Transcripts For SFGTV Health Service Board 20240713 : compar

Updates from the Health Plan Representatives overall. And agenda item requests. Additionally, we are going to begin Public Comment with three minutes in length. All Public Comment should be made concerning the current agenda item that has been presented. Again, any Public Comment made outside of the current agenda item presentation will be asked to hold their comment and remake their comment during the appropriate agenda item. Next slide, please. I will not review all of the instructions for Public Comment. But there will be a Public Comment slide at the end of each presentation for members to make Public Comment during that time. Thank you. President breslin all right. Item number 2, please. Clerk item 2 is the roll call. President karen breslin. President breslin here. Clerk Vice President stephen follansbee. Present. Clerk commissioner mary hao. Present. And commissioner randy scott. Present. Commissioner chris canning. Im here. And supervisor dean preston. Here. We have a quorum, president breslin. President breslin okay. Item number 3, please. Clerk item three is the approval of the addend an to planyear 2020, section 125 cafeteria plan and the 2020 Health Service systems membership rules regarding flexible spending accounts and the midyear health plan enrollment. This item is presented by mitchell grig fwrch s, the chief operating officer. And, mitchell, you may be muted. Yes. Im unmuted now. So, good morning. This is Mitchell Griggs with the chief operating officer. And good morning president breslin and members of the board. Last september i had the section plan and our member rules for your approval for 2020. And as you know these documents govern our compliance with section 125 of the Internal Revenue code. And in that governance there are certain restrictions that apply when an eligible member can make midyear changes to their Group Coverage elections and it is also our responsibility of the Health Service system and the Health Service boards responsibility to enforce these restrictions to protect the benefits pretax and nontaxable status. That being said, here we are in may 2020, and the i. R. S. Has provided in response to the 2019 covid crisis some guidance under a couple of notices 2029, and 2033, that is providing some flexibility with respect to midyear elections under the section 125 cafeteria plan. For the planned year 2020. Can we go back to the the first slide, please. Yeah. So under purpose. So this applies to our Health Coverage. Also our flexible spending accounts and our dependent care spending accounts. So what im doing here or what ive done is created an addendum to those rules and the cafeteria plan and the member rules as you approved back in september. Next slide. So what this addendum does is that it revises the member rules and cafeteria plan and this is based on the guidance from the i. R. S. Notices. It applies to employees and retirees eligible for benefits and it allows making midyear election changes once and to make them once during the calendar year 2020, without a qualifying event. Number one here, this is in respect to medical, dental and vision coverage. And an employee retiree can make a new election. Lets say they waived coverage for 2020, and they decide they want coverage now or need coverage now theyre able to make that election without any qualifying event. Or, b, if they currently are enrolled in the plan they can change plans. And they could also change the coverage level. In other words, they can add a dependent or delete a dependent without any type of qualifying event. And, lastly, under the medical and dental and vision, they can actually if they are enrolled for a 2020 plan they can waive that coverage for the rest of the planned year. If they want to do that they do have to test that they have other Health Coverage thats not sponsored by one of our employers. Number two here, this is 2 and 3 is in respect to our s. F. A. S with health care s. F. A. S, they can decide to cancel Going Forward for the rest of the plan year, cancel their election. They can make a new election if they had not enrolled in a flexible spending account before. Or they can increase or decrease their election. And this is Going Forward. And number three, applies to our dependent care flexible spending accounts. Again, they can cancel Going Forward in the plan year of their election and make a new election or increase or decrease the election they have made for the plan year 2020. Next slide. So the next one, which is based on i. R. S. Notice 2033, is specific to Health Care Flexible Spending accounts and this is our carryover provision that we currently have in our Health Care Flexible Spending accounts. Typically i would ask you to approve this, again, this september for the following 20202021 plan year but i wanted to include it in the addendum now so that members get notice that this is changing so they can better financially plan what theyre going to do with their Health Care Flexible Spending accounts. What this notice from the i. R. S. Does is increase the carryover limit from 500, for 2020, to 550. And to make sure that you all know that the carryover is the money that you have left over that you dont spend in one plan year. You can carry it over to the next year, up to 550 for 20202021. Just as a note here, the i. R. S. Is not requiring employer groups or those leading the group to make those changes. Its completely up to the employer and its on a go forward basis. And it does have to if you decide to do