January 14, 2016. Are there any edits, amendments are comments to the minutes. Im trying to get open. I understand ill ask those of you who are new in the audience from the last minute we have new Technology Something called an i pad not on ipod and all of us have gone through training and the consultant with the city has been with us and we all have to take a manner to be patient. It is page 7. Page 7. I think the gentleman responded a twopart question whether or not the forms im still not there were available electronically you said no, i think thats my understanding include the answers towards the bottom of page 7. From the minutes. From the minutes. Oh, im sorry were on the agenda im out of order. Were to be contrary look at the draft minutes of january meeting. laughter so again, i call are there any edits, comments or changes to the minutes i saw one i cant find it. So my edit the second to the last blood sugar level it was confirmed the former will be received by the employee but the form is not available electronically typed. Okay. 94 c. Anything else . If not im ready to taper a motion. Move to approve. Seconded that is he minutes for the january meeting at this board be approved with the idiots so noted any comments or any questions by the board any Public Comment . . Here we go none all in favor, signify by saying i. I opposed . So ordered a item. Two general Public Comment on matters within the boards jurisdiction not on todays agenda. My name is diane i am representing the use of force retirement we had margaret from the Wellness Program she did an excellent job a question she couldnt answer it was suggested i ask the question the question is members were wondering why kaiser didnt offer the silvers sneakers program as several of the other plans available and if that question would perhaps be asked of kaiser thank you. Okay. Well talk about what we currently do ill call think director bohe to provide information this go issue has come up make a comment about kaiser or an represent. A representative from Kaiser Permanente please come forward. Hi cindy exclusive account manager currently we dont offer the snaerngz benefit but but will off of january of 2017 my understanding it is been finalized and there would be a cost with a rider. So your that looking it for the next planned year. Yes. And more information. Yes. During the renewal thank you for your comment and question questions or comments from the public on matters this board should be concerned about before we move on an extensive agenda today i tried mightily and labored like hector. To narrow it but items carried over from two meetings since november and i feel that if we got to press on so i do not o i dont want to be short with any of the presenter or members of the public but were asking our cooperation to keep our comments focused and your questions the same way were able to get through the agenda were trying to close the public side of the meeting at about 4 oclock we have a closed session after that time and then theres another public body who comes in here and 5 oclock so you know we cant inpigeon their time ill ask for your cooperation and so, now take up addition item 3. Thank you. Item 3 action item in violation of blackout period for the duration of the rates and benefits process commissioner scott. Yes. Were in receipt of some guidance from the executive director regarding this you want to summarize and before you do we have a series of items today that look you fairly standard because we have extensive policies on them if you look at the website or look at the meeting materials youll see the occupying policy on a lot of the items today is not a policy discussion because weve had these were talking about how were going to behalf and act during the rates and benefits renewal so just to be clear this body and its terms of governance about a year ago changed its structure so that the rates and benefits process is done as a committee as a whole all Board Members participated and that allows the public to participate as well were disliking well talk much over the course rates asia benefits as a whole and we will convene and hear the finance committee present items on next years budgeting process and then go into the regular meeting and i will try to make where we or so that none of us get confused so thats whats going on and, in fact, director dodd to comment. We begin a blackout period for the retails and benefits that that means that no commission on the board or exclusive a staff can speak in the City Attorney can conform can speak to the vendors about rates and benefits if were asking a question wellness of Something Else to the permissible but specifically so rates and benefits not to have conversations with the gender; is that correct. Consul general. Yes. Correct obviously we cant stop the members of the public but adopting this policy the board has adopted that. All right. Any other comments ever be observations by Board Members questions about the blackout notice for 2017 rates and benefits. Move we approve the blackout period for 2017. Its been. Moved a seconded properly through the blackout period for 2017 rates ace benefits are questions or comments by Board Members . Any comments from the public seeing and hearing none were now ready to vote all in favor, signify by saying i. I opposed . So ordered a action item 4. Item 4 action item to approve the administrative 2017 by ann hewitt. I have it up there troyer good afternoon and we have you have a presentation in your packet choops not working i guess there we go. So so this is a standard presentation we give every year it is a plan youve had if you have a small body of active employees that use this plan earlier retirees and the code with the ppo you fund that plan but you set a premium quadrant have an opportunity and take the risk we step out on our risk you vote in a specific merging in april we present you the prudently for those 3 pieces to look at page 3 oh, there it is were trying to brought to your attention in it the clarification transparency of full disclosure to the board when the fees are for the standard administrative theyve increased the fees for active and medical by 3 percent bye find them to be reasonable given the services and additional amazement of money to the full fee in determining the final price before we vote on this we have 3 other piece of information on page 4 and these are the h s f sustainability fee its 2. 