:0
Board, who meet the criteria established in this resolution to retire through the Flo~getirjlR1e~
--. r- ::x r:1
System and maintain their group heaith insurance benefits \'lith Monroe County as p~~ n:; ""ing
~ C'> U1 ::0
!low, therefore, ~ rTl '-'> a
BE IT RESOLVED BY THE BOARD OF COUNTY CO~ISSIONERS OF MONROE
COUNTY, FLORIDA:
Section L Retiree eligibility for group health insurance benefits.
A.) Employees in FRS Regular Class with a minimum of 10 years of service with Monroe
County who retire on, or after, their normal retirement date as described in Sec. 121.021 (29), F .S.,
or Employees in other FRS Classes who complete years of creditable service as required by Florida
Statute who retire on, or after, their normal retirement date as described in Sec. 121.021 (29), F.S.
including all group insurance participants who have retired or will retire prior to October 1, 1999,
will maintain their group health insurance benefits with ~-fonroe County,
B,) Effective October 1" 1999, employees who retire at an early retirement date, as
described in Sec. 121.021 (30), F.S" must, in order to maintain their group health insurance benefits
with Monroe County, pay to Monroe County a monthly premium in an amount established annually
by the Board of County Commissioners, The premium will equal, but not exceed, the County's
premium cost for active employees, Retirees who must pay the monthly premiums described in this
subsection (1 B) wiII have their premiums canceled when they reach
(i) 60 years of age; or
(ii) qualify under the Rule of 70 wherein the combined years of service with
Monroe County and the retiree's age equal a total of70,
C.) Employees who have less than 10 years of service with Monroe County and are fully
vested with the Florida Retirement System, must, in order to maintain their group health insurance
. ....
, ,-
uenefits with Monroe County, pay to Monroe County a monthly premium in an ,.mount established
annually by the Board of County Commissioners, The premium will equ::d, but not exceed, the
County's premium cost for active employees.
Section 2,
This resolution does not affect any requirement of eligibility with the Florida
Retirement System; it affects only eligibility to receive healt~ insurance benefits under the Monroe
County Group Employee Benefit Plan;
Section 3
The Monroe County Board of County Commissioners formally reserves the
right to any and all future changes and modifications of this resolution.
PASSED AND ADOPTED by the Board of County Commissioners of Monroe County.
Florida, at a regular meeting of said Board held on the 10th day of March
1999.
Mayor Wilhelmina Harvey
Mayor Pro Tern Shirley Freeman
Commissioner George Nuegent
Commissioner Mary Key Reich
Commissioner Nora Williams
yes
yes
yes
y.es
YPS
(SEAL)
ATTEST: DANNY L. KOLHAGE, CLERK
BOARD OF COUNTY COM~.fISSIONERS
OF MONROE COUNTY, FLORIDA
By J1,...L.D_ c.. ~)&~
Deputy Clerk
. - ~-
By ~\ '.- r'. '\."
Mayor/Chairman
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RE:
CC:
February 23, 1999
All employees
David P. Owens, Grants Coordinator, Social Services;
Chairma~rsonn~1 ~J~ aw Procedures Review
Board 'U~r:'&~
Retiree Health Insurance Task Force recommendation
DATE:
TO:
FROM:
The Retiree Health Insurance Task Force held its second meeting on February
22, 1999 and agreed upon an alternative to present to the Board of County
Commissioners concerning the proposed changes in retiree health insurance. The Task
Force consisted of the Personnel Policies and Procedures Review Board and
appointees from each of the constitutional offices, Mosquito Control Board, and County
Commissioners. The makeup and mission of the Task Force were agreed upon by the
County Commission at its January 1999 meeting. Current employees and retirees were
included. Below is a summary of the issues discussed and the alternative proposal.
Prior to October 1, 1988, retirees were offered health insurance, and those under
age 65 paid 60% of the department rate ($175.00), or $105.00 per month. Retirees 65
and over paid 40% of the department rate, or $70.00 per month. The difference was
due to the fact that those 65 and over would have Medicare coverage, which would be
the primary coverage. The department rate is the amount charged to your department
per employee for our health insurance package. This rate is currently $470.00 per
month per employee and covers the costs of claims, administration, excess coverage
(over the self-insurance limit), life insurance, and retiree health coverage.
At its meeting held on July 21, 1988, the County Commission unanimously voted
to "authorize the payment of Group Insurance Premiums to all County Retirees with the
requirement of a minimum of ten years' service" (quoted from the minutes of that
meeting). This would provide free health insurance to anyone approximately 42 years of
age and up with ten years of county employment.
Recently I consultants hired by the county have estimated that the potential
liability for providing free retiree health insurance under the October 1988 policy
amounts to approximately 65 million dollars as of July 1, 1998. In arriving at this
estimate, they considered the number of current employees, the number of current
retirees, the number of ecnployees eligible to retire, life expectancies, and so on. This
estimates the cost of providing free health insurance to retirees for the rest of their lives.
Currently, there is no money set aside for funding this potential expense. The
consultant has advised us that regulations are expected in the future which would
require the County to fully fund a retiree's estimated cost of health insurance for their
lifetime at the time of their retirement. This would mean that, for a current employee
eligible for retirement, on his or her day of retirement, the County would have to have
set aside approximately $92,398,00 under the October 1988 policy,
In August 1998, a proposal was sent to the Commission, to be effective October
1, 1999, which would require that an employee must have ten years of service with
Monroe County and be at least age 55, or have ten years of service with Monroe County
and their years of service and age add together to equal at least 70 (rule of 70). In
addition, the proposal required that retirees contribute to the cost of their coverage in an
amount equal to the subsidy paid to them for health insurance from the state retirement
system. Currently, retirees receive $5.00 per year of service per month as a subsidy to
help them pay for health insurance. Someone with 20 years in the Florida Retirement
System would receive a $100.00 per month subsidy, for example, and would contribute
that amount under the August 1998 proposal. This proposal reduces the potential
liability to approximately 36 million dollars and the amount to fund an employee on their
retirement date to approximately $54,476.00.