these you have to make sure to follow the nondiscrimination rules. That means that you cant just give it to one group to be eligible and not others. Next slide, please. We will be implementing this with a communication plan, mostly webbased meeting with the department, personnel officers within the city, emails and well be working with our other employer groups and the superior court so they can apply and send these notices out or a notice about this addendum through their communication channels. So basically h. S. S. s recommendation to the board is that you approve this event and that modifies the two plan documents, our section 125 cafeteria plan and the sfhss rules to make them consistent with the notices from the i. R. S. And those allow employees and retires who are eligible for benefits to make midyear election in the calendar year without a qualifying event. Any questions from the board . Vicepresident follansbee, m. D. this is commissioner follansbee. If this is approved today this is up for reapproval in september when we normally would approve the recommendations for the following 2021 years . So the guidance from the i. R. S. Is that this only applies for 2020. The only piece of this is the notice 202033, which raises the carryover from 500 to 550 for sfhss h. S. A. But the other 2029 is the medical plans and the vision and the Health Care Flexible Spending account elections only applies for 2020, and this would be amending the current documents that we had out there that you approved back in september. Commissioner scott this is commissioner scott and i move that we accept the staff recommendation. President breslin is there a second . Commissioner canning i second. President breslin okay. Is there any Public Comment on this item . Clerk at this time were going to go into the Public Comment section for this item. Were going to give the numbers at home a few minutes as there is quite a delay between this live event and the feed that is being given to members through sfgovtv. So ill pause for about 30 seconds to allow for people at home to catch up to the questions that were asked and for them to join the phone line at this time. Clerk moderator, can you please up the phone line for our first caller. You have two questions remaining. Hi, just want you to know this is commissioner zvanski and im only through Public Comment, i somehow cant connect through the computer. So i apologize. I have no questions and i support thests, so please record my vote as being supported and on the board. And i apologize again. I am reaching sfgov remotely and its the only time that i attend the Board Meeting at this time. Thank you. Clerk thank you. Moderator, can you please up the call line for the next caller . You have one question remaining. Good morning, commissioners. Thank you for everyones work to provide flexibility to all City Employees through this agenda item. My comment is related to addendum item 2 about the changes. As described on page 2 and page 5 of the attached notice 202029, the i. R. S. Now submits the cafeteria plans such as ours to apply unused balances to pay for or reimburse medical expenses near the end of the year, december 31, 2020. And how this would apply to the city is that the grace period for unused balances had already ended back in march. And i wanted this to ask to extend the grace period through the end of the 2020 calendar year because the grace period, again, had ended in march to provide additional to all employees and if theres future addendums to any future addendums planned for rollovers and balances of this calendar year 2020 as allowed by notice 202029. Thank you for your time, commissioners. Clerk thank you, sir. Moderator, are there any callers left in the queue . You have zero questions remaining. Clerk thank you. President breslin, this concludes Public Comment. President breslin okay, we have a motion on the table to approve addendum to section 125 cafeteria plan and sfhss membership rules. All those in favor signify by saying aye. Aye. President breslin any opposed . Its unanimous. All right. And now well go into our raise and benefit section and i remind everybody that this is a continuation of our may 14th meeting and there were many Public Comments at that meeting. And the recommendations, the staff recommendations remain the same as that meeting. But i will limit the Public Comment time to one minute. And i appreciate any of those who had comments at the other meeting, if they may consider not recommenting if there is nothing changed, but that would be up to you. So id like to have director to maybe explain how the rates and benefits works. Thank you, commissioner breslin. This is the executive director of Health Service system. Thank you to the board for adjusting your schedules to attend this special meeting today. As we know, setting rates and benefits on an annual basis is a very rigorous process. It is not easy to do. And indeed sfhss was created to have this primary role of working with Actuary Services to determine the best rates on behalf of our members in San Francisco. Our actactuary well hear from shortly to determine what the rates are for the coming year so those negotiations that occur take all of that very sophisticated mathematical analysis into consideration and is a process that is standard in the industry. And it can be difficult to understand. Certainly, weve all done a lot of study. Theres educational videos on our website that explain how rates are set. Because we do we do realize that it is a difficult science for people to understand