December 8, 2005

 

The Board of County Commissioners of Brevard County, Florida, met in Special Workshop session on December 8, 2005, at 1:02 p.m. in the Government Center Florida Room, Building C, 2725 Judge Fran Jamieson Way, Viera, Florida. Present were: Vice Chair Susan Carlson, Commissioners Truman Scarborough and Ron Pritchard, County Manager Peggy Busacca, and County Attorney Scott Knox. Absent were: *Chair Helen Voltz and Commissioner Jackie Colon.

REPORT, RE: TRAFFIC ACCIDENT IN MIMS

Commissioner Scarborough advised there was a tragic accident in Mims this morning and a 13-year old boy has been lost and a 9-year old girl and 11-year old boy are in critical condition. He stated in talking with Traffic Engineering Director Dick Thompson, the irony is that for a number of years, going back to an accident in 1987 where people lost their lives at that location, every attempt to try and get signalization, even as recent as September 12 and 29, 2005 by correspondence, staff said there is not sufficient evidence to justify it.

*Chair Voltz’ presence was noted at this time.

Commissioner Scarborough requested Mr. Thompson readdress the issue and that a letter go from the Chair to Mr. Gilhooley, District V Secretary of Florida Department of Transportation, expressing the Board’s concern that it has gone on this long and they now have had a second major accident.

Commissioner Pritchard inquired what is the intersection; with Commissioner Scarborough responding SR 46 and Holder Road/Pine Avenue.

Motion by Commissioner Scarborough, seconded by Commissioner Pritchard, to direct Traffic Engineering Director Dick Thompson to readdress the situation with signalization at the intersection of SR 46 and Holder Road/Pine Avenue; and the Chair to send a letter to Department of Transportation District V Secretary George Gilhooley expressing the Board’s concern that it has gone on a long time and now the County has had a second major tragic accident. Motion carried and ordered unanimously.

REPORT, RE: HOUSING AUTHORITY PLAN

Commissioner Pritchard advised he met with Bill Deatrick of the Housing Authority regarding a plan on affordable housing he implemented, and it looks like it is working; they have the wherewithal to construct houses appraised at $150,000 to $170,000 and market them for $80,000 to $100,000 because they are able to hold a soft second mortgage; and it gives an opportunity for people who are making quite low incomes, as low as $16,500 a year, to purchase a home. Commissioner Pritchard stated what the Board needs to do is find property that can be picked up affordably, so the homes can be constructed; generally they are on smaller lots; the houses range from 1,200 to 1,500 square feet with a two-car garage; and it seems that is the type of program the Board needs to look into. He stated it is relatively new in that it only started a year ago, but it is working; and he spoke with Housing and Human Services earlier today and asked if they would contact Bill Deatrick and host a meeting with him to really find out how it works and how the Board can implement it because if it can get down into the incomes of $25,000 to $50,000 and provide people with nice housing, something they will own yet always in some fashion be managed by the Housing Authority, it sounds like something that would be beneficial to the community. He stated it would help with infill and encourage home ownership.

Commissioner Carlson inquired if the Board can get a report from staff; with Commissioner Pritchard responding once they meet with Mr. Deatrick, he assumes that would be the next step.

REPORT, RE: FREE PRESCRIPTION DRUG CARD

Commissioner Pritchard stated the headline of a newspaper from Florence, South Carolina, says, “Board Okays Free Prescription Drug Card”; and the article says, “Florence County Council voted unanimously Thursday to offer a free prescription drug discount card to all Florence County residents. The National Association of Counties has contracted with Care Mark to provide a prescription discount card for member counties to offer their uninsured and underinsured residents.” He stated from what he was able to find, it is almost like one of those sounds too good to be true programs, but the information he has on Care Mark says, “Prescription Benefits At a Glance”; and it would be $4.00 for each generic prescription and $8.00 for each brand name prescription, and $4.00 for brand name with no generic available. He stated apparently it is backed or funded by the National Association of Counties; so he would like to give the information to Human Resources Director Frank Abbate. He stated Sharon Luba is researching as much of the information on Care Mark as she can; they derived the information from the Internet and newspaper article; and if it is one of those programs that does what it says, it is something the County needs to look at.

*Commissioner Colon’s presence was noted at this time.

REPORT, RE: CHRISTMAS PARTY AND PARADE

Commissioner Colon advised the Christmas party in Cocoa will be on Monday at 3:30 p.m. and the Melbourne Parade is on Saturday at 6:00 p.m.

 

REPORT, RE: REASONABLE WORKFORCE HOUSING

Chair Voltz advised last night at the Economic Development Commission meeting’s housing issue, Lynda Weatherman indicated she has worked with Lisa Rice and a Miami Dade Commissioner regarding reasonable workforce housing; and she would like to be involved with that whole discussion when it happens. She stated it was supposed to have happened last month but the hurricane hit and the discussion did not happen; so when it happens, she would like to go to Miami or wherever it will be to discuss whatever it is they will be talking about.

County Manager Peggy Busacca advised the Workforce Development Board is taking the lead on that.

DISCUSSION, RE: HEALTH PLAN ISSUES

Human Resources Director Frank Abbate advised during the last discussion, one of the items talked about was the advantages of having discussions annually in December on what has happened during the course of the year with the health plans and to give the Board updates in various areas of things they have done, where the costs are, and project into the future, and to get some direction so they can start early in the budget process for the next fiscal year. He stated they would like to get some Board input now as to what they can do with their health plans, what the Board’s contributions might be based on the experiences they had, and what the Board thinks would be appropriate to plan in the budget process. He stated John Robinson, the employee benefits consultant with Robinson Bush, is here and will fill the Board in on a variety of items they talked about last year that has come to fruition. Mr. Abbate stated they will go over health plan drivers and trends, demographics, and changes that are occurring in the health plans; and there are significant issues that are impacting the costs. He stated they will talk about the health plan proactive strategies they have been involved in and ones they are looking at for the future; and one of the strategies is looking at the health plans and relative costs so they can make adjustments in the premiums based on how well the plans are performing now that they had the plans on line for five years. He stated based on the Johns Hopkins model, they will be able to talk about a case mix adjusted analysis, where they are with it, and how they will be able to use it not this January but next January; so they want to lay the groundwork and share that information with the Board. He stated they will talk about upcoming initiatives they have for this year and will be looking for some guidance, after he shares some information with the Board on the plan performance this year, about a contribution strategy for the next fiscal year that they will implement in the budget process that will start in February and March and the future plan management. He stated what they have in line is what they are going to do with RFP’s, etc. and making sure the Board is comfortable with all the types of decisions that were made this past year, where they seem to be going with it, and if that is in alignment with what the Board would like to see them continue in those specific areas.