The alternative agreed upon by the Task Force is similar to the August 1998
proposal, but would require a retiree to be at least 60 years old (instead of 55) or meet
the rule of 70, and would not require payment of an amount equal to his or her subsidy.
This proposal reduces the potential liability to approximately 25 million dollars. This
alternative will be considered by the County Commission at its meeting on March 10,
1999.
Several alternatives were discussed by the Task Force. These included:
Charging existing employees and retirees a flat monthly fee for insurance.
Various changes to years of service and age requirements.
Self-insurance versus purchased coverage.
Benefits and drawbacks of cafeteria plan features.
How to preserve current benefit package features.
Ways to reduce claims.
Approval of August 1998 proposal.
Charging retirees a flat monthly rate regardless of subsidy amount.
Charging retirees different percentages of department rate, depending on age.
Discussion and comparison of our plan benefits and costs compared to other
entities.
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03/02,-'Cl 17::)1
WHPHI EAST SALES/C SUCS ~ 13052924452
NO. 724 P014/015
H. Pylori Pro~ram for 1\1onroe CountylKPHA
WHllllong wilh KPHA will provide a screening for H. Pylori for Lhc mcmber~ of lhe Montoe Count)' Govemment.
This screening will toke place in conjunction wilh the 2001 annual health fairs provided by KPHA, Tho purpose of
this program is a reduclion in cost of tile class of drugs known liS prolan pump inhibitors, This cl:lsS rcprc~t:nt~
approlCimalely 9-10% of the total dollars spent on prescription drugs for the county, Idenlifying Dnd treRting those
patients that test posilive for the H,pylori bacleri~, we would expccL n reduction in these costS os we!lns a possible
reduction in furure costs n:llllcd 10 the Irealment of peptic ulcer disease in the county's members, The program will
. cost $35 per member screened with 11 minimum charge of $2500,00, This will be included in the county's rej;ulQr
invoice after compl~tion of th~ program, TIle primary KPHA conlRct will be Winnie Radosti and the WHI clinical
cont<lct will be Jack Diamond, Winnie will provide us with the eontllct name ns well as the dales and times afthe
health fairs within 30 days oflhis correspondence,
Pro;ram componen!~:
1_ Identilicativn of potential patients by \\'HI. Those patients will be long term, high dose utilizers of the
?PI'3.
2- Letters and patiem surveys will be mailed directly to the patients identified, Members will be asked 10
complele the survey and bring them with them to the health fair for review by 1II WHI phannncist, All
mftilings will be done by WJ-II. Additional surveys will be available at the health fair for those PQtienu
who either forget to hring their:: or did not receive one via mail.
3- After review of the survey, the WHI pharmaciu will dotenninc if the patient meets the criteria for funher
testing and direct the palient to the appropriate station at the health fair, providing approprialo educational
malerials to the patients pertaining to the cause and treatment of Peptic acid disclISc.
4- The test consists of II fin~er stick blood draw provided by WHI and will be performed by a
phlebotomist/nurse provided by KPI-IA staff. KPHA will be responsible for all-proper licensing nnd
cenificates necessary to perfonn the above which will include disposal of all sharps materials related to the
blood draw,
5. The tesl re!lulu will be available within 5-7 minutes,
6- If the palient tests positive they will be educated and referred to their physician for funher treatment.
7. WHI will also provide a copy of the test results directly to the physician along with materials showing
the most recenlly approved FDA treatment protocols,
The C09t or Ireotment for i\ pnlient on PPl's annually is approximately $650.00, After treatment, the ~I.pylori plttienl
will proviLle say ings of lIpprOXimElI\)ly S 126,00 in the first yenr and grellter sllyings in Ihe subsequenl yeaTS ofter
discontinuation of PPI therapy,
A preliminary counl of Ihe number of poggible candidiltu for screenings is approximntely 90 potients, Experience
hou shown we should get between 50.75 plltients screened, Approximl'llcly SR% of these patients will have
additional therapy recommended due to a positive test result,
03/02/01 17:01
WHPHI EAST SALEs/e sues " 13052924452
NO. 724 P015/015
WHI will provide reporting as to the number ofpatienl identified, screened end tesl results within one month oClnc
last set ofscreening9, Al 6 cnd 12 months pOSl treatment, Wlil will review anll report On the uuh;omes :lnd savings
accl\led.
Anached are the SAMPLE letter~ we have used in previous .~creenjngs, There will be no charge for customi;l;;ng (he
letters to meet the needs of the client, Wl-lI will provide all educlltional malcriftlS ror both patients llnd phy:;icicns,
WHl's objective i9 to promote tho mOil appropriate UStl uf lhese and other drug therapies wilh Q resul!Qn( cOSt
reduction ror we county,
We look forward to working with both Monroe County Government and KPHA in providing this 811ciring and
.effective oppornmjl)' to bc:uer mana:e droll: expenditures,
Plellse feel free to contacl Shawna Turner, Elizabelh Linle or myself at O\.lr oflice for any questions,
Yours tr.:ly,
Jack Diamond R,Ph,
Regioni'll Clinical Director
Walgreens Health InitialivCi, Inc,
03/02/01 17: 01 WHPHI EAST SALES/C SVCS ~ 13052924452 ~IO. 724 P016/016
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Monroe t:ounty Board of County Commbsium:n
Summary of Post Retiree Medical Issue
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1. Dadqround
In December 1990. the Finam;ial Accounting Standards Board (FASB) issued a statement
cha.'1ging the way employers subject to its reporting rules had to report liability and expense
associated health benefit plans tor retirees. financial Accowuing Standard 106 (FAS lOG) was
rha.~d in becinnin& in 1993 and requires employers to accrue the costs of postretirement health
benefit plans over the working years of the employees. This treatment is very similar to the way
expenses for defined benefit pension plans ~re rer-orted under f AS 87. Prior to F AS 106, the
expense for retirees was reported the same was as the expense for actives. employers simply
reported the claims wCW'led during a reportul/i; period.
