so st of all the community announcements there are only twenty one dollars is that the patrons event trivia night is at the beach street center at seven pm tonight to raise money for the performing arts program in the schools always a good night i'm going to be going our team is going to try to defend its title from last year you want to come and beat me to show up secondly would be the food pantry is opening its new location here at town hall tuesday at five pm with the ribbon cutting all are welcome to that so next we're going to get right into  the st item we have two items on the agenda tonight one is an open session which we're going to begin with which is health insurance discussion the nd is an executive session which we will be dealing with nd so if you two want to turn the microphones and just introduce so essentially we've asked you to be here to explain some various options available that we can start discussing in terms of our health insurance and what is being offered some of this information has been presented already to the town's insurance advisory committee which is comprised of the union presidents in town some of them are actually here today to hear the additional discussion and gather more information but essentially we're you know facing you know another increase and we'd like to present kind of some of the options that the board and the town and the unions can start looking at to determine the best way to proceed in the coming years of our health insurance plans and controlling costs and then you see increase your time with the health insurance cost of the town overall right the town and the employees everybody you have you walk every through the sure it's here tabs are all numbered so a time soon might refer to various documents referenced them by numbers that you can flip to the appropriate number in the packets and again for those of you in the audience the top right hand corner i believe of all of the documents are numbered so you can follow along as well if it should be some copies in the back to ok ok thank you for having me so as i said i'm president of cook and company and basically what we do is work we're in health insurance consultants predominantly to massachusetts minnes a pallet so this is our field this is our net we work with a variety of cities and towns who have lots of different types of plants ones that are self insured such as the town of belmont fully insured on their own with the harvard pilgrim as you are blue cross different joint purchase asians such as my or the g i c so i feel like we basically have seen it all the time to belmont has been self insured on the health insurance program since two thousand and seven so just very briefly self insuring is where you actually assume the risk for your claims you purchase an additional insurance policy to protect you for large claims but as opposed to harvard pilgrim coming to you and saying these are your premium rates for the next year you're going to pay them every month regardless of what your claims are in a monthly basis when you're self insured you're actually paying your monthly claims as they come in and  administrator so every month they bill you for the previous month's claims and then you have the fixed cost of the administrative fee that you pay to harvard pilgrim to administer the play  belmont offers two dollars programs to your active employees and your non medicare employees which are the h m o which has the bulk the vast majority of here in rome and the h m o uses a local network you have to have a primary care physician also get referrals for specialists you then have a p p o which has a very small enrollment and the p p o is actually a national network so it's really good for people particularly early retirees who might live outside the h m o service area you don't have to have a primary care physician nor do you have to get referrals for specialists the town then also offers two programs for your medicare retirees so for those retirees who have medicare parts a and b you offer a plan through harvard pilgrim called enhance and it supplements medicare a b there's no network so those retirees can live anywhere or go to any provider that accepts medicare and then you have another program through toughs which does use a local network so those are the four health insurance as is toughs so i looked back since two thousand and seven since you have been self insured your average annual increase has just been about four percent now obviously the last two years you've had larger increases in premiums but the average over that time period was only four percent you had a couple of years where you didn't take any health insurance increases in fiscal seventeen you had a two percent increase and then the last two years were nine and eleven you do expect because health insurance is cyclical you can have a period of very good claims experience and small increases but it is expected that at some point that will turn around in ill experience higher costs the medical trends right now actually when you combine medical and pharmacy trends they're hovering right around eight percent which is actually a little bit lower than it's been in the last few years so the medical trend is when the actuaries take a look at claims experience from one year to projected into the next year they look at what they would expect with everything else being equal what your cost increases would be and the combination of medical and pharmacy is right around eight percent now so the fact that you've had an average of just about four percent since two thousand and seven you actually have done very well let's correct correct we had a couple years and zero correct the last time you made benefit changes to your plans were back in july of two thousand and twelve and for some of you might remember that that swim state the g i sea level of benefits the g i c is the group insurance commission which is the state health insurance plan and there's also quite a few municipal entities that have entered into the g i c to obtain their correct so at the time you mimicked what the benefits were at the time with a couple of variations since july of two thousand and twelve there have been changes to the g i see what we call the benchmark plan so under the statute we benchmark everything