MINUTES
COUNCIL OF COLUMBUS, GEORGIA
SPECIAL CALLED MEETING
MARCH 18, 2014
The meeting of the Council of Columbus, Georgia was called to order at 9:06
A.M., Tuesday, March 18, 2014, on the 2nd Floor of the Citizens Service Center,
located at 3111 Citizens Way, Columbus, Georgia. Honorable Teresa Pike
Tomlinson, Mayor, presiding.
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PRESENT: Present other than Mayor Tomlinson and Mayor Pro Tem Evelyn Turner
Pugh were Councilors Mike Baker, Jerry Barnes, Glenn Davis, Judy W. Thomas, and
Evelyn Woodson. City Manager Isaiah Hugley, City Attorney Clifton Fay and Clerk
of Council Tiny B. Washington were also present.
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ABSENT: Councilors R. Gary Allen, Bruce Huff and Deputy Clerk Sandra Davis were
absent.
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Mayor Tomlinson made the following announcement to Council and Public:
On behalf of the City of Columbus and Council she expressed her deepest
sympathies to the family of Bo Callaway on his passing.
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INVOCATION: Reverend Charles ?Chuck? Hasty, Pastor of First Presbyterian Church.
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PLEDGE: Led by children with the Ridgon Road Elementary School?s Student
Council.
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CITY ATTORNEY'S AGENDA:
THE FOLLOWING ORDINANCES WAS SUBMITTED AND EXPLAINED BY CITY ATTORNEY FAY AND
ADOPTED BY THE COUNCIL ON SECOND READING:___________
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An Ordinance ( 14-8 ) - Rezoning the property located at 1030 Illges Road
and 1044 Rigdon Road from NC (Neighborhood Commercial) to RO (Residential
Office) zoning district. The purpose of this rezoning is for multifamily
apartments and offices.
Councilor Barnes moved the adoption of the ordinance. Seconded by
Councilor Woodson and carried unanimously by those eight members of Council
present at the time, with Councilors Allen and Huff being absent for the
meeting.
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An Ordinance ( 14-9 ) - Rezoning the property located at 3071 Williams Road
from RO (Residential Office) to PUD (Planned Unit Development) Zoning
District. The purpose of this rezoning is for multi-family dwellings
(individual rentals units).
Councilor Davis moved the adoption of the ordinance. Seconded by Mayor Pro Tem
Turner Pugh and carried unanimously by those eight members of Council present
at the time, with Councilors Allen and Huff being absent for this meeting.
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An Ordinance ( 14-10 ) - Rezoning the property located at 2020 Fort
Benning Road from NC (Neighborhood Commercial) to GC (General Commercial)
Zoning District. The purpose of this rezoning is for pet grooming daycare and
boarding/barber shop.
Councilor Woodson moved the adoption of the ordinance. Seconded by Mayor
Pro Tem Turner Pugh and carried unanimously by those eight members of Council
present at the time, with Councilors Allen and Huff being absent for this
meeting.
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An Ordinance ( 14-11 ) - Rezoning the property located at 2728 and 2739
Manchester Expressway; 4400 and 4408 Armour Road from NC (Neighborhood
Commercial) to GC (General Commercial) Zoning District. The purpose of this
rezoning is for general restaurants with drive-thru(s).
Councilor Henderson moved the adoption of the ordinance. Seconded by
Mayor Pro-Tem Turner-Pugh and carried unanimously by those eight members
present at the time, with Councilors Allen and Huff being absent for this
meeting.
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CITY MANAGER'S AGENDA:
THE FOLLOWING TWO RESOLUTIONS WERE SUBMITTED AND EXPLAINED BY CITY MANAGER
HUGLEY AND ADOPTED BY THE
COUNCIL:________________________________________________________
A Resolution ( 101-14 ) - Authorizing the support of Uptown Columbus,
Inc., application to renew designation for Uptown Columbus as a Main Street
Program by the Georgia Department of Community Affairs? Office of Downtown
Development.
