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HomeMy WebLinkAboutResolution 2008 (45) t RESOLUTION AMENDING SELF - INSURED EMPLOYEE MEDICAL PLAN POLICY Resolution No. 14 6 (c O F) St. Croix County, Wisconsin WHEREAS, the St. Croix County Self - Insured Employee Medical Plan Premium and Funding Policy became effective on January 18, 2002; and WHEREAS, it is necessary to amend the policy to include the addition of the Health Reimbursement Account (HRA) Plan administrative costs; and WHEREAS, when the policy was adopted in 2002, the health care support service, a 24 hour a day call line service, was not included; and WHEREAS, some clarifications and housekeeping changes were necessary. THEREFORE, be it resolved by the St. Croix County Board of Supervisors that the St. Croix County Self - Insured Employee Medical Plan Premium and Funding Policy be amended as attached. Offered by the Finance Committee YES NO ABSTAIN ABSENT SUPERVISOR SIGNATURE A ® ❑ ❑ ❑ Daryl Standafer ❑ ❑ ❑ ® Esther Wentz Sharon Norton- // 411,„ ® ❑ ❑ ❑ Bauman �/ i !� � At /A _ i> / ® C ❑ ❑ Clarence Malick anormyffs ® ❑ ❑ ❑ David Peterson ����� = J ,, This Resolution was ado�ppted by the St. Croix County Board Reviewed as to form on ion ' g 0 of Supervisors on Dec 16 .2.O38` Gre Ti rman Cor oration Counsel Cindy am b n Clerk p y C p e, County C erk ST. CROIX COUNTY SELF - INSURED EMPLOYEE MEDICAL PLAN Premium and Funding Policy Purpose The purpose of this policy is to establish rulesguidclinca for funding and setting the premium of the Employee Medical Plan, a partially self - insured health and medical benefits plan offered to employees of St. Croix County, their spouses and their dependents. This policy is intended to create consistency and predictability in the administration of the Employee Medical Plan for the County Board of Supervisors and employees by: (1) identifying the cost components used to establish the premium; (2) minimizing funding spikes and budgeting volatility; (3) utilizing a segregated fund or funds; and (4) maintaining the Employee Medical Plan's solvency. II. Glossary Actuary — A specialist in the mathematics of risk, especially as it relates to insurance calculations such as expectancy, premiums, etc. Administration Fee — The amount paidthc County pays to a Third Party Administrator (TPA) to administer this plan and the Health Reimbursement Account (HRA) Plan. Aggregate Stop Loss — Insurance which pays claims after the total of all claims exceeds a certain amount per year. The total of all claims is often referred to as the aggregate attachment point. The insurance coverage is often expressed as a percentage relating to ExpectedAnticipated Claims. For example, Aggregate Stop Loss providing coverage at 125% of ExpectedAnticipatcd Claims means the policy will pay all claims after total claims paid by the County exceed 125% of ExpectedAnticipatcd Claims. will pay in a calendar year. This amount is determined by an actuary. Contingent Costs — Conversion Costs, Lasered Claims, the cost of a claims audit, and/or the cost of consideringation of other providers. Conversion Cost — A cost that maywould arise if a claims were incurred but not reported or paid in the event the County converted from the Employee Medical Plan to a fully insured_ plan; or the cost of an Administration Fee if the County contracted with a different Third Party Administrator. The period for which funding is provided for the cost — commonly called the "run -out" period — is usually three months but may cover six months or more. January, 2002 Revised , 2008 Drug Claims Processing Fee The cost of participating in a prescription drug plan and processing prescription drug claims. Employee Medical Plan — A partially Self - insured Health Plan for employees under which the risk for the cost of the benefits provided is partially borne by St. Croix County. The plan and benefits are described in the Summary Plan Description. Expected Claims — A prediction of the dollar amount of claims the County will have in a calendar year. Also known as "Anticipated Claims." This amount is determined by an Actuary. Gap Claims — The amount of claims, if any, between the amount of ExpectedAnticipatcd Claims and the amount at which the Aggregate Stop Loss starts paying. Health Reimbursement Account (HRA) Plan — A program whereby an account is set up and funded by the County for each employee to use to pay medical expenses pursuant to Internal Revenue Code §105. The funding of the accounts is not a component of the Premium. The administration fee for the HRA Plan is a component of the Premium. Health Care Support Service — A service that provides assistance to persons in making health care decisions and lowers the cost of health care, such as a 24- hour -a -day call line