against the g i c plan that has the highest and roll meant which happens to be the tops navigator place and i'll get into that in a minute last three years since two thousand and seven we've had an average increase of four percent what is g i c had over that same range yeah yeah excellent question it's actually it's very it from year to year the other part of that very asian is due to the fact that they oftentimes will tweak their benefits in order to keep the eight so for example don't get into this in a minute you have a two hundred and fifty dollars deductible they then modified that a couple years later up to a three hundred dollars deductible and now it's a five hundred dollars deductible plus they add a prescription drug into it and you haven't changed your tom's point what is the so this is so this year they're looking at an average of about three point three percent last year it was zero percent but again the reason that they were able to do that is because they incorporated some benefit change but they had hired doctor bills correct correct correct yes so i mean that's the balance correct generally negotiated your benefit changes through traditional bargaining under one hundred and fifty then back in two thousand and seven you had topped it sections twenty one through twenty three which gives you a different process for negotiating that process is very very specific again it allows you to negotiate up to the g i c level of benefits using this process which basically is forming a committee that's called the public employee committee which is comprised of want and representative from each union as well as that retire eight and town sits down during a thirty day period to negotiate the benefit changes as well as a mitigation plan so when you use that statute the town is required to give up to twenty five percent of the total st year's savings back to the employees in m packet this is a cash flow summary which is a report that we do every month just to take a look at where your claims are versus your funding and there is one number that i go directly to three hundred thousand dollars which means that your funding is generating a surplus over your total cost of three hundred thousand dollars but if you go to the left a few columns you'll see a column titled reinsurance reimbursement those are checks that have come back on that reinsurance policy which is a separate policy you purchased through harvard pilgrim that protects you for claims per person per contract year over one hundred and fifty thousand dollars so the majority of this four hundred and thirty seven dollars that has come back the majority of that was for claims that were incurred last year so if we don't if we strictly look at your costs for this year for claims administration and reinsurance your rates would actually be deficient by roughly two percent one and a half to two percent wanted to review that because as we talk about potential increases for next year which again it looks like it's going to be another fairly high number if medical and pharmacy trends combined are eight percent everything being equal you would expect to see your costs go up by eight percent given the one thing that you have to look at the trust as well trust has increased over the years it's sit well actually that was the next thing i was going to yeah i don't know it's not so your trust fund very simply the way the trust fund works is all of your contributions from both your appropriation and your employee b section three a it's the health insurance trust fund and that statute says it's the treasurer's responsibility to make sure that there's enough funding in the trust account for to pay for all claims that are incurred regardless of when they're paid that's what we call the i burn our has incurred but not reported where really comes into play when you continue to run a self insured plane that sort of rolls over from because within the fiscal year you're going to pay claims that were incurred in the prior year probably the easiest way to describe it would be as if on june th the town no longer existed are no longer offered health insurance there would still be somewhere between seven and ten percent of the claims that have been incurred up until june th that have not yet run through the system and happen been paid so that's the legal requirement to be financially responsible you want to have multiple of that in the trust fund because clearly over the last few years as you can see from the trust fund document the trust fund has that we pay more clear i mean so what's oftentimes now it's not you're correct in that when you have claims that hit the stop loss you're getting reimbursed for everything over the one hundred and fifty but it means you've paid one th correct so just with health care costs now a days it's not hard to have one hundred thousand dollars claim so we could just be like many many if you consider one hundred thousand where you want to slit your rates to cover the projected costs whereas the years where you had zeros or to the trust fund which was much healthier so you could say for it and we're going to draw down on the trust fund i don't five through at least half a year right that you say that we should consider premium increases that match what our costs are going to correct thank you correct so is the navigator which again is what i talked about as being the benchmark plan so just to highlight the big differences between your current plan and the g i c plan your deductible is to fifty per individual plan at a one thousand dollars per family one person within the family will never pay more than the five hundred dollars so it basically means if two people hit the deductible and they g i c plan the rest of the family members don't actually have to pay there to talk to the out of pocket max which gets very confusing for people the out of pocket max is not and to talk to both it's actually a protection for the employee basically saying if you were to talk to handful of people that even hit that it's a protection really for catastrophic situations where people may have a lot of specialty drugs a couple of hospitalizations right and the difference is clearly how much additional co benefits so for example your primary care and specialty office visits doesn't matter if you see a