Councilor Woodson moved the adoption of the Resolution. Seconded by Councilor
Barnes and carried unanimously by those eight members of Councilor present at
the time, with Councilor Allen and Huff being absent for the meeting.
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WORK SESSION AGENDA:
HEALTH CARE DISCUSSION
Pamela Hodge, Finance Director presented a PowerPoint presentation on the
current financial standings of the CCG Healthcare Fund. The following
information was presented to Mayor and Council:
FY14 Health Insurance Fund
Year to Date Actuals (thru March 14, 2014)
Budget YTD $ 16,291,667
Expenditures YTD $ 19,430,531
Fund Deficit ($ 3,138,864)
In addition to our negative balance Year To Date for FY2014, we have $3.8
million negative net position for our FY2013 Health Insurance Fund due to
Incurred But Not Reported Health Cost
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FY15 HEALTH PLAN PROJECTIONS
(excludes Muscogee Manor)
Total Estimated Costs* $ 26,586,633
(including Active & Retirees)
Current EE Premiums $ 7,317,419
(based on current enrollment and 6/1/14 rates)
Current ER Contributions $ 14,695,650
(at $5,650 per employee)
Projected Deficit ($ 4,573,564)
*Medical and RX Claims, Admin and ACA fees
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Councilor Davis asked Director Hodge if these figures are before or after the
Healthcare changes that were recently made by Council. Director Hodge responds
by saying, these figures are after. These are based on the rates were adopted
for June 1st and also the plans changes that were made when Northwestern did
the calculation for the claims, that was all taken into consideration.
Mayor Tomlinson clarified the difference between the estimated deficit
and the actual deficit.
Councilor Baker asked if this is a calendar year deficit or a fiscal
year deficit. Director Hodge responds, this information is based on the fiscal
year.
Councilor Thomas asked Director Hodge to explain how the $3.1 million
and $3.8 million deficits work together. The $3.8 million would?ve been at the
end of fiscal year 2013. These projections are of those claims that would have
been incurred but had not been reported to Blue Cross Blue Shield. There is a
timing issue when you visit your physician typically. It can be weeks or
months until the claim is submitted and processed through Finance. This is what
that $3.8 million represents at the end of FY13. Which would have been claims
associated with FY13, but at this point had not been funded at the end of that
fiscal year. This resulted in a negative net position for that fund. You
would expect any claims associated with a particular fiscal year to be funded
out of that fiscal year. When CCG started off in FY14 we already knew that
there were claims that had no been processed for the prior fiscal year. At this
point, CCG will adjust that incurred but not reported number. Part of those
claims in FY14 would have been those $3.8 million in claims from FY13. It is
expected to have incurred but not reported claims at the end of FY14 as well.
Councilor Thomas asked if it would be correct to say that CCG started
FY14 $4 million in the hole. Director Hodge said that is an accurate
statement. Councilor Thomas then asked if this is typical. Director Hodges
said no, it is not typical that the incurred but not reported claims are not
funded within that particular fiscal year. Typically the fund is at a zero
balance. This particular year we did not have funding available in all the
departments? budgets in order to balance that internal service fund which left
it in that net negative $3.8 million.
Mayor Tomlinson said typically there is excess in department budgets,
those funds are then taken to reconcile for these type of administrative and
personnel costs. This deficit could have been offset by a transfer from the
General Fund Reserve if we had the funds available.
Councilor Woodson asked if the $5,650 dollars allocated for each
employee in the Healthcare Fund was not enough due to the amount of claims
being more than usual. Director Hodge said the claims for FY13 were higher than
what was budgeted for $5,650 per budgeted position. That allocation was
increased from the prior year where it was $5,400. It was increased to $5,650.
There were also items presented to Council such as, changes in deductibles,
copays and premiums that were not approved so this is why claims were higher
than what was anticipated.
Councilor Davis asked if the employees that are paid out of the OLOST,
could their overages on healthcare be covered from the OLOST fund. Director
Hodge said all personnel costs for those particular positions do come from the
OLOST fund and any overages for those particular employees could be paid from
that fund also.