that provides a nurse to answer questions or provide advice. Lasered Claim — A known situation which has not yet become an incurred claim which a-Stop Loss policy will not cover. This situation could arise if the County purchases a new Stop Loss policy from a different insurer, or otherwise changes coverage. Maximum Claims Cost — The total amount of a claim or claims that the County is responsible to payfor before Stop Loss starts to pay. Premium — The amount paid for the Employee Medical Plan. It is expressed as an amount per month per Employee Health Plan participant. The Premium is comprised of contributions made by the County and employees, and retirees. Reserve — An amount equal to 25% of ExpectedAnticipated Claims. This amount is reserved for and anticipated to cover Contingent Costs, Conversion Costs, and Lasered Claims, should any of these costs arise. The 25% represent a 3 -month run -out period. Self - insured Fund — One or moreA funds specifically dedicated to the operation of the Employee Medical Plan. All receipts, disbursements, funding, and accounting regarding the Employee Medical Plan is done through this fund. More January, 2002 Revised , 2008 than one fund would be required if the County established more than one group of insurable employees. Self - insured Health Plan — A group health plan under which the risk for the cost of the benefits provided is wholly or partially borne by the employer. Specific Stop Loss — Insurance which pays the the claims of any individual of individuals after the claim exceeds a specified amount. Stop Loss — Insurance which pays a claim or claims after a specified amount is reached. The insurance may be Specific Stop Loss or Aggregate Stop Loss. The County utilizes both Specific Stop Loss and Aggregate Stop Loss policies. Third Party Administrator (TPA) — An entity which administers the Employee Medical Plan and /or the HRA Plan and processes claims on behalf of theSt. Croix County, provides a network of health care providers, pre- certifies medical procedures, and provides other administrative services. III. Premium A. Components. The Premium for the Employee MedicalH lth Plan shall consist of the following components: 1. Maximum Claims Cost. 2. Administration Fee. 3. Health Care Support Service fee ! . _ • • - = - • : - 4. Specific Stop Loss cost. 5. Aggregate Stop Loss cost. 6. Reserve amount. B. Computation. Annually, as part of the County budget process, the total amount of each Premium component shall be determined. Those amounts are then added together. The sum is divided by the number of Employee Medical Plan participants. That number is then divided by twelve to arrive at the monthly Premium. IV. Funding the Employee Medical Plan 1. The Employee Medical Plan shall be funded out of the Premium. 2. Expected ^�d Claims is an estimate. Actual claims may be less than or more than ExpectedAnticipatcd Claims in any year. Aggregate Stop Loss does not start paying claims until total claims exceed a certain amount in excess of ExpectedAnticipatcd Claims according to the terms of the insurance policy (presently the amount is 125% of Expecte Claims). Since January, 2002 Revised , 2008 the Premium includes the amount required to cover Gap Claims and Reserve costs, the Employee Medical Plan should always be funded adequately. However, there is a possibility that in any given year the Reserve may not be adequate. The shortfall would have to be added to the Premium in the subsequent year. 3. If actual claims are less than Maximum Claims and/or costs paid out of the Reserve are less than the Reserve amount in any year, there will be a positive balance left in the Self - insured Fund at the end of the year (determined by an audit completed in July of the following year). This balance will always be applied to the next Premium to be determined after the audit is completed; it cannot be used for other County expenses or costs. 4. Any interest accruing on amounts representing the Self - insured Fund will be applied to the Self - insured Fund. V. Contingent Costs 1. Periodically, a claims audit of the Employee Medical Plan may be advisable. Additionally, it may be desirable to consider other providers through "comparison shopping." The cost of retaining consultants to perform services for the County relating to audits or comparing providers may be paid out of the Self - insured Fund. 2. If the County changes TPAs or converts from a partially Self - insured Health Plan to a fully insured plan, Conversion Costs and Lasered Claims may occur. These costs may be paid out of the Self - insured Fund. VI. Effective Date This policy takes effect January 18, 2002 and remains in effect until amended or repealed by the Board of Supervisors. Revised 2008. January, 2002 Revised , 2008