primary care or a specialist your co pay is fifteen dollars you'll see here that the g i see actually tears the providers the whole premise of tearing and you'll see that both hospitals under the doctors are tiered the whole premise is to not take away choice but to say if you go to a more expensive facility you're going to pay more so for example with the primary care office visits a local community physician the co pays ten dollars a middle tier provider is a twenty dollars co pay but the highest tier and i refer to the partners hospitals mass general and brigham and women's if you opt to have your primary care physician at that facility you will have a forty dollars co pay because the cost of that visit is going to be that much higher than if you saw a community based physician so would tiering it's all done based on cost in quality initiatives but again i think the simplest way to explain it is if everybody is equal a quality level it's then based on cost and you'll see with the specialist because a specialist office visit i clearly more expensive than a primary care those copays are high the g i c last year did take a look at that rd tier again i just referred to general breakdown it was the lower tier perhaps for providers because of the cost we're just at the same cost in each year correct so the whole premise is to have people engage in their think that there is you trying to create a behavior with the co pays that reflects the cost that ultimately incurred by the community correct while still preserving choice thank you and when i'm sorry i will just say t based on choice some people could argue that you're not taking away the choice of going to mass general financially some people may not actually remove that choice  yourself i'm john birt i'm from boston benefit partners i'm a consultant for the mass teacher's association ok in the g i c and again this changes on an annual basis but roughly fifteen percent of providers thousand seven hundred the g i c actually has three different tiers so the lower cost here is actually a little bit lower slightly lower than your three hundred middle tier is five hundred and then dollars no change there are your prescription co pays the g i c last year introduced a new separate deductible for prescriptions which is one hundred dollars for an individual capped at two hundred  family and you can see on the spreadsheet that the co pays are actually higher as well so you for retail thirty day prescription your co pays are five dollars to your one  premiums would be approximately eight percent lower than if you didn't make changes so if your rates for next year were going up by ten percent it means with these benefit changes they would only go up by two percent five is actually looking at if you went to the g i c because i felt a need to at least put all of those options on the telephone if we went completely correct under both your plan so complete decision today yeah i just ask you what is the minimum increase to keep the trust fund balance of five million one hundred thousand so that we're still in our same benchmark because you don't have to go all g i c you don't keep everything word is are there some little levers we can tweak to keep to match to cover whatever problem i'm having now and you keep our trust fund at the same balance so to cover the costs for next year we're projecting a ten percent increase cover a cost was not just the trust fund though it's how much in the fiscal budget next year are we going to budget for increases in premiums or not premiums but health care expense if we were to dramatically ramp that up we could add to the  almost one point five no less an increase in playing in class so we're talking about ten percent or eight percent is that everything across the border are just some you can touch and some you can leave and get to the same number like you could increase some because there are all these different claim things on tap three you could dramatically increase specialist office you could cut primary care or something like i could do yeah it's the same so how can i guess what you're going to get what can we play with legally to do it legally you can play with any of may your people get sick of these doctors you know you get it and on the other hand as we all do if we don't do anything we don't have the money in the budget for to store ten percent increases with the current one it's also understanding what is actually even subject to the deductible you could go to a doctor you know fifty times in one year and you might not have anything that ends up being subject to the deductible you know something like a colonoscopy is usually going to be subject to the deductible but just going to the doctor to have you know something look down your while we adopted we decided to go to self interest which frankly save us money to mimic the g s t is at what level do you feel comfortable what level it's almost like free cash guidelines at what level do we feel called to keep our health insurance trust what they're saying three to four times right to just sort of try to ease the sort of increases past say five million it doesn't sound like you want to go below that's where we are know you don't know about this and where the claims come in twenty and get this done and the reason being that you can see on tab two on that trust fund document how there have been years where you've seen the trust fund depleted mishear he was really into setting up likes of walking programs and things like that there hasn't been a huge response to it we've also been speaking with the insurance advisory committee about other things they can do like for example visiting urgent care clinics rather than going to the actual emergency room so we've had several discussions with you know the union membership at our insurance meetings and you know they definitely see the issue and more around that if we can i mean i don't know whether i would think over time it has some impact to be able to wellness programs within the community  if you did that and therefore we what we did we could get stuck with it so therefore mimicking the g i c without joining it got us the benefit without the risk is that still the case is still a silly it's a three i guess white men seems like from the minute that's why we made the decision