Mayor Pro Tem Turner Pugh made a referral to Director Hodge requesting
the cost to CCG for Health Insurance Coverage for active employees and Pre-65
retirees.
City Manager Isaiah Hugley comments, on how tight Department Budgets
are and in the past they have ended the fiscal years with excess funds in their
budgets to cover overages such as this. Because over the past few fiscal years
City Departments have been required to reduce their budgets, they are extremely
tight and there are no overages at the end of the year. An example of the
seriousness of the Department Budgets, something as simple as dealing with the
wild hogs, coyotes and chickens that were lose in the city, he asked
departments to engage someone to do this work, he had Department Heads asking
where this money was coming from because they do not have it in their budgets.
Then they have to go to contingences for $2,500.
City Manager Hugley also spoke on the past convenience CCG had on
relying on Fund Balance when it was over the 90 days, even at times at 131
days. This is no longer an option to cover overages because that budget is so
tight. Between that and no change in premiums, copays and deductibles, we are
left where we are. This information is a good segue into what our Human
Resources Director will be covering during the meeting. She will be sharing
ideas that staff has on how to deal with this deficit.
Human Resources Director Reather Hollowell takes the podium and
recognizes three employees from the Benefit Committee, Consultant Phil
Goldstein and Consultant April Halstead both from Northwestern.
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Healthcare Options Summary
Muscogee Manor- Eliminate Liability; Long Term Savings
Spousal Exclusion
Cost Sharing Plan- 25/75% Employee/ Employer
Pre-65 Retirees pay 50% of coverage, spouse and dependants 40%-0% over 5 years
Increase deductibles and copays
Increase Rx copays
***All Options are valued independently***
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Councilor Thomas asked what kind of liability is CCG responsible for
when it comes to Muscogee Manor. Director Hollowell explains, Muscogee Manor
pays their full insurance premium every year however, at the end of the year
that does not always cover the full cost of their medical claims. Whatever
cost is incurred after the premiums, CCG is liable for that expense.
Councilor Thomas asked if this can be avoided by requiring Muscogee
Manor to carry some sort of risk insurance to help eliminate the liability to
the city and so they are still able to participate in our plan but at no cost
to the city. Director Hollowell responded by saying, the administration of
Muscogee Manor contacted the City Manager a week ago wondering what they were
able to do to cover that liability. The administration offered to pay what
ever the cost is that is not covered by their premiums.
Councilor Henderson said he would not be comfortable with Muscogee
Manor being in agreement with CCG to write a check for the difference of
premium costs to claim costs. Reason being, the unexpected cost of healthcare
in general and catastrophic illness costs. He expressed the only way he would
feel comfortable with an agreement like this is if Muscogee Manor had a
stop-loss plan to cover the overages up to a certain amount.
City Manager Isaiah Hugley spoke to the discussions between him and Mr.
Frank Morast, President of Muscogee Manor Administration. There was a
conference call meeting, during this call Mr. Morast explains that he
understands the financial situation that CCG is in. He also spoke on the
stop-loss during this conversation and how they would have to acquire this type
of insurance.
Councilor Mike Baker asked Director Hollowell if Muscogee Manor has
developed anymore facilities. She responds by saying, that in 2013 they did
acquire two additional facilities. Councilor Baker said that if Muscogee Manor
is acquiring additional healthcare facilities, he is not sure that this is part
of the basis mission of the city. He is not sure that CCG covers programs that
are expanding beyond the basis function of the city, whether they are going to
pay for it or not. He said he would like to look at the situation from the
standpoint of, are they expanding beyond the basis functions of the city
government. This was accepted as a referral to look in the mission and scope of
Muscogee Manor.
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Councilor McDaniel said that CCG would be creating a lot of problems
with excluding employees? spouses from the health insurance. Mayor Tomlinson
explained that the only time a spouse will be refused insurance, is if they are
eligible and have access to healthcare benefits through their current employer.
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Councilor Thomas clarifies her earlier comments regarding Muscogee
Manor to Council.