As a public employer. the Monroe County Board of County Commissiont:r:s (lhe COUllty) is not
subject to F ASB statementS. Historically t however, the Government Accounting Sta..11dards
Board (GASB) has often issued statements that lniITor earlier FASB statements. UASH has not
yet issued a statement ~om1"a.rahle to F AS 106. but given the possibility that this may occur at
some point over the next several years, the CoWlty asked Gallagher Benefit Services (GBS) to
prt::pare a valuation of its retiree mcdico.l plan lU1d~r FAS 106.
Although t'AS 106 was the motivating factor in the study, iL ::il1uuld be noted that fAS 106 docs
not create liability or expense - it just changes the way they are measured. The benefits are
ultimately going to be paid, whether you accrue today as required by F AS 106 or expense them
when they are paid several years from now. Even if no FAS 106 counterpart is ever adopted by
CASB. the costs identified in a F AS 106 valuation provide a very good warning of t.1re retiree
medical exp~n::;t; WI'; COWlty \-"ill one day have to recognize.
~ Initial County Results
The County's initial FAS 106 valuation was completed in August 1998. It idenritlec1 an accrued
liability of $65 million ~nd an annual expense of$15 million usin~ FAS 106 rules.
I.lll~:5ponse to these number3, the County adopted a significant change in th~ eligihitity
requirement, introducing what is referred to as the "Rule of70". It requires that an employee's
age plus his years of service must equal at leliSl iO for bim to be eligible for the retiree benefit.
Previously, any employee aie 42 or over with at least 10 years of service was eliiible for the
retiree benetit. The Rule of 70 significantly reduced the nwnber of eliiible employees, and this
c.aused the ar.r.rued F AS l06 HabUit), to fall from $65 million to $36 mHlion. The annual
expense under F AS 106 fell from $1.5 million to $8.51l'illion.
3. Subsequent Review and Recommendations
In J\.Ule 2000, tbe FAS 106 valuation was run again, using updated claim and census data. It
showed the liability was back up to $53 million and the annual expense had increased to $11
million. Thel'f'! are 2 main reasons Lie numbers had increased so sharply. First, FAS \06 figures
will almost always increase over time given a relatively stable active population. Much like a
pension plan., you have Q lillbility that GrOWll over tinle as inter~st is ~(~(~rll.ed and employees earn
additional service credits. This natural grov..th accounted for $6 million of the $17 million
increase in liability. An addiliumU $8 uillllon W~ due to the f:Lpid increase in medical CO$tQ that
the County ex.perienced during 1999. The expected annual per capita increase under the F AS
t.t.\R-05-Z00 1 1 Z ;;Z
FROM-
T-T81 F.003/00~ F-413
Monroe County Board of County Cummbldun~n1
Summary of Post Retiree Medical Issue
work was 11.25%. but costs were up well over 30%. The proje<.1ed CO~1 of retiree health benefits
increased sharply as a result, and this caused a further jwnp in the liability and expense figures
under FAS 106. The remaining $3 million increase was due 'to other minor changes in
assumptions and plan experience.
Dwing the summer of2000, the County's Task Force on retiree health met several times to
review further changes to the pJ.an. In late July. the Task Force members voted to recommend
that additional changes be made. The changes recommended were:
. Employees hired by the County after October 1, 2000 would be required to pay the full
department rate ($470 at the time) for retiree coverage. This would largely eliminate any
liability fur Dl::W hi~.
. All current retirees and any future retirees hired prior to October 1, 2000 would be
required to pay $100 per month for their medical coverage.
. An emergency room C'.Opaym/?nr of $75 would he introduced effective October 1.2000.
. The phaImacy copays would be changed to $6 for generic chugs, 20% for preferred
brallJ dJ'ugs, aud $35 fOJ: 110l1-prcfelT~ brand drugs effective January 1,2001.
The combined impact of these changes would have reduced the liability to $28.5 million and the
annual expense to $5.6 million under FAS 106.
It is our l.lnderstanding that thE:'! (;ounty (Hel nnf. IIdopt lhe~ change~.
4. Additional Plan Chaoecs
We have been asked by the County [0 estimate the impact of additional plan changes. Because
the Task Force focused much more on the iiabitity than the expense, we used the FAS 106
liability as baseline for comparing different plan options. The attached table shows the plan
~hAnep.!Il :lno onr e~tlmate of the impact of each on the FAS 106 liability.
If the County were to implement all the plan dC:lign changes (Itema 1",2,3, llnd 4 from the
table), the accrued liability for 2000 would fall by $7.3 million (14%), to $45.6 million. These
changes would. also result in reduced costs for the County's active employees, although the %
change would not be quite as great since the pharmacy changes have a Larger affect on retiree
costs.
