MINUTES OF THE MEETING OF THE BOARD OF COUNTY COMMISSIONERS

BREVARD COUNTY, FLORIDA

 

 

February 12, 2009

 

 

The Board of County Commissioners of Brevard County, Florida met in special session on February 12, 2009, at 1:05 p.m. in the Government Center Florida Room, 2725 Judge Fran Jamieson Way, Viera, Florida.  Present were:  Chairman Chuck Nelson, Commissioners Robin Fisher, Trudie Infantini, Mary Bolin, and Andy Anderson, Interim County Manager Stockton Whitten, and County Attorney Scott Knox.

 

 

 

Stockton Whitten, Interim County Manager, stated he has a couple of scheduling issues; there will not be a quorum at the April 2, 2009 Zoning meeting because three Commissioners are traveling out-of-state; requested that the April 2, 2009 Zoning meeting be held on April 9, 2009; and stated that has been coordinated with the Boards calendars.

 

Chairman Nelson inquired if there is an issue with Zoning; and if they have all of their notices; with Mr. Whitten responding staff is ready to go forward with that move.

 

Motion by Commissioner Anderson, seconded by Commissioner Bolin, to approve changing the date of the Zoning meeting from April 2, 2009 to April 9, 2009.  Motion carried and ordered unanimously.

 

 

Mr. Whitten stated on February 26, 2009 there is a Housing Projects Workshop scheduled; he is not sure what the intent or the goal of that Workshop is; he inquired if it could be moved to later in the schedule and replace the Housing Projects Workshop date of February 26, 2009 with a Budget Workshop; stated there are a number of open dates on the Board’s calendar; and in addition to the February 26, 2009 being a Budget Workshop he would like to make March 19, 2009 and April 23, 2009 Budget Workshops also.

 

Motion by Commissioner Infantini, seconded Commissioner Bolin to approve changing the Housing Projects Workshop scheduled on February 26, 2009 to a Budget Workshop; and approved the Workshops scheduled on March 19, 2009 and April 23, 2009 to be Budget Workshops.  Motion carried and ordered unanimously.

 

 

Mr. Whitten stated there will be an add-on for the Transportation Stimulus Projects; Mel Scott, Assistant County Manager, will update the Board on how the staff is proceeding in terms of bringing the Board back the prioritization of those projects; and staff may need some direction from the Board prior to Tuesday.

 

Mr. Scott stated in following up after a productive meeting with the Metropolitan Planning Organization  (MPO)  and  in following up this moment now is being replicated throughout all the

Municipalities; and there were assignments given that needs to be completed by next week at noon.  Mr. Scott stated he just wanted to inform the Board that he will be preparing and bringing it in on Tuesday as an add-on, which will seek to accomplish several things; first, it will seek to get the Boards blessing on the prioritization list, which will take up a $6.1 million figure; and he will do his best to prioritize that and any insights that the Board would like to share of how it might be handled would be beneficial to him at this time.  He stated he will share with the Board some received letters from cities wishing to collaborate; there is a the letter from City of Titusville wanting to collaborate on the Sission Road repaving; that will help the County in crafting some of the allocations in District 1; and he will be bringing to the Board authorization to award to the lowest several bidders to bid for a small team of providers with the stimulus package.  He stated at this time if there is any insight the Board would like to share regarding the methodology for the transportation repaving list, he would be happy to hear it.

 

Commissioner Anderson stated when looking at the list he thinks the County needs to do a triage, because the roads in the worst shape should be priority; he stated he has the smallest amount of unincorporated area; it is very obvious the two cities he represents basically are the biggest receivers of stimulus money; however, he still has County roads located within those municipalities.  He inquired if a letter was not received from Melbourne or Palm Bay will there be a call to them to try and work with them for cost sharing on those County roads.  John Denninghoff, Public Works Director responded he has preliminary indications from Palm Bay that its needs are great enough that it is going to focus its funds on City roads rather than develop an interest in helping the County with one of the County roads; it is the opposite with Melbourne, their staff has indicated several times that there is an interest there and he does not know if the County will get anything infinitive from Melbourne until after it has its council meeting, which will be Tuesday.  He stated there is a strong indication from West Melbourne as well, but a majority of their roads are County and State roads such as I-95, and the County will not put any money into I-95; there will be some endorsement, but he is unsure of what road or amount; and he will continue to have dialogue and information to update the Commission on real time on Tuesday, with more information given about different cities also.

 

Commissioner Anderson stated all Districts received some amount of stimulus money, but small city amounts were much smaller than the larger cities; Palm Shores did not get allocated any stimulus; and he does not know if they have any County road needs.  Mr. Denninghoff advised that they do not have any city roads that are eligible, it will be U.S.1 or Pineda. 

 

Commissioner Anderson stated he wanted to make sure it was equitable for everybody in the County and knows District 2 has the majority of unincorporated area; and he knows he does not have as much as the other Districts.

 

Commissioner Bolin stated in District 4, because of the relatively new the roads, they are really not up for resurfacing; she wants to entertain all other Districts in that sense, because those roads have been in existence longer than hers; and asked the Board to please remember when her District is in need since she was generous now.

 

Commissioner Infantini stated she would like to continue the dialog with Melbourne, because while  it  is  not  part  of  her  District  per  se,  she   would  like  to  continue  working  with  them;

Councilwoman Kneehan expressed an interest to possibly move forward on the alignment of the Ellis/Nasa; if that is an option it should be investigated and looked at; she knows Sarno is in desperate need; and she would like to look out for the County good.

 

Commissioner Fisher stated part of the stimulus package was to put people back to work; he does not know if there is a way when looking into the package that it can be seen which one gets the most bang for the buck, but also to create the most jobs in effect; stated he does not know if paving of Sission Road will create more jobs than putting a culvert in somewhere; but he thinks that should be part of the discussions.

 

Commissioner Infantini mentioned in her area in Melbourne and Chairman Nelson’s area in Cocoa there is a lot of drainage issues; and she would like to see those issues taken care of rather than a lot of asphalt.

 

John Denninghoff, Public Works Director, stated there have been other options looked at instead of just resurfacing; in some cases he thinks it might be able to qualify, but it will complicate the picture and the considerations and so, while not having gone down that path very far most things would not qualify or could not be shovel-ready to be part of the 50 percent that would be required in that short timeframe.  He stated those types of projects would more fall into the other half and maybe have another year or two to get shovel ready, but some of the drainage projects will be lengthy to attain all permits needed and will go beyond the timeframe given; and unfortunately the drainage issues will not be able to work for this opportunity.

 

Chairman Nelson inquired how Mr. Denninghoff is going to prioritize these projects.  Mr. Denninghoff responded Public Works has a record of the major roadways that have had resurfacing in the last ten years; staff is going to try and avoid those roadways that have been resurfaced during that time period; by the same token Public Works knows which roads are in the worst shape, and are going to be looking at those roads very hard; stated there is a sensitivity  trying to keep a relatively balanced approach to each of the Districts; he thinks the Board has given him permission to be a bit more free with the decision to help do the job better; and at this point what is going to be done is to formulate staffs opinion as to what the resurfacing should be on those roads.  He stated clearly he recognized the Board has the final say on all of these matters, but the roads that are in the worst condition will be looked at; and are going to go after those the caveat and that he is unsure how to mix into not knowing what the cities are going to do; Titusville, for example has offered up a cooperative measure there; so that will have to be evaluated.  He stated in giving how short the timeframe is the County will have a difficult time coming up with something that it can vet out thoroughly; and unfortunately, that is where the Board will be on Tuesday; and he does apologize in advance, but will do the best he can with it and does not know how to say it any better than that.

 

Commissioner Fisher stated he thinks it is great that Titusville has came to the table to help with that road, but what he does not want to happen is that part of that money is taken and is not allocated with what the County is going to spend in District 1, because Titusville is willing to pay one-third of the cost.  He stated he assumes his District will get more bang for the buck.  Mr. Denninghoff added District 1 will definitely get more bang for the buck and will not ever cheat District 1 of that.

 

Chairman Nelson inquired if Mr. Denninghoff will bring back a list to the Board on Tuesday for final adoption based on an analysis of needs.  Mr. Denninghoff responded yes; stated ordinarily he will have until noon on Friday and will try to do it by then; and he expects changes up to Tuesday morning.

 

Chairman Nelson stated one thing he did notice on the preliminary list during the Transportation Planning Organization (TPO) meeting was a lot of the roads that are up for resurfacing are on the verge of failure; and when roads are looked at it is forgotten if they are not maintained and paved there could be possible base failure, which then leads to a much greater cost. He stated the one road that comes to mind is Cox Road; and it is an industrial area and it just literally on the verge of falling apart.  Mr. Denninghoff explained when base failure gets that far the cost goes up by a factor of a least five to 15 percent.

 

Chairman Nelson stated another item that came out of that when looking at the list is it is not going as far as a lot of people believed from everything heard from the national level; and stated by the time it drifts down to County level it is really just a drip; but will take everything given.

 

 

 

Commissioner Fisher stated he asked Lynda Weatherman, Economic Development Commission (EDC) Director, if she could come up with a Brevard Economic Stimulus Package; what that looks like he does not know, but he thinks on the 17^th there will be some questions on impact fees and some other stuff; he stated she has that assignment and will send a draft; and he would like to bring it to the Board to see if five or six things could be done to help stimulate the economy.

 

Chairman Nelson advised that would be great; in addition to that, for instance, Palm Bay has mentioned having its own package; and he has also mentioned to the Board to look at the County’s projects to see if there are some projects to help stimulate the economy.  He stated the natural reaction is to pull back; and when there are dedicated sources of money, the pulling back does not do anything except hang on to money when it could be building a road or a building needed.  He inquired if as part of the discussion on the 17^th that Mr. Whitten could look into some of the capital projects, because he thinks the County is covered on roads; and stated this would be for any parks or structures where the County might be able to accelerate.  He mentioned Commissioner Fisher and he attended the EDC meeting last week and EDC is working on some of the constraints on economic development; in this session he found out it was County Government; and there is a lack of understanding to some extent when speaking with Ms. Weatherman about this.  He stated the Board is going to continue to work with the EDC to try to make this partnership much more productive in terms of understanding each other.

 

 

 

Commissioner Bolin stated she is requesting permission to do an add on to the February 17^th Agenda and the topic is in August 2008 the Board made a decision to do the Parkway Canal drainage options and decided upon one; and a lot of things happened between then and now and  she  feels  the  Board  needs  to step back and reconsider the situation, and she will go into

more depth on the 17^th unless the Board would like Euri Rodriguez, Solid Waste Director, to talk about it now.  Commissioner Bolin stated the money set aside for this project can be used in another location considering the situation now, with the things that have happened from August 2008 to present with storms the County has gone through; and she would like permission to have an add on to bring the Eau Gallie Stormwater improvement back for reconsideration on the 17^th.

