Are part of, we dont need that, strategic principle. The other instructions are participate in the citys Talent Development programs. Foster Community Engagement in the Budget Development process. Consider independent reviews and audits when developing the budget submissions. And the next steps are on february 8th, we will be presenting the proposed 1819, and 1920 budget for your approval. The key of the date is that by charter we have to turn in our budget on february 21st, and therefore, without having a special meeting in february to go over the budget we will present the budget. My plan is that we will present the budget to the Mayors Office and with the caveat that the executive director has not had a chance to spend a lot of time with our department, in fact, i believe you said the starting date was on the 12th of february. And as you know, we do go through a long period of time in which the budget is in the Mayors Office purview, which has in the past given us some leeway to make some reorganizations within that. And then also on the 8th ill present the Health Care Sustainability fund. That is not approved by the board of supervisors, only approved by this board. I present it at the same time so you can see how they intermix, but that, too, can be brought up again in another month. Are there any questions . Any questions of director levin regarding the budget, budgetary process, what well be going through . So, the board will hear this as a committee as a whole, in terms of the recommendations around the budget. Budget process at the next meeting. And commissioner sass is chair of the finance committee will preside over that part of the meeting. Thats a commitment im making on your behalf. Thank you. Is there any Public Comment on this . Hearing and seeing no Public Comment, well now go to the next item. Item 7, discussion item, presentation of 2018 rates and benefits calendar for plan year 2019, acting executive director griggs. Before director griggs begins, i want to remind folks of the process. We used to have a Standing Committee on rates and benefits. We no longer have that in our governance structure. This board acts as the committee of the whole as we deal with rates and benefits. And hence, we are now out of our general board meeting, and acting as the committee as a whole on rates and benefits. Its the same people, we have not changed places or positions. Director griggs. Thank you, president scott. I believe you have the calendar in front of you. At this time its pretty standard as far as year over year. At least recent years. One addition later on ill get to. Starting in february, february 8th meeting, blackout notice will be presented. Can you give a brief description counsel, what the blackout notice is . Counsel. Once the blackout notice goes into effect, commissioners are not supposed to have communications with the vendors. Existing vendors or potential vendors. Potential vendors. All right. Restrictions on our communications as commissioners with the vendors. Usually are existing unless we are doing an r. F. P. In addition, well be reviewing for you and presenting the fees, and stablization reserve. A presentation on copay benchmarking, copay, deductible and compare them against other Government Entities and private sectors, too, i believe included. Then in march, 8 early board meetings of the month. Well present for your approval the ten county average amount. Also well bring you stop loss recommendation for the selffunded plans. The blue shield flex funded nonmedicare review of claims experience. As well as blue shield stablization reserve and the best doctors for renewal for your approval. April meeting, well have the risk scores available for your review. Also do a health value initiative. This is where we take our cost, our total contributions and premiums and compare them again to the private sector and certain large employers and other Public SectorEmployer Groups. Well also take a look at the city plan nonmedicare selfinsured to approve the premium contributions for 2019, so thats city plan nonmedicare. Thats the first early retiree and active Employee Health plan that we are approving the benefits for. Also review, or youll review for the approval of dental, vision and aetna renewal during that month. In the may meeting, kaiser permanente, and blue shield, the rest of the nonmedicare plans. Reviewing their premiums for your approval. And then in june, looking at Medicare Advantage plans, kaiser permanente, senior advantage, for proof of rates and premium contributions for those, and this is the new item, to appear the first time on the rates and benefits calendar, we will be presenting the multiregion, kaiser multiregion, early retiree and medicare eligible plans for rate renewal. Again, that was another popular well received addition for 2018. Just as reminder, the reason we have the calendars and the reasons we have to stay on schedule is that we have to present these, have to be presented initially to the board of supervisors, rates and benefits committee and then to the full board of supervisors in july, we dont have the dates yet, but they will be forth coming. Are there questions of director griggs . Regarding the rates and benefits calendar . It has a very familiar ring. I thought we just did this. Time flies when you are having fun. Ok. All right. Any Public Comment . Hearing and seeing none, well go to the next item. Item 8 discussion item. Review fund status for the incurred but not reported ibnr reserve for u. H. C. And blue shield. I have been sitting here about an hour and a half, and the mind can only endure what the end can support. So, i would like to declare a fiveminute recess. Let me do that, all right . Thank our colleagues for their patience and indulgence of my personal proclivity of not sitting in one place for an hour and a half. Please identify yourself and well proceed with this discussion item. Thank you. Mike clark with aon. Good afternoon. The first of the presentations on reserving will talk about the