In addition to the plan design changes, the County asked us to value the impact of increasing the
amount employees and retiree, pay to cover dependents. We e:mmClte that each SSO per month
increase in the dependent contribution requirement will reduce the liability by another 52
million., or 4%. An increase of$200 per month would eliminate virtually all of the $9 milliun
liability associated with dependents.
5. Other Consideratjgns
One of the reasons so many employers have struggled with their retiree plans is that the Ii.,hility
and expense tlWDbers present such a moving target. Assuming all the actuarial assumptions
made 1u setting the 2000 COWlty liability ofSS~ million turn out to be eXACtly correct, the
MAR-05-2COl 12;33
FROM-
l-791 P 004/00; F-413
Monroe County Board or County Cummblliium:n
Summary 01 Post Retiree Medical Issue
liability L"12001 will have increased to $6] million. with a number of close to $70 million by
2002. If we continue to see high medical trends, which is cenainly possible, the change in
liability will be even grea.ter. Even without the FAS 106 imp~ the County's retiree health
expense is ioing to increase sharply over the next several years as the number of retirees
increases steadily. The failure to plan for this ex.pense, whether or nul OASe adopts a. retiree
healthcare standard, will cause far worse headaches for the County in the not-so-distant futul'C.
Since FAS 106 was implem.ented i" 1 qcn. there has been a steady drop in the number of
employers offering health benefits to retirees, and many of those emplQYers that have continued
to ofibr bt:ru:fits have changed their plans to reduce their liability and expense. According to the
1999 Mercer/Foster Higgins Benefit Survey 140% oflarge employers provided health benefits to
retirees age 65 and over in J 993, but ol"ly 28% did so by 1999. The: :.;aIm:: pi:lLl,cm holds true for
retirees under 65, with a drop from 46% of employers to 35%. The survey also notes that among
employers continuing to offer retiree coverage, about 25% have increased the % oHlle cost
passed on to the p.mployees. These chan~es have taken place despite a very tight labor market in
recent years. Any slowdown in the economy is likely to speed up the rate at which employers
are modifying their retiree het\lth plans.
Two things that empioyers really need lO kc:r=p iu mind ar:c the need to preserve their right to
make changes to the plan and the need to communicate this right to employees and retirees. This
extends to both active and retiree plans, but is especially important for retiree plans because of
the lonv;-tenn nature of the employer's obligation. Employers should establish a routine practice
for considering and adopting changes to their plans, and the practice should be communicated to
employees and retirees in writing. The most common complaint from retiTep.~ whn!'e I'lans have
been modified by their former employers is that they were never told this could happen. An
established, cOlT'.municated process ""ill prol~c~ Lhe: c:mplu)'c:.t: but will also be received by rL."tirec3
as a much fairer approach, even if they don't like the changes that are made.
Another advllnlaee of a documented periodic review of plan design and costs is that it makes it
much easier to make necessary changes. Once a process becomes familiar, it can generally
pTOcecd with fW' less effort than i~ required under an a.d-hoc approach to plan ml'ln"eement. In
the event that GASB ever adopts a F AS 106-type standard, a documented procedure for make
changes will make auditors more comfunablc: ~ccc:pliJ1g assumptions that anticipate future
changes. For example, an employer might assume that retirees will have to pay a fix.ed % of the
retiree cost, but if the employer has no history ot'increaslng retiree contributions to ensure mat
this happens. an auditor will question the appropriateness of the assumption. The same logic
applies to using plan design changes that keep medical trend assumptions down, or any other key
Q3swnption used in the valuation.
Whether or not GASB I1UUpL:s Ii refuee mcdicall-we, the County ill going to ha.ve to deal with
sharply increased retire health costS over the next d~cade as the nwuber of retirees receiving
benefits increases, The longer the delay in taking steps to manage the expense, tht: mort: WWiUC
the steps needed will become. We urge the County to take the necessary steps to begin to
address this issue.
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Board of County Commissioners
RESOLUTION NO.
-2001
A RESOLUTION CANCELLING RESOLUTION NO. 104-1999 AND AMENDING RETIREMENT ELIGIBILITY
REQUIREMENTS FOR GROUP HEALTH INSURANCE COVERAGE FOR MONROE COUNTY
EMPLOYEES.
e
WHEREAS, group health insurance expenses have been steadily increasing; and
WHEREAS, the number of retired County employees continues to increase dramatically each
year; and
WHEREAS, it is the intent of the Monroe County Board of County Commissioners to allow
County employees, including employees of the Constitutional Officers and the Mosquito Control
Board, who meet the criteria established in this resolution to retire through the Florida Retirement
System and maintain their group health insurance benefits with Monroe County as provided herein;
now, therefore,
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BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE
COUNTY, FLORIDA:
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Section 1.
A. Employees in FRS Regular and Special Risk Classes with a minimum of ten (10)
years of full-time service with Monroe County, who retire on, or after, their normal retirement date as
described in Sec. 121.021(29), F.S., and who are covered under the group health insurance coverage
provided by Monroe County upon retirement, employees in other FRS Classes who complete the
number of years of creditable service required by the Florida Statutes to be eligible for a benefit
under FRS, who retire on, or after, their normal retirement date under Sec. 121.021(29) F.S., and who
are covered under the group health insurance coverage provided by Monroe County upon retirement,
including those who have retired or will retire in accordance with these provisions, and all other
retirees who as of October 1, 2001 are participating in the County's group insurance program at no
cost, may maintain their group health insurance benefits with Monroe County following their
retirement, provided such retirees pay to Monroe County the following monthly premium:
(i) One hundred dollars ($100.00), or such other amount as determined by the
Board of County Commissioners.