 

Chairman Nelson stated that from a policy perspective any Commissioner has the ability to add on; he appreciates her bringing it to the Board’s attention; and stated there has been no abuse with add ons and with items that pop up in the Board’s business world.

 

Commissioner Bolin stated it is a prime example of having the chance to step back and reconsider a decision made in the past before moving forward.

 

 

Frank Abbate, Interim Assistant County Manager, stated with new Board Members on the Board  this is a good time to review the current program to look at where the County has been, is, and going in the future.  He stated he would like to introduce John Robinson from Robinson/Bush who is the Board’s Employee Benefits Consultant; stated he will be giving part of the presentation today; he especially wants to thank Jerry Visco, Insurance Director, who has spent considerable time developing the PowerPoint Presentation; and he hopes the Board will see a very comprehensive review; and will give a lot of thought in terms to where the County needs to go in the future.  He stated in terms of the workshop agenda, he will begin by giving some background in terms of the historical Board policy decisions that have come into play that impact where the Board is today; also he will review the plan issues and trends that have been experienced and seen in the future; plus what the Board’s funding level has been, the employee and retiree independent contributions has been, retiree benefits, unfunded liabilities related to Government Accounting Standards Board (GASB) 45, which are retiree benefit related, pro-active management strategies that have been put into place; and other ones that the Board may want to consider; and will conclude by discussing future strategies with the Board and where to go from there.  He stated he would like to begin speaking of historical Board Policy decisions; stated over the last 20 years this Board has been guided by thoughtful deliberation by Board Members over the years about recognition of employee benefits package and its value of recruitment and retention; and mentions the Board has done that independently and it is also, at times, relied on information from employee surveys.  He stated there has been a recent employee benefits survey with the results being sent to the Board in the past couple of days; he will be discussing part of that on the PowerPoint Presentation as well; but because the Board has made the strategic decision over the years, one of the things that comes into play and will be very evident is the dependent premium rates and retiree premium rates.  He stated the Board has been extremely sensitive to increases over-the-years and the financial impact that it has on employee and retiree families.  He stated the Board has for many years looked at what employee salaries were, but more focused on what employee increases were than the potential premium increases; and uses that information in making determinations.  He stated as a result over the years what has occurred from a benefits premium sharing perspectives are employees and retirees having enjoyed a very robust plan at a very reasonable cost; stated if a person was to look at the percentage basis where would the County falls in terms of the benefits the Board provides;  the  Board’s  benefit  package  and  premiums  is better than 85 to 90 percent of what

other employers offer; and that is a very robust program.  Mr. Abbate stated the other things that has played a very important roll over-the-years has been the Board’s interest in having hospital networks that include all Brevard County facilities; stated in the late 1990’s when the hospital wars and anti-trust suits were going on the Board was faced with a difficult decision of what to do and there was not a vendor that had all the hospitals in a single network; and as a result the Board was very pro-active and worked together with consultants to develop a partnership plan with the School Board and physician group networks; became a self-insured funded program that accomplished what that Boards direction was; four or five years into that the situation changed significantly and the Board had participation, private insurance companies, and vendors that were able to negotiate contracts successfully with all the hospital systems; and it has moved away from that type of plan to a plan in place today, which includes two different providers, but have always been driven right  through the present day.  He stated 2006 was the last time the County went out for a Request for Proposal (RFP) on health insurance by a Board directed policy to include all the hospitals in one or more plans; and stated basically in 2006 all the hospitals were in both vendor plans that the County offered.

Mr. Abbate mentioned the employee satisfaction survey gives the Board some information to the degree of what the employees find valuable in helping with decision making; what is being seen from the survey is the Board’s health plans satisfaction level has been extremely or very satisfied at 91 percent; stated that is a tremendously high amount that shows a tremendous amount of appreciation that plan participants have for the current program with going to their providers and going through the freedom of choice has been a big issue for retirees as well as employees; and those that participated in the Wellness Programs there was a very high response rate.  He stated the future does not look that bright in terms of ability to sustain the current plan as it exists; with significant changes on the horizon; stated changes will have to happen; and inquired how the Board wants to see them occur.  He stated two primary ways that it can occur is one to increase premium for employees dependents or retirees, and 29.6 percent responded that was their preference from the employee survey; and two is to increase out-of-pocket expenses, which basically means the plan is changed by design, increase co-payments, go to a co-insurance, and raise deductibles to a higher deductible plan and 31 percent responded with that preference.  He stated that 39 percent wanted a combination of both, so in strategizing the County will be able to develop more options to see what alternative will be best.  He stated an interesting thing that he thinks has driven the Board in the past is the employee retention issue with job security being the number one concern; he stated that is not unexpected and reported in at a high of 98 percent and that is one of their primary reasons for being employed; and stated a list was given of ten items based on focus groups and when it was evaluated job security reported 98 percent, Florida Retirement System (FRS) reported 97.5 percent, and health insurance reported 96.8 percent.  He mentions there was a phenomenal response given with the survey and has confidence and creditability of the information returned in the complete survey results.  He stated the Boards plan is made up of 11 different agencies; most of the agencies have been participating in the plan for well over 20 years; stated in his 20 years of employment there has not been an agency to ever leave the plan, but the Board typically has had over the past several years a few agencies to join the plan that were not on previously; and that has basically been through an agency coming before the Board in a public session requesting to participate in the plan.  He stated it will be seen that the employee numbers of who is participating is about 4,800 and the County is the largest employer and the second largest is the Sheriff’s office; the dependent participation level is very high and stated much higher than the partner participant the School Board that also has the identical programs available for their employees;  but the favorable dependant rates have created a situation where

the County has more dependants in its plan than the School Board has; and the ratio, when looked at, comes out to every employee-retiree member there is actually a 2.1 member in the program for every one employee.  Mr. Abbate stated the total enrollment is a little over 10,000, which makes the Board one of the largest employer groups that provides health insurance; and when combined with the School Board, it is a very powerful negotiation.  He mentioned the plans offered are through two primary vendors such as Blue Cross Blue Shield HMO and PPO, Cigna EPO and PPO, and a fully-insured Health-First Medicare program for retirees over the age 65; stated when looking at the numbers Blue Cross Blue Shield has less enrollment than Cigna because Blue Cross Blue Shield came into the program two years ago replacing another vendor so the fact that Cigna has been available for awhile longer is part of the reason; additionally most of the retirees participate in the Cigna PPO and what has been learned over  the years the retirees have a comfort level with their current program so the likelihood of their moving is fairly limited; stated the other contributing factor may be to the extent that in mentioning the Board’s long-term policy has been that all the hospital systems in the program; when using Blue Cross Blue Shield they had all the hospital systems in it; and several months after the Agreement was executed the relationship between the vendor and hospital group changed.  He explained when that happens some hospitals or physicians either add or leave networks and the insurance carrier will tell it is because of the hospital or physician group not being reasonable; it has not been the County’s issue; but it has impacted the Blue Cross  Blue Shield network because it does not include Parrish Medical Center; and as a result, when people go there for services it is more costly to the County because it is not under a negotiated rate.  He stated later in this session there will be an area of hospital admissions information of the impact; and while looking at the rates they need to be taken into consideration in terms of what will be done in the future.  He stated also a competitive model and multiple plans will be discussed later in this session.  He mentioned planned management strategies have been enjoyed with multiple plans over-the-years and access to all the local hospitals; stated the reason this competitive model was recommended and still exists today is if one vendor is used and if for whatever reason the vendor decides they are going to eliminate a hospital or a major provider group the County is stuck with that; and if it is in the middle of the year it can create a lot of chaos.  He stated that has happened on multiple occasions such as when Aetna was a provider for the County as the only provider and when United Health Care was there and seen a little bit of that with this current situation with Blue Cross Blue Shield.  He stated the Boards direction has always been followed to offer multiple plans so that a person is not caught in that situation; but there is always the opportunity to be able to offer a different product that hopefully has the physicians systems or hospital systems in it that the employees want, and that the Board has wanted to make sure that kind of choice opportunity was there.  He mentions joint-purchasing with the School Board while participating with them since 1999 when beginning negotiations as partners and still have plans to mirror one another; and stated although each is a separate entity and do not have to comingle funds for that purpose.  He stated benefit carve-outs, and that means there is certain benefits that are offered as part of the health insurance plan currently that do not come through those primary insurance carriers such as Blue Cross Blue Shield or Cigna; specifically, there are two main areas one being the environmental protective services and mental health which is done through a fully-insured program, which has been more cost effective to the Board over-the-years and is fully-insured; second is prescription, which is done through a third-party administrator Walgreens Health Initiatives; and he will be speaking more about that later because it is time for the County to go out for a Request for Proposal (RFP) and he will be seeking Board approval to begin the process.  He stated another issue in terms of planned management strategies last year was an important year for the County  and  having  11  agencies  participating  during  the  time  of  operation  has  been  fairly

informal with no problems in terms of who participates, pays, and everybody working well together; in the past year issues arose, which caused the need to look and make sure the County memorialized through an Interlocal Agreement with each agency, which was a very comprehensive one being submitted to all the agencies and Mr. Abbate stated he was extremely glad to bring forward to the Board executed Interlocal Agreements with all 11 agencies that participated in the program last year; and that the agencies are continuing to participate in the program this year.  He stated that does a lot for the County, because it is a good, comprehensive document, and leads the way how the Board moves forward ultimately related to the where the Board is headed in the future with premiums, policy decisions, and recommendations that will come to; but this Board has the final authority over what happens and that is provided for in the Interlocal Agreements as well.  He stated one aspect of the Interlocal Agreements is there is the Employee Benefits Insurance Advisory Committee, which has existed for a long time has been revised over-the-years; most recently in 2005; it provided for how the committee operates, functions; and who the members are is provided for in the Interlocal Agreement and are an Advisory Committee to this Board.   He stated one thing he wanted to point out is currently there is a vacancy; in 2005 the Board wanted to see a retiree representative on the committee and on the Board’s initiative it directed staff to go forward and seek from the retirees who was interested in participating; he stated that was done and information was brought back to the Board and the Board selected Doug Futch to participate; and recently, for personal reasons, he has had to resign the committee.  He advised during that time there is also an employee representative that is selected through the Employee Advisory Committee and that representative was Georgia Phillips; she has functioned in that capacity for a couple of years; but this past year recently she had the opportunity to retire, so she will not be serving as the employee representative anymore; but she did volunteer and fulfill the role as the retiree representative if the Board so chooses; and that was discussed with the Employee Benefits Advisory Committee and they did make a motion and recommendation to the Board that she be appointed.  He stated that is totally the Board’s call and it can go that way or another if the Board has a different direction as to how to go about selecting someone to be the retiree representative.