to news just throw it on the pile you know oh yeah just one other thing that i want to mention as well is the cadillac tax which we've heard about for a very long time that's been delayed several times at this point it's been delayed until two thousand and twenty two but the cadillac tax that's a threshold like ten thousand and seven and for an individual twenty seven thousand dollars for a family if the cadillac tax comes into being anything over those know because i think that threshold probably will be indexed so at this point we really don't know and i think it's probably it has been extended several times but small print so i recall that it is something that you have to keep in mind of any of our plans qualified at this stage for the cadillac tax treatment i didn't do the calculation but we can certainly do that because i want and it will give me a number and i said oh lord you know it could be tax was supposed to be for plans that really were outside of the norm right they were providing benefits that were outside of the norm but if it turns out that we've got a number of plans that we're offering they're providing benefits that are so far outside of the norm that they trip the cadillac tax context i don't know where they set that debt collector actual but the idea was supposed to be those were plans that were very much outside of the norms in terms of the benefit that was being provided correct yeah unfortunately in the municipal world because you ha we're going to negotiate with some idea not we're going to agree but it's a very well i think will be helpful at least for me to know that if it's if you look at sort of plan design changes at different levels where we are and then sort of some increases what impact does it have a cautious run in some rough it went up to ten percent it jumped the budget up over four hundred thousand dollars in the other sort of country to that of course is that how much to we if we had all is those outlier years such as f i sixteen when your claims just come in significantly higher than project and right and i think the trust funds there to help the employees i mean the trust fund is there so we so that when there are good years and bad years it smooths out those right every but whatever one pays of the employees should want us to have a healthy trust forums that will cover us in bad years and we don't have to go to them and jack up the rates on the other thing that we have talked about to is maybe looking in the future insurance advisory committee again on march th they've been asked to you know digest the information we've already given them plus what's been gathered and talked about today and comes in you can wait on their thoughts on that because yeah absolutely that part of me thinking that well maybe we cheated to  understand that we draw down a trust fund by three hundred dollars grand but that's a short term fix and then think about next year year after plan design changes i don't know just sort of a strategy maybe a strategy well plan a long term strategy or one plan design changes bleeding those in over changing all the time if we were to contemplate that it has to be negotiated that process takes thirty days he said or is it so much longer when you put the whole under the statute it takes about two to three weeks of activity eight to get to the thirty day negotiation so i think you have to give yourself a minimum of two months i guess what i'm wondering i mean i am i think we have to seriously consider plan design the thing changes i think that's probably an sue what the plan design changes effect might have been the true view of my role sits here could decide over the next year you know what kind of plan design changes we'd like to consider as we look at the twenty one budget taken three hundred and thirty five thousand from across from the  come back to us with the some sort of an idea in executive session on what to do and then to go talk to the unions and come back and the process will be with the process will be and will see if we make it we make it if we don't make the timeline we will make the timeline but  think is right i think the point that was made though is we may not make a timeline directly for this particular budget but we could affect change on october st that may have benefits for the year even if it's budgeted slightly different to mark's point to be better if we just got it done on time what happens if that's possible agreement and that's not part of this quickly i'm not saying do not do it ok we're going to do it one way or the other half i think we have to do it diligence and go through this process because we're facing this is just one of a myriad of budget problems that we're as the override is ending here that we're hitting and we want to avoid trying to go back to the public for another override right after going for a high school things have to change some areas just because the world is changing complete  so but i don't know what those changes will be will have to find out what the university looks like once you give us some figures but thank you so so next step then is the next meeting our next meeting is february th it's pretty packed but where you know this is kind of time sens in preparation for negotiations with nonunion personnel or to conduct collective bargaining sessions or contract negotiations with nonunion personnel fire chief chief result in a motion to enter executive so moved so i can roll call  i think you were going to just say you know we're going to be going into executive session we may be coming back for public session so but we don't know mean thomas computer had to leave but we are going to continue as we have a quorum and we do have a hit the next item which is tented a vote to ratify fire department chief contract another round of executive this is how we usually do it right you all parties involved that this would be a benefits so the terms of the contract are fairly straightforward it provides for a base salary of one hundred and seventy thousand dollars effective retro to july st two thousand and eighteen this be a three year contract providing for basic costs of living increases as well as any merit increase it is offered to other department heads within the town and essentially mirrors the contract with a few minor changes so that