2017 Plan Performance - legistarweb-production.s3 ... · 2017 Plan Performance 2017/2018 Budget Planning August 15, 2017 ... While GBS does not guarantee the financial viability of

Arthur J. Gallagher & Co.

All information contained herein is subject to the disclosures and disclaimers at the end of this presentation

Guadalupe County2017 Plan Performance

2017/2018 Budget Planning

August 15, 2017

ARTHUR J. GALLAGHER & CO. | BUSINESS WITHOUT BARRIERS™ 2

Plan Design Changes

© 2017 GALLAGHER BENEFIT SERVICES, INC.

ARTHUR J. GALLAGHER & CO. | BUSINESS WITHOUT BARRIERS™

Medical Plan Changes

3© 2017 GALLAGHER BENEFIT SERVICES, INC.

BCBS of TX2016

Calendar Year Deductible $1,100 (3X)Coinsurance%/Maximum 20% / $4,000ACA Annual Out of Pocket $5,000 (3X)Physician Copay $25Specialist Copay $50Routine Lab and Imagining●Billed by Physician 100% Covered●Free Standing 100% Covered●Out Patient Hospital 100% CoveredEmergency Room●Facility $200 Copay + 20%●Physician 20% After DeductibleRX Copays●Copays $15/$45/$70●Retail Specialty N/A●Mail Order 2X●Generic Push/ ST/PA YesPhysical Therapy/Chiro 20% After Deductible / 35 Visits

NOTE: 2016 Plan is currently an 81% ACV Value Gold Plan

$35

100% Covered

100% Covered100% Covered

20% After Deductible / 35 VisitsYes

$120 Copay + 20%20% After Deductible

2X

$10/$35/$60N/A

$600 (3X)20% / $2,400$3,000 (3X)

$35

Plan Name BCBS of TX2015


2017/2018 Budget Year Projections

© 2017 GALLAGHER BENEFIT SERVICES, INC. 4


2017 / 2018 Budget Year Projections


With Trend No Trend

(1) Net Medical RX Paid Jul‐16 to Jun‐17 $4,474,479 $4,474,479

Trend Factor 15 @ 0.8% 12.0% 0%

Total Projected Medical/RX Claims $5,011,416 $4,474,479

Number of Subscribers 6,153 6,153

ACV Medical PEPM $814 $727

ACV Dental PEPM $51 $51

Stop Loss; Pooling Charge: $125,000 $127 $127

ASO Medical/Dental $51 $51

ACA Fees N/A N/A

Total Projected Costs $1,042 $955

Payroll Deductions ($179) ($179)

Projected County Contribution ($823) ($823)

Deficit ($40) $47

EE Lives Annualzed: 521 ($250,352) $295,225

Total Life/AD&D Annual Costs $4 $4

Notes:(1) the Pooling Charge is $125,0002016/2017 Medical/ RX PEPM Budget Projections: GBS $832; TAC $824Actual PY 2017 PEPM through June 2016; $824

© 2017GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. | BUSINESS WITHOUT BARRIERS™ 6

By the Numbers


By The Numbers


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 R12*TAC TAC TAC TAC TAC TAC TAC TAC TAC TAC

ASO/SL $129.00 $129.00 $128.00 $128.00 $136.00 $139.00 $142.00 $157.00 $155.00 $158.00Net Claims $440.00 $418.00 $569.00 $580.00 $682.00 $645.00 $665.00 $768.00 $672.00 $727.00Total PEPM $569.00 $547.00 $697.00 $708.00 $818.00 $784.00 $807.00 $924.00 $827.00 $885.00

County Budget $618.00 $575.00 $575.00 $575.00 $590.00 $625.00 $675.00 $694.00 $750.00 $800.00EE Payroll $110.00 $110.00 $110.00 $121.00 $114.00 $107.00 $128.00 $120.00Total Funding $685.00 $685.00 $700.00 $746.00 $789.00 $801.00 $878.00 $920.00

* 2017 Rolling 12 claims; 7/16 -6/17; Rebates Included

Note:

