CITY OF
LONG
Department of Human Resources
411 West Ocean Boulevard, 1 o"' Floor Long Beach, CA 90802 (562) 570-6621
August 23, 2022
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
R-27
Authorize the City Manager, or designee, to execute contract amendments with Anthem Blue Cross, the City of Long Beach's (City) third-party administrator for the Preferred Provider Organization (PPO) group health plan, the Health Maintenance Organization (HMO) group health plan, and Medicare Supplement plan; UnitedHealthcare for the City's Medicare Advantage PPO Plan; Scan Health Plan for the Medicare Advantage Plan; and Vision Service Plan (VSP) for the vision plan; CVS Caremark as the Prescription Benefit Manager (PBM) for the Prescription Drug Plan for the PPO and HMO plans; Delta Dental for the fee-for-service dental plan (DPPO) and Delta Dental USA (HMO plan); The Standard Insurance Company for employer-paid life insurance, voluntary life insurance, and short- and long-term disability insurance; Union Mutual Life Insurance Company (UNUM), through Larry Lambert & Associates Insurance Services, for long-term care insurance; and Carrum Health as a third-party administrator for eligible surgeries to be performed through a Centers of Excellence facility; and, any subsequent amendments necessary to maintain current benefit levels and remain in compliance with State and federal laws on all plans, at the discretion of the City Manager. (Citywide)
DISCUSSION
City Council authorization is requested for approval of the calendar year 2023 Benefits Package rates and employee contribution amounts for active employees and retirees, effective January 1, 2023, through December 31, 2023.
The Human Resources Department administers the City's employee benefits healthcare program, including group health plans for HMO, PPO, dental, vision, life insurance, long- and short-term disability, long-term care, and flexible spending plans (health and dependent care).
The program covers approximately 4,300 active employees, 2,000 retirees, and 7,000 dependents. In accordance with the Memoranda of Understanding (MOU) between the City and its employee organizations, the Health Insurance Advisory Committee (HIAC), which is comprised of representatives from each of the employee associations, annually reviews the status of the plan costs and makes recommendations to the City Manager on plan changes, benefit levels, and addition and deletion of plans.
Human Resources Department staff, members of the HIAC, and Alliant Insurance Services (Alliant), the City's benefits consultant, held a series of meetings from January 2022 through July 2022 to review plan utilization data presented by plan providers, trends, legislative impact,
HONORABLE MAYOR AND CITY COUNCIL
August 23, 2022
and plan design to finalize recommendations for the calendar year 2023 Employee Benefits Program
Alliant in conjunction with an independent Actuary, Turner Consulting Actuarial LLC, conducts an actuarial analysis of the proposed benefit plan costs and negotiates with each provider on behalf of the City to obtain the most competitive rates. Alliant presented the results of their actuarial analysis and negotiation efforts to the HIAC at the July 2022 meeting. It is noted that the claims experience on the Anthem HMO plan has been increasing year after year since 2019, with 2022 being the highest reported year since the contract's inception. Even with this in mind, the City's core plans continue to out-perform industry trends. The Anthem Blue Cross health plans have received only modest employee contribution increases, while the dental (PPO) and vision plans received rate passes for the calendar year 2023. The City remains dedicated to provide added value and innovative resources that are designed to contribute towards the City's efforts to mitigate future claims costs, promote healthier outcomes, and improve overall employee satisfaction through its comprehensive benefits package.
The following chart summarizes the City's benefit contracts, applicable industry trends, and final renewal impact for Plan Year 2023. Further, City Council approval is requested to authorize the City Manager to execute contracts and/or amendments with various employee benefit providers for the 2023 plan year employee benefits package, as reflected in the recommendations from the HIAC (Attachment A).
Plan
-- -
Anthem Blue Cross PPO
Self-funded medical & Rx
Anthem Blue Cross HMO
Fully insured medical &
Self-funded Rx
United HealthCare - Medicare Advantage
Fully insured
SCAN Health - HMO Medicare Advantage
Fully insured
Delta Dental DPPO - Self-funded
DeltaCare USA DHMO - Fullyinsured
Vision Service Plan (VSP) Vision -
Self-funded
The Standard - Fully insured
Basic Life/AD&D Insurance
Voluntary Life Insurance
Short and Long-term Disability
1 Industry
Trend
7.3%
4.8%
4.8%
3.1%
3.0%
1.7%
1 Varies by
Claim .