 

Motion by Commissioner Bolin, seconded by Commissioner Anderson, to unanimously appoint Georgia Phillips to serve as retiree member on the Employee Benefits Advisory Committee, replacing Dough Futch, said term of appointment to expire December 31, 2009.  Motion carried and order unanimously.

 

 

Mr. Abbate stated the next item to go over is the decision making process that is currently in place and he will explain how it is done currently and then will look for Board direction in terms of the Board wanting anything to change.  He stated in early February there were various Charter Offices that were new and new Commissioners that have appointed new members to the Committee; while spending a considerable amount of time in early February after the Charter Officers and Agencies that the new elected officials came into affect were able to make their appointments, stated in early February there was the first Employee Insurance Benefits Advisory Committee; significant time was spent going over a lot of detailed information; and that Committee reviewed the Committee program status and is ready to make recommendations to move forward.  He stated in this particular workshop will hopefully help the process and will be reviewed in detail; based on the information that will be provided to the Board for direction in terms of how the Board would like to move forward; once that happens and the direction is given,  the  Interim  County Manager will be developing his proposed budget to the Board based

on that information; this is a large part of the Board’s budget and that is part of the one reason for this workshop now, because it is really strategic in how the Board moves forward; and the Interim County Manger will determine the budget with whatever rates the employer rate increase is on a tentative basis that the Board wants to see.  Mr. Abbate stated he is hopeful that the Board will give some direction on that while moving through his presentation; once that happens between now and August Request for Proposal (RFP) will be done and during that time frame the most up-to-date information available will be reviewed based on what the parameters that the Board tentatively sets the Insurance Advisory Committee will come back and make recommendations to the Board relative to plan design change premiums that the Board may wish to consider in the August to September timeframe; and then the Board will have that opportunity to voice the direction the Board wants to go as heading to open enrollment in October.  He stated that is the current model in place and he will be happy to modify it in anyway the Board sees fit during that proposed process.

                        

He stated employer-funded methodology currently based on the plan design the Board has approved and has in place with all the various insurance programs including the co-payment structures, what is in or out, the number of plans available, and the premium structure that the Board has approved to put in place for employees, retirees, and dependents based on that structure and those revenues the County can predict rather accurately what kind of money has to be contributed by the employer to adequately fund the program; and based on all of that information the current required strategy requires $48 million in employer funding.  He stated can that can go up or down; but it is required based on what the current program design is; the program, premium structure, Board contribution up or down can be changed how it existed; but inquired how is that program funded; he stated the Board funds the program on an employer basis by taking that amount of money that the County knows will be needed with experience from the number of years being done but there are always variables involved; stated dividing the number of full-time eligible people who could participate in the program that gives the monthly employer premium; and every employer pays for all those individuals, whether he or she participates in the program or not.  He stated there was discussion last year about the most effective way to move forward; there was some dialog about people who opt-out and the County should not have to pay the same employee premium.  He stated about the amount of the bottom line, there is a different strategy that could be used, but it creates two primary problems; one, when funding for every full-time equivalent employee makes it easier to budget, especially if it is a small office and a person is funding for a certain amount of benefits; stated if a person for one year does not participate that is fine, but if it not budgeted for that person the next year it changes and someone new comes on board there is a $10,000 to $11,000 loss and that money is not in the budget to pay for it; so paying across the board like that has worked well for the Board over the years and that is the current strategy that everyone is participating in; and hope that clarifies some of the issues with that.  He mentioned with the Interlocal Agreements there are a variety of highlights needed to be brought to the Board’s attention; one being every agencies obligations and responsibilities is outlined in it; the employee methodology remains this Boards determination with continuing to do what has been done or go to a different methodology; and if going to a different methodology and the plan design is not changed or the employer retiree contributions, then instead of 907 percent, which is the current contribution rate, it has to go up because it just has to meet the $48 million.  He stated the terms for every entity participating has provisions in the Agreement that the County has to notify an entity if the Board does not want an entity to continue participating for whatever reason; the primary reason is the entity is not contributing and the agreed amount and stated he does not anticipate that to be a problem with anyone; but there is a prevision that says by July 1^st the determination  needs

to be made so there is plenty of notice to go out to another plan that can be in place by the end of the year for the next calendar year; also, there is a prevision that the County needs to be informed if the entity wants to move out so it will work out to the mutual benefit of all the agencies participating.  He stated it also does a good job of outlining retiree contribution and who is responsible for the retirees when he or she leave the plan, which is covered in the Interlocal Agreement; it outlines the Employee Benefits Insurance Advisory Committee (EBIAC) role in the process and the bigger participating agencies all have a representative on the EBIAC; but it is very clear that the exclusive final control and decision making authority rests with the Board.  He mentioned going through the history of the plans expense and membership; he stated the bad news is over the long-term and the current program is not seen sustainable in the current way that it operates, because it is cost prohibited for  a  variety of reasons, and while looking at what was presented to the Board four or five years ago is virtually right on the money were the County ought to be; but the bigger challenge is the economic times for the Board today, the fiscal constraints employers faces, and the fact that the program has grown.  He stated what was a 10 percent increase on an $18 million program was $1.8 million and it is an 11 percent increase on a $50 million program and that is $5.5 million; since medical inflation has been very constant over time it can be seen that in the year 2000 the plan expense was $18 million, but with Mr. Abbate stating the history of medical trend and growth of the program currently it is projecting for 2009 is for it to be $53 million; last year it was $48 million.  He stated if looking three years out, the County will be at $65 million if nothing is changed and that is almost $17 to $18 million additional when everybody is cutting; he inquired where does that money come from; and stated it puts the Board, employees, and retirees in a very difficult position.  He stated additionally, he wanted some history on the employer premium contribution over the last six years from 2004 to the present with how much has employer funding gone up over those years; the 907 percent rate use to be 600 and explained how much did that increase on a percentage basis over time; and on average, in the last five years the employer increases in the contribution strategy was 8.55 percent.  He stated the national medical trend has averaged about 11.6 percent; where the difference in the money coming is the employees and retirees either through premium increases or plan designs are making up the difference; additionally in 1999 when the Board went to a self-insured program from a fully-insured program reserves had to be developed so the premium rates that had to be developed to develop those reserves had to be more than adequate to pay the current expenses and, therefore, the rates that had been a little bit higher do not have to match medical trends as those reserves have grown and built to where they are today; and no additional reserves have to be built at the same rate that was required over the last six to eight years.  He stated the premium revenue and contribution ratios is a very valuable benefit that employees have enjoyed and continued to enjoy; the employer has picked up for active employees 97 percent of the cost; employee retirees pay approximately three percent on a premium basis, which is not the whole program; on active dependents, the contribution rate is 89 percent the employer paid, the retiree active dependents contribution rate is 11 percent, and the Board is paying 63 percent on an overall basis on the retiree contribution strategy of 37 percent.  He stated the Board has been provided a survey done last year by Indian River County showing of the 29 counties surveyed that the 63 percent rate was most favorable for retirees compared to other jurisdictions.  He stated overall when all this information is put together on the premium strategy side, the overall program is very close to 89 and 11 percent; meaning that the premium dollars collected from employees and retirees are putting in about 11 percent of that money and all the contributing employers are putting in the remaining money required; and stated how employee/retiree dependent dollar strategy currently exists and also provides out-of-pocket expenses meaning how much money does not go through the plan directly goes directly to the providers which is $5.6 million and add

that to the total premiums and the total is $11.8 million; and with the employer contributions overall the program is 80 percent funded by the employer and 20 percent funded by the participants.  Mr. Abbate stated from 2004 to the present it shows an average medical trend of 11 percent; the per-member per-month cost over the last five years trends the 11 percent mark, which is $380 to $390 per-member per-month of the aggregate group of 10,000 members and divide all the costs for the claims; stated the medical trend is easy to predict because it has been steady with actual experience; employee and retiree membership in the program has grown over the year and while noticing 2007 to 2008 it has really leveled out with all the things happening in revenue, property tax, and economy so employee growth for all the agencies leveled or decreased; he stated the reason it is not going down is because of the retiree population continues to grow; and people who then leave and retire stay with the program.  Mr. Abbate stated claim and reserve projections of actual prescription claims and medical for the last fiscal year was $45 million and with an 11 percent projected trend and a constant population growth is anticipated to be $49.9 million for this calendar year; he stated when having self-insured health insurance as the Board does, one of the things required to do by the State is there must be reserves to cover expenses on anticipated expenses that are called incurred but not reported expenses; there has to be a 60-day run-off every year an actuality report must be filed with the State, which it then reviews to determine if there are sufficient reserves on hand; and if not, reserves need to be provided somewhere so that the program will be adequately funded.  He stated the Board’s program is adequately funded at this point though years ago it was not and the Board had to build those reserves; and a target of 25 percent was always used of claims to take incurred but not reported the 60 day run-off period.  He stated while looking at the numbers, he is hoping the projected $10.9 million at the end of 2007 and at the end of 2008 $12 million was needed; and stated where the Board is at this point is above the reserve requirements that the Board anticipates; how much was projected at the end of the year is not certain yet; the County gave $14.5 million depending upon what the claims experience actually is and it may be necessary to dip in the reserve a little bit; but stated he does not anticipate that and is hopeful it is in the $16 million range by the end of the year; and if that occurs that will give a bit of flexibility.  He stated in looking at the reserve numbers he would like to thank staff that were involved in looking at how to change the chart of accounts and separate some things to make it easier to see where reserves are and take out the fully insured aspects of the program to be looked at easier, because today there are funds that are together even though they are insurance related the break out of self insured stands alone and helps with reporting the financial statement that is going to help the Board with discussions and reserve requirements were the County is with Government Accounting Standards Board 45 Liability (GASB).  He stated in regards to GASB if the County is at $16 million and only needs $13 million meaning the $3 million remaining is not free money because there is a unfunded liability of $141 million, however, the $121 million was an estimate and the $141 million is broken out; it is not the Boards liability with every employer reporting their liability separately and is required under this financial accounting standard to do that.  He stated there was an additional analysis on the $141 million by the actuaries that show every agency what their individual liability is; for example, the Sheriff’s Office is $34 million, $81 million for the Board, the Clerk of Courts is $10.5 million, Port Canaveral $3.4 million, and that makes up the $141 million liability; the reserved number is shared by the whole group; but the individual liability of someone left they would take that liability with them as well as their retirees when the individual leaves the program.