Mr. Abbate stated they took the opportunity within the last 60 days to meet with all the hospital systems; they invited participation from all the hospital systems or health plans and brought them to the table; and they talked about what is happening in the community, what do they see as the trends for the future, because they want to make sure they had their input and could share that with the Board as well; so they will look at health plan cost drivers based on their best information plus information that their partners, hospital systems, vendors, and health plans have provided very recently. Mr. Abbate stated provider expenses are rising; there are a lot of advances in medicine that is driving the cost for everyone; and there are a variety of government mandates such as COBRA, which talks about people who leave employment and how the Board is required to continue their coverage, and HEPA, which deals with privacy issues and requires staff to do additional things. He stated when people come into the plan, the Board has to accept them with pre-existing conditions and become responsible for that; different design issues, reconstruction issues for surgery, things that are mandated, many for good purposes, increase the cost to the plan; and all those mandates are things that are passed on to the County as a plan sponsor, so it ends up having to charge employees premiums for those or pick them up as part of the cost of the plan. He stated the Board has to pick up dependent child and their obligations as part of the plan; those are typical and are increasing; and there is an increase in consumer demands and new technologies advertised on television, which increases the level of consumer expectation. He stated prescription testing by celebrities and sports figures are becoming so advanced that it creates a level of expectation and demand by the consumer that is increasing the cost to the County; and workforce aging and unhealthy lifestyles impact the cost of health care as well. Mr. Abbate stated the other issue is prescription cost; biotechnological drugs are having an impact on the County and is becoming accented over time; and they will look at some trends and what is happening as they move forward with the workshop presentation and how those areas may be what is driving some of the things the Board is going to see later on in the presentation. He stated in the last year or two they were talking in generalities about GASB-45, which is an accounting standard that is coming into play; staff did a very rough estimate to give the Board an idea what its unfunded liability might be under actuary analysis, and said it could be anywhere from $36 to $51 million; and that figure may be understated by half, depending on what actuary they talk to, which is an extraordinary large amount of money and something the County may face as well as other jurisdictions.

Chair Voltz inquired if that is something the Board has to do or something it can choose not to do; with Mr. Abbate responding it is an unfunded liability based on the benefit level the Board provides. Chair Voltz stated she understands what it means, and inquired is the Board going to be required to do it; with Mr. Abbate responding it is required to report it but not required to fund it.

Commissioner Pritchard inquired what is the downside of not having something set aside; with Mr. Abbate responding the downside is difficult to determine; he shared it with Finance Director Stephen Burdett and they both anticipate that there is going to be very little downside because all governments are going to be in the same boat. He stated the long-term downside would be if the Board does not start addressing it, it may be a factor that could, if a variety of jurisdictions are starting to address it, affect its overall bond rating; but that is a question that is out there and everyone will be wrestling with it. He stated they will be doing something this year about how they are going to try and get an actuarial analysis done at the end of the coming fiscal year so they can start reporting that information and trying to be aware as they budget and finance in terms of what they are doing in other jurisdictions and how that may impact for the future. He stated they will make their best efforts to stay on top of that and keep the Board apprised on how it may impact the County. Commissioner Pritchard stated at this point the Board does not have the same level of fiduciary responsibility with the insurance program that it does with the retirement program. Mr. Abbate noted there has not been, in the public sector, requirement to even report the unfunded liability; but something that happened in the private sector now is catching up with that.

Mr. Abbate stated hospital issues that are out there are capacity and expansion; Wuesthoff is opening the third floor on Wickham Road; it is increasing critical care and expanding critical care services; and Health First has various expansions in process and is trying to implement those as well with the proposed Viera facility. He stated they have issues and trends that deal with shortages of critical professional staff; the main areas in the community are nursing, neuro-surgery, general surgery, and obstetricians, which continue to pose challenges; and in addition to that, many of the systems look at that and are sensitive to how it is impacting the County as it expands services and hospitals as well. He stated biotechnological drugs deal with injections for rheumatoid arthritis, which is beneficial to those who need it, but it is extremely expensive; those are new cutting edge technologies that are out there that are impacting the County; and with those drivers and trends, he would like to call the Board’s attention to the inflation in medical increases and basically make comparisons of the cost of living over inflation in medical premiums. He stated it has remained fairly constant between 1.5 and 3.5% over the last five to six years in terms of overall cost of living; it spiked up two or three years ago to the 12% range in terms of what they experienced in overall medical premium increases to a level now that is projected to be in the 8% to 10% range in the last year or so; and once again as it has been for the last seven years, medical trend has been two to three times the overall rate of inflation, which creates significant problems for the County as an employer and every other employer in terms of allocation of resources. He stated the next slide looks at the demographics, which is who makes up the participants in the County’s health plan; they have all the Charter Officers and variety of other agencies; and in the last couple of years, they have increased the overall participation in the program by about 7.5% annually.

Mr. Abbate stated the number of retirees is 749 currently; last year that number was 689; so it is a 9.5% increase. He stated the overall participation in the plan is increasing by 7.5%; the retiree population is growing more significantly; and that becomes important because one of the ways they fund the plan is by employer contributions that relate to employees. He stated when employees and retirees are growing at the same rate, that is great; when employees and dependents are growing at a lower rate than retirees, they need to pour more money in on the employee rate to cover the growing retiree population; and that is a trend that has grown over the years and will continue to grow significantly. He stated there are some organizations, including General Motors, that are getting to the point where their retiree population is going to outpace their employee population; and in terms of their supporting that, obviously they will have significant financial problems as it relates to pension and health insurance. He stated the County is not in that boat, but it is an issue that is important to stay aware of; so they can stay on top of it as the Board makes important decisions relating to contribution rate, which they will talk about as well. He stated in 1999, the County was at 284 retirees; currently it is at 749 retirees; so the Board can appreciate how much larger the group gets as it gets larger even though the Board is funding it at 58/42% ratio, it is an increase and larger burden for the County to bear. Mr. Abbate stated the retiree demographics under 65 and over 65 as of January 1, 2006 are 219 under 65 and 530 over 65; and those living outside of Brevard County are 55 under age 65 and 91 over age 65. He stated two years ago there were 200 under age 65 and 470 over age 65, and outside of Brevard County were 29 under 65 and 78 over 65; so there has been some growth there in terms of what is happening with the retiree population and who lives within the County and who does not.

