EVALUATING THE GIC OPTION

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					                                                 EVALUATING THE GIC
                                                 OPTION

                                                I    Andrew Powell
                                                     Analyst/Consultant
                                                     Boston Benefit Partners,
                                                     LLC

                                                     Town of Randolph

                                                     October 14, 2008

177 Milk Street • Suite 310 • Boston, MA 02109 • tel 617.570.9100 • www.bosben.com
         Today’s Presentation
    Overview of the Group Insurance Commission
    (GIC)

    MGL 32B, Section 19 and the GIC

    GIC Option for the Town of Randolph

    GIC Eligibility Guidelines

    Q&A


2
         Escalating Healthcare Costs
    Local and State Government Response


    July 2007 – MGL 32B, Section 19 Amended to
    allow Municipalities into the GIC

    2004 to Current – Continued threats to
    Remove Collective Bargaining Rights from
    Healthcare Negotiations
    –   Changes to M.G.L. 32B
    –   Mandating Communities Into GIC



3
    Town of Randolph and the GIC Option

     July 2007 – MGL 32B, Section 19
     Amended to allow Municipalities into the
     GIC
      –   Retirees have collective bargaining
          rights
      –   All union negotiate as a coalition
      –   Agreement focuses on:
            Premium split
            Medicare Part B for retirees
            Impasses resolution
            Duration of agreement

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    What is the Group Insurance Commission
    (GIC)


     Established in 1955 by State Legislature


     Purchases Health Insurance for Approximately 160,000 Active
     Employees and Retirees (277,000 covered members)


     Quasi-Independent State Agency Governed by 15
     Commissioners
      –   5 Commissioners Represent Labor




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     GIC Health Insurance Plans

    GIC Plan Options
      Active Employees & Non-Medicare Eligible Retirees
      Choose from:
       – 4 Regional PPO Plans; 1 Indemnity Plan
       – 4 Regional HMO Plans

      Medicare-Eligible Retirees:
      – Retirees must join Medicare if age 65 and Eligible for
        Medicare (Self or Spouse)
      – Choose from 6 Medicare Supplemental Plans
      – Municipality Pays any Medicare Penalties



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    GIC Health Insurance Plans
    GIC Plan Options
     Active Employees & Non-Medicare Eligible
     Retirees
      –   Regional HMOs
          Fallon, Health New England, Neighborhood Health Plan
      –   Regional PPO*
          Tufts, HPHC, Unicare Plus & Choice
      –   Indemnity
          Unicare Basic with CIC


    * Most state employees and municipal employees select one
     of the PPO options


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     GIC Retiree Health Insurance Plans
    GIC Plan Options

     Medicare Supplement Plans
      –   HPHC Medicare Enhance
      –   Tufts Medicare Complement
      –   Tufts Medicare Preferred
      –   Fallon Senior (Worcester Area)
      –   Health New England MedRate (Western MA)
      –   Unicare Indemnity Medicare Extension OME
          w/ CIC




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    Understanding an HMO, PPO, and Indemnity Plan
      HMO
        Need referral from your PCP before seeing specialist.
        Can access emergency care anywhere.
        Cannot access (non-emergency) care outside of network

      PPO
        Do not need referral from PCP before seeing specialist
        Can access emergency care anywhere
        Can access non-emergency care outside of network with deductible.

      Indemnity
        No referral, no network, no restrictions.


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     Joining the GIC
     Section 19 Coalition Bargaining
     Process
     Board of Selectman Adopts MGL 32B, Section 19
     Unions Create a Public Employee Committee (PEC)
     Union Representatives Negotiate a Written Agreement
     with City:
       1.   Premium Split
       2.   Medicare Part B Contribution
       3.   Impasse Resolution
       4.   Duration of Agreement
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       Section 19 Coalition Bargaining

     Process (continued)
      Agreement Must be Finalized Before October 1, 2008
      in Order to Enter the GIC for July 1, 2009


      Agreement Must be Accepted by the Local Governing
      Body and 70% of the Union Coalition Weighted Vote


      Each Union Obtains Vote from their Membership
      Based on their own By-Laws



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       Section 19 Coalition Bargaining and Public
       Employee Committee (PEC)

     The Public Employee Committee (PEC)
      IAC is Replaced by PEC
      PEC Structure
       –   Representative from Each Union
       –   Retiree Appointed by State Retiree Organization

      Unions have Weighted Vote Based on Members
      Eligible for Health Insurance




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     GIC PPO Plans Cost Less
     TOTAL                          Randolph       GIC
     Cost/Year
     HMO Blue          Single       $7,540/year    $6,168/year
                                                   HPHC PPO
     HMO Blue          Single + 1   $14,298/year   $14,916/year
                                                   HPHC PPO
     HMO Blue          Family       $21,306/year   $14,916/year
                                                   HPHC PPO
     Blue Care Elect   Single       $10,495/year   $6,168/year
     PPO                                           HPHC PPO
     Blue Care Elect   Single + 1   $17,476/year   $14,916/year
     PPO                                           HPHC PPO
     Blue Care Elect   Family       $24,788/year   $14,916/year
     PPO                                           HPHC PPO
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          Randolph HMO Blue vs. GIC HPHC PPO
          Lower Premium Cost – Higher Copays
     Actives and Non-         Randolph          GIC              Impact on Plan
     Medicare Retirees        HMO Blue          HPHC PPO         Member
     Single Cost/Year         $2,073 (27.5%)    $1,234   (20%)   $839 Savings to
                                                                 You per Year
     Single + 1 Cost/Year     $3932   (27.5%)   $2,983   (20%)   $949 Savings to
                                                                 You per Year
     Family Cost/Year         $5859 (27.5%)     $2,983   (20%)   $2,876 Savings to
                                                                 You per Year
     PCP OV Copay             $5 in 2008        $15              $10 more per
                                                                 visit 2009