Experience i
Service Provider Contract Renewal and Rates
ANTHEM BLUE CROSS
Final COLB Renewal
4.3% increase
Inclusive of 1 Year
Pharmacy Benefit_ContractExtension
5.97% increase
Inclusive of 1 Year
Pharmacy Benefit Contract Extension
2.5% increase
0.00%
0.00%
0.00%
0.00%
0.00%
The overall impact of the calendar year 2023 renewals for the Anthem PPO and HMO (including CVS Caremark carve-out for prescription drugs) plans resulted in 4.3 percent and 5.97 percent
HONORABLE MAYOR AND CITY COUNCIL
August 23, 2022
rate increases, respectively. The City's final renewal rates are lower than the industry standard trend and the City's carrier partners book of business trends. As stated previously, claims experience on the Anthem HMO plan has been increasing year after year since 2019, resulting in an initial medical renewal increase of 14.3 percent. Final and favorable renewal results are attributed by further negotiation efforts led by Alliant Insurance Services. Renewal figures include a consideration of the impact COVID-19 had on the City's claim activity and its ongoing uncertainty.
Additionally, increases to employee contributions are limited by maximum(s) that have been previously negotiated in MOU agreements for single, two-party, and family coverage for active employees. For 2023, the rate increases have no impact on the MOU cap, resulting in no carryover amounts for the 2024 plan year.
DELTA DENTAL OF CALIFORNIA AND VISION SERVICE PLAN (VSP) Rates and employee contributions for the Dental PPO (Delta Dental DPO), and Vision coverage (Vision Service Plan (VSP)) plans reflect no increase for the calendar year 2023. Rates for the Dental HMO (DeltaCare USA) plan also remain unchanged for the calendar year 2023.
VISION SERVICE PLAN (VSP) ENHANCEMENTS
It is recommended that the City Council approve the following enhancements for employees and their eligible dependents covered on the VSP vision plan:
• The frame allowance value of $90 will increase to $130 • Eye exam frequency will become available on a calendar year basis vs. a rolling 12- month schedule
The above-recommended changes will be effective January 1, 2023.
RETIREE HEAL TH PLANS
It is also recommended that the City Council approve the proposed calendar year 2023 rates (Attachment 8) for the retiree Medicare health plans, which include:
• A 2.50 percent increase for the UHC Medicare PPO Advantage Plan rates; • No change for the SCAN Medicare Advantage Plan; and,
• An increase of 4.3 percent for the Anthem Medicare Supplement Plan rates.
On July 25, 2022, the HIAC voted to adopt the employee benefit plan changes outlined in Attachment B, which is submitted to the City Council for approval.
This matter was reviewed by Assistant City Attorney Gary J. Anderson on August 4, 2022 and by Budget Management Officer Nader Kaamoush on August 8, 2022.
TIMING CONSIDERATIONS
Human Resources is planning to utilize the months of September and October to communicate open enrollment changes through various efforts to employees, who will update their health plan options online. Therefore, City Council action is requested on August 23, 2022, for
HONORABLE MAYOR AND CITY COUNCIL
August 23, 2022
adequate open enrollment planning. Communication pieces explaining benefits options will be distributed prior to and during the Open Enrollment period.
FISCAL IMPACT
The costs for the health benefit plans are paid from the City's Employee Benefits Fund Group in the Citywide Activities Department. Funding to support these costs are recouped through charges to departments and funds as a personnel-related overhead rate. It is expected that there will be sufficient appropriation to support these costs based on these renewal rates which have been included in the Proposed Fiscal Year 2023 Budget. City staff will monitor actual costs throughout the year, and any adjustments needed to the interdepartmental charges will be evaluated based on actual experience and incorporated into future budget development processes. This recommendation has no staffing impact beyond the budgeted scope of duties and is consistent with existing City Council priorities. There is no fiscal or local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully submitted,
~~·
JOE AMBROSINI
HUMAN RESOURCES DIRECTOR
ATTACHMENTS-A-RECOMMENDATIONS FROM HIAC
8- PROPOSED 2023 RATES AND BENEFIT PLAN CHANGES
APPROVED:
THOMAS B. MODICA
CITY MANAGER
Attachment A
CITY OF
LONG Memorandum
Date: August 1, 2022
To: Thomas B. Modica, City Manager
From: City Employees' Health Insurance Advisory Committee Subject: RECOMMENDATIONS FOR THE 2023 CITY EMPLOYEES' BENEFIT PLAN After a review of the comprehensive actuarial analyses and renewal negotiations performed by Alliant Insurance Services, the City's Benefits Consultant, the Health Insurance Advisory Committee (HIAC) recommends the contribution rates and payroll deductions for plan year 2023 as shown in Exhibits 1 and 2 for the 2023 Benefits Rates Package, effective January 1, 2023, to December 31, 2023, for active employees and retirees.