05 and we have a shared savings what that is as a ppo the United Health care when we get a large claim they negotiate that and whatever the savings is they take the there are no percent and the rest is passed on a bill they bring it down and share the savings and have a fee for the negotiation their fee steldz and the value based on prying theyve contracted where the vend theyve paid a little bit of money to do a better job so i know im quick we have a full agenda kwhaum when you add up the piece you took the component piece of additional cost and at the bottom of page 4 you see the rate went from 47 plus to 48 for takes. Will you come back to the microphone so we can hear you. Theyve begun that 2 percent important early retirees and medicare and at this point i want to say last year in february we presented premium you have the p p d contract that coffers all the costs for the retirees thats been deferred from various reasons until april not able to present at this point we have a fully discussed this with the United Health care i find it appropriate and no issue that will not defer any actions take place as part of determining the final rate is well now looking at accepting the Administration Fees this is full disclosure that are being asked for by United Health care and it is reasonable. Art so were taking one slight stem from a year ago auto yeah. Are theyre questions from the members of the board regarding the administrative fee and discussed and outlined. Move we approve the citys administration. I have one question i want to make sure i understand the shared savings the cost to administrator the personnel that go back to renegotiate out of plan bills is that it. This is when we take a bill say a bill comes here for 5 thousand dollars and the bill is charged with the higher fees they go into negotiate and bring it down to 13 are 12 they keep a thousand you actually, they get paid so i guess to answer the question youre paying for the service but. Thats different. And figure out how that works. All right. Any other questions from the board . We have a motion is there a second technical second. There is a motion and a second we accept the recommendation of the administrative fees for the United Health care plan for the coming year any other questions from the board or any Public Comment . Seeing and hearing none were now all in favor, say i. I. Opposed . Passed our next item is action or deduction item number 5. Item 5 discussion review cy plans ann hewitt. You can stand there for Public Comment most of these items are you. Were at the United Health care. Is this inappropriate we need to vote on it today. I dont believe we can do that. No. You cant. Ive looked at to my council for for the goons. Please. Need to notice it as an ax item that being said the director can make an independent decision and followup that way but basically, it should be an action item and noticed to the public okay. We will do the best we can within the perimeters so if you, please. Okay. What were looking at the rates stabilizations calculation it should be in your packet this is a fantastic policy that you adopted before i he was allowed loudly to to be our tyler new a have deficit the coming year but collect the premium and youll have a surplus whats the rule the rule ask say if elected 50 million and sent 45 you have 5 million of surplus the rule is we are going to rebate that over 3 years if back in 2015 we know about it but apply to the 2017 rate every year question take a look at the deficit or service for 80 that year and how much is that and take it off the 3 by the owe or chase so at the end of the day you are fully accounting for all the money no money is kept all for the we think of the people and a excellent policy. I might add the original monies could from where. The premium in excess of the expense. Who pays the premium. The city ann. And the members thats right. Okay laughter okay. So given that what do we do . Over to this page right here the expected and tuff when we price that important 2011 we had sat we were rebeating money it was listed itemization and the contribution at this point i do presented this document you were going do pay back 7. 4 million that means the premiums will be less than the expenses so what happens in 2015 . Well, we came in at 8 million so we spent more by 8 million so that of those priced early by the troyer lets have the based on experience spent 8 million spent more than you intended to spend you lowered the rates and at the end of the day it was an inverse what does that do creates an mop up of money you over spent you can get money instead of get money back at the end of the day it is 4 thousand plus should be netted against the ongoing balance we go back to what page would you be on. Back to page 2. Which the actual circulation u calculation of the amount so if you go back to page 2 of our deduction items at the time of the at the end of the last year, we have 11,783,000 in the reserve we had to give back we generated extra money now only give back 11 million plus a third is 3. 8 million roughly so what do you mean that means that for 2017 we finally lists the operational rates a line the rate card x amount for the singles those will be monument for that and that we take away from the rate we reduce the rates by approximately 3. 8 million so were giving the money back were wee rebatting the money i love the policy so wvpd this is a deduction item this is an explanation of what were doing and giving an update of the status what were intending to give back through 2017 for the city plan any questions. I do have a question. Last year you advertised 8 million 8. 