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Page 1
(ii) The payment of the initial premlwn under this subsection I.A. for those
employees who retired prior to October I, 200 I, is due on October I, 200 I and
the first day of each month thereafter. For employees who retire on or after
October 1, 200 I, their initial premium will be due on the first day of the month
following the month in which they retire and the first day of every month
thereafter.
B.) Employees with ten (10) years of full-time service with Monroe County who are
covered under the group health insurance coverage provided by Monroe County upon retirement and
retire on their early retirement date, as described in Sec. 121.021(30) F.S., may maintain their group
health insurance benefits with Monroe County following their early retirement, provided such early
retirees pay to Monroe County a monthly premiwn in an amount established annually by the Board
of County Commissioners. The premiwn will equal, but not exceed, Monroe County's monthly
departmental cost for active employees. Such premiwn will be payable on the first day of every
month commencing with the month following the month in which the employee retires,
Notwithstanding the foregoing, early retirees required to pay the premiums described in this
subsection 1,B. will become subject to the premium set forth in subsection I.A. above upon meeting
one of the following requirements:
0)
Sixty (60) years of age for Regular Class employees or fifty-five (55)
years of age for Special Risk Class; or
(ii)
Qualification under the Rule of 70 wherein the combined years of
service with Monroe County and the retiree's age equal a total of
seventy (70).
C,) Employees with at least ten (10) years of full-time service with Monroe County who
are covered under the group health insurance coverage provided by Monroe County upon termination
of employment and are fully vested under FRS who elect not to retire under FRS upon termination of
employment with Monroe County, may elect to re-enroll under the group health insurance coverage
provided by Monroe County upon retirement under FRS, provided that Monroe County was their last
FRS employer, Former employees electing this option, may maintain their group health insurance
benefits with Monroe County following such election, provided such former employees pay to
Page 2
Monroe County a monthly premium in an amount established annually by the Board of County
Commissioners. The premium will equal, but not exceed, Monroe County's monthly departmental
cost for active employees. Such premium will be payable on the first day of every month beginning
with the first of the month following the month in which the employee elects to re-enroll under the
group health insurance coverage provided by Monroe County upon retirement from FRS, Employees
electing this option must, notify Monroe County of their intent to re-enroll in the County's group
health insurance program. Employees who elect to re-enroll under this option are not eligible for
premium adjustments under subsection 1.A. or I.B. of this resolution,
D,) Employees with less than ten (10) years of full-time service with Monroe County who
are covered under the group health insurance coverage provided by Monroe County upon termination
of employment and are fully vested under FRS, upon retirement under FRS, including those
employees retired prior to October 1, 2001 in accordance with these provisions, may maintain their
group health insurance benefits with Monroe County following their termination of employment,
provided such terminated employees pay to Monroe County a monthly premium in an amount
established annually by the Board of County Commissioners, The premium will equal, but not
exceed, Monroe County's monthly departmental cost for active employees. Such premium will be
payable on the first day of every month beginning with the first of the month following the month in
which the employee terminates employment with Monroe County, Employees with less than ten (10)
years of full-time service with the County are not eligible for premium adjustments under subsection
1.A. or 1.B. of this resolution.
E.) Notwithstanding the foregoing, employees with a hire date on or after October 1,2001
may, upon their retirement under FRS, maintain their group health insurance benefits with Monroe
County following such retirement, provided such former employees pay to Monroe County a
monthly premium in an amount established annually by the Board of County Commissioners, The
premium will equal, but not exceed, Monroe County's monthly departmental cost for active
employees and will be payable on the first day of every month beginning with the first of the month
following the month in which the employee retires under FRS, Employees with a hire date on or
after October 1, 2001 are not eligible for premium adjustments under subsection l,A. or l,B. of this
resolution.
Section 2,
This resolution shall be effective as of October 1, 2001.
Page 3
Section 3. This resolution does not affect any requirement of eligibility with the Florida
Retirement System; it affects only eligibility to receive health insurance benefits under the Monroe
County Group Employee Benefit Plan.
Section 4, For purposes of this resolution, full-time service shall have the meaning provided in
the County's policies and procedures governing determination of service. For purposes of this
resolution, the definition of date of hire is the date an employee first begins work for Monroe County
determined in accordance with the County's procedures governing fringe benefits. Any break in
employment of forty-eight (48) hours or more will result in a new date of hire if the employee returns
to County service.
Section 5. The Monroe County Board of County Commissioners formally reserves the right to
any and all future changes and modifications of this resolution, the group insurance contract
providing health benefits described herein and/or the required premium contributions.
Section 6.
The Monroe County Board of County Commissioners cancels Resolution No. 104-
1999,
PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida, at a
regular meeting of said Board held on the day of ,2001.
Mayor George Neugent
Mayor Pro Tern Nora Williams
Commissioner Dixie Spehar
Commissioner Charles "Sonny" McCoy
Commissioner Murray Nelson
(SEAL)
ATTEST: DANNY L. KOLHAGE, CLERK
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
By
By
Deputy Clerk
Mayor/Chairman
Page 4
RECOMMENDATIONS
As the Board of County Commissioners is certainly aware, public and private
entities for many years have been adjusting their group benefits programs. This has been
very much in response to the growth in health care and pharmaceutical costs. Our
experience in the Keys has been that health insurance providers find it very difficult to
sustain an ongoing program. There have been many entities that have withdrawn from
serving the citizens in the Keys over the years.
