instructional protocol. >> You don't have a light. call the workshop to order. Um, I guess the big item on the agenda today is hope. Superintendent Gross, do you want to kind of lead off on that? You
bet. Uh thank you for being here. Uh tonight uh tonight's work session is about one item but one very important item, one complex item in our school district uh retirey health benefits or OPED. And
we've spent some time on this issue going back uh to early spring and you know in the business office and HR office previous to that even. Uh the goal of tonight is to
uh review where we stand today, the process that we've followed so far and the solutions under consideration and then uh take a look at uh a timeline and hopefully giving you the context you
need to make an informed uh responsible decision considering all that goes into this. Uh ultimately one that balances our obligations to our retirees with uh long-term planning and responsibility to
our district and taxpayers. Um so Julie, I don't know the slide deck if you want to bring that up. We do have George Vanderweight on the line from One Digital. He's our insurance consultant. He's been working
with us for a number of years. Uh has helped us through a number of changes and recommended many good decisions that our fringe benefit committee has uh benefited from. And so he's on tonight uh just sort of to answer questions as
well as Michelle and Cara and Casey from the business and HR offices. So um here's what we'll cover tonight. We'll see if my clicker can do the besides just uh wave the thing around. So, tonight we'll take a look at the
current context uh including some background. I' I've done quite a bit of that, so we're not going to spend a lot of time on that. Uh we've been kind of flown over that numerous times. Um talk about our obligations as well. Talk about the process we've used today. Take
a little bit deeper dive. And this is where we haven't really dug into what the plans actually look like, what the implications of those plans are, how they actually compare. Um, uh, and then at the end review the decision that is on the horizon. And I'd say, you know,
if there are questions along the way, please just interrupt and ask so that we can get to those in real time. All right. So just uh quickly uh again we've discussed this 596 total lives.
Our uh current total liability is o over 126 million. I think there some of those 596 are Medicare eligible some of them so some of them are under 65 some of them are older 65. I was just looking at a
handout from Michelle, I think must have been or HR. And so we have 265 that are over 65. We have some retirees with spouses over 65, 199 of those. Um, we have 25 surviving spouses. So, one of
the things that I think it's important as we're going through this and one of the things that makes it delicate and complex is that this isn't a homogeneous homogeneous move or a homogeneous group of people. This is a a group of people
all with individual stories. Um all individual situations and some of them might be similar. Um but everybody, you know, and even the calls and questions that I know Michelle's been getting, uh what's going to happen to me personally, those are the
questions that we're getting because the some of the there are nuances just baked into this. Um, second, uh, and this is really the crux of how we're ending up here, uh, the the trust that was created in 2009,
uh, was funded with $35 million in bonds. Uh, at that time when in 2009, our liability was 66 million. And so, we've talked about how that trust was not fully funded. At the beginning, it
was funded at 53% of um the total liability. And so over the course of its life, it paid out $52 million. It earned $17 million in interest. Uh and that was a a
it was a fund that could only be spent on health insurance or retirey health and insurance benefits. Um we don't have the ability to bond again. That that was a two-year window that the legislature created. So, even if that was a good idea or a good option for us, uh it
wouldn't be one that we could do. Um unless, you know, we went to the voters to do it. I guess we could do that. Um and then finally, without a change, we uh we have to or we will be going to pay as we go no matter what. Um and there
will be a property tax increase regardless. It's just a matter of how big it is. I mentioned that $126 million in liability. This is a look back uh this chart and again you've seen this before
but it gives an overview of this early what insurance premiums were and then really times you know double three times it's 200% increase uh to get to here. So these um huge increases to here actually
three I should go over uh 3x all the way over to the to the far right and you can see our actuarial liability in 2007. I mentioned that in 2009 when those bonds were sold when the trust was established it was 66 million and now that liability
is $126 million even though $52 million has been paid out. 70 staff approximately and you know we don't really know that number for sure. Um but that's approximate number of additional staff that could potentially
qualify for these benefits. And you know one of the things that makes this complicated also is that we're not talking about a homogeneous group of uh employees. We're talking about former teachers that that retired under
different contracts, principles that retired under different contracts, food service that retired under different cost. So all of those different individuals um have different benefits that they retired under in some cases. And so it's difficult to to sort of narrow this down
in some ways. 5.5 million is a number we've talked about. And the changes that we're going to look at tonight would save $2 million annually and that that's an that $2 million is a number that would ultimately go on our property tax levy. So, one of the things that
happens indirectly is the same people that could be affected by this um if we were to not do this would be affected by a property tax increase. So, this will um benefit some of the same people that are going to have to go through the
change via property taxes. A few things about our obligations. So, one of the things, you know, in talking to our attorneys, uh, it was clear and important that we maintain the obligation from when an employee retired. So, in our case, our contracts talk about, I was just talking to one of
our audience members about, you know, 90% commitment to family premium. Um, if an employee retired with that 90% contribution to family premium in their contract, we have to continue to honor that. if they retired under a contract
that provided 100% single, we have to continue to honor that. Um, doing anything other than that would um jeopardize the legality of this. Looking second at our current contract language, this is what is in our current
our current contract with the teachers. Um, it says that changes negotiated in active employees medical coverage shall also apply to retirees coverage. um except that no reduction in coverage shall apply. The the going through this with our attorney, you know, that
there's a condition on the front of that statement that we're that uh goes into effect if we're negotiating changes in our active employees medical coverage and we're not negotiating changes in our active employees medical coverage. This provision doesn't um doesn't go into
effect. This is really about, you know, this is about preventing the case where uh active employees would negotiate something away and that's not what's happening. The other concept that's brought up quite a bit is aggregate value. This is