 

Commissioner Fisher inquired where the $81 million is broken down and is there a separate chart.  Mr. Abbate responded he has that and it is a separate document; stated the $81 million is  the Boards and it a total of $141 million; he can give all the numbers if needed and they have

been sent to all the agencies; a memo sent January 13th will be provided for the Board and there were three additional ones not mentioned earlier and he will provide them with the Property Appraiser $4.5 million, Tax Collector $5.1 million; and all the other smaller agencies combined liabilities are $2.4 million approximately; and those were determined by the actuary based on their membership of who is in the plan and looked at all the demographics, which was done by an outside actuary.

 

Mr. Abbate stated the retiree demographics from 1999 to 2009 have gone from 484 retirees to 807, with the average growth rate over that period of time being 5.7 percent when growth rate will stay the same in the future even if the number of employees change in the organization; and the pool will increase because of the retiree growth as moving forward in future years.  He stated the average years of service for those participating in the program is 17.23 years, and the average Florida Retirement System (FRS) benefit received is $935 per month; the FRS for those that participate in the defined benefit plan received a subsidy of $5 for every year of service that he or she then get in addition to whatever their retirement benefit is that can be used to help off-set health insurance costs; and the average retiree receives $75 a month for that and it could be up to $150 if he or she has 30 years of service.  He stated retiree demographic information given is how many are under the age 64, how many are over the age 65, and how many retirees carry dependents; from a policy perspective the Board has given direction to continue with efforts to move forward with the Health First Medicare product that is a fully-insured program to offer to the County’s retirees; from 2004 to 2009 there has been good progress with moving individuals into the Health First Medicare plan, because individuals that participate in the PPO plan with Cigna is more costly of a plan and are at risk because it is self insured that the Health First plan that is fully-insured meaning there is a very limited liability there.  He stated for a variety of reasons last year when the Board had looked at this and stated it is costing 90 percent of the retirees cost if the individuals got into Health First, but yet there is only 122 of a possible 574 participating; last year there were 116 out of 568; instead of paying $20 month the individual pays $300 a month.  He stated the County met with retirees and asked why and the retirees responded better plan benefits that are provided under the current program that the Board offers to employees, freedom of choice comfort level, and out-of-area, because there was a limited coverage for retirees moving away from the area to be able to get the coverage unless it was an emergency situation.  He stated that has changed in working together with Health First there is now a Point-of-Service plan were people would have some options to go to the outside with limited success; there has been improvement but it is not were the Board thought it should be today.  He mentioned the GASB liability that is an unfunded liability that must be reported on the financial statement; the Board is not required to fund that liability, the Board has made the choice not to fund it; but it does show up on the financial statement and it can effect a Bond rating with input from the Finance Department about it; and it is continuing to be monitored in this environment will the Board be negatively impacted by that.  He stated he does not think so and has not received any information from anyone that makes him think that it will impact the Board.  He stated the Board’s inquiry from a couple of years ago how can the liability be reduced from getting bigger and one way of doing so is whatever subsidy the Board chooses to provide to retirees; and once there is six years in and he or she retired a person that was eligible because they had six years under the FRS system to receive the retiree benefits that were available in health insurance program.  He stated effective January 2006 the Board established a policy that said whatever subsidy the Board provides a person is only going to get a percentage of that based on their years of service; until 25 years of service have been met a person is not entitled to that 63 percent subsidy; next year the Board may decide that the subsidy may only be 50 percent, then he or she will only be entitled to that 50 percent subsidy

once he or she has 25 years of service; and so a person will get four percent of whatever the subsidy amount is until 25 years of service time is reached.  Mr. Abbate stated the good news is that was a pro-active step to reduce future costs related to retiree coverage; the bad news is that calculation is already included in part of what the current GASB liability is; and that is if the Board had not taken that action that the number would actually be higher today.  He stated with what the cost shifting strategies are the Board used to utilized this past year; recognizing challenges, mirrored the medical inflation rate for retiree premium increases, which of course shifts some of the program costs to the retirees and kept the 63 percent subsidy level constant; the addition of the Health First Medicare Advantage Point-of-Service plan has limited success and will continue to work with Health First to see what additional options can be done in the future to encourage people to move to that plan; one way people will move in a plan is if the premium structure in the other plan available becomes cost prohibited.  He stated the Board has an obligation under Florida Statues to offer retirees the same benefit plan design option that it affords to employees; the Florida Statues however does not say what rate is needed to afford that, it just has to be a blended  rate  that  means  the  whole  group  of employees, employee dependents, and retirees group is the rate that can be charged; and the Board is Statutorily obligated to provide a implicit subsidy retiree, which means even if the maximum rate is charged that is allowed there will still be a GASB 45 unfunded liability.  He stated the current Board policy that exists is relative to GASB 45 that is a pay as you go; the individual employers in the employer funding rate pays whatever the subsidy is through the premium structure and every year it is taken care of on a year-by-year basis.  He stated the Board has the opportunity to address increasing or reducing that liability in the future by increasing premium contributions above the medical inflation trend and by plan design changes, which has been done over the last couple of years and stated he is confident there will be more of that done because the numbers say it just has to happen; unfortunately, it will have to happen at a difficult time for the employees and retirees.  He stated what the Board has done relative to employees was there was no premium increases for active employees last year, because there were no salary increases so the Board tried not to take more money out of employee pockets so they did not increase the premiums; but the Board did make changes on co-payment structures.

 

Chairman Nelson inquired what are the ramifications of all governments being in the same box; and stated he does not want people to think the County is doing something other than everybody else.  Mr. Abbate responded from a practical perspective he thinks what it does is it heightens awareness and over-the-years there has been seen a significant shift of how retiree benefits are paid in the private sector; stated the primary driving force of that was their equivalent of GASB 45; from a practical perspective that is the real impact for a lot of employers who have already subsidized substantially less; and that is part of the reason an increase will be seen over time of where things are headed.

 

Mr. Abbate stated the 2009 cost shifting with the co-payment issues with an office visit costing $15 changed to $20, specialist visit costing $25 changed to $30, out-patient surgery costing $25 changed to $100, and emergency room costing $75 to $125; and those were the additional cost changes that brought additional revenue into the program by those plan design changes.  He stated the more significant increase that occurred was the working spouse premium; and the Board approved a program that if an employee spouse declines health coverage through his or her own employer where coverage is available and they elect to participate in the Boards program then a surcharge will have to be paid of $100 per month.

 

Commissioner Infantini inquired if it is best to go through the whole presentation because she has several questions to address and does not know if she should ask during the presentation or after.  Chairman Nelson responded it is best to ask as going through the presentation from this point forward.  Commissioner Infantini stated she knows that in some places there is a plan in place in order to steer the employees towards a given plan they contribute to the flexible spending plan; she explained it would cost $400 per month per person if get a person goes to plan A instead of plan B; as an enticement the person will contribute $200 per month to flex spending; the individual is still $200 to the better; and she looks at it as free money.  She stated yes, a person will have to pay more because the co-payment is going from $20 to $30; but the way to fund the out-of-pocket expenses is with flex spending; a lot of people do not spend money with insurance they just like knowing that they have it so flex spending would be a way to decrease the premiums to both the County and the employee; but give them back some of the savings; and she does not know what the savings is at this time with the increase in co-pays.  Mr. Abbate advised with a self insured plan the actual utilization is what is paid for so when steering people into that kind of flex spending plan if they are part of the significant number of the population that does not use it, it is giving them additional money; but they were not costing anything.  Mr. Abbate stated there are definitely opportunities in Commissioner Infantini said a structural program if not done appropriately there will be people that will go to a lower premium plan with high deductibles because they are the healthier people that were not costing any money in the other plans already. 

 

Commissioner Infantini inquired if Independent Colleges and Universities Benefits Association, Inc. (ICUBA) are limited to schools educational facilities and if they are willing to be open she thinks it is a good idea but does not know their side; and stated maybe the County should not be self-insured.  Mr. Abbate responded whether or not the Board is fully funded or self funded that is a big factor and what Commissioner Infantini is talking about is steerage could be very significant when in a fully-funded program and the County has tried to get in fully-funded programs and the County is such a big program and there is such risk; and they might be able to get someone to provide a program for one year; but to get multiple year programs they have not been able to be successful to get that.

 

Chairman Nelson stated the Preferred Provider Organization (PPO) does that without giving any money back because the employee is paying for the premium by picking his or her doctor.  Mr. Abbate advised yes, and the employee gets more freedom of choice in the PPO, which is actually the easiest way to go to higher deductibles co-insurance; but it can be done in the current Exclusive Provider Organization (EPO) or Health Maintenance Organization (HMO). which has definite opportunities to move into those areas.

 

Commissioner Anderson stated he knows the Board went through the 2009 payment increases and obviously the co-payments are high in the emergency room because the cost in the emergency rooms are that much higher; and he stated he is aware that the United Postal Service (UPS) national firm has a policy in place with a teamster in its union that if a person frivolously goes to the emergency room for a cold, the person is on the hook for a lot of money that is only for bonifide emergencies; and inquired should this Board consider to reduce costs to implement the same policies.  Mr. Abbate responded absolutely, there is a couple of ways; stated one, as the emergency room co-pay increases itself it is going to help steer people to more cost affordable urgent care facilities; but then the second is actually what was said by Commissioner Anderson with repeated cases and gives opportunity to be looked at.

Commissioner Bolin inquired when looking at changes made last year there was of course concern and a discussion of whether or not by raising the co-payment there would be people that were not pro-active on their health because of it; and inquired has it been calculated if there has been any change from the $5 to $10 difference.  Mr. Abbate stated he has not; but it can be looked at and he thinks it is a bit early; and there is a lag period as it will be more than three-quarters of the year before being able to look at that.

 

Mr. Abbate stated in continuing with the working spouse section of the presentation, what happens when going to the spousal surcharge is with spouses that were not actively working or work for a public entity participating in the County’s program already was 691 that were not affected by the spousal surcharge; spouses who work for a another employer that do not have medical available was 503 that were not impacted; but the people that were impacted are 415 spouses who had employees that were on the County’s plan last year and looked at what was available to them he or she made the determination that it was appropriate for them to remain in the County’s plan, and they are paying that $100 per month surcharge for their spouse to be in the County’s program and not going with the spouses employers, which generates $480,000 per year in additional revenue to the Board; and it was not done by the Board for the purpose of trying to generate additional revenue, it was really done for the purpose of an employer and should not continue to subsidize another employer not providing their employee health insurance benefits.  He stated he thinks the Board was rather sensitive because if the rate that could be looked at was a developed rate that fully covered the cost for spouses based on the County’s plan experience it would be $522 per month with all the spouses divided by their claim costs into the number of spouses for the total.  He stated there are 301 spouses who left the County’s program because of the surcharge and probably went to their employer; and stated that many of the individual spouses that left the County’s program were employees of the School Board, have shifted back, and are the responsibility of the School Board in their program.  He stated many people have spoken their concern feeling that it was not fair; stated with a lot of decisions coming up that is one he has adequately explained to rationale; because that is the rationale that was presented by the private sector when they recommended it be presented to the Board; and that is the base upon which the decision was made. 

