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Board of Aldermen 3-31-2020 Page 44

President Wilshire
Anyone else? Could the Clerk please read the motion back, | think you have motion.

Susan Lovering, City Clerk

| do | believe. There is an amended motion to suspend all public comment and ask that IT set up the
criteria for telephonic audio for if the public cannot hear the meetings to be able to call in and let all
communications received be added to the Agenda for acceptance and placed on file. Is that correct
Alderman Dowd?
Alderman Dowd
Sounds good to me.
President Wilshire
Any further comment or any further discussion? Would the Clerk please call the roll?
A viva voce roll call was taken to adjourn the Board of Aldermen meeting which resulted as follows:
Yea: Alderman O’Brien, Alderman Klee, Alderwoman Kelly, Alderman Dowd,

Alderman Caron, Alderman Clemons, Alderman Lopez,

Alderwoman Lu, Alderman Jette, Alderman Schmidt, Alderman Laws,

Alderman Cleaver, Alderman Wilshire 13
Nay: Alderman Tencza, Alderman Harriott-Gathright 2
MOTION CARRIED
ADJOURNMENT

MOTION BY ALDERMAN O’BRIEN THAT THE MARCH 31, 2020, SPECIAL MEETING OF THE BOARD
OF ALDERMEN BE ADJOURNED BY ROLL CALL

A viva voce roll call was taken to adjourn the Board of Aldermen meeting which resulted as follows:
Yea: Alderman O’Brien, Alderman Klee, Alderwoman Kelly, Alderman Dowd,

Alderman Caron, Alderman Clemons, Alderman Lopez, Alderman Tencza,

Alderwoman Lu, Alderman Jette, Alderman Schmidt, Alderman Laws,

Alderman Cleaver, Alderman Harriott-Gathright, Alderman Wilshire 15
Nay: 0
MOTION CARRIED

The meeting was declared adjourned at 10:05 p.m.

Attest: Susan K. Lovering, City Clerk

FY2021 Proposed Health
Care Changes
Unaffiliated Employees

March 31, 2020
Board of Aldermen Special Meeting
Proposed Ordinance - O-20-011

Current Challenges:

Fiscal 2021 proposed budget health care costs are up 3 million or 8.6%, after an increase of 3.3
million or 11% in Fiscal 2020. The chart below includes all costs including Dental, Administrative
costs & fees, Stop loss insurance, Health claims, and Wellness activities.

. my
FY14-FY¥21
City of Nashua city of Nashua Health Care Expenses
Health Care Expenses 355,000,000
Actual Spend
FY14 535,725,108
FY15 $38,365,299 350,000,000
FY16 $41,195,465
FWw1? 542, 566,175
FY18 544,255,614 $45,000,000
Fw19 $47,484,380
FY20 $48,780,708] *estimate
FY21 552,975,849]*estimate
$40,000,000
Nobe: FY14-F¥19 are actual costs, FY20 costs
are not finalized. budgeted estimate onhy. FY21 is |
an estimate provided for FY21 budget based on
trends. $35,000,000 |
$30,000,000 — — — = — — — — —_
L FY14 FY15 FY¥16 FY1?7 FY13 F¥Y19 FY¥20 FY21
ual

Health Care Claims remain the largest challenge.

FY19 Claims Total FY19 Claims by Type
35,000,000

Type of Plan Total Claims Avg.Claims/Employee | 30,000,000
HDHP 6,119,217 15,414 95 000000 -
HMO 33,035,013 20,045; °°
POS 2,192,436 26,737 | 20,000,000
Grand Total 41,346,666 15,439 15,000,000

# of Employees by Flan 10,000,000
HOHP 397 5,000,000 {+
HMO 1648 0
POS 82 HDHP HMO POS
Grand Total 2127

Difference in AVG Clalms HMOVSHDHP $4,632 Estimated Savings with 1/2 HMO Population Changes to HDHP © $3,816,662.56

(per employee) (Based on Avg Claims 2019)