included in 4716161. This is the statute in Minnesota that talks probably the most about group insurance uh 471 in general. And this is the the um
the part of the law that talks about uh not being able to or the organ organization not being able to reduce the aggregate value of benefits. It does apply to if you read this, it talks about employees covered by a collective bargaining agreement. Um so that's that
creates nuance here. Um retirees were part of a collectively bargained group. Um whether that's still in play or not. There's some case law about that. But regardless, when we were going through this, it was important for us to guard
the rails on that to protect aggregate value anyway. So, that was one of the things we worked on to make sure that um the changes that we're proposing, even though that may or may not apply, um the changes that we're proposing do not decrease aggregate value. So, we wanted
to have that guardrail in place regardless of whether it was applicable or not. Our goals, we've talked about these uh previously. We want to maintain or improve retirey benefits, reduce liability, reduce tax impact, and create
some u stability as well or reduce volatility. So, as we take a look at the changes that uh were on the table or you know what could we do about this? I don't know if you remember back to when we met with the actuarial consultant uh this
spring they walked through OPED that was sort of like the original introduction to this. Um, in that conversation and conversations with uh the administrative team, one of the things that was presented was the idea of a defined benefit. That
typically looks like a set dollar amount to retirees to purchase insurance on their own. So, we would say here's an X dollar amount and that that the employee or the retirey could put that towards their insurance. um
that I believe creates problems with the contracts that the employees negotiated because the contracts that employees negotiated specifically said a percentage and so doing a set dollar amount isn't something that really works
with the legality of that. It also creates some unpredictability for retirees um and doesn't enable that group uh group benefit to exist. So this isn't a this isn't an approach that we felt was in the best interest um and or
even legal for us to do. uh in wa in talking with our team um again people that do this more uh and looking at other districts that have been through the situation uh it seemed like the best option and maybe the only
option that was realistic was to transition Medicare eligible retirees to a medical Medicare advantage plan and oftentimes we'll talk about um retirees that are 65 and older um you you can I think for the purpose
uh substitute Medicare eligible in there because there are some individuals that may be um under 65 but may be Medicare eligible due to a disability. So um those individuals if they qualify
otherwise would be included in this. So, we the plans that we looked at were those with comparable benefits. Um, we've talked a little bit and it actually came up in our retirey meeting that we held in May uh that the county had been through this and had good
results and um I continued to hear about that in the in the community. Uh again, that doesn't mean it was simple. It doesn't mean it was easy and it doesn't mean it was welcome necessarily. Um but after being involved in the change, uh
county retirees also grew to to appreciate the change. Um so the type of plan I mentioned that we're proposing is a Medicare advantage plan. I mentioned the comparable benefits. One of the things that was difficult for me to understand and I
needed to get my own learning scaled up is how could the benefits be comparable at a cost that was much less and the reality is our current plan doesn't take advantage of Medicare funding and you know if we want to take a deeper dive into that uh that's why George is on um
but that's the big the big thing that our current plan as it's being utilized doesn't take advantage of Medicare funing and so it's a more expensive way to to do do the same thing. Um, and I mentioned that successful local implementation. We know that the changes
like this also don't occur in a vacuum. And so, one of the questions our fringe committee asked and I think is really important is well, what does this do to active employees if a group leaves? Because essentially what we're talking about is taking a group of people out of
our um self-insured plan. And George has found out from health partners that our stop loss will increase because the group size will be smaller. Um, we kind of knew that a little bit earlier on and and George, if
you're able to, I might ask you to to to expand on that in a second. Um, but the second thing that we were asked, well, what about what about premiums? And um, our premiums as a self-insured plan are based on utilization. And that's a shift
in mindset that anybody like I was for the majority of my career was on a fully insured plan. And so that works very very different. Um because we're self-insured, our premiums are entirely driven by our own group's utilization.
And so the group that's left, that's the group that will essentially determine what premiums are because they'll be the ones using the insurance. Uh George, do you want to talk a little bit about stop loss and that that adjustment? >> Yeah, sure can. So, in regards to the
the active plan, we do have individual stop-loss that protects the the plan in the event there's catastrophic losses for or from any of the individuals that are insured under our program. And so when Health Partners looked at
the population that exists as active versus the population that exists as a a retiree, so an individual that's eligible for Medicare, the the losses that were uh showing both from an active
population and from a a post 65 retirey Medicare population was comparable. So there wasn't that the active population had a child with really large medical losses or a retiree. And so when the
underwriters for for health partners uh understood that this population of retirees was to be leaving the program at some point in time. Uh their analysis was not that the premiums would be increasing because the risk is getting
more concentrated. Right? So there's this uh higher cost of of claim with less premium. It's really just a a function of less overall contracts. And so that's that's a a positive uh
understanding is that we are not either keeping the worst risk or shedding the worst risk in that respect. Both uh populations have similar risk from the underwriting standpoint. So yes, there is a slight adjustment to the the premiums that exist for the active
population to stay, but it's not because of the risk that is there. It's just because we have less contracts to cover that overall, you know, liability or obligation in the future. Doesn't mean that, you know, in the future we don't
incur a high claimment, right? a child, an active employee, a spouse with cancer, things of that nature that could adjust our stop loss. That future is unknown. But what we know today from from the risks that exist in those two populations,
uh we are not going to be assuming a higher risk because that retiree population is leaving. Hopefully that helps a little bit for uh the group. George, is there anything else that I've kind of hit on so far that you um think
might be a little bit off or might need clarification or >> No, I think you're doing a good job of summarizing kind of the the number of meetings and conversations we've all had to to try to solve for this. >> Okay. Any questions for George before we
keep going? I I I guess I have a little bit it I appreciate the fact of that you dealt or you discussed a little bit about