incurred but not reported reserve that each plan that is selffunded or flexfunded has within the systems programs. So incurred but not reported ibnr reserve, estimate of unpaid claim liability for claims where services are incurred on or before a certain date, but not yet paid until after that date. And for the plans we do our calculations on a fiscal year basis, that date is june 30th, the last date of the fiscal year. What ill be presenting on today are calculations involving claims where services are incurred on or before june 30, 2017, but not paid until and or after july 1, 2017. So if we turn the page you will see the table of our calculations for the recommended ibnr reserve for 2017, june, selffunded or flexfunded. U. H. C. City plan, delta dental of california p. P. O. Dental plan for active employee participants and the blue shield of California Health plan. In particular, you will see overall a reduction in the projected ibnr reserve of about 1. 6 million. And most of that being attributable to the change in the u. H. C. City plan. All of these reserves are fully funded, and particular with the u. H. C. City plan, a key driver of the reduction, as of june 30, 2016, the reserves were required with the change over to full funding on january 1, 2017, we look at the june 30, 2017, figures, you no longer need to hold reserves on the fully funded program. So, therefore that is a key reason for the substantial reduction on the u. H. C. City plan. And we will reset these reserves again as of june 30, 2018, after the close of the current fiscal year. Are there questions by members of the board recording the ibnr reserve . So, why do we have to do this . Its required that you carry the liability to protect the ability to pay the claims that are incurred as of a certain date, but not yet paid by the plan. Thank you. Many times people see money in a savings account and say well, i guess i can spend that, too. And the case, thats not the case here. So we, being prudent and what we are doing, we are projecting these as estimates so we can play these claims as they are submitted to us. Ok, thank you, mike. Absolutely. Any other questions from the board, any Public Comment . Hearing and seeing none, well go to the next item. Item 9 discussion item, review fund status for contingency reserves. Mike clark, aon hewitt. The second of my presentations address the contingency reserve. And that for each selffunded plan is a reserve that protects against shortfalls, potential shortfalls and funding estimates. They could occur if actual claims occur over a plan year or higher if who was projected when the premium were developed, and could cause a difference between actual expenses and revenues collected. So, this presentation will review the contingency reserve status, as of the end of the prior fiscal year, for each of the selffunded and flexfunded health plans. As you can see on the table, on page three, the u. H. C. City plan, we are recommending a contingency reserve of approximately 5. 5 million. For the delta dental plan of california, active employee p. P. O. Plan, about 3. 1 million. And blue shield of california, about 13. 3 million. For a total of just under 22 million as of june 30, 2017. This is a reduction in our contingency reserve calculations for each of the three programs, from what we had calculated as of june 30, 2016. Now, all of these reserves are again currently fully funded, and we do account for the change in contingency reserve into the calculation of plain stablization. So in the next couple months ill discuss the reserve status with you and how the contingency reserve impacts the claim stablization reserve. In particular on the change, youll note the u. H. C. City plan overall stayed relatively stable. We had the reduction attributable to medical retirees, coming out of the need to be reserved for because of the change in the fully funded status effective january 1, 2017. We did have some offsetting increases in the contingency reserves for active employees and early retirees in the u. H. C. City plan, in part because of the growth of the head count of those programs. Just so happens they relatively net out, but there were some change dynamics occurring between the active early retiree populations and the medicare retirees. Delta dental plan of california, primarily the claim variances stablized somewhat, so in the methodology, that created a reduction in the needed contingency reserves. And then for blue shield of california, we had the elimination of the medicare retirees, that contributed to the reduction on the blue shield of california plan. So, like with the ibnr reserves, we will reset these calculations as of june 30, 2018, at the close of the next fiscal year. Any questions from members of the board. Commissioner sass. Im trying to recall the discussion around u. H. C. In 2018. I know we were basically utilizing Stablization Funds to main to offset the additional cost. Im not sure i recall that we would be exhausting the Contingency Fund as well, the last sentence on that. That does not ring a bell with me. It could be my own memory. Thats actually not the case. So, i had originally had prior discussion, thats not the case. Not the case, not accurate. Stablization reserves, apology. Surprised to see that. So you are talking about the line that says contingency reserved for u. H. C. To be 0. Yes, thats not correct. I thought thats what we expected. Stablization, not contingency. I will address the stablization reserve next month in some of the early information provided. Just for the record, then, im going to suggest this slide be amended and reposted. So that we dont have that lingering out there for a month, if that sentence needs to be removed or edited in any way, we rely on you guys to give us the right wording, to amend the slide than we have it posted correctly. Lani, did you have a comment . I was just going to say that you have the corrected version, hard copy, and its going to be posted after the meeting, the correct version. It will be