Chair Voltz stated on the demographics under total it says 9,074; with Mr. Abbate responding it was a typographical error as 9,074 was last year’s number; and 9,756 is the right number, which is about 7.5% growth.

Mr. Abbate stated the next area is an overview of the County’s health plans and where they are; they have about 41% participation in Aetna HMO, 30% in Health First HMO, 15% in Cigna EPO, 12% in Cigna PPO, and 1.5% in Health First Medicare; and transferred to a more meaningful number is about 10% of the retiree population over age 65. He stated that is important because one of the shifts they are looking at is a more cost effective way to provide benefits to retirees; the plan has been that; so as more people shift into it over time, it is going to be more cost effective to the Board. He noted they have increased it to 10% currently; and that makes up where people are today. He stated when Mr. Robinson talks about the burdens, they are going to look at how well each of the health plans are performing relative to one another and what he is going to look at is relative to wellness of the health plans and how well they are doing to their expected expenses based on what they know about the makeup of who is in their plans. He stated obviously the plans that are more efficient is where the Board wants to see the shift in the future; so they want to see if they can develop a strategy that helps them as they move forward to accomplish that. He noted they have the baseline of where they are starting from this year.

Chair Voltz stated she has Health First HMO and had a lot of medical problems this year, and they have been absolutely wonderful; with Mr. Abbate responding they have become the most effective.

Mr. Abbate advised of the history of health plan membership; stated they had a banner year last year; expenses were lower than the norm; they were at 5% or 6%, and the norm is 11%; but this year the exact opposite has happened. He stated they have jumped up to 16%; they put it in a bar graph for the Board to see because it is a year where 8% or 9% is the national trend, and Brevard County is at 16%; and a couple of things happened. He stated last year they were significantly lower so they started at a lower baseline; this year when they had those increases, they were in the 16% range; when they looked at the health plans, they saw the high-end imaging dealing with x-rays, radiology, etc. that went through the roof, probably a million dollars more than expected; and that had a lot to do with the increase. He stated they are in the process of addressing the issue with the carriers to see what happened, why, and what they can do to be more effective in terms of where those costs are; but those expenses were above this year, but when averaging the last two years, they are still doing better than the average; however, they are not as good this year as they were last year so that is an area they have to work on. Mr. Abbate stated they have been attempting to increase their reserves every year because they need $6.5 to $7 million for the size of the Plans; and they have done a fairly good job at that. He stated in plan year 2001-02, there was revenue of $25.4 million; expenses were $23.7 million; so they netted $1.7 million, which helped to raise the reserves. He stated the next plan year was also positive in that number; when they looked at it in a plan year, January through December, they were negative by $121,000 in plan year 2002-03 although that fiscal year they were positive; they did well again in 2003-04 and added $1.3 million to reserves; and this plan year he showed the expenses and revenues on a month-to-month basis because he was worried that they were $680,000 in the hole, which is the biggest deficit because expenses were up 16% and they budgeted for 12%; so all of a sudden they were eating into the reserves. He stated the Board had the foresight to fund it 12% last year and they increased everyone else’s rates by that; they implemented those rates effective October 1 as they do each year; so for October and November, which they have the results for, they were able to make up the deficit and are through the calendar year going into December with $145,000 to their advantage, which will be added to the reserve of over $6 million at this point. He stated the County is doing fine but is not picking up the kind of numbers this year that it did in 2001-02 and 2003-04; the good news is they do not really have to pick up that much money because over the last several years the way they funded the plan added from what was a $2.4 million reserve to over $6 million; and they need to be higher than that and are in the process of working with the actuary to determine what the new rates need to be for next year and what they need to project them to be. He noted they are heading down the right path. He stated he spoke to the hospital systems and various health plans and asked what they see happening in the local community; and they shared their thoughts that the County would not have a funding problem.

Commissioner Pritchard inquired if the $5.00 per year of service that is provided to retirees enter into the equation as revenue or is it kept by the employee; with Mr. Abbate responding the money is provided directly from FRS to the employee; in many cases the employees use those dollars to pay their premiums for health care; so they come to the County as premiums from the retiree in what they pay on a monthly basis for themselves and their dependents.

Mr. Abbate stated the next area he wants to touch on is the proactive strategies and what they are doing; they are continuing the self-funding arrangements; they are fully insured and will continue to be this year on the mental health side because it is more effective for them; and cost sharing with participants is continuing. He stated they have health plan carve outs, which are the prescription program as well as the mental health program; and they are active with the Florida Health Care Coalition and in looking to an increase in partnership with Brevard County schools. He stated they have taken some steps based on the Board’s initiatives this past year to set up a retiree contribution strategy that is going to lower the Board’s overall costs for retirees and people who are hired after January 1, 2006; that would provide their retiree health insurance benefits and premium structure based on their years of service; and they have undertaken a variety of health and wellness initiatives. Mr. Abbate stated they have taken a variety of steps regarding retiree coverage; there was an issue on Medicare Part D and its impact on the County; the option the Board approved for this year is that it will receive $500 to $600 per retiree subsidy through the federal government, which is about 28% of allowable expenses related to prescription costs; and based on Medicare Part D Program, that probably will have an impact of an additional $150,000 a year revenue to the County’s plan which it will receive on a quarterly basis as reimbursement. He stated the plan did qualify; they did get actuarial study that was submitted and approved to qualify the County for that program; so those are revenues that will be coming to the County as an offset against expenses. Mr. Abbate stated there will be other opportunities to look at doing things differently in the future; most employers are participating in Medicare Part D the same way the County is; but there are alternatives that will become more valuable and will be improved during the next year so they may revisit that issue.