you know when I read this it's like how can this be you know this is better in every way shape or form right now where's where's the catch right you know because it was like my >> my nervous spidey sense goes >> yeah it's like you know, how can this be
better all the way around? Um, can is there any can you >> can you explain a little bit of that to us? I mean, without getting I know it's probably very comp >> Yeah, George, do you want to do you want to pick that one up? Yeah, it's it's sort of that how can this be comparable
benefits and be cheaper. That usually doesn't work in the real world. >> Well, I mean, it's the co-pays are better, right? You know, I'm just looking at it. I'm going >> this is a no-brainer. You know, where's the catch? Yeah. Right. >> Yeah. So, I mean, in in all honesty, the
the plan that exists today for the retirees is a very very rich benefit set, right? So from that standpoint to for Blue Cross to be able to to duplicate an existing plan required it to be similar, right? Where the medical
insurance or the medical care for the most part is covered at 100% and then the prescription drug benefit uh improves or changes because we don't have this first $1,100 deductible. We actually have fixed co-pays. So, one of the things that happens that kind of
that Matt alluded to is that Blue Cross is able to leverage the fact that by them being the advantage plan carrier, they receive monthly subsidies for each
individual that's insured on the plan to provide Medicare's administration for the part A and the part Benefit as well. And so with our current plan, we don't get that opportunity to take advantage of that, right? We are truly a
supplement to what Medicare A and B is doing. So Blue Cross is looking at the overall population and saying, "Hey, if if we're able to get this much money for each individual that's on our plan, some of these individuals aren't going to be incurring those those particular
claims." And so we're able to use those dollars to help offset those higher costed individuals. So that's really the I I think Matt had alluded to that is like how how does this funding or how does this happen and why is it a little bit better and and
that really is the the opportunity that exists here. If we were to compare a supplement plan to a supplement plan in which we had we had kind of done is that the the health partners offer that they had provided was not taking advantage of the Medicare advantage or the Medicare
cost contracts that exist and it truly was a supplement and in those environments the cost is still $600 700 for a program like we have in terms of that very rich benefit set. So it is leveraging th you know those
opportunities that exist from the you know the old school cost plans and then the advantage plans and we can really you know dive into that if we needed to but certain certain counties in in our state uh allow us still to maintain
these older cost contracts which again still provide opportunity for really uh great benefit. It's it's another way that Medicare funds uh and you probably have heard privatization of Medicare advantage plans are are that right where
they're shifting the responsibility of the administration from the Medicare you know proper to these insurance carriers and so that that's what we are looking to take advantage but we are doing this from the lens of trying to maintain that
really really rich benefit set that exists today >> and because of that benefits the benefit set George I feel like you said in a recent meeting this the the Medicare plans that we're going to be looking at the advantage plans we're going to be
looking at a person on the like these aren't available on Blue Cross's website like you couldn't somebody just on their own couldn't buy this because it's that unique is that right >> that that is correct yeah so advantage plans do exist right, for an individual
to purchase, but they are they are prescribed plans that are available and in reality they they almost are similar across all carriers that are willing to offer because they're all trying to compete for each other's business. Our
advantage plan is a group advantage plan that has underwriting from Blue Cross from their large group Medicare business and then within there they're able to kind of customize or modify that benefit set. So who whoever the board member was
that said how is you know this benefit in terms of an advantage plan being able to be offered where there is really no medical you know out of pocket. It's be it is because these are uh true group Medicare plans uh customized for the
group the group setting not for an individual. So they no individual could purchase this type of plan. The the advantage plans that exist in the open market have much higher office visit hospitalization co-ayments have
deductibles on prescription with co-pays or co- insurance in regards to that. So these are uh still very very rich uh Medicare plans. >> So they Bluec Cross kind of had to dial up dial up their dial up the plan to get
>> corrected. Yeah. Yeah. And and and Matt, you know, for reference, if you if you think about the the richest advantage plan that you can buy in as an individual is probably in the $160 $170 range, you know. So you think about our
and you haven't kind of talked about the that premium but when you look at what we're offering you can see obviously it is significantly higher than what's available on the individual market but but it's also a richer benefit set as well. So we are paying uh a comparable
premium based upon the benefit set that's being offered. If you were to compare the best that you can buy as an advantage plan in the individual market to what you're uh proposing to the the retiree population. >> Sure.
>> Other questions? >> Not really question just a comment. I think, you know, I have been following this and um part of the fringe benefits committee and I think, you know, it's appears to be something that we want to probably move forward with. One of the things though that stands out to me just
in a quick conversation with Matt um previously is that um our hands were kind of forced to find something here because the fund ran out. Um, but as we think to the future, how can we be creative with other things to avoid
this? Because it really would have been nice to be able to do this five years ago >> and still had a fun balance. >> Right. >> Right. I'm not, you know, hindsight is very easy, right? But how do we then take this lesson and apply it to other areas of our responsibilities and think
through how can we be creative to do things, you know, that benefit taxpayers as well as this appears to Okay. Uh, taking a deeper dive into the plans and um, let's see. In your packet, I
think you have a copy. Yeah, you have a copy of the the Blue Cross plan. Uh, that's the one with the blue the blue components in this in the sheet. Uh you'll notice that there are two columns there and I'm going to have George I'm
gonna have you explain this. There are two columns there and he mentioned counties and the the differences there. Um what will actually be uh what our retirees would actually be enrolling in is one of these two depending on where
they lived. Um George, do you want to expand on that? >> Yep. Yeah. So, so as I kind of talked a little bit earlier is this idea that the privatization of Medicare, right? And the fact that the insurance carriers taking on this responsibility to process
uh and provide benefits for the Medicare part A, the part B benefit in in kind of olden days. So, prior to the Affordable Care Act, there were similar types of of contracts that existed. They were called cost plans.