 

Chairman Nelson stated for the new Board Members this was the toughest issue that the Board was faced with last year, because it did impact the employees.

 

Mr. Abbate stated the overage dependent eligibility issue is another unfunded mandate from the State meaning the health plan needs to insure everyone up to age 30 on the following basis; if unmarried with no children and they are a resident of Florida or are full-time or part-time students outside of Florida, do not have healthcare available through their employer, and do not have other healthcare coverage, then the parent has the right to put the individual on their plan as their dependent; stated that happened in July and was put in place for January; and 55 people have been added as dependents as a result of that.  He stated the Board does have the opportunity if it so chooses similar to the surcharge issue in the future and he wants to point it out for the Board that if it wants a group to pay something more than what they are currently paying, because right now if an individual did not have a dependent and added one then the individual would pay the one or two dependent rate; and if there are one or two dependents then the individual would pay the three or more rate.  He mentioned the Per Member Per Month (PMPM) with the all the plan costs divided by the total number of members gives the average monthly  cost  of  $390;  the  spousal  PMPM is $522; and the children are $150 per month as of

last year.  Mr. Abbate stated with the dependents that are between 25 and 30 it is suggested that when the totals come in they are probably going to be close to the childrens cost of $150 PMPM because they are healthy young adults.

 

Commissioner Bolin inquired if the Board is mandated to provide the option and is not mandated to determine what the charge is.  Mr. Abbate responded the Board can charge what is believed to be appropriate; and stated the Board also has the opportunity to have a different premium structure for children, spouse, and dependents.

 

Commissioner Anderson stated he thinks the Board should look into this because employer keeps being said and it is really the taxpayers who are paying insurance for the Boards employees; he does not think the County is at a socialized medicine state yet; and knows that Governor Christ tried to do that with this plan; but he thinks the County needs to look at what the maximum for this group is.

Commissioner Infantini stated she is not certain if that has been tested yet because she knows some organizations are not implementing the over 25 to 30 age range because they do not believe it is actually lawful; not everybody has put this in place; and she can see charging the ones using that service the extra dollars.

 

Mr. Abbate stated the County’s thought is to move forward with the County giving the $522 per month and as the County gets closer to the August timeframe there will be six months worth of experience; it will come back to the Board with the numbers again and stated will work with whatever the Board thinks is appropriate at that point.

 

Commissioner Anderson stated it may be found that there is no cost to provide service.

 

Mr. Abbate stated there are varieties of options based on all the information presented and there are going to be a lot of tweaks and changes moving forward; but hopes he is presenting enough information that the Board knows, where the projected costs are for the next several years; the best case scenario is if things go well the Board could be recommending employer funding levels and will be able to stay constant, should it be projected at three percent for the next several years; and, of course, every year there is opportunity to change that.  He stated there is some kind of benchmark needed for a longer term strategy with the provided information that gives a variety of options; zero percent, meaning the Board is going to keep what is currently contributed in place; but everything else related to the plan needs to be absorbed by the plan members.  He stated it assumed that all members such as employees, dependents, and retirees will be going up to 11 percent; if that happened, it will generate $675,000; and in doing the math, if nothing is increased, the Board gets the $675,000, and if medical trend continues that way, to fund the program the Board will have a $4.4 million shortfall that gets made up either through premium changes or plan design changes, which is needed for the sustainability of the program over the long-term.  He stated the next option is three percent, which would be an employer contribution of $1.4 million and that would mean the $3 million would have to be made up in other ways; 4.5 percent would generate $2.2 million and it would mean the participating members would have to generate the other $4.2 million, although they are already paying that extra $675,000 so it is really $2.8 million is what they would be putting in; additionally, that employer increase if the Board feels it can do employer increases in the future what is the impact to the Board; and stated remember there are 11 different agencies some of them are State funded; the Port is an independent agency and when looking from a ad-

valorem property tax perspective what portion of that money is general fund and it would be about 60 percent; and if $2.2 million is taken it is going to be about $1.3 million that would be the impact if done at the 4.5 percent.  He stated six and 11 percent were given; he realized the history over the last five years the average increase is 8.55 percent; to give the Board those figures as a benchmark to hopefully get some preliminary feel from i to help Interim County Manager Whitten develop the preliminary budget; inquired where does the Board feel the contribution rate can or should be at; and stated if the Board is not ready to have dialog yet then he will continue with the presentation and will ask the Board again at the end of the presentation.

 

Chairman Nelson inquired if the Board would like to stop or continue on with the presentation; and stated for Mr. Abbate to keep going with his presentation.

 

Mr. Abbate stated the competitive model in place is National Insurance Carrier Options; there are local ones such as Health First offering an available health plan that can be looked at if the Board would want to move away from the current plan in place; and that would be an example of a restricted network; Health First has a restricted network and have their own health plan; they can lower costs in certain ways, which can be looked at either way as an addition, replacement, or full replacement; if it is a full replacement, the Board would be moving substantially away from the competitive model; he hopes he has adequately addressed that for the Board as to what the potential challenges of that would be; and he is giving his professional judgment being responsible for the program.

 

Chairman Nelson stated it has been miserable experienced because in affect the Board gets into a program for one year and it got hammered the second year.  Mr. Abbate stated that was not with Health First that was with other providers.  Chairman Nelson stated in using that kind of concept as one Board Member stated, it did not work out because there was absolutely no ability to control costs at that point; and there was scrambling mightily to deal with that on several occasions.  Mr. Abbate advised there are other options, and while the Board is currently under the National Insurance Carrier Options there were two competitive ones that were taken; there is the potential when moving forward to move toward a more restrictive networks; if multiple options with restrictive networks were offered for a possibility in the future a Request for Proposal (RFP) would have to be done for the health plans; staff is not recommending that this year as will be making various recommendations to the Board at the end of the presentation relative to what to do in RFP’s; but stated he wanted to share that with the Board now  because if the Board wants to move in a different direction then staff will be prepared to do that.  He stated flexibility of choice is part of where the Board today providing is the choice and spread of risk in plant security really addresses the issue that Chairman Nelson had mentioned.

 

Mr. Abbate stated the options available are the Board can retain the current model and plan structure that can utilize a more limited network plan option and no longer provide plan options that provide all the area hospitals; it has been heard that the Board does not want to utilize a single plan provider because everything is on the table; and he wants to make sure the Board is aware of it so staff can follow its direction.  He stated at this point there is one aspect that staff wants to discuss with the Board and is glad to turn it over to Employee Benefits Consultant John Robinson, President Robinson Bush, Inc., because he deals with issues as big part of the health plan; that is the inpatient hospital costs; and the reason staff brings that to the Board is to make sure it is comfortable with all the information available for health plan costs.
Mr. Robinson stated he will give an overview of some of the analysis that is done when looking at health plan claims; it is not intended to be a deep dive on hospitals and hospitals in this area, it is intended to give the Board an overview of what is being looked at in monitoring when it comes to the actual utilization of claims; the health plan analysis is done on a monthly and quarterly basis; on the monthly basis the financial statements are looked at and the trend line is looked at on a monthly basis to see what the trends are for better forecasting of where things are going at the 11 percent forecast; and inquired where do those dollars get spent.  He advised the $45 million that Mr. Abbate talked about earlier last year is how that is distributed; and about 28 percent of it goes towards inpatient hospitals as one of the components of the analysis when looking at the complete utilization of the claims.   He  stated Robinson Bush, Inc. receives a comprehensive claims report from Blue Cross Blue Shield and CIGNA that gives the entire claim that is paid on the Board’s members behalf, so there is every member and every claim that was incurred during a particular time period; stated it is Health Insurance Portability and Accountability Act (HIPPA) protected so the information is not damaging to any employee; and the information that is presented is not information that identifies any specific individual the claims data is being looked at in aggregate so the trends can be seen on a utilization perspective.  Mr. Robinson stated Commissioner Bolin inquired can the changes in the utilization be seen in the patterns over time with some changes, and the answer is yes; this is one component of several components that are looked at when looking at this particular analysis; and stated again this is just one piece of a comprehensive program that is looked at.  He stated inpatient facilities are looked at because of it being a large portion of the program; the outpatient utilization at hospitals and ambulatory surgical centers can be looked at and there is a break up in the emergency room and urgent care facilities; he can tell the Board the differences in those costs from $1,000 to $100 when looking at the differences from an emergency room visit average to an urgent care, also, being able to see that the actual services per thousand or the number of visits in those particular facilities as a component of each thousand members the Board has; and it is a breakdown to give a much better understanding of how it changes from one year to the next.  He stated pharmacy data is looked at and all of the actual office visits and the specialty visits too; major diagnostic categories from what claims went to cardiovascular, cancers, and muscular skeletal services; he stated that is more of the comprehensive view that his company works with management on a regular basis; he would be happy go through some of those items with the Board if the utilization would like to be seen more of what the trends are; as a part of that an overview wanted to be given of the inpatient facilities in a number of ways one being what were the costs that were incurred through the plan; this is just the cost that the plan incurred during this particular period of time in going to different hospitals with one of the area to be fair to the different hospitals and plans is that there are different severities of hospital stays; a person goes into the hospital to have a baby is not as severe as the person in many cases as severe as a person with a heart transplant; and those particular encounters in the hospital are given a different weight which is determined by Medicare, and is called the Diagnostic Related Grouping (DRG); with all phenomena’s being put into one DRG the severity of that phenomena  or  the  different  complications  that  would  exist  would   have  a  different number for that particular patient that goes in for that; the normal delivery versus the cesarean delivery versus the complications and all of those are given different severities; and that helps to equalize the playing field when looking at different numbers.  He stated the data on the aggregate basis for the plans overall last year there was an average severity of 1.1712, and this year from January through September 2008 there is a severity of 1.3012, so there were ore sever cases in the hospital this year than last year.  He stated with the patients that went to Florida Hospital there were at 2.0, so those were more severe  than  the  patients  that  went  to  Parrish  Medical Center at 1.2; that takes all cases into

Consideration; and then there is a case mix with that so somebody could be at a 2, 1, or .0 and it would all be blended together.  He stated this is not intended to say that all the patients need to be shifted to one hospital or the other this is just to show information and what is happening at this point; there is not enough information at this point to say that this is a better arrangement than another; but it is one of the things being monitored on a quarterly basis.  Mr. Robinson stated the average length of stay for individuals that stayed in the hospital was five days from January to September 2007 and from January to September 2008 it was 4.6 days.  He stated the average paid service for those plans costs were $9,525 from January to September 2007 so it can be seen that the actual costs went down with the number of days in the hospital and costs $9,178 from January to September 2008; some of those cases were the more servere cases going to Florida Hospital; that will show significant differences; increases in other areas will be seen along with some of the costs; but based on this it can be seen as the relative value and the risk factors in how it is factored into the plans themselves; overall the costs are coming down; and it is something that is going to be monitored over time.  He stated Mr. Abbate spoke about the population of more retirees in the CIGNA plan than in the Blue Cross Blue Shield plan and that is one of the reasons that the DRG rating in the CIGNA plan is significantly higher than the average of 1.5 relative value over years 2007 and 2008 compared to the average with Cigna being a little cheaper; the length of stay is a little higher in 2007 than in 2008; and the severity of the patients that are in Cigna while in the hospital were sicker and had more patients than what Blue Cross Blue Shield had.