Alliant in conjunction with an independent Actuary, Turner Consulting Actuarial LLC., conducts an actuarial analysis of the proposed benefit plan costs and negotiates with each provider on behalf of the City to obtain the most competitive rates. Alliant presented the results of their actuarial analysis and negotiation efforts to the HIAC at the July 25, 2022, meeting.
It is noted that the claims experience on the Anthem HMO plan has been increasing year after year since 2019, with 2022 being the highest reported year since the contract's inception. Even with this in mind, the City's core plans continue to out-perform industry trends. The Anthem Blue Cross health plans have received only modest employee contribution increases, while the dental (PPO) and vision plans received rate passes for the calendar year 2023. The City has been able to maintain added value and innovative resources that are designed to contribute towards the City's efforts to mitigate future claims costs, promote healthier outcomes, and improves overall employee satisfaction through its comprehensive benefits package.
The overall impact of the calendar year 2023 renewals for the Anthem PPO and HMO (includes CVS Caremark carve-out for prescription drugs) plans resulted in 4.3% and 5.97% rate increases, respectively. The City's final renewal rates are lower than the industry standard trend and the City's carrier partners book of business trends. As stated previously, claims experience on the Anthem HMO plan has been increasing year after year since 2019, resulting in an initial medical renewal increase at 14.3%. Final and favorable renewal results are attributed by further negotiation efforts led by Alliant Insurance Services. Renewal figures include a consideration of the impact COVID-19 had on the City's claim activity and its ongoing uncertainty.
Additionally, increases to employee contributions are limited by maximum(s) that have been previously negotiated in MOU agreements for single, two-party, and family coverage for active employees. For 2023, the rate increases have no impact on the MOU cap, resulting in no carryover amounts for the 2024 plan year.
RECOMMENDATIONS FOR THE 2022 CITY EMPLOYEES' BENEFIT PACKAGE August 1, 2022
Page2
Vision Coverage Enhancements for 2023
The HIAC recommends the following enhancements for employees and their eligible dependents covered on the Vision Service Plan (VSP) vision plan:
• Increase of the eyewear frame allowance value from $90 to $130 • Eye exam frequency will become available on a calendar year basis vs. a rolling 12- months schedule
Additional Information
Except for the benefits enhancement recommendation, existing plan design, including copays, deductibles, coinsurance(s) for core (health, pharmacy, dental, vision) and ancillary (life and accidental dismemberment, and disability (short and long-term)) plans are preserved for the 2023 plan year.
The Committee requests endorsement of this report and its recommendations by the City Manager and subsequent approval by the City Council (see Attachment x).
JA:MH
Attachments - Exhibit 1 and 2; Health Insurance Advisory Committee E-Signature Page (Attachment B) R:I.Administration/CITY COUNCIL LETTERS/2022/2023 Benefits Package/HIAC Memo to City Manager.docx cc:
Linda F. Tatum, Assistant City Manager
CITY OF
LONG
HEALTH INSURANCE ADVISORY COMMITTEE 2023 BENEFITS PLANS RECOMMENDATIONS o Implement the proposed 2023 benefits package for Actives and Retirees, which includes increases to the employee and retiree contribution amounts.
Vision Service Plan (VSP) Enhancements:
o Increase the frame allowance from $90 to $130.
o Frequency of eye exams will be available on a calendar year basis vs. a rolling 12-month schedule.
Association of Long Beach Employees (ALBE) International Association of Machinists & Aerospace Works (1AM) Name: Name· Ophelia Alvarado
Signature: oPh-ua-ALvncMe:
Sign/Oate: :t~,, .. ',_,,•;·_._'.',''":,~
Long Beach Association of Confidential Employees (ACE) Long Beach Association of Engineering Employees (AEE) Name: Fiahna Cabana Name: Jason Rodriguez
/f Signature: 1\ ··· Sign/Date' Ck~ L-; /
II - '-.../ \........--"
Long Beach City Attorneys' Association (CAA) Long Beach City P~6secutors' Association Name: Cathleen Sanchez Name: Laura Reimer
Signature: Cathleen Sanohf}_?. Signature: .. ~,,-;:; :: I 'I! " " ~ •! I " ' ' \: J' I l' ;,,1 ricr, ''.' '/ 1•-, •1 - j"•('.