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Director Hollowell continues her presentation by explaining that
another Healthcare cost saving option is spousal exclusion. This is for those
employees who have spouses that have access to insurance through their own
private employer. This would apply to about 284 active CCG employees and 22
pre-65 retirees. This is a typical cost saving option that many organizations
are putting in place. Northwest calculated the savings for this particular
exclusion to be about $1.1 million.
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Councilor Henderson informed Director Hollowell that he has an
appointment today and that he has to leave the meeting early, but made a
referral on the Health and Wellness Center. He made a request for a matrix or
an actuarial formula for the savings CCG would incur for every 100 employees
that migrate to the health and Wellness Clinic option. There was discussion
between Councilor Henderson and Director Hollowell on the Health and Wellness
Center is the cheaper option for both the employee and CCG.
Councilor Henderson said the bottom line is sustainability of not only
our health insurance program but also the pothole fund and other areas that
money has to be pulled from to cover the health insurance fund. All signs are
showing that healthcare is going to continue to get more expensive. There was
further discussion on the functions of the clinic.
Mayor Tomlinson gives an example of the magnitude of savings for
employees to elect the Health and Wellness Center option, if CCG was to do away
with the current HMO plan and require those employees to enroll in the clinic,
the savings would be around $600,000.
Councilor Davis said, in theory the cost of a healthcare plan is shared
amongst the participants. He asked if the number of participants goes down, can
the remaining participants expect their premium rates or copays to increase.
Consultant Phil Goldstein from Northwestern says no, they should expect their
premiums to go down if that should happen.
Councilor Henderson then left the Council Meeting, time being 10:00 a.m.
City Manager Hugley asked for clarification from Mr. Goldstein, that
the premiums are not going to decrease considering the cost of healthcare is
steadily rising about 10% each year. Mayor Tomlinson said the way she
understood the statement was, in isolation, if the only issue CCG had was a
$1.1 million deficit then this would satisfy the whole issue. But CCG is not at
an isolated issue. We are at a $4 million deficit and saving $1.1 million only
reduces the $4 million deficit. Therefore, you will not see a reduction in
premiums, deductibles or copays because that additional deficit is still
there. It will also not increase because of the $1.1 million savings. The
spousal exclusion is just a way to help reduce the deficit.
Mayor Pro Tem Turner Pugh made a referral that she would like a written
analysis on the claim cost of employees verses spouses verses dependants. So
that Council will have the numbers to look at when there is a further
discussion on the claim cost of dependants.
Director Hollowell adds that out of all the tiers within CCG?s
healthcare plans, that the employee plus spouse is the most expensive.
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Director Hollowell continued her presentation by going over the other
Healthcare Options, with Finance Director Pam Hodge explaining the shared
contributions.
During which Director Hodge explained how in the past the HMO plan was cheaper
and the PPO/POS plan was the more expensive plan. With the deductibles and
copays changed, the HMO plan is now the more expensive option. If the city was
to abide to the 25/75 percent contribution split for all three plans, the
savings would be $1.6 million. Director Hodge suggests, depending on what is
presented in the budget, Council adopted a different cost sharing strategy then
what was presented before. An example was given, 25 percent of the Health and
Wellness Center plan used as the base, CCG would contribute $319 per month for
employee only. The employee would contribute $106 a month. Since the Health
and Wellness Center would be the base plan, CCG would contribute $319 a month
for each employees plan per month, the difference of cost for their plan, the
employee would then be responsible for paying the difference in cost.
Mayor Tomlinson made a referral and asked Director Hodge to get a copy of the
more detailed information to Council.
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Mayor Tomlinson asked the Representatives from Northwestern, is it typical or
rare for an organization to provide and contribute to health insurance for
pre-65 retirees. Mr. Goldstein said that in their marketplace that it is very
rare to cover retirees. He said according to the Mercer Survey on Employers
Sponsored Health Plans it is the most comprehensive employer benefits survey in
the country. They surveyed more that 2,600 employers every year. The most
recent data that Northwestern has available states that out of all large
employers, which is defined by having more that 500 eligible employees, 4%
offer subsidized benefits to their pre-Medicare eligible retirees, and 13% of
government employers offer medical benefits to pre-65 retirees.