Mr. Abbate stated they are being proactive in strategies relating to health and wellness; they participate in the fall health challenge, which was successful; they have the final results and figures; there were 969 employees who enrolled and received 319 lab draws; in addition, 485 received lab draws through the Pfizer Program, which meant they had a total of 804 participants that were in the program and got blood draws to check their cholesterol and other areas; and the Board will see some of the results in the presentation Mr. Robinson will be making to the Board on Tuesday. He stated they had internal competition within the organization broken down in four groups; and he is extremely pleased to report that among the four groups, which were the County Manager, Development and Environmental Services, Management Services, and Community Services, the highest level of participation was the County Manager’s group with 52%. He stated they returned 53.7% of the report cards; the cards from the Management Services group were the highest at 60.7%; Development and Environmental group had 42% return; Community Services had 51.4% return; and those numbers in terms of return of report cards gave them a benchmark to work toward in the future. He stated they have a rotating plaque that will go from Department to Department; and the 2005 fall challenge award goes to Peggy Busacca’s team. He stated they have an interesting competition with the School Board; there are jousting with the respective leaders in those organizations and comments they provided to their employees about getting back and who can do better than whom; and Mr. Robinson will be reporting to both organizations on Tuesday; but more importantly, the fun of the competition is what the results were and what it means to them in the future with health and wellness activities. Mr. Abbate stated some of the other proactive strategies they were involved in were the Pfizer Pilot Program where 326 employees enrolled, 62 with hypertension, 194 with cholesterol concerns, and 70 with diabetes; they are monthly programs with trinkets that Pfizer provides for people who participate and with certain reporting, etc.; and it seems to be a successful program. He stated they were involved in Know Your Numbers regarding blood pressure and cholesterol and how that impacts health and keeping track of them; they are looking to continue the partnerships with various carriers and health dialogue with Health First; and Wuesthoff has a variety of programs in place as do each of the carriers. He stated they were involved in the health risk assessment with Health First this year, and are looking at other opportunities; some receive the weekly Health e Tips that come from Robinson and Bush regarding a variety of issues to keep health and wellness on the forefront; and those are proactive strategies they are participating in. He stated they have regular quarterly meetings with the carriers and annual meetings with the hospital systems; they are looking forward to an RFP solicitation process this year; and they are going to be putting out a group health insurance program with the parameters of the existing Board direction, but also to look at what alternatives are out there, what new players may be there, and new strategies of how plans are designed. Mr. Abbate stated they are involved in the monthly financial statement review; they do that on a month-by-month basis and can see what they have done every month for the last five years; and they are continuing that strategy to make sure they stay on top of that. He stated they have been involved in a variety of prescription drug initiatives such as step therapies and prior authorizations; they addressed some of the more expensive prescription costs that if they go unchecked can make the rather large numbers they have in prescription drugs become even more phenomenally large; so there is always a balance that has to go on. He stated the Board has approved various initiatives in that area to try and keep the costs within a reasonable level of control; and they would like to go to the risk adjusted health plan analysis which Mr. Robinson will explain to the Board.

John Robinson of Robinson and Bush Consultants advised when they started the competitive model in the health plan several years ago, they were looking for a measurement tool to help them adjust to say which plan was doing better out of the three plans; and they looked at different models to come up with something that with risk adjustment would show them some differences and similarities in the plans to see where the costs were going and if they could become more efficient. He stated one measure was age and gender; the older people are the more utilization of services occur; and they wanted to look at other factors and a tool, so they selected the Johns Hopkins ACG case mix system to do their risk adjustment and look at different claims, run them through the model, and come up with expected and actual costs. He stated they took 12 months of claims data from Brevard County schools and government and ran them through the model to get the particular results; and they will provide some preliminary numbers to the Board and will go through in more detail of the carriers they are using as one of their proactive strategies. He stated the actual case mix adjusted system uses the actual illness burden and compares that with utilization; the number of tests and office visits and all of that is factored into the system itself; it is a system that also adjusts for the risks in one plan or another; and they like the model because of the Johns Hopkins name and reputation, which helps in the marketplace with acceptance of the model. He stated the benchmark for improvements and plans show some of the differences; when they looked at the adjustment itself and at just the County, they looked at two areas; and the one area they want to talk about is the sickness ratio and that is the first column, which he will go over with the Board. He stated the next column is on the efficiencies and how efficient are the plans; they have the three health plans they did the analysis on Aetna, Cigna, and Health First; and the ratios they are looking at is using everyone as a 1.0 and where people fall in different plans on a 1.0 ratio. He stated what they found from the analysis is that Cigna has the most unhealthy population in its plan; Aetna has the next, and Health First has the healthiest plan; and looking at those numbers, Aetna has an 8% better population than average; Cigna has a 50% worst population than average; and Health First has a 13% better population than average. He stated the next slide shows efficiency numbers on a scale of 1.0; Health First has the best efficiency, but it is very close; there is a slight difference in the numbers; and they will be watching that carefully as they go forward in looking at those particular numbers. He stated while Cigna has a sicker population than the other two efficiency-wise, it is doing quite well; those dollars would be coming into another plan if those individuals migrated to another plan; Cigna has a heavy retiree population, which has some impact on the sickness ratio; and fortunately they are being taken care of in that plan in an efficient manner.

Commissioner Pritchard stated what Mr. Robinson is referring to as a sickness ratio could also be that people in the Cigna plan are more in tune to going to the doctor than participants in Aetna and Health First. Mr. Robinson stated that could be, but as they go into more detail it may help answer the question why they are a sicker population and are using more resources.

Commissioner Carlson inquired if people in Cigna are PPO participants because they need to go to specific doctors and if they were in HMO they would be out of network and would have to pay the extra 10% or whatever; with Mr. Robinson responding that is true.