Long Beach Firefighters Association (FFA) Long Beach Lifeguard Association (LGA) Name: Kevin Scott Name: Christopher Gonzales
Signature: /~~~ Sign/Date. ~ 1>/~/1-t_
Long Beach Management Association Long Beach Police Officers Association (POA) Name: Meghan Weeks Name Richard Chambers
Signature: t!t!g.hqn ~'-'~ts Signature: ~
1,\, •1.,1 ·:, •• J :.'• .1:.:1/ ,, co· F"'('" ::"1-n·-b;,-: /~.""g,! :2.cz.: ~t :}. PCT Long Beach Supervisors Employees Association Department of Human Resources Name: Name: Joe Ambrosini
Signature: 7te A1Hb?tl!ill
Sign/Date. >:~ .:.,~-,J~,::'; ·!1,,g-..; :::::.:.'3 l5F(~ 2023 Active Employee Contributions
2022 2023
2022 Single Two-Party Family 2023 Single Two-Party
Plan
I Monthly Monthly Monthly Monthly Plan Monthly Monthly Monthly Combinations Rates Payroll Payroll Payroll Combinations Rates Payroll Payroll Deduction Deduction Deduction Deduction Deduction
Single $621.12 .§Lngle $65029
Anthem Prudent Buyer PPO ITwoParty_ _$1,303.65 $154.00 $207.00 $245.00 Anthem Prudent Buyer PPO TwoPartv ..11,364.87 $163.00 $225.00 {Family ___ ..11,738.18 Fa.!TI!!Y_ ..11,819.80
Single $47.79 .filng_le ___ ___j£JL
Delta Dental DPPO ITwoPartv $100.4.L_ $10.00 $13.00 $18.00 Delta Dental DPPO TwoPartv $100.42 I $10.00 I $13.00 I 76 Familv $133.76 f
§. Single $5.66
VSPVision [Two Party l $12.04 $0.00 $0.00 $0.00 VSPVision TwoPartv $12.041 $0.00 I $0.00 I Family $15.97 Family $15.97
Life • City Paid I Per Emplo',lee I $2.41 Life - City Paid PerEmplo',lee $2.41 II
$65029
Anthem Prudent Buyer PPO !Two Partv $1,30.M§_ $154.00 $207.00 $245.00 Anthem Prudent Buyer PPO TwoPartv J1,364.87 j $163.00 I $225.00 I Family $1 738.18 FamilY ..11,819.80
!Single $20.69 Single $20.69
Delta Dental DeltaCare DHMO !Two Partv ~- $0.00 $0.00 $0.00 Delta Dental DeltaCare DHMO TwoPartv -$34.13 I $0.00 I $0.00 I Family $50.86 Family ___ ___$§Q&§_
§_[11gle $5.66 Single $5.66
VSPVision I'!'oPaJ:!y $12.04 $0.00 $0.00 $0.00 VSPVision Lwg__Em\y __ _ $j_2.04 I $0.00 I $0.00 I FamilY ___$15.97 FamilY ___$15.97
Life - City Paid Per Emolovee $2.41 - Life -City paid_ ----- )'er:E:mplgyee _ ___ $2.41 • II UrAll!t I
$714.98 =I I Anthem Premier HMO !Two Party ,-~&00£4 $203.00 $260.00 I $297.00 !Anthem Premier HMO !Two-Party L$1.57J:ILI $213.00 I $281.00 I Fami)y ____ $_g,001.23
.filngle $47.79
Delta Dental DPPO ITwo~ $100.42 I $10.00 I $13.00 I $18.00 I Delta Dental DPPO ITwoPa[!y I $100.42 $10.00 $13.00 6 VSPVision !TwoPartv l $12.04 l $0.00
I
$0.00
I
$0.00 jVSPVision [Two Party __ l_$12.04 $0.00 $0.00
IFaml!Y I $15.97 I Family___ $15.97
Life - Citv Paid I Per Emolovee $2.41 I
II II
l.fil~g1e_ $714.98 .fil_ng_le ___ $748.56
Anthem Premier HMO IIwo Par!'/ __ J1,500.64 $203.00 $260.00 $297.00 Anthem Premier HMO Two Pa[!y _11,571.11 I $213.00 I $281.00 I Family _ __$2001.23 FamilY $2,09521
Sing!L_ $20.69 Sing_le ___ $20.69 ----Delta Dental DeltaCare DHMO !Two Party__ $34.13 $0.00 $0.00 $0.00 Delta Dental DeltaCare DHMO TwoPa[!y $34.13 -I $0.00 I $0.00 I
50.86 Familv $50.86
.filngle $5.66 J
$0.00 $0.00 $0.00 VSPVision TwoPa[!y __ _ $12.04 I $0.00 I $0.00 I 7_L -------- --- - ·- - -- --···- -- Family $15.97
Paid Per Emolovee $2.41
II :til'illU I
© 2022 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 Family
Monthly
Payroll
Deduction
$269.00
$18.00
$0.00
$269.00
$0.00
$0.00
$325.00
$18.00
$0.00
$325.00