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Healthcare Options Valued
Options Savings
Muscogee Manor N/A
Spousal Exclusion $ 1,180,341
EE Pays 25% Across All Plans $ 1,669,722
Pre-65 Retiree 50%; Dependents 40% $ 257,000
HMO Deductible to $1000/ $2000 $ 715,547
POS Deductible to $1000/ $2000 $ 173,116
HWC Deductible to $500/ $1000 $ 140,142
Rx Copays to $20/ $40/ $60 $ 119,499
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Director Hollowell continued her presentation. She said that the
difference in the amounts of these savings is based on the number of
participants in each plan. About 60% of employees are enrolled in the HMO plan,
20% in the POS/PPO plan and 17% at the Health and Wellness Center.
Director Hodge added that if you increase the deductible, the premium
equivalent for that particular plan would be adjusted and therefore the savings
that you would have by applying the 25/75% rule would change slightly and the
savings would actually be less. Because you are increasing the deductible,
your premium cost would decrease. That is why it was said all of these savings
are valued independently. Mayor Tomlinson pointed out that if all Healthcare
Options were adopted by Council, the net savings would be around $3.6 to $3.8
million. These types of suggestions, if adopted by Council, would restructure
the plan such that it would come very near eliminating the chronic deficit.
Councilor Thomas made a referral requesting when Director Hodge presents
this information again to Council, that the contribution percentages for the
pre-65 retirees be compared to what the current rate is to the suggested
change.
Councilor Davis said that over the years of going over the Healthcare cost
to the city, the figure that keeps coming to mind is $22/$22.5 million. He said
that the number he asked Director Hodge earlier as to what the deficit was
being based on, she said $23 million. He asked what the ideal sustainable
number that the city can afford to cover the cost for healthcare for the
employees. Director Hodge responds by saying that at this time, without
reducing departmental budgets, the contribution from the city at this point is
around $14.7 million. Any increase in the city?s contribution, would require
departments to make adjustments within their budgets to absorb any additional
contribution, which could result in loss of employees. Departments at this
point have reduced their operating budgets as much as they possibly can without
changing the level of service they provide. She says that her estimate that
without the loss of employees would be the $14.7 million contribution.
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HMO Deductibles
Deductible Savings
$600/ $1200 $ 255,552
$1000/ $2000 $ 715,547
$1500/ $3000 $ 1,124,431
$2000/ $4000 $ 1,431,093
$2500/ $5000 $ 1,635,535
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Director Reather Hollowell continued the presentation on the
deductibles. She said that the current rate for the HMO plan is $400 for the
individual and $800 for family.
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POS/ PPO Deductibles
Deductible Savings
$1000/ $2000 $ 173,116
$1500/ $3000 $ 346,232
$2000/ $4000 $ 432,790
$2500/ $5000 $ 484,725
$3000/ $6000 $ 571,283
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The current POS/PPO deductible is $500 for the individual and $1000 for
family.
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HWC Deductibles
Deductible Savings
$300/ $600 $ 98,009
$500/ $1000 $ 140,142
$1000/ $2000 $ 294,297
$1500/ $3000 $ 392,397
$2000/ $4000 $ 490,496
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The current deductible for the Health and Wellness Center is $100 for
an individual and $200 for family.
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Employee Contributions
Contribution Strategies Savings
EE Pays 30% of HWC Plan $ 2,687,529
EE Pays 25% of HWC Plan $ 1,669,722
EE Pays 22% of HWC Plan $ 1,059,039
Other options for Contribution Strategies may also be considered
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As Director Hollowell concluded her presentation, Mayor Pro Tem Turner
Pugh asked if Northwestern?s administrative fees are paid through CCG or Blue
Cross Blue Shield. Director Hollowell responds by saying that Northwestern
receives commissions from whomever CCG?s carriers are. Mr. Goldstein of
Northwestern explains that the administrative fee that CCG pays to Blue Cross
Blue Shield has Northwestern?s commission built in. It is not impacted by
whether or not the city?s claims go up or down. It is a flat fee that is built
into the administrative fee for all the services that Northwestern provides.
