State and Public School Life and 
Health Insurance Board 
Benefits Sub-Committee
Minutes
August 24, 2004 –9:30 A.M.
1509 West 7th St., 1st Floor Conference Room
Little Rock, AR

The Benefits Sub-Committee of the State and Public School Life and Health Insurance Board (hereinafter called the Committee) met on Tuesday, August 24, 2004 at 10:00 a.m. in the 1st Floor Conference Room, 1509 W. 7th Street, 1st Floor Conference Room, Little Rock, AR.

Members Present					Members Absent

John Hartnedy					Jeff Altemus
Janis Harrison
Janie Roach
Becky Walker
Shelby McCook
Nancy Sheehan

Sharon Dickerson,  Executive Director, Employee Benefits Div., DFA.

Others Present

Doris Williams and Susan Bumpas, Employee Benefits Division; Joe Carter, NovaSys; Lynne Lawrence, Delta Dental; Larry Carnes, FBMC; Rob Thorpe, QualChoice; David Bridges, Health Advantage/Blue Cross; Jason Lee, DataPath; Jennifer  Reed, Corphealth; John Glassford, NovaSys; and Nicola Patterson, USAble Life.

Call to Order

The meeting was called to order by John Hartnedy.

Approval of Minutes

A motion was made by John Hartnedy to approve the minutes of the previous meeting.  The motion was seconded by Nancy Sheehan.  Motion carried.

Dental and Vision Claims Experience

John Bauerlein presented to the Committee a summary of the current benefits.  For the Public School Employees there is no vision or dental benefit.  It was taken out about three years ago to get a lower premium.  The Arkansas State Employees PPO has no vision and dental benefits.   HMO and POS In-Network – 2 preventive dental visits per year with a $25 co-pay and 1 vision exam every 24 months with a $25 co-pay.  Bauerlein distributed information on this to the Committee and reviewed in detail.  The historical data was obtained from QualChoice and Health Advantage.  Dental is running around $700,000 a year total.  Vision is running $170,000 annually.  This $1 million a year is .50%, which is a relatively minor amount.  One of the Committee members asked Bauerlein if it would be less expensive to keep the basic plan and offer additional dental and vision benefits which would be employee pay all benefits, or change the dental and vision benefits to include additional services.  Bauerlein recommended keeping the basic plan, and there would be a higher cost to add services to the Dental and Vision Care.  Bauerlein advised that if the Dental and Vision is excluded from the Plan, the employee only monthly premium will decrease a $1.75 and the family monthly premium will decrease $4.50.  Dickerson stated if we don’t get additional funding for the state for next year, then we will have to use our $280 per budgeted position.  And this year we will have to kick in an additional $12 million to keep the 75% employee and 50% dependent state contribution as we have established in the past.  Going forward, if we do not get more money we will keep dipping into the Trust Fund.  Dickerson stated we are going to have to make some harder decisions such as are we going to make the state plan more like the school plan and eliminating some of these other services and benefits, or leave them in there and increase the premium.  As far as what the members would like, all I can do is recite what we had with the schools.  We had a lot of complaints with the schools when this benefit was removed, but more complaints from the older members who were retired.  They didn’t have access to a network like the schools which offered the dental and vision.  We offer it through voluntary products and ASEA; not all the retirees have that option.  The complaints would probably be the same thing with the state retirees as not all would have a network they could access for dental coverage.  Dickerson feels we will probably have to look at the dental and vision benefits, and also the life insurance will probably have to be reviewed for possibly excluding if the money isn’t there.  

One member asked what Delta Dental would charge for this basic coverage.  Lynne Lawrence with Delta Dental stated what they quoted was a self-funded basis and the fee charged would be an administrative fee.  She stated she had some claims experience she wanted to share with the Committee and distributed Year to Date 2004 claims experience and 2003 claims experience for state employees.  Lawrence stated that a full blown plan would be about $43.00 per pay period for dental insurance.  Dickerson stated we could keep this basic coverage, and then allow the employees to buy up additional coverage on dental and vision.  Dickerson stated we would have to go with only one vendor, and Delta Dental only handles QualChoice.  McCook stated he would like to see the dental benefits reinstated for the school group, and would be willing to come up with the additional premium by increasing the co-pays for the state employees to come up with the difference.  McCook asked Lawrence what the administrative fee quoted was, and Lawrence stated it was $1.75.  McCook felt we should keep the basic coverage.  

Chairman, John Hartnedy, asked Dickerson and Bauerlein to look at last month’s minutes and give the committee a proposal for where we want to be in three to five years. Another of the committee members supported this long range planning.  Bauerlein suggested drafting a mission statement with goals.  Dickerson stated we need to have a philosophy for the next three/five years, including the Healthy Arkansas initiative.  One committee member suggested tying anything we do with making the Governor’s goals part of the plan. One of the committee members, who is a school employee, stated one of her superintendents did not want to consider adding anything.  He doesn’t feel there will be any additional appropriation, or new money, but will come out of the money given to each district presently.  One member feels there should be one plan for both the schools and the state employees.  This committee member feels that control should be with the state, but it isn’t for the schools but is controlled by the school districts, and we don’t have any idea on funding.  The school teachers are going to have to work on changing this from the district level, and legislature should be changed to get more funding and have a line item for health insurance.  This committee member feels there should be one plan for both the schools and the state employees, but as long as there is such a disparity in contributions by the respective employers that will not occur.  He stated it is a political issue, and the teachers are going to have to address that issue.  Dickerson stated that one of the things the committee may have to look at is can we continue to have the same benefit package for the school employees and for the state employees.  If the schools are not going to get any additional funding, perhaps we are doing them a disservice by providing the schools the same kind of benefit options.  Dickerson stated we might need to scale down and cover some basic services and have that as an option.  One member stated that we need to have two different plans, one for the state employees and another for the school employees.  The committee agreed with Dickerson putting together a mission statement and plan (one for the schools and one for the state). 