$0.00
$0.00
''
Attachment B
HIAC Slide
20 Single Retiree
Retiree with 1 Dependent
Retiree with 2 or More Dependents
Medi.cal :-Arithem. Blue Cr<>ss Medicare.Supplement (Must h~ve Medicare F'arts_A '1. E3) One Medicare (Single)
One Medicare & One Anthem PPO Non-Medicare Dependent
One Medicare & Two/More Anthem PPO Non-Medicare Dependents Two Medicare (Retiree & Spouse)
Two Medicare & One Anthem PPO Non-Medicare Dependent
Two Medicare & Two/More Anthem PPO Non-Medicare Dependents Medical -Anthem Blue Cross Premier HMO- CA ONLY
,~v ~- -v" "~ - ~-•~ -~v, ~ • ,
Single Retiree
Retiree with 1 Dependent
Retiree with 2 or More Dependents
Medical -Anthem Blue Cross Classic HMO-CA ONLY
Single Retiree
Retiree with 1 Dependent
Retiree .with 2 or More Dependents
. . 1\11.edical :- llHC<lr<>up .M.ecliCc1r.e_Adva11tag.f!=(M 1Jst. ha11e f\ll_e~}Cc1.rE!_t>arti;_~ .. &..B) One Medicare (Single)
Two Medicare (Retiree & Spouse)
One Medicare & One Anthem Premier HMO Non-Medicare Dependent Two Medicare & One Anthem Premier HMO Non-Medicare Dependent One Medicare & Two Anthem Premier HMO Non-Medicare Dependents One Medicare & Three/More Anthem Premier HMO Non-Medicare Dependents One Medicare & One Anthem Classic HMO Non-Med.icare Dependent Two Medicare & One Anthem Classic HMO Non-Medicare Dependent One Medicare & Two Anthem Classic HMO Non-Medicare Dependents One Med.icare & Three/More Anthem Classic HMO Non-Medicare Dependents $1,063.77 $1,113.72
$1,329.73 $1,392.17
$1,397.59 $1,463.22
$716.98 $747.87
$1,329.73 $1,392.17
$1,397.59 $1,463.22
$1,433.60 $1,495.37
$2,116.13 $2,209.95
$2,550.66 $2,664.88
$851.14 $891.11
$1,532.06 $1,604.01
$1,664.70 $1,742.87
$696.28 $728.98
$939.99 $984.13
$1,031.05 $1,079.47
$469.46 $481.20
$938.92 $962.40
$1,320.60 $1,372.31
$1,790.06 $1,853.51
$2,001.52 $2,085.21
$2,134.16 $2,224.07
$1,165.74 $1,210.18
$1,635.20 $1,691.38
$1,409.45 $1,465.33
$1,500.51 $1,560.67
© 2022 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 21 2023 Retiree Contributions Continued... H1Ac slide
Medical- SCAN Medicare advan.!iige.::~A Only(IIJlusthave Medicare ~~r!~~~~L. One Medicare (Single)
Two Medicare (Retiree & Spouse)
One Medicare & One Anthem Premier HMO Non-Medicare Dependent Two Medicare & One Anthem Premier HMO Non-Medicare Dependent One Medicare & Two Anthem Premier HMO Non-Medicare Dependents One Medicare & Three/More Anthem Premier HMO Non-Medicare Dependents One Medicare & One Anthem Classic HMO Non-Medicare Dependent Two Medicare & One Anthem Classic HMO Non-Medicare Dependent One Medicare & Two Anthem Classic HMO Non-Medicare Dependents One Medicare & Three/More Anthem Classic HMO Non-Medicare Dependents Dental- Delta Dental DPO
Retiree with or without Dependent(s).
Dental - Delta Dental DHMO
Retiree with or without Dependent(s).
Vision - VSP Vision
Retiree with or without Dependent(s)
Vision - VSP Vision FuUy-insured Voluntary 65+ Only
65+ Retiree Only
65+ Retiree with One Dependent
65+ Retiree with One or More Dependents
2022 2023
$385.75 $385.75
$771.50 $771.50
$1,236.89 $1,276.86
$1,622.64 $1,662.61
$1,917.81 $1,989.76
$2,050.45 $2,128.62
$1,082.03 $1,114.73
$1,467.78 $1,500.48
$1,325.74 $1,369.88
$1,416.80 $1,465.22
$105.03 $105.03
$38.67 $38.67
$12.59 $12.59
$10.58 $10.58
$21.17 $21.17
$24.87 $24.87
© 2022 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 22