Mayor Pro Tem Turner Pugh asked what the cost of the administrative fee
is. Director Hollowell says it is $37.83 per employee each month. She says
there are 2,600 employees enrolled with healthcare through CCG. Mayor Pro-Tem
asks Mr. Goldstein if Blue Cross Blue Shield is the only carrier that they work
with. Mr. Goldstein says that they have 580 clients in the state of Georgia.
That is every carrier that provides healthcare in the state of Georgia.
Councilor McDaniel then left the Council Meeting, time being 10:50 a.m.
Director Hodges explained that Northwestern handles the RFP process of CCG
choosing their third-party administrator, which is Blue Cross Blue Shield.
Northwestern analyzes the needs of the employer and employees. From there they
look for the best provider to accommodate those needs for the best price.
Mayor Pro Tem Turner Pugh made a referral for a list of services that
Northwestern has provided.
Mayor Tomlinson and City Manager Hugley explained to Council that all of
the figures and information that is provided during these updates are provided
through Northwestern?s analysis.
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Internal Auditor John Redmond took the podium to give information in
regard to a referral made by Council at a past meeting. The referral was
related to the comparatives of what other communities, cities and providers are
doing to deal with the increase in healthcare costs. The Georgia Government
Finance Office?s Association has done a healthcare cost management strategy
study for 3 years.
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CCG Healthcare Cost
Over past 10 years, CCG annual healthcare costs have risen from:
$10M to $25M
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This is the total cost of healthcare for the employees, not right the city?s
contribution. That is about 10% each year, which is consistent with what the
national average has been for the past ten years.
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Why Have Healthcare Costs Risen?
Expensive medical technology
Rising compensation for medical professionals
New and expensive drug therapies
Construction costs of new health care facilities
Community demographics
Mandated benefits
Affordable Care Act/Administrative fees
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The mandated benefits began in the late 1970s and continued on into the
early 1980s. The Affordable Care Act has brought on some additional mandated
benefits as well as more administrative fees that employers are required to
share in.
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Cost Control Strategies
2013 GGFOA Study
32% Negotiated lower cost with current carrier
30% Increased employee share of monthly premium
25% Increased deductibles
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The information that is being shared by Auditor Redmond came from the
2013 GGFOA Study. The 32% of employers have tried or attempted to negotiate
lower cost with their current carriers has generally worked well if it is a
fully insured plan. In CCG?s case the only thing that can be negotiated is
administrative costs and possibly changing the benefit structure.
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Cost Control Strategies
18% Explored market & change carrier/health plan/TPA
18% Increased office visit co-pays
15% Other (including Wellness Strategies)
12% Introduced 4-tier co-pays system drug formulary
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Since it was mentioned earlier, the $50,000 Wellness Grant that Blue
Cross Blue Shield has provided as a result of Northwestern negotiations for 3
years. Wellness Dollars are spent on Wellness Programs. They generally have a
return of $6 in savings on your healthcare cost on each dollar that is
expended.
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Cost Control Strategies
12% Increased Rx drug co-pays or coinsurance
12% Increased employee share of coinsurance
11% Performed a dependant audit
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Wellness Strategies
2013 GGFOA Study
49% Blood pressure screenings
47% Employee assistance programs
43% Flu shots
43% Wellness newsletters
41% Cholesterol screening
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Wellness Strategies
21% On-site exercise facilities
15% Telephonic health coaching
12% E-mail/internet health coaching
12% In-person health coaching
12% Weight management program discount/reimbursement
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Shifting Healthcare Costs
2013 GGFOA Study
Healthcare costs continue to shift from employers to employees- much is due to
the economic downturn
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Who Pays for Healthcare
2013 GGFOA Study
59% Employer Contribution
25% Employee Contribution
16% Employee Out-of-Pocket
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Portions of premiums have been talked about and how we want to divide
it up. The percentages that are being shown work out to be 70% contribution
from the employers and 30% contribution from the employee. Given the
suggestions that Director Hodge and Director Hollowell have presented are still
rather generous compared to what other cities and counties are doing.