And so that group platinum blue plan uh that uh Medicare kind of funding model is is what's called the cost model. And when the Affordable Care Act came in, one of the things that there was was a a really strong push not only what you
know in terms of the the the group market, the individual market, but also the Medicare modernization. And some of that was to start to migrate all of the counties across the country
from these cost plan models to Medicare advantage uh funding type models. And in certain counties where the the number of advantaged plans that are being offered along with the number of advantage plans
that are being enrolled into if it stays under certain federal guidelines, a cost plan can stay in place. Right? So until there's enough migration from cost contracts to advantage contracts, those
cost plans kind of have this sun setting of of of time. And so in Minnesota, I think there's like 22 C counties that still have a fairly large enrollment in cost plans. So because of that, those
contracts remain. And in other counties, as uh advantage plans have kind of changed and and taken over the the population, advantage plans exist. But in both scenarios it is a government
funding of part A part B you know administration that the carrier is taking advantage for. So you will see if you look at your Blue Cross things, Blue Cross is is basically replicating the same plan design using that uh funding
mechanism and the premiums are slightly different for the one versus the other again because of the the funding that Blue Cross receives uh based upon the type of contract that they have in that county. So, so did I hear that
if if more counties within the state start really taking this, it might we're going to see a little bit of an increase. Is that Did I hear that? is >> you would. So, what would happen is is if we have a county today that's a cost
county and enrollment grows in that county and it gets above the federal guideline, then those cost plans those that the the government's no longer going to offer a cost contract in the renewal year. So, that that would then
become an advantage county. >> Okay. But it's on a casebycase basis, not for the state overall. Is that like >> correct? It's county by county. As that enrollment reach certain federal thresholds, then then the the county is
no longer able to have cost contracts because the the government says it must now be only an advantage contract. >> Okay. >> All right. Um, so I included that full
document and but also included in your packet the comparison document and I want to take a minute to to go through this. Uh, this this document was put together by George and his team from One Digital. Um,
do you do you have this in front of you, George? The overview? I do not, but I can pull it up if I need to. >> Well, I can I can take a run at it and then um we can tag team it. But so this this document essentially the one with
the orange at the top on the far right is essentially that full-blown Blue Cross Blue Shield document synthesized down with the high really the high high points, the biggest
points. The one in the middle is the plan that this group of retirees is on now. And again, I want to make sure it's clear that we're not talking about our under 65 group right now. We're only
talking about um a change to our Medicare eligible retirees. So, um I'm not able to pull this up for some reason. I don't know. I'd love to be able to do that. But
anyway, >> Matt, is it is it this document here? I again, I'm not I can share this screen. I don't know if this is what you're >> Let's see here. Look at this.
>> Is this the document you're referring to? Uh, yes. Yep, that's it. All right. So, I'm going to try to make this bigger if I can.
All right. Great. So, uh, comparing these two, you can see, and this is a question that I got from some, uh, I think our our team has gotten, I have gotten, I know our team has gotten, neither plan has a deductible. And so I
think there's some confusion about the difference between an out-ofpocket maximum and a deductible. Uh neither plan has a deductible. The out-of- pocket maximum, which is the amount that accumulates uh of the things that you've
had to pay for before the plan picks up 100%. Uh for the plan that retirees are currently on, it's 77 7350 and then 14,700 for family. For the Medicare
Advantage plan, it's $3,000 for medical, 21,00 for drugs. Now, one of the things that George just pointed out to our fringe team is that because all of these things are 100% here, getting to $3,000 is pretty much
impossible. Um because there's no way to there's no way to accumulate money towards that. But the requirements of the plan design is that you have >> So Matt, it is impossible. Yeah. So Matt, it is impossible. Med. So, and
Blue Cross has confirmed this and and I think I shared that with you as well. Uh, med Medicare requires the insurance carrier to put some out-ofpocket maximum on their plans. Again, because Blue
Cross is covering all of the Medicare medical services at 100%, a member would not have a medical portion of any out of pocket. So, in reality, the only out- of pocket that a retiree would have is in
regards to the prescription drug uh maximum, and that so that $2,100 would be the maximum that they would have. Medical services would be covered at 100%. >> Now, in fairness, you know, the the
current plan has a pretty high out-of- pocket maximum. you know that if if someone was doing regular routine visits and um you know $10 co-pays to get to 177
7350 is a is a stretch as well. So I mean that that I think but but the reality is I and I think what I ran into like I said was some confusion about the difference between a deductible and an out-of- pocket maximum. They are different. Um the Medicare one is lower.