51 million and you to the 26 rates and added 4 million 4 hundred thousand that is 13 billion plus and this year you only have 3 million so how will this effect the rates when i put in more last year. Were not there. 10 million televise. Based on the experience the thought rate ill present the net impact i thought that was today. No, no were not going to give you the rates. So 10 million is going to make a big difference; right . We spent 7 million and did a buy down of the 4 million. It was sort of violated the policy the policy so avoid fluctuation and two were going to have a big fluctuation this year up because of what we did last year. If i can defer my answer to review the final calculations in april and let you see the netted result ill ask that obviously in a public forum. All right. I understand your that the continuation welltaken. My second question if carrying forward to 2018 the 7 million plus 586. And thats on the first page. Thats correct so the following years was a lot more than that 8 million more or something is that a matter carrying forward. What happens this is surplus money at some point we completely eliminate we rebate it for the converse or calculated and we are at the position were casing more or asking for money into the rate or taking money away from the rate vertical if that policy works and rated as best it can be end up with a large surplus its a begun i thought the idea to have this here in the case something goes wrong. Actually, you wanted to say something. The stabilization piece this money were willing to spend obviously 404,000 more modern last year in previous years if we spent 11 million more the Stabilization Fund we will divide that 11 million by 3 and take it out over 3 years. Do you see what im saying is that accurate . May i reframe that please. The purpose of the stabilization. May i. Alert everyone a copy of the policy is one the appendices to this item. And you can read it. And the oifshz of the policy are very clearly stated. Quote the objective the stabilization reserve 2 to spread gains or losses into the following years premium calculation in an evenhanded manner such the employee and the employers and membership are not subject to volatile year over year changes in premium it is a piece it not not prevent volatility we cant control the marketed but a piece to help to reduce the voluntary outlet we might experience. Thats correct and to going to the original state e statement if i generate a surplus not hold onto that an afghanistantion well resurplus and adversely a deficit we will add the deficit into the rate at the end of the day as we get it perfectly rate no stabilization either a surplus or deficit this is a house to amnestimemorializ. This is a matter to be introduced today ill ask if we have Public Comment if we be guided by the recommendations this is in here and we will take action at a later date okay. All right. Is there are there other Board Members. On page 2 when your suing 3. 7 applied to the 2017 is it safe to say it will be applied against the premiums for the 2017 rates we have not gotten the premiums but for the city plan that amount will be applied across the board. Right. Any other clarifying questions by the members of the board if i for the deduction item, i. E. , want to reiterate ill ask the executive director to be guided by the recommendation since not an objection to the recommendation actually such time we take action all right. Discussion and possible action item 6. Item 6 discussion and possible action presentation on premium rates relate activity equalization ann hewitt. I know this will be distinctive by ann hewitt by the executive director will be making comments as well. So in looking at the excise tax tax even though it is postponed one thing the early retirees exceed the excise tax for all levels of retiree only retire plus 2 i consulted and we went back and examined it and learned it is not equal cross the h ss membership the rate calculations for early retirees differ from all others h s f the active members 65 plus members that he differ from all city plan members in the future kaiser and blue shield exceeding the federal excise Tax Threshold for 2018 and subtract years looking at 2020 plus one and plus 2 so h ss relate activity is within the industry standards are the amount and with unless a member of the commission, the public, or staff so requests calpers we compare ourselves with consistently and not showing on the screen sfgovtv we have a presentation. Okay so in terms of background we set and we set the Insurance Premium for 3 tiers retiree only retiree plus one and two for all 3 plans were saying United Health care is both city plan and the n p p 0 per the charter the premium were calculated and this is dr. First pass at this the retiree calculations were 13w5u7b9 the county average and the actual difference if the premium and have up to 3 minutes no rebuttal. To assist the board in the accurate preparation of the the prop example subscribe that multiplies that number by 50 percent the actual difference the amount between the active rate and the retiree rate so essentially a subcontracting the survey and then your 13w5ub9 e subtracting did differ that he Municipal Court by 50 percent so but the charter didnt determine the rate relative activity it is a policy determination that the Health Service board and consultation with the troyer the cost is negotiated by h ss with the insurer and deficit into 3 tiers when we set the tiers one plus two and the relationship is called rate relative activity the insurance. Excuse me. Where did if term come from. Its an industry term. Not in that industry in Health Services ive never heard it. Weve never discussed this before. Thats right. The ratio of one or one to the bar. I know what youre saying. We call it ratio. We call it plan design. It is the rate theyre like go ahead. So in the Insurance Industry and the 10 county with the 10 county average within calpers the data is in your packet a retiree only is one a retiree plus 2 is two and retiree plus 2 or more is 3 so the ratio 2 to 203 for example, the only premium was one thousand dollars plus one independent is 3