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Plans Offered
2013 GGFOA Study
58% offer 1 plan
26% offer 2 plans
11% offer 3 plans
5% offer 4 or more plans
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2013 Enrollment
CCG Active Employees
HMO PPO/POS HWC TOTAL
January 1,845 380 0 2,225
December 1,327 304 553 2,184
Change (518) (76) 553 (43)
% change -28% -20% -2%
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2013 Enrollment
CCG Pre-65 Retirees
HMO PPO/POS HWC TOTAL
January 166 82 0 248
December 167 83 22 272
Change 1 1 22 24
% change 1% 1% 10%
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The pre-65 retiree group has grown by 10% in the past year.
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2013 Enrollment
Muscogee Manor
HMO PPO/POS HWC TOTAL
January 223 62 0 295
December 247 55 52 354
Change 14 (7) 52 59
% change 6% -11% 20%
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2013 Enrollment
Total
HMO PPO/POS HWC TOTAL
January 2,244 524 0 2,768
December 1,741 462 627 2,810
Change (503) (52) 627 42
% change -22% -16% 2%
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How HWC Model Works
Patient focused health risk assessment and management
Eliminates financial barrier to needed care
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The Health and Wellness Center begins at the patient focus and health
risk assessment. From there, the care is managed according to the need of the
individual, so it is tailored to their needs. One of the things the center has
done by taking away the deductibles and co-pays, it has eliminated the
financial barrier to needed care. For families it sometimes comes down to
paying for essential costs to provided for a family or going to the doctor or
buying prescriptions. The center was running at higher than 100% capacity for
the first 6 months of operation.
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How HWC Model Works
Controls rising healthcare cost through direct contracting for primary care;
generic medications; and imagining and laboratory services at pricing below the
allowable payment of BCBS.
Not an immediate fix to CCG global healthcare costs.
Plan takes several years and significant employee participation for CCG to reap
full benefits.
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There was a question asked earlier, why do we use Blue Cross Blue Shield.
Northwestern evaluates each carrier based on their capacity for handling
various types of claims. They also look at the discounts they have negotiated
for their payments.
Our Health and Wellness Center?s management company has gone out and
negotiated prices on some individual services that are well below the allowable
payment by BCBS. Every time patients go to the Wellness Center they receive
quick service. Upon the results the providers get paid at that contracted
rate. They do not have the IBR or time lag of paid claims. This is the reason
that the Health and Wellness Center plan has the capacity, as more employees
enroll, to level out the trend line that has been steadily increasing for the
last ten to twenty years. With this plan CCG could at least flatten that upward
curve out and reduce the annual increase, which would be beneficial to the city
and the employees.
There will not be much savings in the first year because of sick
patients. Once these patients have been seen and treated, they will frequent
the doctor less often. This is when the savings will be prominent and there
will be room for more enrollees. It is not an immediate fix to CCG?s global
healthcare cost, but it is one that offers promise down the road.
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HWC Model Funding
The HWC plan is funded with the primary care portion of its members (employee &
city contribution)
The HWC plan is not subsidized by any of the other CCG healthcare plans and is
intended to be self-supporting.
Emphasis on prevention and wellness mitigates healthcare expense in the future
years.
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Mayor Tomlinson asks Auditor Redmond to address the affect of the capitation
rate of employees who are enrolled in other plans, such as HMO or PPO/POS,
utilizing the Health and Wellness Center. Auditor Redmond says the HMO plan is
probably the least compatible with the Health and Wellness Center. Reason
being, a large portion of the primary care monies goes straight to their
physicians from BCBS each month in the form of a capitation payment Therefore
there is not any money that can be paid for these enrollees to go to the HWC.
The PPO plan is a little different. There can be funds allocated for the HWC.