it's impossible to meet. The current one is very high, really tough to meet. Um, I should also mention that there is no Medicare family plan. So, we have some processes for dealing with individuals
that are currently on a family plan um to make that work for them. >> Does it still look the same for family though or is this just employee only? So if you had if if a retiree and his and her spouse was on a family retirey plan
now they would have two single Medicare plans rather than a family plan. >> Even if that spouse is under 65, >> we would well you'll see that's where the nuance gets in, right? So we have to
have both over 65, one under, one over. I mean the kach I mean there's all those nuanced pieces. Yeah. >> So we've had to work through all these situations where >> uh that could exist. >> It's it's much more complicated than our
current one. So um it'll be a lot more work for Michelle. >> And do those nuances include like the the subsections of like um prescription drugs, routine services, hospital services like if there is a child involved, you know, I don't know how old
the could be. But >> yeah, there there are there are very few, you know, because um children age out at 26, I think, is the the number where they age out unless there's a disability involved. And so that's very very rare that
>> correct retire would be 65 plus and have a you know a 10-year-old, but it can happen. Uh uh and I think we have some, but it's really rare. >> Yeah. Okay. Casey, Michelle, any is that would you
agree with that or am I very small number? Um, some of the other big differences then get into this kind of middle section here. What happens currently uh at the hospital inpatient outpatient in both plans it's at 100%. So that's exactly the same. Our current
plan, uh, an ER visits, $150 co-pay. Again, that would count towards that 7350 in our current plan. Uh, under the Medicare plan, that's covered at 100. Ambulance, uh, the the retirey has a 20% co-pay there. The plan covers 80. That
would count towards a 7350. Under the Medicare plan, it's 100. Urgent care 10 care. So, you can see those differences there. This hearing aid one is the biggest difference. Um, and I would say, you know, from like a positive negative standpoint, one of the things that
people have pointed out like this is a benefit I use. This is not as good. Um, and so this provides uh reduced cost hearing aids to retirees or or plan
members, I guess I should say. Um and so in conjunction, you know, when the the aggregate value question I I mentioned earlier, when they're looking at all of this, this entire these entire columns get sorted to determine what average
costs would be in those aggregate values. You can see the other thing it the the the prescription is different. Our current plan has an $1,100 deductible. So, our current retirees are picking up the cost of their prescriptions up to
$1,100. And one of the questions that we get often is, well, my prescriptions right now don't cost me a they don't cost me a lot. So, um, you know, they're looking at $450 and $10 and might not see a big
difference there. George, do you want to talk about some of those low prescription costs that that have been brought up to us? >> Yep. So, there have been, as Matt alluded to, some retirees that have said, I I'm nowhere paying anywhere
close to an $1,100 deductible, and that is definitely going to be the case. There's a lot of blood pressure med, cholesterol meds, things of that nature that are very, very low cost. you know, a lot of times those are four, three, five, six dollars, right? And so in that
case, the the I think what the members also see through their what's called an explanation of benefits, right? So they'll see that their their drug starts out at a $50 cost, but it's discounted down to $4 or $6, whatever it is, and they're like, well, see, I'm not paying
that deductible amount. It's like no, you you're paying the negotiated cost that Health Partners has with that drug manufacturer for that particular drug. There were some that were brought forward as well where they were saying, "Look, my my uh vaccine wasn't there was
no cost for that." And so those preventative items do have a no cost, right? So if a person's going in having a a COVID shot, that's considered preventative. That's going to be covered at 100% just like it is today. So there was some confusion around that
there are going to be individuals that have brandame drugs that might be might have been paying you know 50 70 $200 for those drugs where now that's going to from a a cost standpoint for them is going to be a $10 co-pay. The other
thing that's important to note is that our current plan does not provide access to what's called a nonformmulary. Right? So the insurance carrier comes up with a list of of drugs for every uh drug classification and so they say these are
our preferred or our formulary drugs for that particular condition. And there are times where a member might be prescribed multiple drugs and one drug might be slightly more effective, might not give
a member the the same, you know, issues and or it might work better with the other drugs that they're on. And so with our current plan, uh the member and the doctors have to go through this process to get approval for these non-formmulary
drugs or they have to use the formulary because the non-formmulary is not covered under the the Blue Cross proposed plan. This is an open formulary where both the formulary and the non-formmulary drugs are still covered at that $10. So there is some uh
opportunity or some benefit there for some members as well. So again, I I just point that out is that there is a little bit of a widening of the the opportunity for some membersh when we met last about um cancer
treatments, chemotherapy, just concerns, you know, people going, is that still going to be covered? George, do you want to just touch on that? Yep. So that happens in a in a couple of ways. A like a chemotherapy drug is not uh a
lot of times it's not a drug that's over- thecounter dispense. Right? So if it's not over- thecounter dispense, it's what's called a Medicare Part B as in boy drug. So it's infused provided in the doctor's office, in a clinic, in a
hospital. Those would be under the medical benefit at 100%. If it's an oral chemotherapy or something of that nature, depending upon if it's a generic or if it's a brand, still covered $450, $10 for that drug. So, we did get
confirmation those are covered in both scenarios, whether they're administered in a doctor's office as an infusion or an oral uh drug that's picked up at a pharmacy. The other differences that aren't on
this um spreadsheet here that are included in the packet, I mentioned that that hearing aid uh is a is a difference. A couple other differences if you go to the third page of the Blue Cross document. Um, one of the concerns
we've heard is, you know, what if the plan changes and we've experienced some plan changes with our active plan. So, we were, George, you can correct me if I'm wrong, but I think we were notified that the $20 credit for going to the gym
that that benefit was being sunseted by Health Partners. Is that right? >> Correct. Yep. So, yeah. So, that >> Yep. that was that was ending regardless of whether this change happens that's happening to the the the total
population. So those plan things can happen. Uh those plan changes can happen and and I think that was a question that we had we had received like what if the plan changes and those can and do happen now. Um that the box where it says additional services and support those
are benefits that are included in the um Medicare plan that our uh retirees currently don't have access to. So that silver sneakers I think would be a sim similar kind of a benefit as the um
that help >> it's actually it's Matt it's actually a better benefit because it provides access to uh fitness centers for our seniors at no cost. Right. So the the current program has have to go to the
club so many times a month in order to get a a a you know a reimbursement of you know $20 where this says you register at your that at a a valid senior's uh silver sneakers uh place and
you don't pay a cost. So >> and I checked the YMCA is a participant in that program. So that's >> y good. Um, so you can see some of the other benefits that are included. Um, which I think is is good. Any questions
about that plan design piece? >> I guess I didn't realize that. Go back a second. The $50 quarterly over the counter benefit. >> Yeah. >> So, it's kind of a unique I didn't see that listed out. >> Yeah. >> That's another benefit of this.