     Specialist OV Copay      $5 in 2008        $15/$25/$35      $10 to $30 more
                                                                 per visit 2009

     Hospital                 No Charge         $300/admission   $1,200 max per
                                                max 4/year       year

     Prescriptions (retail)   $10$20/$35 in     $10/$20/$40      $5 more in 2009
                              2008
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     Randolph Blue Care Elect vs. GIC HPHC PPO
     Lower Premium Cost – Higher Copays
     Actives and Non-       Randolph          GIC              Impact on Plan
     Medicare Retirees      Blue Care Elect   HPHC PPO         Member
     Single Cost/Year       $5,248 (50 %)     $1,234   (20%)   $4,014 Savings
                                                               to You per Year
     Single + 1 Cost/Year   $8738   (50 %)    $2,983   (20%)   $5,755 Savings
                                                               to You per Year
     Family Cost/Year       $12,394 (50 %)    $2,983   (20%)   $9,411 Savings
                                                               to You per Year
     PCP OV Copay           $15 in 2008       $15              No Increase in
                                                               2009
     Specialist OV Copay $15 in 2008          $15/$25/$35      $10 to $20 more
                                                               per visit 2009
     Hospital               No Charge         $300/admission   $1,200 max per
                                              max 4/year       year
     Prescriptions          $10$20/$35 in     $10/$20/$40      $5 more in 2009
     (retail)               2008


15
       Premium Contribution Changes
       Non-Retired Municipal Teachers

                      Current Plans   GIC Plans

     HMO              72.5% - 27.5%   85% - 15%
     PPO              50% - 50%       80% - 20%       Year 1 & 2
                                      82.5% - 17.5%   Year 3
                                      85% - 15%       Year 4
     Indemnity        50% - 50%       60% - 40%
     Medicare         50% - 50%       60% - 40% Most Plans
                                      80% - 20% HPHC / Unicare
     Surviving Spouse None            Same as Above

     Medicare Part – B None           60%


16
       Premium Contribution Changes
       Retired Municipal Teachers

                      Current Plans   GIC Plans

     HMO              90% - 10%       85% - 15%
     PPO              90% - 10%       85% - 15%

     Indemnity        90% - 10%       75% - 25%
     Medicare         90% - 10%       85% - 15%
     Medicare Part – B None           60%




17
     Randolph PEC Agreement Highlights

      Retirees receive a 60% Medicare Part-B subsidy
      starting 7/1/2009
      Section 19, Coalition Bargaining remains in the
      event of withdrawal from GIC after six years
      Binding Arbitration for Impasse Resolution
      Surviving Spouse Coverage




18
            Advantages vs Disadvantages


               Advantages                 Disadvantages

     Lower Premiums               Higher Out-of-Pocket
                                  Expenses

     Moderate Premium Increases   Lose right to negotiate over
                                  future plan design changes
      (5-8% instead of 10 + %)
     Retiree Protection           No Blue Cross products at this
                                  time




19
     GIC – Eligibility Rules

       Municipal Employees may not Participate in GIC
       Dental, Vision, Life or LTD programs, but may
       bargain and purchase locally through Town
       Each Member must Provide Birth and Marriage
       Certificates for Dependent Coverage
       New Hires are Eligible first of the Month after 60
       Days
       Retirees over Age 65 on M/C with Younger
       Dependents have Special Enrollment Rules




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     GIC Eligibility Rules

     Medicare Eligible Retirees

       If 65 and Medicare Eligible

       Retiree Enrolls in M/C Supplement Plan
        –   If Retiree has Spouse and 1 Dependent under
            65, they enroll in two single GIC plans (Example
            with Tufts/HPHC)
        –   If Retiree has Spouse and 2 or more Dependents
            under 65, they enroll in Family GIC plan (Example
            with Tufts/HPHC)


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     Other Considerations


       Pre-Existing Conditions are Covered

       Drug Formulary Differs by Plan

       Out-of-Area Members must Enroll in
       Indemnity Plans

       Students are Covered to Age 26 or Two
       Years after They Lose their Dependent
       Status (Per IRS Guidelines)

22
     Internet sources of information


       Group Insurance Commission: www.mass.gov/gic

       Harvard-Pilgrim HC: www.harvardpilgrim.org

       Tufts Health Plan: www.tuftshealthplan.com

       Fallon Community HP: www.fchp.org

       Unicare: www.unicarestateplan.com




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     Internet sources (cont.)

     Researching the GIC – Provider Directory
        www.mass.gov/gic

        Click “GIC Plans”

        Click “Health Plan – e.g. Tufts Navigator”

        Click “The Plan”

        Click “Provider Directory”

        Type in last name of doctor

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                Q&A




            Andrew Powell

     Boston Benefit Partners, LLC

     617 – 570-9100 extension 224




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