The only problem is that the staff in the HWC is based on the employees that
are enrolled in that plan. Therefore, if employees that are enrolled in other
plans begin utilizing the HWC, it could cause an overload of patients.
*** *** ***
Councilor Davis asked if Auditor Redmond has the total cost of the primary
care portion that funds the HWC. Auditor Redmond says he does not have that
information at this time but is going to provide it at a later date. City
Manager Hugley reminds Council that they will be conducting a one year
assessment in May on the cost savings of the HWC.
*** *** ***
Councilor Thomas asked Mr. Goldstein, in his experience, if the insurance
tiers that CCG uses, is a typical structure. Mr. Goldstein says that he
primarily sees 4 tiered ranges. It is a more equitable distribution against any
risk.
Councilor Thomas asked how much CCG pays for stop-loss insurance. Mr.
Goldstein responds the city does not have stop-loss insurance. CCG pays an
administrative fee and then funds 100% of its claims cost. Mayor Tomlinson says
that CCG went out on RFP for stop-loss insurance and it was extremely cost
prohibited.
*** *** ***
Councilor Thomas said that she was in a meeting with the Columbus Fire and
EMS service, as they are dealing with the accreditation of their paramedics
program. One of the topics that came up in the meeting was citizens that
frequently call on EMS transportation to go to the hospital. A representative
of another region sais that they have started a program where their paramedics
go out to these citizens and check their blood pressure and cholesterol, it has
significantly cut down on the ambulances having to transport these same
citizens one to two times a week to a hospital. She asks if there are programs
such as this that could be of benefit to CCG employees on a proactive basis.
She would like to see if there are any programs that could be administered
through our paramedics to save money. City Manager Hugley says that he will
accept this as a referral for Fire and EMS. He does say that it may be a
liability by going to someone?s home and checking their blood pressure, if they
leave and then something happens to that particular person.
*** *** ***
Councilor Davis asks if having a high deductible health savings plan is an
option for CCG. Mr. Goldstein responds, it is an option but it requires a
great deal of employee education. The employees would need to understand that
there is an overall deductible and all medical services would go through that
deductible. Consumer driven healthcare is a great way to save on cost. You
have to make sure that the plan is designed well and communicated well amongst
the employees.
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Director Pam Hodge explains to Council that CCG is going through a
review by Standard and Poor. She says that she has provided Council with a
list of the questions and topics that will be discussed during the conference
call. As reminder, over the last several years they have been emphasizing the
importance of the General Fund Balance and Reserves. One reason being, our
Bond Rating Review. The majority of the topics for the review relate around
the drawdown of the General Fund Balance and the reasons for that. Director
Hodge says she is confident in responding to their questions and she will
update Council on the results of that review.
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Mayor Tomlinson asks City Manager Hugley and Director Hollowell to
alert the employees of this meeting so that they can be informed of the
discussion that Council is having regarding the health insurance.
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City Manager Hugley makes an announcement. There is one more Special
Call Council Meeting on March 28th. Mayor Tomlinson says this 9:00 a.m. meeting
will be a presentation on the Mayor?s Recommended Budget.
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Mayor Tomlinson says that Mayor Pro-Tem Turner-Pugh asked for her to
make a comment earlier in the meeting. The High Speed Passenger Rail Forum is
to be held that night at 5:30 p.m. She wanted to add that transportation
projects do not come out of the General Fund. They are separately funded and
anything such as this would be a 20/30 project. It is projected to be
profitable in the first year for bond financing, Tiger Grants and other grants.
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With there being no further business to come before the Council, Mayor
Tomlinson then entertained a motion for adjournment. Mayor Pro-Tem Turner-Pugh
so moved. Seconded by Councilor Woodson and carried unanimously by those six
members of Council present, with Councilor Allen and Councilor Huff being
absent for this meeting and Councilor Henderson and Councilor McDaniel being
absent for the vote, with the time of adjournment being 11:52 a.m.
Tiny B. Washington, MMC
Clerk of Council
The Council of Columbus, Georgia
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