>> Yeah. That the And I just I talked to one of our employees whose mom uh takes advantage of this now and she said there's like an online store and you go on there and click and add ibuprofen to the cart and band-aids to
the cart and yeah so just yeah it's like shopping >> a lot of seniors also uh may have certain uh supplements right so they might have a >> a like a a vitamin that they need to take at at a higher dosage they're able
to get access to those through that over-the-counter uh benefit as well. And so that I think that's also some of the the reason that carriers make that available is really to to promote and to make sure that there isn't access uh to those particular uh vitamin supplements
that uh some uh retirees need as well. >> And then the vision one is another one that I I don't think our current plan has. Is that right, George? >> Corre correct. Yeah. So, with our with our current plan, you know, there's access where you can get your vision
exam, but there isn't this additional uh allowance where a member has access to additional dollars to kind of help with uh the eyeglasses. Medicare does provide a eyewear and it's really only when a member has cataracts and they have those
removed and they need to then get uh a pair of eyeglasses because of that surgery. there is a Medicare benefit, but just the standard eyes are getting older, my prescriptions changing. This does provide uh an allowance that members have access to as well.
>> Okay. >> And I think the other thing too is the meals, right? So if a if a if a Medicare person is is in a a inpatient stay, they you know they and they're leaving and they coming home, they have you know meals that can be delivered to them as
well. uh as they're kind of transitioning back into the home and and they don't have to worry about making meals, they're going to get access to that. And so that that is an an extra benefit that exists for individuals and and most of us don't think about that. for somebody who's aging and might not
have, you know, the same support systems and things of that nature to know that they're able to get a a meal, you know, as they're recovering because, as we all know, sometimes we're just not in the mood to to do that extra work as as we've just kind of worked through, you
know, a surgery or something of that nature. So, that that is also a nice benefit for the individuals. >> All right. Thanks, George. Julie, you want to bring up the slide deck again? All right. Um, taking a look, I think
the next slide will go over the cost comparison uh of the plans. And I should mention, we've been talking about Blue Cross Blue Shield. Uh, one of the things that we heard from our retirees when we had our our large meeting in May was they really
wanted us to uh check with health partners because they they like working with health partners. And so we reached out, George did, to health partners um to have them match the plan first of all that Blue Cross was offering so that we had apples
to apples. And then I think George once we had the number back from health partners, George also went back to health partners to try to get them to price match as well and they were not they were unable to. So is that right,
George? Yes, you're yep, you're correct. >> Um, so the the these are the cost comparisons. Now, the this is our current at the top single family. That's not the employee share. That's the total cost of the premium. So, I just want to
make sure that that's clear. All actually all of these are the the total cost of the premium. So, the health partners one, you can see that the plan they came back with was really close to what we had gotten from Blue Cross, but you can see the the cost was um about
double. Um these are just some highlights of the of the the differences. I don't know if we need to go over this because we just sort of did. uh this kind of highlights some of the the main differences. Th this is where it gets complex when we start looking at actual people and
coverage and cost and things like that. Um you can see on the left scenarios family coverage both over 65 family coverage additional dependence family
coverage retire over spouse under um so all these different scenarios and you can get a handle or a feel for when we're looking at the number of contracts how many actual people are in those scenarios. um that second column, the
current monthly total premium there. And so if you remember the 655 from the previous slide, uh you can see that at the bottom that transfers over there. That's the total, you can see the retiree payment. And um then that column
in between the yellow and the green is the updated monthly one using the Blue Cross advantage rates. So this sheet is based on the most expensive plan. Um so it kind of shows I guess depending how you looked at look at it worst case
scenario or best case scenario. Um if the rate depending on again the county that somebody lived in. If the rate goes down that would just result in additional savings for both the retirey and the uh
the levy or the taxes. You can see that annual difference per person. This this is an example of how this could play out. I would hesitate to say like this is for sure how this would play out for everybody that because I
said before there are nuances. Um if someone retired under a contract that said the district was going to cover 80% and they were covering 20%, it would be different. This is really um making some assumptions as an example of what would
it look like for a teacher for instance that retired under 9010 um uh and has full full single coverage on the far right. Then you can see the the
difference that's generated by the savings to the district there as well and then how that accumulates to that number of about 2 million that we've talked about. So um a number of factors will play into that number being different
what county people live in potentially um what what that employees job was um when they retired what contract they retired under. you can kind of get a sense for for the scenario here. Casey, you were
the architect behind this spreadsheet. Any any comments on that or maybe questions for Casey? I guess like Matt said, this is an example, but it is where most people fall. So when we're looking at the top
family coverage both over 65, there is about 10% of the people that are different than this. So that means that they're paying either less or more than this 10%. But 90% of people are going to fall into that category where
they would save over a thousand just in their premiums every year, not counting, you know, potentially slightly better benefits on when they use the plan. So, as we get more retirees
who don't follow, you know, didn't didn't come into the district under the premium plan. How does how's that going to change this group? I guess I'm trying to visualize that because they're just averaging
things right now, right? I mean, >> yeah. >> So now that that liability's shrunk quite a bit as you start, >> you know, from this plan sunsetting those premium plans, right? Yeah. >> More your retirees come in with a
reduced contract. >> Yeah. I mean, we have it's really over a long period of time. >> Yeah. I mean, we're probably talking 10 years down the road before we'd even see maybe >> Yeah, I'd say before we start seeing maybe any kind of like significant
>> downward trend in the size of that pool. So, I mean the the number of people that are in this group >> is going to be large for a long time. >> Yeah. >> Okay. >> Yeah. I'm going ask a question that I might answer as I ask it.