and so we do our best to make sure that the public understands and that our members understand how we do this. We do stand by the recommended rates that were submitted to the board last week, or two weeks ago, and that enables us to ensure the same level of coverage that our members have come to expect. So its important that we recognize that theres no changes in the coverage of the benefits that our members enjoy. A very rich Health Benefit in San Francisco that is guaranteed to our members through the charter and health ordinance. So its our job as the Health Service system to administer these benefits and i think that most people recognize that were on a very, very tight timeline every year to get these rates approved by the Health Service board, approved by the board of supervisors, so that i. T. Systems can load in all of the data, the Communications Team can prepare the outreach material, and that can all drop and be ready by october 1st for our members to enroll or reenroll in their health plan. That allows us then to crunch the numbers, get all of those new information over to the health plan so that each of us have a valid, effective Insurance Plan in place on january 1st. So its a very heavy lift every year and the timeline is extremely sensitive. So we appreciate having the special meeting to continue this process. I also just want to note that Health Care Costs are increasing and, again, thats a complex discussion that we can, again, have at another time. But we do take into account the increase in utilization of these benefits that our members have been doing, which is good that we are enjoying the benefits. And that the cost of the health care really has to do with the infrastructure of the system, the expense of the workforce itself, and the pharmaceuticals and the technology that are also prevalent in our Health System today. So with that im going to turn the microphone over to our actuary, mike clarke, who will present the kaiser plan first and then proceed with the blue shield plan and the United Healthcare plan. So, mike, its your turn. President breslin madam secretary, you didnt read the item yet though. Clerk yes, ill wait for our producer to move over to the slide and then ill call the item. Llt r all right, item 4 is review and approve updated of the Kaiser Permanente nonmedicare rates and premium contributions for active and early retiree members, plan year 2021. This presentation is from mike clarke for aon. Mike clarke for aon. Next slide. Ill present the Kaiser Permanente 20202022021 nonmedicare rates and premium contributions for active and early retiree members. This starts with a ratesetting premise that we included for todays discussions on the three plans. Just to help to bring more visibility to our ratesetting process and then how total cost rates allocate to members and employers. Then we will dive into the 2021 plan rating for the Kaiser Permanente or kaiser plan and present the 2021 rate cards for early retirees and finish with our recommendation and then ask for a statement from a kaiser representative. You cannee appendix items in this presentation. I do not plan to cover them in this particular discussion today but the appendix slides are also available for reference. Next slide. So as we start the ratesetting methodology process on the next slide, we thought that it would be helpful to talk through a couple of different concepts. So if you could forward to the next slide, please. Starting with health plan funding. And each of the San Francisco Health Services plans utilize a particular funding method based on how that particular plan is established. And they can be summarized in three different categories which represent the column headings to this slide. Selffunded plans are where the claim dollars are based on services delivered to members or paid by the trust, along with planned Administration Fees to manage the plan. And you can see in the second row the aon actuary uses fees for selffunded plans. And a particular example that ill talk through later today is the u. H. C. City plan. And the second is for the two blue shield plans and, again, ill review those in more detail later today. But for high level summary, flex funding is an insurance approach where most claim dollars based on services delivered to members are paid by the trust, with six costs for Certain Health Care Services called capitation as well as planned Administration Fees and large claim reinsurance, that pooling mechanism that occurs at 1 million per participant annually. And here the aon actuary, myself, is doing those with cost assumptions that i validated as the ac actuary and the large clm pooling fees. So in this particular presentation well focus on fully insured. As you can see towards the bottom of the third column here all kaiser plans to sfhss members are fully insured. The funding method of fully insured is that the Health Planet sets fixed dollar premiums to cover expected claim costs for Health Care Services by members as well as the administrative fee costs incurred by the plan. And a very important distinction is that second row in the last column here, who sets the recommended sfhss plan rates for fully insured plans. For these fully insured plans its the plans actuary, using planned cost assumptions, but assumptions that i carefully scrutinize as the aon actuary and along that the administrative fees and any large claim fooling adjustments and required legislative fees. And theres a large claim pooling neck nymph in the kaiser plan very similar to what is described on this pag