 

Commissioner Infantini inquired why that is; and people are only sick if they have Cigna versus Blue Cross Blue Shield, because there is a huge disparity.  Mr. Abbate responded there are 450 retirees that are in the Cigna plan and those retirees are not in the Blue Cross Blue Shield plan so as a population that is why the differential is being seen.  Commissioner Infantini stated it is just an astronomical difference.  Mr. Robinson advised when looking at the costs and it is equalized the Blue Cross Blue Shield plan is not that big of a difference from Cigna; and with the answer saying go to Cigna or Blue Cross Blue Shield is not necessarily an answer because the difference is in the severity of the cases that goes to one plan or the other; and a lot of that is driven by the retirees rather active employees.  Commissioner Infantini inquired does the Board charge the retirees a higher rate.  Mr. Robinson replied the Board cannot by Statute, and those are the kinds of analysis; if the Board needs him to go deeper it can be done and he would be happy too do so at some other time; and he just wanted to give the Board  flavor of the actual analysis that is done on the plans and show some of the differences when it comes to the plan itself and also, some of the relative values seen from a hospital perspective; and even though it is somewhat immature at this point it gets more robust as more information is gained.

 

Commissioner Fisher inquired does this make a difference with Parrish and Blue Cross Blue Shield.  Mr. Abbate responded there is no contract so it will be higher because of bill charges with no contractual discount.  Commissioner Fisher mentioned roughly there are 30 percent of the employees in the Blue Cross Blue Shield plan so that is helping to drive that cost up.  Mr. Robinson mentioned those people that selected Parrish would be in the CIGNA plan.   Chairman Nelson stated if a person is an employee living in North Brevard a person really has no choice but to accept Cigna.  Mr. Abbate advised it is also important to remember that the information is valuable and has value and that is why it is being presented today; but it cannot be taken and ran with because the Blue Cross Blue Shield population is much smaller, so if there are a few cases that are big it really throws the numbers off and makes a substantial difference; and the Board needs to be sensitive to that.  He stated opportunities are provided to reduce costs such as steering in certain areas rather in urgent care centers or facilities then that

is an opportunity; and stated he is sure there will be significant dialog from the hospital systems that are going to add significant value as to why the Board should or should not in various areas; but his point today is just to bring the issues forward to the Board.  Commissioner Fisher stated one thing he noticed was the network provider Parrish per day charges $1,600 and when looking Cigna Parrish section is $2,500 a day.  Mr. Robinson explained it is not creditable and since they are not a network provider because there are not very many inpatient admissions; the creditable way would be to look at the Cigna portion in trying to make a comparison from a Parrish perspective.  Commissioner Fisher inquired for the employees in North Brevard is it possible to help with Parrish in getting the Blue Cross Blue Shield partnership back together.  Mr. Abbate responded he would love for that to happen; but stated unfortunately, while the County is a big employer in Brevard, it is a small cog in the wheel of Blue Cross Blue Shield and their interest go way beyond us as a single employer.

 

Commissioner Anderson inquired about something that was talked about in Mr. Abbate’s office at a visit the two of them had together; if there are two hospitals in a relatively same area, one appears more economical than the other, is there an option for the Board to do something; not to penalize the other hospital but to reward a patient if they chose the least expensive hospital.  Mr. Abbate responded there is and that is an opportunity if the Board has an interest for future dialog; he explained the way that would happen is he is sure there will be a full discussion about why costs are in a different hospital systems the way they are; and he has heard some of those discussions previously and is sure the Board will be hearing them in the future as moving along this line; but how to get there would be if in the Board’s determination is yes, there is similar outcomes to be more cost effective to be in system A than system B; and what will need to be done is to raise the daily inpatient charge and the co-pay that employees pay for every day they are in the hospital.  He stated if they make the decision to go to the more expensive hospital they are paying more money out-of-pocket and what will be seen is a significant shift similar to what is in the place of surcharge of people in how they choose their hospital systems.  Mr. Abbate stated not everyone will participate because people have different comfort levels of what they are going to pay and are going to go to that system; it may be because there is a tie-in in physician groups of where there are hospital privileges and how people are impacted; and are all complicated issues, which he just wanted to get the issue out to the Board. 

 

Commissioner Anderson inquired could he provide the Board the options before the meeting of this topic, because he thinks it is fair to the taxpayer to have those options on the table to look at.  Commissioner Fisher stated for one thing that is not fair to the employees living in North Brevard as their doctor’s have privileges at Parrish but does not have privileges at Wuestoff and cannot submit he or she there because the physician has no privileges at Wuestoff.  Commissioner Anderson stated that is true and that is why he was looking at not penalizing those hospitals but maybe discounting the co-payment if an employee went to another hospital.

 

Commissioner Bolin stated she has tried to be an equal opportunity health consumer in her family and unfortunately sometimes determining upon the current illness of that situation determined where she was going between the different hospitals; she frequented several hospitals and it was what the illness was at the end that determined who the doctor was and which hospital to go to; and there is not always a choice.

 

Commissioner Infantini inquired if the Board’s schedule is available; stated this topic is a huge amount of the Board’s budget; she thinks there is a very good dialog, has a lot of good ideas to finish getting out,  and she would like to see more direction on this; she stated she has lost track

of all the great opportunities and does not know if others are on track with them; and wonders if the Board should have another workshop rather than trying to close this off today.  Chairman Nelson stated he thinks the Board is going to get to a point to look at some basic decisions that needs to be made so that the information can be generated that comes back to it; and actually he thinks the key points will be covered today.  Commissioner Infantini stated she was not meaning to stop the presentation today, she just wants to close up the gap because there are so many budget meetings and will know how much this is going to effect the Boards budget.  Mr. Abbate stated he will be happy to come back once some general parameters with options will be available.

 

The Board recessed at 3:05 p.m. and reconvened at 3:23 p.m.

 

Mr. Abbate stated when the Board decides direction on some of the options that are available it may want to consider some of the options with shifting and necessities in a premium increase, and the one that will gives the most return on whatever increase the Board chooses; it is impacted by the employees, because there is more employee participants than any other group; as a group, for example, several years ago the Board went from $5 to $20 co-pays and that impact was a very substantial revenue; the challenges when doing that is at some point employees who do not have any dependents start subsidizing the retirees because the dependents are not paying the full load; the increase can be done on employee premiums, dependent with the one, two, or three-person tier structure which is very family friendly; if the Board wants to move to something for its pro-portionate share based on what the relative group experiences, then the Board may want to look at some points in different tiered structures from children only, spouses only, or family and children; and additionally, the tiered  structure  was  brought  before  the  Board  in  the  past and was not chosen.  He stated there are a number of retirees who have more than one dependent and pay right now under the current structure; whatever the number of dependents he or she has as a retiree will pay the same premium as a retiree dependent coverage; and the Board could look at doing something different in that area with the premium increases employee, employee dependents, retirees, and retiree dependents.  He stated the second is co-payments or co-insurance increases that can be done multiple ways; the Board could stay with the current programs and increase the co-payments or change it to co-insurance, which will become more like what use to be a traditional indemnity or PPO type plan; the Board could go to a high deductible plan that is very significantly impacted to users, people with the lower salaries and he knows a lot of this is going to impact employees and the Board is sensitive too based on previous dialogs heard.  He stated the third is incremental increases that suggests for the Board to do something on the premium side that is going to be higher than the medical rate of inflation, and if above the MTR if 11 percent average rate to whatever the rate the Board decides to go with is going to reduce the Board’s contributions; stated overall on the 89/11 percent, 80/27 percent, or 63/37 percent basis mentioned before; whether it is for the overall plan, including out-of-pocket expenses, or the retiree portion, the Board may have some dialog on to add.  He stated some recommendations for the Board in addition to the thoughts the Board will provide to him in that area are prescription program options, clinical prior authorizations, and step programs meaning the provider Walgreens Health Initiatives has looked at their book of business and the County’s employee utilization of different medications; for example, oxycontin, Walgreens came back to the County and said that the utilization of that drug is significantly above the benchmark that they have in their book of business, therefore, they would recommend to the County that for a small fee if Walgreens can develop something that every time someone comes in with that prescription they will call the physician  and  make sure he or she has explored the most effective options and will provide the

medication; and stated some of these steps are in place currently and can be more aggressive in that area and some cost savings will be seen.  He stated as Mr. Robinson mentioned the 28 percent is in-patient at the hospitals with prescriptions being a tremendously large part of over 28 percent as well and is becoming more so as the County group size increases; and where the benefit comes in is from the prescription side of the program with a significant return.

Commissioner Infantini inquired when using her tax software she can put in any number to get different scenarios and she wants to know if the same can be done with what Mr. Abbate is speaking of because a lot of the suggestions made are increases of the co-pays, percentages for hospitals; and stated if a person has a co-pay and they are hit every time they go versus co-insurance hitting the user because it has the heaviest impact to the County to have them bare more of the cost is like a user fee.  Mr. Abbate responded those types have a cap limit of 20 or 30 percent and once a person has reached a certain cap then that is it.

 

Commissioner Bolin stated she has taken several drug cards to Walgreens and inquired how much does the prescription cost with each of the cards and uses the cheaper one; and inquired is there a mail order prescription plan available; with Mr. Abbate responding yes. 