Mr. Robinson stated the next slide shows the resource utilization bands; the model takes each individual and puts him or her into a band as to how he or she is utilizing the services; Aetna has the highest number of people; and the actual number they used for claims is 4,673 individuals throughout the year that had some claims. He stated Health First had 3,146 people, and the lowest is Cigna with 2,501; the slide shows where those people fall within the resource utilization bands; and some individuals were using those services but no claims were paid for. He stated Aetna had 22.4% versus 19.1% for Cigna and 21.3% for Health First; overall, the County and schools average was 21.6%; and there is a healthy population that just goes for physicals or preventive services. He stated the next slide shows the low, moderate, high, and very high; the two areas they looked at in more detail and did more work on are the high and very high; the slide shows the difference of the population in Cigna, Health First, and Aetna; Cigna is 13.7% in the high category versus the others at 8.8% and 8.6%; and it is 9% in the very high versus 3% and 2.3%. He stated the next area they did is review of some of the major diagnostic categories or codes; the slide shows five of the highest areas of utilization that they saw; and they broke them down into the plans and looked at the high and very high areas.

*Commissioner Colon’s absence was noted at this time.

Mr. Abbate stated improvements to enhance the health risk assessment tool will give people a degree of confidence that it is confidential, which is an issue for a lot of people; and it will make it easier for them to access that information. He stated those are the kinds of things they are going to continue to work on and will be able to see how they are improving over time because they know how many participated this year; and the benchmark would be how much better they do in the coming year.

Commissioner Carlson inquired what was the participation rate at the health fair; with Mr. Abbate responding there were 804 participants for onsite screenings and what Pfizer did at the health fair. Commissioner Carlson stated there are some tests that doctors will not give prescriptions for if a patient has a concern; and one way to do it is to get the full battery of tests and bring the results to the doctor and ask him or her what it means. She stated the aspirin test was provided by one of the few vendors; if a person goes to the doctor to get a test on aspirin to find out if it is working, he or she would probably say the person does not need to do that; if they take the aspirin test and find out it is effective, the doctor may say they can go ahead and take it; so there are discrepancies in the medical community as far as some of the tests go; and it would be good for the general population to be more educated on that.

Mr. Abbate stated not only doing it at the health fair, but what they found most successful with the wellness challenge is sending health and wellness officers into the field; they had various vendors who provided support staff to draw blood and reach individuals who may not take the time to go to their physicians; and staff is committed to expanding that because it sends the right message about caring for people and providing them an opportunity to address their own health issues in a way they may not have taken the opportunity to do. He noted they received good feedback from people letting them know that utilizing their resources that way was pretty effective; so they intend to expand on that even further.

Mr. Robinson stated the information was out there on knowing your numbers; there were a couple of things that were done during the health challenge that helped in that area; and one of the education components on knowing your numbers dealt with cholesterol, glucose, blood pressure, etc., and what to do, what it was, what the numbers meant, and what to do about that. He stated several workshops were held on knowing your numbers; they were taped and shared with other individuals; there are still opportunities to do more with that program; but that education was an important component and can be expanded.

Mr. Abbate advised regarding parameters for the RFP, they are going to conduct a market assessment; and they started that by speaking to current vendors. He stated they are going to look at medical as well as mental health components, how comprehensive the networks are, the competitive model, enhancing disease management, reporting capabilities of each vendor, and exploring cost sharing alternatives that deal with how they pay for the cost of the programs. He stated in terms of cost sharing alternatives, they are going to look at premium alternatives where the Board has up to 100% premium buy for a higher cost plan option based on the results of what they get from the Johns Hopkins model; and they intend to share that information with all the carriers, bet their buy in comfort level as much as they can, address their concerns, and start looking at differentials between HMO’s based on their effectiveness. He stated it has been a long time building to that; it is something they talked about several years ago; and now that they have all the information behind them, they can get it in place and are ready to start dealing with it more effectively as they move forward.

*Commissioner Colon’s presence was noted at this time.

Mr. Abbate stated they are also going to bring back benefit design changes; the Board directed caution about not overburdening people to the point of pricing them out of effective health care because of out-of-pocket expenses being too much of a burden; so they will look at what kinds of alternatives there are and where the marketplace is, and explore those options. He stated in terms of premium contribution, the current funding strategy is 86/14 for employees and 58/42 for retirees; and they have provided how the Board funded employer increases over the last five years. He stated in 2004, they averaged 9.67%; for this year the Board paid $33.12 million, which is the 86% of the premium cost; and employees, retirees, and dependents are paying about 14%, which is $5.39 million for a total of $38.51 million. He stated they anticipated for this year in terms of what the costs are, where they are going to go, and what they are predicting for the future; and he will give the Board funding options to address the issue about the future. Mr. Abbate stated they are talking about 2007, which they do in budget year 2006; and they put together the employer and member contribution strategies based on what they have in the Union Contract, which is a 2% COLA and 2% merit increase or 70 cents per hour for the lowest paid employees. He stated if they were at 11.5% across-the-board increase for 2007, what he has given the Board are the annualized salaries for some of the lower paid employees, the Countywide median averages, the Countywide average and retirees, and how it impacts retirees. He stated the retiree number include the FRS retirement and does not include anything they receive from Social Security or other sources; and employees will receive, based on 70 cents per hour, a $1,456 increase next year. He stated the range in the diagram is what the expected increases are depending on whether or not the employee is in HMO, EPO, or PPO; they did that by employee, one or two dependents, and three or more dependents; so the Board can see that employees with families have the most expensive plan and their increase could be, if the Board adopted something for 2007, anywhere from $31.00 up to $412 a year based on 11.5% increase in rates; but they would receive merit and COLA increases for a total of $1,456 a year. Mr. Abbate stated they may be a little on the conservative side, but they put it at 11.5% and developed a strategy; option #1 is the current arrangement; if they were to maintain the 86/14 ratio, which was the direction they received in the past, the other alternative is what about other arrangements; so they gave the Board some options regarding the 2006 contribution. He stated the analysis shows that employees are paying about $5.39 million in premiums; they were told not to make the out-of-pocket expenses a big piece of the pie that people do not get health care; and that is staying stagnant, as they have not made changes to it, but additional employees or member participation and utilization may make that number change a little. He stated employees in a $40 million dollar plan are paying about $10 million or 25% of the overall cost of the plan.