The following recommendations are the result of deliberations by the Monroe
County Employees Task Force, the Keys Physician Hospital Alliance, Walgreen Health
Initiatives, Inc. and Arthur 1. Gallagher and Company as well as the County
Administration, All of these have worked on the growing problem for quite some time,
The recommendations cover wide-ranging issues involved in the group benefits program,
EVEN IF ALL OF THE RECOMMENDATIONS BELOW WERE
IMPLEMENTED, THE COUNTY MUST HAVE A CONTINUOUS PROGRAM OF
REVIEWING THE STATUS OF THE GROUP BENEFITS PROGRAM AND THE
OPTIONS AVAILABLE, IN FEBRUARY, 2001, THE BOARD OF COUNTY
COMMISSIONERS SUPPORTED THE PASSAGE OF LEGISLATION BY THE
STATE TO MAKE SMALL COUNTIES (UNDER 100,000) ELIGIBLE FOR THE
STATE HEALTH BENEFITS AND PHARMACEUTICAL PROGRAMS. IF THAT
PASSES, THE COUNTY SHOULD UNDERTAKE A MAJOR ANALYSIS AS TO ITS
BENEFIT FOR THE FUTURE, IN ADDITION, THERE SHOULD BE CONTINUAL
MONITORING OF THE COMMERCIAL MARKET AND OTHER OPTIONS,
The Recommendations from the Task Force are:
l.~mployees hired on or after October 1,2001 would not be eligible for
V free or reduced coverage upon satisfying Florida Retirement System
requirements. Employees hired on or after October 1, 2001 would
have to pay full premium rate upon retirement (whatever that rate is at
the time). At present, retirees do not contribute toward the cost of
health insurance. The Administration concurs.
Implementation of Emergency Room Visit deductible of $75 per visit.
Implementation date is October 1, 2001. At present, there is a
tendency for employees and dependents to utilize the emergency room
for non-emergency situations rather than going to a personal physician
or a clinic. The Administration concurs.
h. Implement a charge for all current retirees and all employees
employed by the county prior to October 1, 2001, upon their satisfying
all retirement requirements. The charge should be $100 per month for
their insurance. Group Insurance will assist all retirees who do not
claim their Retiree Health Insurance Subsidy from the FRS with the
process to obtain it. Implementation date of October 1, 2001, (The
amount of the subsidy is based on service credit at retirement, $5 for
each year of service, with a minimum monthly subsidy of $50 and a
maximum of $150. The County pays FRS for Insurance Subsidy.)
Jhe Administration concurs but is willing to consider a different
/amount commensurate with the amount received by retirees to assist
with the provision of health insurance.
4. The task force recommendation was to change Pharmacy co-pays from
$6 for generic and $12 for preferred brands to $6 for generic, 20% for
preferred brands ($12 minimum and $50 maximum), and 20% for
non-preferred brands ($35 minimum and $50 maximum)~~ updated
recommendation from Walgreen Health Initiatives - Retail: $10 for
generic, $20 brand, $35 non-preferred brands. Via mail: $25 for
generic, $50 brand, $87.50 non-preferred brands for 90 day supply,
Implementation date of October 1, 2001-;1 The Administration concurs
with Walgreen Health Initiatives recommendation with room left to
j consider adjusting rates and percentages as experience dictates.
5. Begin two-stage approach on examining other options for health ~
coverage. Phase one: Work with consultant on what plans are
available and what would be the range of options we would have from
self-insurance to fully funded plan and/or a mixed plan, Phase Two:
Refine our range of options and RFP for providers, The
recommended time for implementation would be ASAP, The
v2.
2
Administration concurs and feels that the state health benefits program
should be considered if eligibility for Monroe County is passed by the
state legislature.
The Recommendations from Keys Physician Hospital Alliance and
County Administration are:
A. Secure National wrap around network and eliminate out-of-network
exclusion. This means that retirees and dependents who live around
the country will have the benefit of in-network expenses rather than
out- f-network expenses. The Administration concurs,
ncrease out of Network disincentive from 10% to 50%. Since a
reduced cost of network services will be available in most areas of
the country and since almost all plan participants will be able to take
advantage of it, there is little need to go outside of network. Plan
members who go outside the network for personal reasons, thereby
costing the County more money, should pay a higher percentage.
The Administration concurs.
;;
The
Limit Chiropractic visits per calendar year from 60 to 30.
Administration concurs,
j Limit Massage Therapy visits per calendar year to 15. The
/ Administration concurs,
00, Limit Acupuncture Treatments per year to 15. The Administration
concurs.
A'vision Benefits - return to "no more than one complete visual
examination, including refraction, during any two calendar years. At
present, the benefit is available for each calendar year, The
/ Administration concurs.
1:12. crease yearly deductible from $200 to $300 per individual and
from $400 to $1000 per family. The Administration concurs.
13. At present, covered individuals are responsible for 20% of health
care costs on a total cost of $10,000. Thereafter, the plan pays
100%. Recommendation is to change the base limit to $20,000, The
Administration concurs.
v14. Acordia to process claims under Medicare guidelines regarding
unbundling of charges, The Administration concurs, This will
3
reduce the possibility for providers to charge full fees for two
services when both rely upon the same basic procedures.
Additional Administration Recommendation:
/15. The rates for dependent health, premiums should be increased $10
per pay period to help cover the deficit between health care costs and
dependent premium contributions. This will change the deduction
per pay period from $100 for one dependant to $110 and from $120
for two or more to $130.
Some of the recommendations above will produce some short-term financial
savings, Others will create longer-term savings year over years, The County should
continually review its program status as it has been doing and should consider the
possibilities of commercial insurance or the state health benefits program, should they
prove to be more advantageous in the future.