Jerry Visco, Insurance Director stated one is called a 90-day over-the-counter prescription drug program and the other is the mail order; based on Walgreens book of business the County is very successful with penetration in that market; and there are more people accessing the 90-day over the counter versus the mail order, which is another area that is being considered to make the mail order a bit more attractive than the 90-day with the discounts slightly deeper in the mail order than over-the-counter; and that is a pharmacy option that will be explored this year to see if it cannot be tweaked to generate more traffic on the mail order side.

 

Mr. Abbate stated other options are medical provider networks with a more restrictive network and the theory behind that is the Board can get more cost effective in those networks.  He mentions formulary changes are anticipated to be seen and can be very substantial for example; it there is a formulary change there will be deeper discounts in certain medications, additionally in the pharmacy side if a ten percent co-pay is added it could equal almost $1 million in terms of the off sets; the answer to the questions can scenarios be given; absolutely scenarios and direction can be given and he will develop those what if scenarios for the Board.  He stated where is the County in review of the market, which was asked earlier and he will give the specific details the County went out for RFP Medical Plan last time in 2006; 1994, 1996, and 1999 that is when the County developed its own health plan, and 2003 is when the County was finally able to move to the vendors as mentioned earlier and 2006 is when Blue Cross Blue Shield was brought on board.  He stated the pharmacy benefit enrollment system for RFP proposals was 2004 with a five-year contract and that is why he is coming before the Board today and asking to go out for RFP; he believes that is what needs to be done for this year if the Board is comfortable with it; he will bring it before the Employee Benefits Insurance Advisory Committee and will leave all the parameters open, meaning the current medical providers can provide a program that is reintegrated into the health plan and develop the RFP that way as well as what other stand alone carve-out programs are available; and he will look at a multitude of options relative to formulary design and co-pay so co-insurance structure can be put into place.

 

Commissioner Bolin stated she does not see why that could not be talked about right now; and stated the five years are up, it is time.

 

Motion by Commissioner Bolin, seconded by Commissioner Anderson, to move forward on discussion.  Motion carried and ordered unanimously.

 

 

Mr. Abbate stated he came before the Board already for a benefits enrollment system and that the RFP process is underway and bids have been received; that review has began and will be coming back to the Board with those recommendations; that is basically during open enrollment period for people to be able to go online and enroll in whatever program the Board approves for next year; and he will have instant access to a lot of demographic information and other information for the Board.  He stated the next one will be on the medical plans and stated he put a question mark there because obviously he is ready to follow Board direction; but in light of the County Mangers, search and a lot of other priorities that are going on, he is going to come to the

Board with a lot of plan design options based on what is told today; with the other items going on his thought is that this would not be the year the Board would probably want to go out for RFP; he does not know how effectively it could be done if that is what the Board wants; if it is done, it needs to be done rather quickly otherwise, medical plan changes in terms of who the vendors are at some future time; and at that time the more restive networks will be able to be explored.

 

Chairman Nelson stated given the economic uncertainly he does not know if he would want to entertain that right now because he does not know what will be responded back.  Commissioner Infantini stated she thinks it would be better to find out what is out there because it is a more competitive market and people are very price sensitive right now days.  Chairman Nelson stated everywhere except the medical field is having that discussion with others such as why is the rest of the economy seem to be tanking and the medical field is going up; it is the healthcare nationwide issue; he does agree with Commissioner Infantini; but the reality is it is a different market with different parameters driving it.  Commissioner Infantini inquired if the Board does not go out and check to see what else is out there then the Board is stuck with the exact thing that it has.  Mr. Abbate stated with premium and/or plan designs the Board can change were it is today.  Commissioner Bolin stated she agrees and does not think to start all over again and find out that all new insurance companies are a little bit more to bite off than this particular year because of all the other changes going on.  Chairman Nelson stated the Board is talking about some major changes in the system.  Commissioner Anderson stated he does not disagree with Commissioner Infantini and the only thing he is concerned about is the new administration putting a lot of legislation that is going to change everything dramatically; and does the Board want to replicate this next year again.

 

Commissioner Fisher inquired on the GASB45 there is a certain amount of liability and trying to stay in a certain ratio of $16 million in 2010 and he is trying to figure out if the ratio can be held at $10 or $12 million; inquired can the difference needed be reinsured to say legal; and stated that cost is $500,000 to insure the $3 million in case there is a worst case scenario; but $2.5 or $3 million of that money is sitting there to help bring down that $5 million cost.  Mr. Abbate stated he is not aware of that being possible.  Mr. Robinson advised in the Florida Statues says it has to be an actuary sound plan; he stated what is done is provide the stop loss insurance for catastrophic cases; and there is protection for those large cases of heart transplants or premature babies that is in the hospital for months, so there is stop loss insurance.  Commission Fisher inquired if there is $10 million to plan and suppose the plan got out-of-whack anyway what would be done.  Mr. Robinson responded the reserves that are needed in that plan to be approved  by  the  State would be the Incurred But Not Reported (IBNR); one, for example is the

hospital claim that happens in December that does not get reported until January; money will have to be reserved for those type of situations; the second example is to reserve for two months of claims in addition to the premium stabilization; anything above and beyond that the County does not have to reserve for; but those two factors are required to reserve.  Commissioner Fisher inquired if all of the reserve is taken care of and there is, for instance, $16 million in reserve and the County needs $15 million in reserves why could the Board not insure that $10 to $15 million difference somehow so the reserve requirements are met; but for the Board it might give more cash to offset what is going to happen with health costs this year.  Mr. Abbate responded he does not know and will have to deal with finance on that because that is really a GASB aspect of it.

 

Stockton Whitten, Interim County Manager, stated as he understands it if the reserve is a cash requirement and a portion cannot be financed or bonded-out a portion of the reserve has to be cash basis.  Commissioner Fisher inquired is the County over the required amount.  Mr. Abbate responded the County is over the required amount; but stated only for the actuarially required amount by the State of Florida that was described by Mr. Robinson; there would be no mechanism to get reinsurance for unfunded liability which is owed so it has to be there on the books or it has to be funded in some way; and using that money for reinsurance is not sure that really meets the parameters.

 

Mr. Robinson stated some of that money could be used; yes above and beyond what the County’s liabilities would be; stated one issue to consider is being careful when using non-recurring monies for recurring expenses; and stated from a revenue side people end up spending more than what is taken in and what happens the next year is the difference has to be made up and then there has to bee an increase; and the 11 percent increase spoken of earlier could end up being 15 percent the following year if some of the reserve is being used to cover reoccurring expenses and claims.  Commissioner Fisher inquired if maximum probable loss is $50 million and the County does not have that in cash anyway, if there is a $10 million deductable but there is $35 million just sitting there, is there a way to purchase coverage for that.  Mr. Robinson responded no.  Commissioner Fisher inquired can the dental be carved out and have the numbers been looked at.  Mr. Abbate responded dental and vision is fully-insured; and stated the employees and retirees pay the full cost it is not subsidized by the Board in any way.

Commissioner Bolin inquired can any more Government entities be added or businesses of private to the group for a larger buying power.  Mr. Abbate responded those opportunities have been explored in the past and there has been overarches that have been discussed with the Cities of Melbourne, Cocoa, and Brevard Community College (BCC); stated the answer is the dialogues have been continued and some have occurred in the last 12 months; and stated it has not gotten to any point in those dialogues were the Cities wanted to come forward and join with were the County is in the program in place.  He stated he was contacted a few months ago by BCC to look further into joining in with the County’s plan; and entities are looking into what can be done more effectively and will continue to explore those options.

 

Commissioner Fisher inquired does it help the County if more entities join.  Mr. Abbate responded honestly it is rather limited if there were more people joining and had more buying power to negotiate like in 1999, but if there are a lot more people going to AETNA, Blue Cross Blue Shield, or CIGNA and there is a group of 30,000 people instead of 10,000 people that is not  going  to  change to hospital rates and books of business with all there providers; it may get

the County a little bit of money in the administrative side of what is charged and that is an infinitesimally small amount of money compared to the $50 million and the vendor have a negotiated contract on the national level that drives them and not the fact that the County would have extra lives in its program.  Mr. Abbate stated the exception would be if going out as was done in 1999 and to negotiate better deals; and what was found out by the time year 2004 reached what could be done with the vendors was not as good as what was tried to be done internally and why servers moved back to them.

 

Mr. Abbate stated he would ask as the Board moves forward to give some direction on the decision making process if the Board is comfortable with the competitive model, which he believes was already addressed, then to look at the employer funding and give some kind of outside parameters of where the County could be in the future; then obviously whatever that might be, if there is broad dialog it, would be helpful in terms of what to do relative to the premium and plan design structures to explore more fully to be able to come back to the Board with the what if scenarios; and then more informed decisions can be made at some future date.

 

 

 

Commissioner Fisher stated looking back at the history of the health plan chart there was concern about the amount of members and it was not because of layoffs it was more retirees joining and not so much employees; and stated he is trying to understand that if more employees were added which will increase expenses but will increase revenue; that has to be able to drive down the per-month cost; and inquired why would that not work.  Mr. Abbate stated what happens is if employees stay flat, the retirees increase, and health employees coming to the plan do not cost any money and receive the employer contribution absolutely that would help the plan.  Commissioner Fisher inquired if the cities and BCC participate in the plan.  Mr. Abbate responded it needs to be understood the answer is yes; but one the current structure that is in place with the funding methodology that is utilized provides substantial subsidies; most of those employers when coming in it is unknown of what their retiree participation will be as they try to be brought into the plan; but it could have adverse consequences to the Board; and unless he or she were willing to come into the plan with the same kind of premium structure that is in place now and how the dependents and retirees are funded the likelihood of he or she coming onboard at the rates in place are probably not going to get much participation; the County’s plan will be more expensive for the employer; and they will not be able to come into the plan with the current structure in place.

