Managing Health Care Costs for Past and Present Public Servants April 27 2015 Health Insurance Cumulative growth from FY01 2 3 4 Municipal Health Reform Approved by state in 2011 Increased flexibility to negotiate health insurance changes with labor unions ID: 192743
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Slide1
Fiscal Leadership and the Modern City
Managing Health Care Costs for Past and Present Public Servants
April 27, 2015Slide2
Health Insurance Cumulative growth from FY012Slide3
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Municipal Health ReformApproved by state in 2011Increased flexibility to negotiate health insurance changes with labor unions
Allowed municipalities to join state’s Group Insurance Commission
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6Projected to save $59M over 4 years2.5% employee premium share increase
Primary care, specialty, Rx, and ER copay increases
Boston’s 1
st
PEC AgreementSlide7
7Elimination of most expensive medical planSelf-funding
Limited wellness program
Dependent eligibility audit
Other Savings InitiativesSlide8
Health Insurance Pressure RemainsIn FY16, the City has budgeted $296 million in health insurance premiums – 10.4% of the total City budgetIn FY16, it is expected to cost the City $18,959 per subscriber for our most commonly used HMO family planIn FY15, the City Council and the mayor re-approved the local adoption of MGL Ch. 32B Section 19, creating a Public Employee Committee (PEC) that both ratified the successor agreement
Successor agreement with PEC included $45 million in savings over 5 years through changes to copayments and premium splits
In partnership with the City’s unions through the
P
EC, the City issued an RFP for the new non-Medicare health insurance options to be available in FY16 and will issue an RFP for new Medicare plan options for FY18
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9Projected to save an additional >$45M over 5 years
2% employee premium share increase
Additional primary care and specialty increases
Boston’s Successor PEC AgreementSlide10
10Excise (Cadillac) Tax AvoidanceNumber of plans reduced
Procurements
Carve outs
Boston’s Successor PEC Agreement- Additional Savings OpportunitiesSlide11
Other Post Employment Benefits (OPEB)In FY16 the City and Public Health Commission (PHC) will make OPEB Trust Fund contributions towards the estimated $2.1 billion liability
* The aggregate amount on deposit in the OPEB Trust Fund as of December 31, 2013 was $272.4 million.
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($ in millions)
City
PHC
OPEB Trust Fund Total
FY08
$ 20.00
$ -
$ 20.00
FY09
$ 25.00
$ -
$ 25.00
FY10
$ 20.00
$ -
$ 20.00
FY11
$ 35.00 $ 1.25 $ 36.25 FY12 $ 35.00 $ 1.25 $ 36.25 FY13 $ 40.00 $ 2.25 $ 42.25 FY14 $ 40.00 $ 2.25 $ 42.25 FY15 $ 40.00 $ 2.25 $ 42.25 FY16 $ 40.00 $ 2.25 $ 42.25 $ 295.00 $ 11.5 $ 306.5
*