Chair Voltz inquired if the 11.5% cost increase project is on top of the 12% from last year; with Mr. Abbate responding that would be the cost increase of wherever they are at the end of the year; they are projecting for the following year it would go up by 11% to 11.5%; they were over 12% in 2002-03 and dropped to 10% in 2004; it is probably 8% to 9% this year; but in October they were $600,000 in the hole; and staff did not want to give the Board a number that would make it feel it is not able to support it at the end of the year and put the Board in an even bigger hole. He stated there may be people who may say it is not going to be that bad, but looking at the past, a year or two ago, they were projecting five years out at 12%; and they lowered that a little to 11.5%. He stated if there is a surplus at the end of the year, that will get the County closer to the reserve amount it has not yet achieved. Chair Voltz inquired what is it trying to achieve; with Mr. Abbate responding they are required by the State to have a level to pay for runoff in unanticipated large claims, so they need to have a 20% to 25% reserve level. Chair Voltz inquired what is that in terms of dollars; with Mr. Abbate responding around $7 million. Chair Voltz inquired how much do they have now; with Mr. Abbate responding over $6 million. Chair Voltz inquired what will happen when they reach $7 million, where do they stop, or do they keep on building the reserve; with Mr. Abbate responding they build the reserve based on 25% of the anticipated claims; once they achieve that, they continue to fund it at that level to maintain the 25%; and they have been operating in a catch-up scenario because they have never been at that 25%. Chair Voltz inquired where do they draw the line and stop; with County Manager Peggy Busacca responding when claims go down, the reserve can go down; but as long as claims go up, the reserve has to go up. She stated because the cost of medicine has gone up 12% a year, they anticipate claims to go up by about the same amount, which means that the 25% of those claims will go up every year also. Chair Voltz stated she knows medication has gone up, but she does not know about anything else. Ms. Busacca stated for the foreseeable future, they expect claims to go up and so will the need for reserves.

Commissioner Pritchard stated the plan he mentioned earlier could be a benefit that might help offset what some of the costs are. Mr. Abbate stated they will look at it, but if it looks too good to be true, it probably is; however, he is hopeful. Ms. Busacca stated what she read in the NACo Newsletter is that it is being used for low-income persons and is being considered for jails; and she is not sure County employees would be able to use that and meet the income requirement. Commissioner Pritchard stated not the income requirement, but the idea behind the plan, and if it could be available for certain people, maybe it could be available for others. Mr. Abbate stated they will explore that.

Commissioner Carlson inquired if staff looked into anything regarding wellness incentives for employees. She stated she is sure there are employers that will pay employees an extra bonus for achieving certain health benchmarks or whatever; and that might be an incentive to bring costs down because claims increase for those who are not educated or do not understand what is going on.

Chair Voltz inquired what about going to the gym being a health benefit, and how would that be quantified. Mr. Abbate stated they will bring back issues that relate to health incentives. He stated when they provide incentives, the literature on that spans the full spectrum of saying the healthy are healthy so why would they give them any additional money; and is the Board really giving people incentives who otherwise are not taking care of themselves to where it can show some substantial savings. He stated they will explore those and report to the Board on what they are doing and how they are basing it.

Commissioner Carlson stated she is not talking about those who are healthy and stay that way because that is their way of life; she is talking about a small test population that has shown a lot of claims; and maybe there is a way to test that smaller population and do that with incentives to bring them out of constantly wanting to go to the doctor to go out walking two miles a day. Mr. Abbate stated as an employer, HEPA is about not having access to certain information. Commissioner Carlson stated they would have to ask for volunteers. Mr. Abbate stated it would have to be looked at from that perspective.

Mr. Robinson stated they will look at that in the enhanced programs when they go out for the RFP. He stated one of the capabilities interviews they had with Health First talked about one of its disease management programs called Health Dialogue that is now part of its plan; and it helps coaches that could be involved with certain people, such as the pre-diabetic population, where the persons have not reached the level of diabetic status and through behavior modification would not reach that level.

Chair Voltz stated she had a GYN checkup and they said her co-pay would be higher because it was a specialist; an OB would be a specialist, but not a GYN; and the GYN should be regular because employees should get regular checkups every year. Mr. Abbate stated that is part of what the current design of the plan is. Chair Voltz reiterated her previous comments on a GYN not being considered a specialist. Mr. Abbate stated they will bring that back to the Board in terms of addressing that issue; it would have to be done as part of them amending the current document in terms of how benefits are structured; so they will bring a report back to the Board. Chair Voltz inquired if someone wants to go to a chiropractor, does that person have to see his or her primary doctor first; with Mr. Abbate responding no. Chair Voltz stated her neighbor who works for the School Board wanted to go to the chiropractor and was told she had to go to her primary first and she had to wait two weeks, which does not make sense; and inquired if the School Board has the same insurance as the County; with Mr. Abbate responding yes. Mr. Abbate stated they actually moved away from the primary care physician and most of the plans directing having to go to the primary care before a specialist they have moved away from and provided more open access as long as they stay within the network; so that should not be an issue, but they will go back and double check it and make sure.

Commissioner Scarborough stated a television ad indicated it is not just a person’s lifestyle, it is in the genes; he may have a high propensity for diabetes that could be determined by filling out a form that would run straight in the heart of HEPA; and inquired rather than try to kill every bird out there, if people wanted to fill out the form, is there a problem. He stated there could be a potential program for a segment of the population to direct to healthy lifestyles for those elements that they are genetically at risk for; there may be a higher response level rather than a program that blankets everything; and if staff would say if they want to participate they will help them to identify where they have a propensity genetically and provide counsel on things to watch for so they can detect things earlier. Mr. Abbate stated what he is hearing is making sure they focus on making sure they maximize opportunities for voluntary participation in health-related activities that deal with issues that people may have genetically or otherwise, having incentives for those people, and to try and be as innovative as they can.

Commissioner Pritchard stated the wellness program he is familiar with was annual examinations that included the numbers plus percentage of body fat; and if they improved in a category and moved to another category the incentive could be either cash, depending on how healthy the person is, or they could pay for membership to a gym or some other thing. He stated attendance to that was pretty good; a lot of people got involved in doing better the next year; and they found a healthy lifestyle made them feel better so it was more than coming to work, doing the job, and saving the employer money. He stated they felt better and their attitudes toward everything changed; the incentive to move from one group to another was always there; but the overall benefit was more important; so if staff focuses on various wellness programs that are available and look at what works and what does not, they could come up with something that works and is going to be good.