FY20 Paid th ru March 24th Total Claims Paid to Date
30,000,000
eof Plan Total Claims Aveg.Claims/Employee
NP é /Employe 25,000,000
HOHP 6,965,180 10,675
HMO 21,233,021 14,735 | »9 090 000
POS 1,773,657 22,171
Grand Total 25,571,858 13,845 | 15,000,000
# of Employees by Plan 10,000,000
HOHP 615
HMO 1441 2,000,000 -
POS 80
0 »
Grand Total 2136 ADHP EMO P05
* 3-4 Months of Claims still Pending
Ditference In AVG Claims HMO V5 HDHP § 4,055.83 Estimated Savings with 1/2 HMO Population ChangestoHDHP = = § 2,923,079.27

(Based on Avg Claims 2019)

Estimate Fall 2019

City of Nashua
H.S.A. vs HMO Claims

$25,000
$20,326 520,817
$18,239 $18,578 1,695 1,527
. 1,784 Enrolled Enrolled
$20,010 ae Enrolled "
¥ Te _Enrothend = we
$17,768
$15,009 ———— ae 330 aa
Enrolled Enrolled 14,763 $14,389
424 a
$10, Enrolled Enrolled
$5,000
$0 :
FYi7 F¥1e FY19 FYTD20
—H— PEPY HSA CLAIM COST -afh= PEPPY TRADITIONAL CLAIM COST
Notes:

1. HSA Claim Costs include the City's contribution to the employees’ HSA Funes.

2. Traditional Claim Costs have increased 24% since FY17, or 7.493 annually fon average).
3. HSA Claim Costs have decreased 21% since FY17, or 7.6% annually (on average}.

4. The expected (actuarial) difference between the Traditional Plan and the HSA pian is 15%. The current actual claim differential is F236

Why does H.S.A. save $

HMO (Health Maintenance Organization)
HMO members are unaware of their claims cost. $20 copay for most services.

H.S.A. (Consumer Driven High Deductible Health Plan with Health Savings
Account)

Patients receive EOBs. Awareness of claims cost fosters natural interest in
consumer involvement.

H.S.A. is a tax-free savings plan

The balance carries over from one year to the next. It is portable at retirement
or resignation. In addition to health claims, tax free funds may be uses to pay
other qualified medical expenses such as dentistry, orthodontics, and
prescription eyewear.

SMART SHOPPER RESULTS as of February 2020

ro 206

Activation Activation Activated Houscholds
er Lal sturse lone) as

mabe 141

Activated Activated Shop

Shopping Rate eT as HERPES Say pat

Fd = bra) a bra) wi i

Shop Conwersion § Shop Conversion Households Total
| a steals Receiving Incentive #incentives

$27,786 $3,100 $24,686

Total Gross Savings Total Incentives($) Total Claims Savings

Incentive and Savings Summary

Timeframe Gross Savings Incentives Paid($) Claims Savings Incentives Paid(#)
$4,201 $3,576
$6,852 $7,852
$27,786 $24,686

Proposed Changes to the HMO:

Effective July 1, 2020
° $20 co-pay increase to $25

° $250 individual / $500 2-person or family inpatient / outpatient
deductible increase to $1500 / $3000.

° Pharmacy copays increase from $5/$15/$35 ($5/$30/$70 mail
order) to $10/$30/$50 ($20/$60/$100) mail order.

City contributions to the HDHP w/H.S.A. are now memorialized in the
Policy:

The City’s contribution to Health Savings Accounts remain at $1,500
individual / $3,000 2-person or family. The deductibles in the High

Deductible Health Plan with Health Savings Account (HDHP w/ H.S.A.)
remain at $2,000 individual / $4,000 2-person or family.

Effective July 1, 2020, the City H.S.A. contribution will be distributed in 2
installments, one on or about July 1 and one on or about October 1,
provided however that if an employee is required to pay more towards his
/ her deductible than the initial 50% contribution, upon presentation of

suitable documentation, the City will contribute the remaining 50% before
October 1.