um for somebody that is going to retire let's say let's say we move forward with this and I'm current district employee the current plan today with the high deductible you know whatever we have today >> I move into this next year do I see this
giant increase in benefit >> it I'd say that I mean it I would say it depends again right so um and maybe I'll let Casey jump in the contracts currently. Depending on
when you were hired, you may or may not even you may not qualify for anything after you retire. >> So, um >> yeah, the Yeah, the the contracts all have sunsets in them
>> for when new retirees were eligible for retirey healthare. >> So, that depending on when they were hired, they may or may not qualify for that benefit. So like um I don't have a provision in my contract that provides retirey health at all. So this this
would never affect me. >> Yeah. Casey, I don't know if you want to expand on that. >> Yeah. And then the other thing that you mentioned is so all of our active employees are on an HSA plan now. So and a few of our retirees. We've only had this plan for a couple years, but we do
have a few early retirees on the HSA plan, so they wouldn't fall into any of these buckets. They're paying lower premiums, but then they're also paying more when they use their care. So, they're going to see less premium savings and then more savings um on the
Medicare plan when they're using their care. But we do have 70, like Matt said earlier, 70 individuals that could get retirey health. That doesn't mean that they all will because there's an age requirement and a years of service. And
some of them only get it to 65. So if they don't retire till 65, there would be no benefit. So that that number could very well turn into only 10 or 15 that we actually realize costs for. We don't know. And some of them might quit before
they reach that that age or years of service. It was different for each contract, I think. >> Yeah. >> Yeah. So, anyone hired in the 20078 school year, so after July 1 of '07
would not have retirey health benefits in general. Um, we have a couple like small units that still got it to 65, but nobody knew was getting it post 65 that's been hired since 2007.
All right. Um, this goes back a while. Like I said, uh we've had numerous meetings, including tonight's uh the fringe committees talked about it, uh on two different occasions exclusively. Uh in September, I mentioned that large
group retirey meeting in May. We met with a subcommittee in September. Um got some more feedback. So that was really good. We got a lot of questions and feedback uh in May and that helped us put together a a Q&A document that we sent out as well. Um, and then a couple
differentformational documents have gone out. Um, I put a link in the I'll put a link in here and I won't go over this now, but you if you want to look at this later, you can see, you know, the frequent questions that
came up. I'll say that one of the large questions concerns that people understandably have is the network. Am I going to be able to see my doctor that I've been seeing for 20 years? Uh that that's the one that that I think
probably stands out the most. Um and I've personally gone in and looked at the network and the list. I sat with some retirees after our last fringe meeting. They asked me about doctors and you can put your doctor's name in there,
see if they're in the network. The Blue Cross Blue Shield network is really really large and it's nationwide. So, um I haven't been able to find and I'm not I shouldn't even All of the ones that I've looked up so far have been in the network. That's probably the safest way for me to say it, but George, do you
want to comment on that network at all? Maybe as it relates to or compares to what people might be used to. >> Right. So it it is, you know, as we had shared with the retiree population in in Minnesota, Bluec Cross does have one of
the the largest networks of all of the carriers. So when we compare our Blue Cross uh network with this plan to the current health partners network, there is very consistent overlap of of most
providers, right? 90 I think 97 or 98% of providers in the state of Minnesota are contracted with Bluec Cross, 100% of hospitals. We also have access to care outside of Minnesota with the large Blue Cross Advantage plan network. Uh when we
leave Minnesota under our current plan, Health Partners doesn't have that large network in that sense. They have to contract with Sigma. So they're they're leasing Sigma's network outside of their uh service area. So it sometimes can be
a little bit disjointed because they're leveraging a a network and a relationship that way. With Blue Cross, they they kind of are like, you know, McDonald's where they're franchised. And so in that respect, the the Blue Crosses across the country all kind of come
together to create this large uh network from a national standpoint. So from an access of care as Matt alluded to it, there is going to be you know equal to or better access to care for what members have today as well.
>> People ask specifically you know Grand Ita Mayo U of M understandably and they're all all included. >> Yep. >> Um I mentioned some of these already uh when we were going through the documents. These are some other
clarifications came in via email like you know this seems unclear things like that um clarifying that difference between out-of- pocket maximums for people and deductibles. Uh that was requiring some clarifications. Uh also like you know that number there doesn't
seem right for me individually and it may or may not be if they have a different benefit that they retired under. And so like we said um Casey called that spreadsheet a model or What was the word you used? I can't remember. It was Yeah. Yeah. sample. I don't
remember. But but it's it's right for most employees. Um because um uh most of our retirees are teachers. Um and then decision- making is another question mark that that we've been asked. Uh you know, the the board has the uh authority
ability to make decisions related to this as long as the board's maintaining its contractual obligation. uh that there it doesn't violate current contact contract value uh language and that you know again an argument could be made
based on that statute about value and because the value is as good or better that's really not something that we're going to need to be concerned with. So uh if those conditions are met uh the board has the ability to move forward.