Chair Voltz stated out of 9,756 employees, only 804 participated in the health fair; and that is about 8% which is very low. Ms. Busacca stated they do not expect retirees and Sebastian Inlet Taxing District to participate in the health fairs. Chair Voltz stated somehow they need to be more mobile and make the program more accessible to get more people involved, especially those who may be in need of the program. She stated the County, Clerk, and Sheriff are three big groups, and even retirees should get involved. She stated if they get more people involved in wellness programs, it could bring down the health care policy costs. Mr. Abbate advised the numbers he gave relate to the Board employees and do not include the Clerk or Sheriff; and it was significantly higher than 8%.

Commissioner Carlson inquired if the health fairs are done in partnership with the School Board; with Mr. Abbate responding no, the School Board does it separately because it has logistic issues; it has in-service days and come together at one facility and dedicate a day to health and wellness activities; and that is how it does it.

Chair Voltz inquired if there are many dependents that participate in the health fairs; with Mr. Abbate responding no. Chair Voltz inquired if they are encouraged; with Mr. Abbate responding yes, when they give flu shots, but at the wellness fairs it has been primarily employees, but they can expand it to dependents. Chair Voltz inquired what does it cost the County; with Mr. Abbate responding it does not cost much because vendors participate; the County picks up the tab for tests at $12 for each screening; but it is minimal and they can expand it and invite dependents to come as well. He stated they have not done an outreach to dependents and typically focused on employees. Chair Voltz stated it should be expanded to as many people as possible because the more they expand the program the more they can decrease health care costs.

Commissioner Scarborough stated if a handful of big claims are taken out, the County would be sailing along beautifully, but it is the monsters, like tragic events, that impact the program. He inquired what percentage is driving the cost of the program; with Mr. Abbate responding less than 20% make up 80% of the cost. Commissioner Scarborough stated it is a small percentage of people who can drive the program in strange directions; their costs and nature of their illnesses are the numbers; so it is not taking averages because it is the unique illnesses that are driving the cost of the program. He inquired if Mr. Abbate could give him the average cost of the ten largest claims without providing protected information; with Mr. Abbate responding he does not have it with him but can put that together. Commissioner Scarborough stated Mr. Abbate made that point in many of his presentations over the years; it is significant; it is a risk because no one knows what is going to happen; and requested Mr. Abbate send the Commissioners a memo on that.

Mr. Abbate stated the last area to get Board direction as they move forward on what they shared today is where do they set employer rate as part of the 2006-07 budget; he gave the Board four options to consider; one option maintains the current strategy at 86/14 based on everything that has been shown; and staff is recommending 11.5% increase across-the-board to maintain that 86/14. He stated that is the model he gave the Board in terms of salary increases; the retirees and employees’ dependents are going up at the same level; and the increase would be $3.81 million employer contribution and $0.62 million member contribution to maintain the 86/14 strategy. He stated other options are lower contribution rates of 10% and 8.5%; and the slide shows the relative change in the numbers and strategy. He stated 8.5% would be $2.81 million instead of $3.81 million and change the 86/14 to 83.7/16.3; and the premium increase for employees and retirees would be 29.9% of the current rate, which is significant. Mr. Abbate stated 10% would change the strategy to 84.8/15.2 and require an increase from members; and if it is changed to 13%, that would generate $4.31 million, member increase would be 2.3%, and change of strategy would be 87.2/12.8. He suggested maintaining the 86/14, if the Board is comfortable, and staff will move forward with Option 3 as they begin to plan for 2006-07.

Commissioner Pritchard inquired where is the compensation study; with Mr. Abbate responding they will meet within the next week with Nick Pelligrino; and he anticipates Mr. Pelligrino will have a package to present to staff. He stated they will schedule something on the Agenda in January 2006. Ms. Busacca noted she anticipates it would be the second meeting in January. Commissioner Pritchard stated the retiree model is 58/42; he is concerned about the retirees because their incomes are pretty close to fixed; the amount of increase they derive annually is not much; and other costs go up considerably. He inquired if there is anything the Board can do better and what the cost would be to go to 60/40 or 65/35. He requested Mr. Abbate provide those dollars to the Board; with Mr. Abbate responding he will look at those and provide the alternatives.

Mr. Abbate stated one thing they have done is look at who is participating in the Health First Medicare plan; it was 10% of the population; the Board provides a cost-effective option to retirees currently and pays 100% of the premium for retirees who choose that particular option; and that includes a prescription program. Chair Voltz inquired why would retirees not go with it; with Mr. Abbate responding 10% are choosing that option; and to the degree the Board increases its contribution in the other plans, it would deter people from joining the more cost-effective plan that it funds at 100%.

Commissioner Pritchard stated when the Board went through this discussion last year, the dilemma it faced was how to encourage people to obtain health care; and he questions why they are not choosing that plan and what benefit is derived by spending more money. Mr. Abbate stated they could conduct a survey of retirees to explore that. Chair Voltz stated they need to do a survey to find out why.

Commissioner Scarborough inquired if the physicians network is the same as the other plans; with Mr. Abbate responding it is a different plan but he believes the network is the same Health First network; and there are retirees who are on the Health First network plan and enjoy the benefits of the prescription plan. Commissioner Scarborough stated Mr. Abbate indicated retirees travel, and because they do, they want a larger national network; with Mr. Abbate responding that could be a factor. Chair Voltz stated she does not think 90% of them travel. Commissioner Colon stated the main reason is retirees want to have their own doctors. Mr. Abbate stated that probably speaks to the issue of the numbers who live out of the area; the one thing he can tell the Board is who lives out of the area half the year; and if they are away only half a year, they may be considered residents of the area, which can play to it as well. He stated as that group gets larger, they will do a survey and get answers to those questions and explore other opportunities that may be available.

Ms. Busacca inquired if the Board is comfortable with Option #3; with Commissioner Scarborough responding it was inferred that it is part of the compensation package and it always plays together, so he is comfortable with the blend.