 

Commissioner Infantini stated basically the County needs to cut down on retiree benefits if new participants were enticed from other organizations, because, as the chart shows, the County is at the top level of any other participants as far as retirees with nobody else giving 63 percent subsidy; there were three providing 50 percent with most providing none; and perhaps if cutting back retiree benefits right there is over $5.3 million of the cost.  Mr. Abbate advised not only is it a significant of cost but if the premium structure is changed then that is going to reduce the unfunded GASB liability and then impact the overall plan costs in terms of the employers contribution; inquired does that make it more attractive for other employers to come in or not; stated it would have the potential of increasing.  Commissioner Infantini stated also, participation would be lost because if the retirees structure were increased then people would drop out of the plan because it would behoove them to go with Medicare if eligible and they would  drop  out  of  the  County’s  plan, which would then reduce the per-person costs, which is

averaged at a ten year old cost versus and 85-year old cost.  Mr. Abbate responded exactly.  Commissioner Infantini stated additionally, what is being subsidized per-person is actually subsidizing more because their per-unit costs is average with all of the County’s per-unit cost making it look like a person costs the same as somebody that is not very well.  She stated she thinks it serves a huge financial benefit for the County because there will be people that actually drop off the plan that are otherwise costing the County; and stated who gets fired from the County for the most part and people already receive nice compensation per the Cody study, retirement benefits, and 63 percent subsidized healthcare, which unless the County wants to be the next General Motors, which she does not, it does not want to go to the Government to ask for more because she feels the Government will not have any left; and she thinks it is time to start rethinking seriously about some of these costs that the County has been subsidizing.

 

Commissioner Nelson inquired how many of those are firefighters and deputies that are retired that retire early and are not eligible for Medicaid or Medicare.  Mr. Abbate responded the most significant amount because there are more retirees that are firefighters and deputies because they can retire at 25 years so they are the larger group; stated he is sure the challenge faced is balancing; but when looking at the very significant impact of people that have served the County and would not say the ones  that  served  for six years; but those that have served for 20 to 30 years is a wake that he knows appropriate consideration will be given to for what those individuals have done up to now; and what he is trying to do is get the Board to a point were it can get to where it needs to get to make the plan work and provide whatever the appropriate benefit level is; and hopes he has given that information to the Board to help make that very difficult decision.

 

Chairman Nelson stated when looking at the Cody study bringing salaries up to a competitive level, if there was a winner the Sheriff’s Department and deputies got the bulk of that; and blaming County employees is not fair.  Commissioner Infantini advised she is not blaming she is saying there is a privilege.  Chairman Nelson stated the context says that somehow the Sheriff Department got something that was not earned or deserved.  Commissioner Infantini stated she did not say that and he continually puts words into her mouth; and inquired has he noticed that he does that meeting after meeting; stated she did not actually blame them as she thinks it was well deserved; but Count employees are well compensated as a population and well looked for  in retirement benefits, which most other sectors of society receives and the sectors that continue to provide defined benefit contributions and plans are all going through bankruptcies and asking the Government for bailout and she is trying to prevent the County from being California; and stated she would rather be pro-active.  Commissioner Nelson stated he is not going to put words in Commissioner Infantini’s mouth, but Brevard County is not California and she is using examples that does not equate to where we it is as a County; and thinks the County Commissions long before this Board came into place, were pretty physically conservative in terms of how it dealt with employees; stated one of the things that drove the need for a study was the fact that staff was not being compensated at those levels.

 

Commissioner Bolin stated she wants to ask Mr. Abbate for further information on retirees; on page 18 the retiree demographics are very well pointed out that retirees are people who have so many years in when starting at age 16, are out after 30 years, and are younger an 88 year old person; and inquired if she could have the demographics of the retirees broken up more than just over or under 65.  Mr. Abbate responded yes.  Commissioner Infantini stated like it is shown in the presentation there are 574 retirees out of 800 that are over aged 65 so they are eligible for Medicare; she is not trying to cut people out of having health insurance; but she has to make

it to where it is more financially responsible for the County so the County can move forward as a County and keep operating; she does not think it is fair for the taxpayers that have lost their homes and lost their jobs to subsidize her healthcare when she retirees; and stated it is a far stretch to ask them to do that and will not ask them to.  Commissioner Anderson stated the direction to look from is the target scenario on page 29; but it is his concern, and he has discussed it with staff, if somebody takes the culture of somebody taking a small increase of co-payments or premiums to save jobs; not only do those jobs need to be saved but he does not want to layoff anybody with the economy the way it is and makes it worse in Brevard County; and he does not want to effect the service of the taxpayers.  He stated his input to the County is, and the entire Board may not feel this way, but there has to be something done with a slight increase to protect the current positions that the County has as much as possible to continue to insure and provide the services to the residents; and he does not know how that equates as far as how many employees are saved per million.  Mr. Abbate responded 20 employees per million.  Commissioner Anderson stated he wants to make sure if his house burns the firefighters show up and there needs to be communication to the employees so they can hear the story that anything the Board does with this is not because the Board is greedy it is because the Board is trying to protect their jobs.

 

Chairman Nelson stated it is a given that the Board is going to have to change the plan and that there are going to have to be costs that the retirees are going to have to pick up a bigger share; does not think that, that was ever a doubt; the question is to what extent does that happen; he thinks what Mr. Abbate is looking for is a target number so that he can begin to build the plan around that; and with the five scenarios, the one in this middle to him is the one that can then be adjusted upward or downward based on how this proceeds; but at least it begins to initiate the discussions on the plan itself.

 

Commissioner Fisher stated that he thinks one of the things that the Board is missing is what 70 percent of the employees have said is they are willing to share in the increase, and have said in their survey that they understand the challenge that the Board is in and that in the out-of-pocket premium with a combination of that it gets them where the employee wants to be; and he thinks more options for the younger family that may be willing to take a higher deductable if that brings down the costs; and stated there should be some of those options available also as going through the plan, which could help bring down the Boards out-of-pocket expense.  He stated the whole industry needs to be reformed and one of the challenges is the Board has kind of helped create the problem by offering a $10 to $20 co-pay; and what do the folks do, they run to the doctor to get medication.  He stated Commissioner Infantini’s report on the retirees that have earned their position with the County to be a part of the program could be looked at down-the-road and modify things later; but he is not advocating change for a retiree drastically as they are on fixed incomes and have a harder earning power that others.  Commissioner Infantini stated she thinks it needs to be fixed.  Chairman Nelson stated the Board has changed that because there is a percentage of benefit based on years of service that the Board has implemented in moving toward that direction.

 

Mr. Abbate stated the subsidy amount needs to go down and the question is how drastically; what he will do for the Commissioners is give some further options as the County moves forward focusing specifically on retirees; and he will give information on dependents and employees as well.  He stated it will be presented in some form of plan design changes; the only thing  Mr. Abbate  needs  to  know  is  the target; and next year is the Board going to be at zero,

3.5, 4.5 percent; and it does not have to be anything that is committed to, it is just to help the what if scenarios for the Board.

             

Commissioner Infantini stated she thinks 11 percent just to, keep up with the normal costs.  Mr. Abbate stated he is talking about the Boards contribution going up.  Commissioner Fisher stated he feels part of the plan aught to be when the County gets the whole budget and if the County does an 11 percent increase does that save 50 to 100 jobs; the Budget side of that will have to be figured out because there is probably a group out there that is willing to pay the 10 to 12 percent more just to keep their job; and he would like to know what that value is if it is tied to jobs.  Mr. Abbate responded the value would be if the Board decided at $2 million and did not know how to spend it that would be 40 jobs or the Board would pay 4.5 percent of the future costs increase of the plan as it currently exists; and will move from that to get to the bottom line and will develop the scenarios for plan costs based on that, that information is available to the Board; but also realize the employer contribution is $2.2 million and that equates to 44 employees; that is all the employers combined; the Boards portion of it is just a certain percentage of that; and that is another target to keep in the back of its mind; because  historically  there  has  been  an  increase in the last five years of nine percent.

 

Mr. Abbate stated there needs to be contributions and he wants the employees to pay a substantially more share of the premium and the out-of-pocket; and the 4.5 percent will tell a very significant impact increases in retiree rates, premium rates, dependents, and plan design changes.  He stated it has to be for the County to be able to get anywhere close to the target amount needed; stated it is the Board’s call if it can do anything for the employees; but it will be extremely difficult for the Interim County Manger to have a target to start building that preliminary budget on and know what the employer contribution rate is going to be; there are ten other entities that are going to be developing their budgets as well; and that is a big part to know how to develop it for the future, so any assistance the Board can give for the future will be helpful.  Mr. Whitten stated the number of employees is an average of $50,000; and for every average of $50,000 the Board saves on average one employee; and again if there is a given employer contribution percentage target then Mr. Abbate can come back to the Board and give all the what if scenarios.  He stated there will be workshops on February 26, March 19, and April 23, 2009; insurance will be a part of one or if not all of those workshops; to start building a budget the sooner the better; and stated it would be nice to walk away today with some type of target.

 

 

Motion by Commissioner Fisher, seconded by Commissioner Bolin, to direct Interim Assistant County Manager Frank Abbate, to utilize 4.5 percent as a target number for employer contribution to the County Health Plan for 2010; and to provide a report to the Board with further options.  Motion carried and ordered unanimously.

 

 

 

Hamilton Boone stated he has an office across the street from Holmes Regional Medical Center at 301 Hibiscus Boulevard, and he is a Board Certified Physicians Assistant in his 30^th year of practice; and has a question for Mr. Abbate, Interim County Manager, School Board, Commissioners, and everyone underneath them to get together and join forces to negotiate for benefits and  a plan.   He inquired does the School Board have its own plan and the County has

its own plan.  Mr. Abbate responded that was back in 1999; stated the County joined forces and went out and developed the Brevard Partnership Plan that went through the Brevard Physicians Network (BPN) and had a contract with them, and with each of the hospital systems; and that plan ended in 2004.  He stated what was continued from that point forward was joint purchasing arrangements were the County went out looking for plans, the vendors came in and both the School Board and Insurance Advisory Committees acted as a selection committee and selected the plans that are currently provided; then the County went their separate ways and the funding is totally separate; so it was a joint purchasing type of arrangement.  Mr. Boone inquired cities were mentioned and colleges but what about the small business owner is that a possibility; stated he has seven employees  and  they  have  their  dependents; and his ability to contract a carrier is very limited; and there are plenty of small business that would love the ability to get together.  Mr. Abbate responded the reason the County is available to have the arrangements were there are 11 agencies that are Statutorily (112.08) provided as a County having the ability to deal with Government, public, or semi-public agencies; stated there is no opportunity to be able to do that in the private sector; and the Board is limited statutorily for agencies that can participate.  Mr. Boone inquired is there any awareness of any states that do allow that.  Mr. Abbate responded in the private sector there is a variety of legislative programs that exist; but he has not looked into it because it does not apply to the County and the type of programs that the County is involved in.

 

 

Upon motion and vote, the meeting adjourned at 4:07 p.m.            

 

 

 

    

  

 

 

ATTEST:

 

                                                                                    _________________________________

                                                                                    CHUCK NELSON, CHAIRMAN

                                                                                    BOARD OF COUNTY COMMISSIONERS

                                                                                    BREVARD COUNTY, FLORIDA

SCOTT ELLIS, CLERK