Coverage for Obesity

John Bauerlein reviewed the Obesity Coverage, per his handout, and also the Milliman report put out on obesity.  Dickerson stated that obesity is not covered by the plan.  Dickerson asked the committee for their feelings on whether the plan should cover anything for obesity, since it is a part of Healthy Arkansas.  Hartnedy felt the committee should agree that the plan should cover obesity or weight loss and determine at a later date what to cover. Dickerson stated she felt maybe one office visit per year should be covered or Corphealth should cover it in some way. She doesn’t feel surgical procedures, such as gastric bypasses, should be covered for weight control.  Bauerlein stated obesity, if covered in some way, might help employees and dependents have a better quality of life, but he stated many times the patient doesn’t want to make a motivational or behavioral change.  Bauerlein stated covering obesity would be equivalent to the plan covering tobacco cessation.  The opinions of the committee varied from only an office visit to maybe broader coverage, but no one wanted to cover surgical procedures, such as a gastric bypass.  One member stated that if we are going to charge a higher premium based on obesity that their feeling is the plan should offer some assistance or benefits.  The committee agreed to table this topic until the next meeting.

Wellness Coverage

QualChoice – Rob Thorpe reported that their plan applies the co-pay to everything except immunizations and mammograms.  The Committee wanted to know what the carriers did with their other book of business for wellness so as to compare what our plan does, and QualChoice advised their plan doesn’t have any coverage except for immunizations and mammograms. 

Blue Cross/Health Advantage – David Bridges stated that their plan is the same as QualChoice.  One thing that they do have with their PPO is a $500 limit on wellness.  The HMO has a cap on wellness visits during a calendar year.  They do have some employers who, if the employee will bring in a statement from their physician that said they had a wellness check-up, will refund their co-pay.    

NovaSys – 91% of their clients offer wellness benefits.  There are variations in the benefit maximums.  Most of the plans have a limit of between $250 and $500 a year per member.  NovaSys has a standard package in their plan summary document language and 76% of their clients have elected this language, and it includes office visits, mammogram, Pap smear, prostate exam, x-rays associated with preventive care.  NovaSys has a few groups, less than 15%, that include hearing and vision exams in their benefit package.  

One Committee member asked the carriers, particularly Blue Cross, if they would strip the clients name and give this Committee some of their language on their annual limits, and also asked NovaSys to do this.  It was asked by this Committee member that the information be forwarded to Sharon Dickerson at EBD.

Bauerlein stated that on the high deductible plan option there is 100% coverage on preventive benefits, and there is no maximum.  He stated that an analysis of the experience can be done before making the next cycle of benefit decisions for 2006 to see if we think there might be too many dollars going over the maximum or not being appropriate.  

One Committee member stated he would be more comfortable rather than threatening to deny coverage or something to that effect to instead put a dollar limit on wellness care.  He stated we already have preventive care benefits, and his suggestion was that there be a wellness care benefit based on the five conditions set up in a previous meeting, which are smoking, alcohol abuse, seat belt use, exercise, and obesity.  Dickerson stated we could have a rider for each condition.  For example for TMJ have a limit of $500 lifetime.  The tobacco cessation program has certain lifetime limits.

Another member stated it would be a good idea to find out what things are covered in wellness, such as mammogram, Pap smear, etc. and how much that would cost based on the provider scales to insure that our plan has enough allowance for those wellness benefits in any limits we set.  

Dickerson reviewed the various guidelines the state has set for wellness benefits with the carriers, and is specific according to age and gender.  

Upcoming Topics

  Retiree Coverage

Dickerson stated that we need to look at the retiree rates with the change to the new accounting system (GASB) going into effect.  Bauerlein asked the committee to look and see if the rate relationships between active employees and retirees are where they should be.  Bauerlein stated the early retiree rate is 80% higher and will spread each year.  Bauerlein distributed Active/Retiree Rate Relationships.  Dickerson stated that we really need to look at the retiree situation to make sure we are charging the retirees what we should charge them on utilization.  She doesn’t want the retirees to be charged anymore than is warranted by their utilization.  Bauerlein stated that next time we should have the retirees underwritten separately from the actives.  Dickerson stated that the numbers are really not accurate because most of the PSE retirees are taking COBRA for18 months, and then at the end of COBRA going on retiree rate.  But for the most part the retirees are not paying the retiree rates for at least 18 months.   Bauerlein stated to add into the Active/Retiree Rate Relationships – August 24, 2004 the following information (a copy of which was distributed to each committee member):

Aggregate Financial Results ($ millions) – Compared active PPO loss ratio to retiree PPO loss ration:

                                          Qual Choice		Health Advantage

Retirees				81%				99%
Actives				90%			         100%

Dickerson asked each of the committee members for suggestions on the time of the month to have the Benefits Sub-Committee Meeting.  It was the consensus of the committee to change the meetings to the third Tuesday of each month and the next meeting will be Tuesday, September 21st at 10:00 a.m.

There being no further business, the meeting adjourned.