4
March 13,2001
To the Mayor and my fellow Commissioners:
On the subject of the budget:
.~-
"
There are some crucial issues that we need to deal with NOW so that we have the
information to make some much needed decisions when it comes to budget approval (and
luture direction),
1) The Commission approved YEARS ago an assessment of our very expensive Fleet
Management Program. We never actually got the assessment done, in part because we
argued that we wanted to wait until the incorporation issues were settled and we knew
how much area we were dealing with. Well, the incorporations are over for the
moment, and we know, and we still need to find out why it costs so much, whether
we could save more money by moving this service provision elsewhere, and why the
materials the process generates seem to have so little impact on helping us plan for
the future, Fleet Management needs examination BEFORE we make decisions for
this budget year,
2) Gro\\1h t.,'lanagement: even as we try to trim and cut our budgets (and, I hope,
SUCCEED in those attempts), we've got to deal with why we have so much turn-over
in this department - it's just crippling us. And it isn't just money and people moving
to the newly incorporated departments. It is ex1raordinarily trying and frustrating to
work on either side of the counter in the rVlonroe County building/planning process
and we have to deal \\'ith that problem. And throwing money at it isn't enough. The
GrO\\:th Management Director has supported in the past hiring someone to basically
do an "audit" of the permitting process, to help us make this process easier and more
efficient more both client and County employee and I really think we need to look at
that issue - again, before we just start throwing money at the problem,
3) Obviously, as expressed every time we've talked about it, this Commission feels a
need to establish reasonable and responsible caps on our fund balances, I don't find
that I'm getting inlormation in a format I find particularly coherent and I've provided
a spreadsheet that is more along the lines of what I'd like provided to me with
reference to these fund balances. Particularly for ad valorem based funds, these
balances could have significant impacts on this year's taxes and/or on future projects,
4) We need to consider whether or not we want to issue an overall message to ad
valorem dependent departments this year, My first year in office I suggested that
every division should come back with a 12(% reduction, I got majorly TAB! ,ED, Do
we want to deliver an overall message? Do we want to deliver an overall message this
year? Please, if we do nothing else today, let's define some C'rtJALS for everyone.
i'age 1 Of.!.
5) Obviously, restructuring will have some impaL1s on where our budget ends up this
year. And I hope before the day is out, we'll have a date for that meeting pinned
down,
6) Capital Projects Workshop: I've got every fear that if we don't sit down soon and talk
to one another and associated agencies about expected coming capital costs. and the
whys and whens of capital improvement projects. we're going to have that
infrastructure sales tax spent eight ways to Sunday hefore we even get the ex1ension
started, I believe that we need to make some long term commitments down with those
funds (and others, like the half cent of the 4th cent of the TOC funds for affordable
housing) and that that's a meeting that is long overdue, Let's sit down in a (and yes, it
probably needs to be a SATUROA Y) workshop on CAPITAL PROJECTS, and talk
about our hopes and dreams and the realities we face, We need to look at coming
projects of the next few years. what our priorities are f<lr accomplishments, and how
we strategize and prioritize the goals for which that tax was ex1ended: wastewater,
stormwater, land acquisition and management. To tell you the truth, I'm not sure we
shouldn't try to do this workshop very quickly- it may serve as a very useful tool in
our discussions on the $100,000 million - I'd love to see us have this workshop even
before our meeting with the other municipalities,
7) Again, ya'lI, I hate not being with you today, but my thoughts and best wishes are
with you. These topics are so huge, and the challenges before us so many, that I wish
us all great strength and wisdom during the coming months of the budget season, I'm
looking forward to working with you all on this soon.
Sincerely,
Nora Williams
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LAW OFFICES
MULLER, MINTZ, KORNREICH, CALDWELL,
CASEY, CROSLAND & BRAMNICK, P.A.
DAVID V, KORNREICH
MICHAEL W, CASEY, III
..JAMES C, CROSLAND
..JAMES S, BRAMNICK
GORDON D. ROGERS
CARMEN S, JOHNSON
..J EFFREY E. MANDEL
DENISE M, HEEKIN
PAUL T, RYDER, .)R,
RICHARD D. TUSCHMAN
TERESA A, HERRMANN
BENTON N, WOOD
MELISSA B, MEDRANO
MARLENE QUINTANA MORALES
SUSAN M, HAYES
..JAMES W, SEEGERS
ERIN E, GILL
TIMOTHY G. ..JOHNSON
..JOHN A. WALKER
LORNA B, SALOMON
..JAMES 0, STOKES
DAVID C, MILLER
..JENNA RINEHART RASSIF
SCOTT S. ALLEN
KELLY N, CHARLES
KEVIN ..J, MORRIS
DEBRA M, LEDER
SUITE 3600, FIRST UNION FINANCIAL CENTER
MIAMI, FLORIDA 33131-2338
RAY C, MULLER (1924-1977)
HERBERT B. MINTZ 11924- 1993)
..JOSEPH A, CALDWELL (1923-1996)
200 SOUTH BISCAYNE BOULEVARD
MIAMI (305) 358-5500
BROWARO (954) 522-0393
TELEFA>< (305) 379-3802
February 9, 1999
ORLANDO OFFICE
SUITE 1525, CITRUS CENTER
255 SOUTH ORANGE AVENUE
ORLANDO, FLORIDA 32801 - 3462
TELEPHONE (407) 843 -1400
TELEFA>< (407) 843 - 1410
Ms, Suzanne Greager
Human Resources Director
Utility Board of the City of Key West
1001 James Street
Key West, Florida 33040-6935
VIA FACSIMILE
Re: Different Benefits For New Hires
Dear Ms, Greager:
This letter responds to your request for an opinion as to whether an employer may provide different
levels of benefits (e,g" a lower pay plan or different insurance plan) to employees hired after a certain date
in the future, We are not aware of any law that prohibits an employer from creating a different set of benefits
to all newly hired employees based on a specific hiring date, This opinion presumes that those benefits will
be across the board to all new employees and will be clearly delineated at the time of hire, The opinion also
presumes that the new (i,e" lower) benefits plan will not being implemented as to any employee or group of
employees for any discriminatory reasons that would violate state or federal employment discrimination laws,
Of course, each proposed change in benefits has its own internal implications, For example, if an
employer plans to provide all newly hired employees with a different health plan than its existing employees,
the employer may (if applicable) need to ensure that the insurance provider is willing to offer more than one
plan, The employer would also need to establish and specifically define the different groups of employees
for each plan, Similarly, if the employer plans to offer a different pension plan for new employees, then the
employer would need to consider the effects of changing the old plan (e,g" if it provides for only one plan
for all) and creating a new plan for the new employees (which may involve revising and/or enacting
ordinances and dealing with, if any, the pension board(s) that may overseethe p~nsiQn plan), In addition, if
FEB I 0 1999
RM
Ms. Suzanne Greager
February 9, 1999
Page 2
if any of the newly hired employees who fall under the proposed new benefits plan will be hired into
positions that are part of a collective bargaining unit, then the employer will also need to deal with the
bargaining representative with respect to proposed benefits changes for those employees.