Chair Voltz stated the Board is looking at changing the retirement package as of January 1, 2006 for new hires and when employees retire. Commissioner Scarborough stated that is a new calculation. Chair Voltz stated the Board may look at that for new hires and retirees down the road, and look at something else for current retirees.

Ms. Busacca inquired if the benefits were taken into account for the salary survey; with Mr. Abbate responding Mr. Pelligrino did an analysis on that. Ms. Busacca inquired if he used 86/14; with Mr. Abbate responding yes. Ms. Busacca stated if the Board moves to another option, it will affect the validity of the salary survey if it wants to tie the two together; and everything he would have done would have been based on one set of factors.

Chair Voltz stated she is not sure the Board can at this point with someone who will be retiring next year or the year after as they are expecting to pay 42%. Commissioner Scarborough stated the Board does not want to change anybody who is currently retired. He stated if they are not currently employed by the County, they will come under the new rules, but the Board is not changing the rules for the current population. Chair Voltz stated if the Board is going to start with new hires in January, it needs to look at adding that into the new package now so that come January new hires will know exactly what it is the Board will be doing.

Commissioner Pritchard stated if the compensation study is using 86/14, the Board needs to maintain that standard, otherwise it will be mixing apples with oranges. Mr. Abbate stated the Board is not locked into anything; and this workshop is for planning purposes of how they will start developing the insurance program for the budget. Commissioner Pritchard stated the reason the Board opted for 86/14 is because it was a reasonable compensation for insurance premiums based on what the employee would pay; now it is going to find out what the compensation in terms of salary should be; and the mix of that with the 14% will be compared with other jurisdictions to see where the employees fall. He stated the issue with retirees, maybe a lot of them do not realize the benefit with Health First is good and they should be in that plan; if he can get the same service from Health First as a retiree that he gets from Aetna and not pay for it, it is not going to take much of a decision to change unless there is a reason why he cannot go to Health First; and if it is traveling or smaller selection of physicians, or whatever the problem may be, that is something to consider from the Board’s perspective. He stated they need to look at the cost to the County and the retiree and do its best to inform the retirees that they can do as well and maybe better by being in the Health First plan.

Mr. Abbate stated the Health First Medicare Plan has grown in a few short years; they only had a couple of people in it and now have gone up to 10%; Deborah Kitchen of Health First worked with the County to try and reach retirees; and they did some marketing to get to 10%. He noted what he is hearing is that they need to work harder to get to a better level to know why people are doing what they are doing so they will survey it and make sure they are maximizing the opportunities to market what is out there, especially if it is effective for the Board and the retirees. He stated they will work on those as part of their strategy for the coming year.

Commissioner Colon stated the survey needs to let those folks know the information and needs to come back to the Board because the Board is going to decide what kind of contribution it is going to make. She stated staff needs to ensure Ms. Busacca sees the letter before it goes out to the retirees and that they realize how important it is to the County to hear from them. She stated people get tired of surveys, but it is critical because it will affect them as far as contributions from the Board and the participant.

Motion by Commissioner Colon, seconded by Commissioner Scarborough, to approve Option 3 of the FY 2006-07 funding target options for planning purposes regarding Health Plans for Brevard County. Motion carried and ordered unanimously.

Ms. Busacca stated staff wants the Board to know it is for planning purposes only and as it goes through the process, the Board has the option to change things. Mr. Abbate expressed appreciation to the Board for its direction and the ideas in two or three areas that they would otherwise have not undertaken.

REPORT, RE: SEBASTIAN BUFFER PRESERVE

Commissioner Colon stated she needs to bring something to the Board; it is not in her District, but impacts her District; it is an item from District 3 that is on the Agenda for Tuesday’s meeting; and it is the St. Johns River Water Management District issue regarding rezoning that was put back since September 13, 2005. She stated now that they have a JPA with the City of Palm Bay she wants to ask the Board to move the item for 30 days to allow them to follow what they are doing unless time is of the essence.

County Manager Peggy Busacca stated it is on the Agenda as a public hearing and would have to be re-advertised.

Chair Voltz stated she is not sure what Commissioner Colon is talking about. Commissioner Colon stated it is the St. Johns River Water Management District administrative rezoning in District 3. Chair Voltz inquired if it is the Sebastian Buffer Preserve; and what is the matter with it; with Commissioner Colon responding the Board now has a JPA after it had given direction to rezoning the property; it needs to postpone it for 30 days, since it has a JPA, even though it was before the JPA was executed, to have it come back at the second meeting in January versus next week for the public hearing. Chair Voltz stated she does not want to postpone it because she does not know anything about it and will wait until Tuesday to find out more details. Ms. Busacca stated if the Board waits until Tuesday it would not have to re-advertise the hearing. Commissioner Colon stated the Board can table it on Tuesday; with Ms. Busacca agreeing and noting it would allow the City to make comments it wishes to make.

Commissioner Colon requested the County Manager send a letter to the City of Palm Bay letting it know it is on the Agenda. She stated that is how they run into problems, lack of communication; she does not think anyone purposely did it to undermine anybody, but perception is everything; and it is on the Agenda and somehow affects the JPA. She stated it is up to the Board to keep the spirit so it is a positive spirit because they have huge areas with issues they are dealing with such as annexations; and she wants to make sure they have good lines of communication and everyone is speaking to one another. She stated she could not call another District to let it know of her request, and that is why she brought it up now.

Chair Voltz stated on that very issue, the City of Palm Bay actually put that area in the JPA that they wanted to annex the Sebastian Buffer Preserve and the Park Ranger down there freaked out and said they are not going to do it, and asked why they wanted to do it. She stated City Manager Lee Feldman apologized and said the City does not want to do that and he is sorry they should not have mentioned that before talking to the Park Ranger; so that is why they went ahead and put it on the Agenda; and she does not feel comfortable pulling it off at this point.

 

Upon motion and vote, the meeting adjourned at 2:55 p.m.

 

ATTEST: __________________________________
HELEN VOLTZ, CHAIR
BOARD OF COUNTY COMMISSIONERS
BREVARD COUNTY, FLORIDA

___________________
SCOTT ELLIS, CLERK

(S E A L)