corrected on the website. I call the boards attention to that. We were handed, and now in my stack of papers, i cant find it, a corrected edited ok. And thats the one that will be posted. Thats correct. Thank you. All right. So, let me ask you, too, like and anybody else. Is this a high reserve for the blue shield flexfunded plan . Are we always subsidizing the flexfunded plan . Reserve calculations for ibnr and contingency reserves are consistent across all three of these programs. So, the the methodologies produce figures that again are consistent methodology, and i will address the Stablization Fund next month for the u. H. C. Plan and additional plans. Those particular funds are tracked based on those programs and i know that decisions have been made to apply certain elements of Stablization Funds differently to different plans over the past year or two. I will be addressing that with the board in february and march. Director levin, do you have something to add at this point in this query . Yes, so, there are two Different Reasons why we have these reserves. So, stablization is so we can buy down and stabilize the rates and present a major migration and keep the plans so we have some competition. Contingency reserve is for a catastrophic situation. So, lets say, i mean thats the way i understand it, simple terms. He can explain it in other terms. But lets say we had a the flu thats going around right now, thats started really impacting peoples health. Lets say that that became a huge problem. And overwhelmed blue shield. We would want to have the contingency there for those kinds of catastrophic. So, and in doing the calculation, mike will be able to kind of go through, but in terms of the use and why we have it, its totally different. All right. So, just in summary, the incurred about you not paid claims reserve is there to pay claims that we know have been incurred but have not been paid. Ibnr. Then we have a contingency reserve set up specifically to take care of catastrophic circumstances. That is correct. And theres a statistical formula behind how we calculate contingency reserves. And its consistently applied across all three. And the third bucket of money over here is the Stablization Fund, and applying and utilizing those funds to keep rates reasonable for our members and to manage, if you will, the overall participation in various plans. Correct. And all of these are broad board policies that this board has set up and reviewed. The statements of which are, i believe, online, or certainly within our terms of governance so they are there for anybody who wants to look at them and kind of see what is this money being used for kind of thing, ok. Just an educational moment, kind of a public thank you, sir. Commissioner lim. Required Financial Reporting during the audit when we do the financial report, required with the audit, and also reviewed by aon and reviewed by independent auditor. Ok. So, further certification we are using the funds properly and for the purposes intended. Correct. So, we provide the calculations but you are correct in that is audited and i know that was reported on last month. Ok, thank you. Commissioner lim. Ibnr for the city plan was substantially reduced 2008, because pretty much all of the city plan is fully funded now. For the medicare retirees. So it would go down, expect it to go down in 2018. All right. Thank you. Any questions, other questions from the board . Any Public Comments . Hearing and seeing none, thank you. We will now return to our regular board meeting. We are no longer the committee of the whole on rates and benefits. Have we changed . No. Madam secretary. Thank you. Item 10, discussion item, update on blue shield trio hmo implementation and provider partners. Jeanette moen, blue shield of california. Hi there, thank you. Jeanette moen with blue shield. I just wanted to give the board an update on the trio implementations and some other provider relationships that have changed in the product. I always have to remind myself why we are doing this because it is herculian project and undertaking, and again its to leverage those relationships that we have already forged with provider partners en the community who are doing an outstanding job for the city and county of San Francisco delivering high quality care and reducing costs. Its to reduce costs and make the plans sustainable for h. H. S. Members longterm. Its an attempt to transform Health Care Delivery by disrupting competition nuances in our marketplace. And its to ensure that longterm all members of actually california, part of our mission, have access to high quality affordable Sustainable Health care. I just wanted to give an update to the board to amend some numbers i had provided last month, we have final numbers in. Based on the january 1st trio enrollment, 14,500 members, approximately enrolled, equivalent to 13. 5 million in 2018 savings. Continued enrollment of that number, 2019 and 20, and beyond, will only be compounded. Meaning that 13. 5 million for the same cohort or of members will only increase in savings. If you add more membership, it will compound even further. So, updating this pie chart, 62 of all h. S. S. Members are using trio providers, and of that 62 , 40 of those 22,500 members enrolled in trio ultimately. Excuse me, why arent the rest of them automatically enrolled . You know, so we used a logic to automatically enroll members only if every Family Member in a family unit was using a trio provider. And some have 5, 6, 10 different doctors sometimes in a family. Right. If nine of the doctors were trooi trio and the tenth wasnt, they were not a candidate for auto enrolling. We did not want to prompt any relationship changes with physicians. Ok, thank you. So, we have some really exciting updates. We have we will continue having bumps along the road and changes. Fortunately today i have mostly very positive things to report. I will get the hard message out first. With meritage, if you look at the pie chart, it does not constitute a large portion