I hope that the foregoing adequately responds to your concerns. Please call me if you have any
questions, or wish to discuss this matter further.
Very truly yours,
~~~
Marlene Quintana Morales
G:\347000\Correspondence\MQM0880ach, wpd
LAW OFnCES MULLER. MINTZ. KORNREICH, CALDWELL, CASEY, CROSLAND & BRAMNICK. P,A,
Monroe County Commission Meeting
March 13,2001
Mr. Mayor and commissioners
My name is Leonard Knowles. I was appointed to the Monroe County
Health Insurance Task Force in 1999 and again in 2000. I come before
you today to speak out for the many employees and retirees that have
no idea what is being proposed today. I remind you that this was a
benefit given to the employees more than a decade ago and you are
being asked today to consider charging the retirees $100.00 per month
plus all the other changes that are being proposed. This will greatly
impact the quality of life to all retirees and all active employees who are
nearing retirement; some may not be able to afford to retire.
In 1999 the Health insurance task Force was instituted by the Monroe
County Commission, which I believe was suggested by Commissioner
Nora Williams. The task force was made up of Employees and retirees.
The purpose was to deal with the unfunded liability of $65 million
dollars. The marching orders as I remember was that the task force
was to bring forth to the commission a plan that was equal or better
than the County administrator. The County Administrator's Plan was a
reduction from $65 Million unfunded liability to Approximately $35
Million. The task force reduced the unfunded liability to $25 million. I
point out that this reduction by the task force was done without
charging the retirees as the County Administrator's plan did.
During this period of time I suggested to the task force and
administrator that we consider a new policy for new employees being
hired. When the new employee retires Health Insurance would be
offered to them and they would be required to pay the same rate it cost
the county for an active employee. The Human Resources Director said
that the Legal Department had told her that they could not legally do
this. I requested City Electric System at that time to request their Labor
Attorney to render an opinion. A copy of the Labor Attorney's opinion
dated February 9, 1999 was given to each member of the Committee
including the County Administrator. I felt the opinion was favorable as
long as you did not discriminate within that class and they stated that
they did not know any law that would prevent us in doing so. If this had
been passed in 1999 this would have prevented any further unfunded
liabilities with additional employees when they retire. As things would
happen I found out that City Electric's Labor Attorneys are also
Monroe County's Labor Attorneys. The second reason for forming the
task force was for the employees and retirees to participate in this
process as they were most affected.
The second suggestion I made was to establish a cafeteria Plan. A
Cafeteria Plan gives employees the option of choosing from a variety of
benefits offered by the employer and the employee pays for these
benefits. This could be Dental which is running the county from
approximately $450,000 to $500,000 dollars annually, life insurance,
accident insurance, Flexible Spending Account, etc. The great thing
about a cafeteria Plan it can be done pre-tax. Cafeteria Plans are being
offered by the various governmental agencies through out the County to
their employees.
The Monroe county Health Insurance Task Force met again July 2000
for two days. The first day was reviewing recommendations from the
County administrator, which caused a great deal of the discussion. The
second meeting started out with Chairperson, Mrs. Sheilia Barker from
Human Resources calling for the vote on the County Administrator's
recommendations. Knowing what had happened the prior year I asked
whether the committee communicated to the employees as to what is
being proposed and if the employees had any suggestions or questions.
The Chairperson quickly responded to me that if they did not like it
they could opt out. I am telling you today that the employees and
retirees do not have clue as to what is being proposed. In my opinion the
employees and retirees were not made a part of the process. The
Committee did not communicate to the employees and the meeting were
held during working hours which prevented the employees from
attending.
I am asking you today not to charge the retirees a monthly fee, as this
will have a great impact on the lives of these families. Remember that
these retirees devoted many years of service, serving the people of
Monroe County and upon their retirement took into consideration the
benefits that they were promised. Please consider the active employees
who have been counting on these benefits at retirement.
I suggest to you that you implement this year by RFP a Cafeteria Plan
and Medical & Prescription Drug Plan. This can be done with the help
of your Insurance Consultants and implemented by October 1, 2001. I
also suggest to you to immediately impose a policy on new hire. This
policy would further decrease any additional unfunded liabilities
through new hires. Over a period of years the numbers of new
employees would increase and the numbers under old policy would
decrease.
I thank you for allowing me to speak today and to tell you how honored
I was to serve on the Monroe County Health Insurance Task Force.
Leonard H. Knowles