• ASO/SL; Administration, Care Management, PPO Network, Stop Loss• Claims are net of Stop Loss recoveries from reinsurance contract. (PY 2015 ; $100K); (PY 2016 ; $125,000)• 2008 Plan Year was the inaugural year with TAC. Cost include GPA IBNR Fees/Claims plus the 12/12 contract with TAC

Total PEPM $35.00 $44.00 $44.00 $50.00 $51.00 $49.00 $50.00 $50.00 $50.00 $55.00EE Payroll $40.00 $40.00 $40.00 $44.00 $44.00 $42.00 $47.00 $60.00

Note: Plan Year 2017; Increased Ortho Benefit to $2,500;and Calendar Year max to $2,000

Total PEPM $3.40

• Total Cost increase over five (5) plan year periods since Plan Year 2012; 8.2% ($885 / $818); 1.6% Avg. increase

GROUP DENTAL COSTS PEPM (INCLUDES ASO OF $3.65 PEPM)

GROUP LIFE COSTS PEPM

2016/2017 Budget Claims PEPM $832.00

• County sustaining a very healthy plan claim stabilization reserve asset

PER EMPLOYEE PER MONTH (PEPM) HISTORICAL PLAN PERFORMANCEPer Employee Per Month; Total annual cost divided by # of annual EEs covered (Current 513 Avg.)

GROUP MEDICAL PLAN TOTAL ACTUAL ANNUAL OPERATING COSTS JUNE 2017


Compensation, AM Best &Disclosures

© 2017 GALLAGHER BENEFIT SERVICES, INC. 8


Compensation - HealthA.M. Best Ratings & Compensation - Health


Carrier Quote Status Commission/Supplemental Compensation

Medical, Rx, Dental

TAC Current Net

While GBS does not guarantee the financial viability of any health insurance carrier or market, it is an area we recommend that clients closely scrutinize when selecting a health insurance carrier or HMO. There are a number of rating agencies that can be referred to including, A.M. Best, Fitch, Moody’s Standard & Poors and Weiss Ratings (TheStreet.com). Generally, agencies that provide ratings of U.S. Health Insurers, including traditional insurance companies and other managed care (e.g. HMO) organizations, reflects their opinion based on a comprehensive quantitative and qualitative evaluation of a company’s financial strength, operating performance and market profile. However, these ratings are not a warranty of an insurer’s current or future ability to meet its

contractual obligations.


A.M. Best Ratings- Non-HealthA.M. Best Ratings & Compensation – Non-Health


Carrier Status Commission/Supplemental Compensation AM Best Rating

Life/AD&D

TAC Current Net NR

Arthur J. Gallagher & Co. uses A.M. Best & Co.’s rating services to evaluate the financial condition of insurers whose policies we propose to deliver. The rating of the carrier and the year of publication of that rating are indicated. Arthur J. Gallagher & Co. makes no representation and warranties concerning the solvency of any carrier, nor does it make any representation

or warranty concerning the rating of the carrier which may change.

Best’s Insurance Reports, published annually by A.M. Best Company, Inc., presents comprehensive reports on the financial position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best’s Rating which attempts to measure the comparative position

of the company or association against industry averages.

Level Category Level CategoryA++, A+ Superior C, C- Weak

A, A- Excellent D PoorB++, B+ Good E Under Regulatory Supervision

B, B- Fair F In LiquidationC++, C+ Marginal S Rating Suspended

Financial Size CategoriesFSC I Up to 1,000 FSC IX 250,000 to 500,000FSC II 1,000 to 2,000 FSC X 500,000 to 750,000FSC III 2,000 to 5,000 FSC XI 750,000 to 1,000,000FSC IV 5,000 to 10,000 FSC XII 1,000,000 to 1,250,000FSC V 10,000 to 25,000 FSC XIII 1,250,000 to 1,500,000FSC VI 25,000 to 50,000 FSC XIV 1,500,000 to 2,000,000FSC VI 50,000 to 100,000 FSC XV 2,000,000 or more

FSC VIII 100,000 to 250,000


Disclosures

© 2017 GALLAGHER BENEFIT SERVICES, INC.

The intent of this analysis is to provide you with general information regarding the status of, and/or potential concerns related to your current employee benefitsenvironment. It does not necessarily fully address all of your specific issues. It should not be construed as, nor is it intended to provide legal advice. Questionsregarding specific issues should be addressed by your general counsel or an attorney who specializes in this practice area.

This analysis is for illustrative purposes and is not a guarantee of future expenses, claims, costs, managed care savings, etc. There are many variables that can affectfuture health care costs including utilization patterns, catastrophic claims, changes in plan design, health care trend increases, etc. This analysis does not amend,extend, or alter the coverage provided by the actual insurance policies and contracts. Please see your policy or contact us for specific information for further detailsin this regard.

Network discount analysis is based on a representative basket of 'goods and services' an employer's health plan(s) could expect to see over the course of a year. It isin no way intended to imply a direct correlation to an employer’s actual claim experience. This analysis is designed to approximate a differential in reimbursementrates among various networks in order to assess efficiency and does not in any way represent a guarantee of savings.

This proposal is an outline of the coverage proposed by the carrier(s), based on information provided by your company. It does not include all of the terms,coverages, exclusions, limitations, and conditions of the actual contract language. The policies and contracts themselves must be read for those details. Policyforms for your reference will be made available upon request.

This analysis contains a financial cost summary and an outline of key policy provisions. Although cost is an important factor in placing coverage with a stop losscarrier, key policy provisions are also critical to the selection process and they may represent additional financial liability. For example, a stop loss policy thatsupersedes a client’s plan document language could have a negative financial impact on the Plan. Although most stop loss carriers will agree to cover medicallynecessary and generally accepted practices and procedures, there may be other limitations which should be considered prior to policy acceptance.

GBS and certain of its insurance carrier markets from time to time enter into arrangements providing for additional compensations to be paid to GBS by such carriergenerally with respect to the total volume of premium or insurance coverages written through GBS with that carrier (i.e.: all insurance policies with that carrierwhere GBS is the broker). It is not clear at this time what these fees and/or commissions retained by GBS, GBS affiliates, such as excess and surplus lines brokers,wholesalers, reinsurance intermediaries, and similar parties, may earn and retain commissions and/or fees in the course of providing insurance products.

Commissions include all commissions/fees paid to Gallagher that are attributable to a contract or policy between a plan and an insurance company, or insuranceservice. This includes indirect fees that are paid to Gallagher paid by a third party, and includes, among other things, the payment of “finders’ fees” or other fees toGallagher for a transaction or service involving the plan. Gallagher companies may receive supplemental compensation referred to in a variety of terms anddefinitions, such as contingent commissions, additional commissions and supplemental commission.

Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc.Gallagher Benefit Services, Inc., a non‐investment firm and wholly owned subsidiary of Arthur J. Gallagher & Co., is a licensed insurance agency that does business inCalifornia as “Gallagher Benefit Services of California Insurance Services” and in Massachusetts as “Gallagher Benefit Insurance Services.” Securities and InvestmentAdvisory Services may be offered by Gallagher Retirement Services, Inc. and executed through NFP Securities, Inc., Member FINRA/SIPC. Investment advisory servicesand corresponding named fiduciary services may also be offered through Gallagher Fiduciary Advisors, LLC, a Registered Investment Adviser. Gallagher FiduciaryAdvisors, LLC is a single‐member, limited‐liability company, with Gallagher Benefit Services, Inc. as its single member. Not all individuals of Gallagher and none ofGallagher Fiduciary Advisors, LLC individuals are registered to offer securities or investment advisory services through NFP Securities, Inc. NFP Securities, Inc. is notaffiliated with Arthur J. Gallagher & Co., Gallagher Benefit Services, Inc. or Gallagher Fiduciary Advisors, LLC. Neither Arthur J. Gallagher & Co., NFP Securities, Inc., ortheir affiliates provide accounting, legal, or tax advice.

11

© 2017GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. | BUSINESS WITHOUT BARRIERS™ 12

Arthur J. Gallagher & Co.

Thank You

Bob Treacy, LHIC

Patsy McClellan

Sara Davis

Documents

2017 Plan Performance - legistarweb-production.s3 ... · 2017 Plan Performance 2017/2018 Budget Planning August 15, 2017 ... While GBS does not guarantee the financial viability of