So, the recommendation from our our team is that we move forward with this self-funded health partners plan to the fully insured blue cross one. Um, the earlier the better. There's a lot of work that goes into working with retirees. Um, Michelle and
Casey have been working with health partners and Blue Cross to make this simple and we're hoping that this can hopefully happen digitally so that retirees don't need to do a lot of paperwork. um because that's a um a lot of work and it's a barrier potentially
and we don't want this to be more complicated than it needs to be. The target that that uh we're seeking is that we're uh bringing this to the board next week to make a decision and then we
can start that open enrollment process uh right after that. again the goals that we had maintaining or improving benefits um I think we checked the boxes with the things that we set out to do and um
ultimately doing something that I I truly believe will uh save many retirees premium uh result in a benefit plan that's as good or better and then it's it's going to save some of them on their property taxes too um as well as the
rest of the community. So, this is the timeline if we continue to move in this direction. Um, October 6, board action. October then will be about information, communication, uh, working with those retirees. Um, that'll be a big lift for
Michelle and others in that work in that area. And then open enrollment in November for the plan year starting January. >> Superintendent, >> uh, to paraphrase Tom, this is a this is a no-brainer. uh in many respects.
However, is there anyone out there a voice that has really uh um railed against this for some particular reason? >> Um I would say that there have been many questions
uh >> questions I understand. >> Yeah. Questions about like I said about how's this going to affect me? Um the network, >> right? um how was what's the cost really going to be? Who's where does decision making where decision- making rights
lie? Um how does this jive with contracts and bargaining and things like that? >> Um we we've done our homework. >> Yep. >> Uh for sure. Um we also have been in communication with Edmond from the very
beginning of this. >> Okay. >> Uh because I don't want any surprises either. And so, um, to date, there hasn't been a concern raised from Edmin. Um, I know George has been in touch with, uh, one of the attorneys that from
Edmin that does this type of evaluation. And I don't know if there's any commentary there, George, but that that is something that, you know, if we're going to do this, we want to do it out in the open. Um, we don't want any surprises, that kind of thing.
>> Yep. We shared all of the items, the plans that they're currently on, the cost that they currently have, the the proposal, the cost there. Uh on two different occasions, um provided information to Deb. Uh and as of today,
there hasn't been any uh information coming back saying that we don't that they had objections to it. Now, that doesn't mean that they don't. They just have not shared anything with any of us. And so they have had a chance to review this. They did ask what our
recommendation was. We did say that we uh support where things are going and I think that a conversation tonight was going to be had and so that they they were well aware that this was being brought forward to the the school board this evening with a a vote in the near
future as well. So and so far no u followup. >> Thank you, George. >> Yep. Do you can you talk uh and you don't need to bring the districts up by name, but can you talk about this transition? Uh I know you and I have talked about a couple districts that have been through this in the last few
years. Can you talk about that at all, George, or add any comments? >> I can say that the the book of business that one digital in Minneapolis supports from a public school uh environment is is close to 30 uh school districts. And
Grand Rapids is the last school district that we have that has post 65 retirees part of the same program that their active or early retirees are on. The last group that had this prior was Elk
River and they had recently moved about about a year ago and haven't had uh issues in regards to that. Outside of that, all of the other districts that have retire because under statute, we have to allow these individuals to continue whether there's a a district
contribution or not indefinite. And so, uh, all other districts do have some sort of a Medicare option for those individuals as they age into this. So you are one of one of the the holdouts in regards to that and I and completely understand why in terms of the benefit
and h still having the the way that the levy and everything else kind of operated but uh that is not common in any of the districts that we uh kind of work with. >> One comment. Can you go back one slide
on the So I just want to be um very clear that This is going to save taxpayers if we move forward with this $2 million per year. Correct. >> Yep. >> But that doesn't mean that there isn't going to be an additional cost on
taxpayers because benefits have ran out, >> right? >> It will be a tax increase. >> That's right. >> We're just going to have less of a tax increase because of the work that has been done here. >> Right. >> Yep. That's good. That's accurate. >> Um just clarification, there's two plans
on this. Um, Blue Cross, >> if if you're a resident of one of those 21 or 22 counties, you'd be in the the first column. And if if you're a resident of somewhere else, you'd be in the second column.
Okay. Yeah. The if you look on the very last page, you can see the counties. I should have pointed this out. You can see the counties that would be included in the group platinum blue.
So >> Itasa is in the group platinum blue, which again is the the less expensive of the two. But again, our model is based on the more expensive just because we wanted to look at it from a worst case scenario
standpoint. Brilliant work. Thank you. >> I guess I had a couple questions I thought about as we were looking at this. So, um, as we're looking at this, what kind of is it a yearly contract you get on this or is it a by-early or how
what's the longest you can kind of lock in on something like this? >> George, do you want to talk about that? >> Yep. So, so all of these programs are uh annual. So the the rate that's being offered is for J for a January one and
then based upon our experience uh no different than our self-insured right our our rates kind of adjust based upon what's happening with our experience blue cross would be looking at that as well and also spreading this over their entire group Medicare business uh rates
as well. So there there's opportunity to leverage that larger pool as well as opposed to just being part of our self-insured plan, but there it's it is an annual there's no kind of multiple year um
unfortunately on this type of a program. >> Okay. Thank you. Um then the the the next question as we were talking about it, thinking about it is um from an administrative standpoint for are people in the district or you know
specifically are people responsible for answering the questions on this? You know are we concerned that adding another plan makes the effort more than one person can handle or you know I I
guess you know now you got to kind of >> yes >> you're navigating a lot a lot more in my mind. Is there a concern about that or is it Yeah, I don't know. >> I mean, anytime you add something different, it's more from an administrative standpoint. I don't know.
You know, if you want to speak freely about concerns, that's that'd be great. >> Yes and no. Um, you know, we have to deal with everybody on a plan no matter what. Depends on what plan they're on. So every year I'm still dealing with sending out information to every retiree
no matter what plan they're on. So I'm not worried about having communication with those retirees. My mainest concern is making sure everybody has the right plan at the right time. So I it's a lot of work, don't get me wrong. I think the work majority is going to come at the
beginning of it, not throughout it. So that doesn't concern me as much. And if I do, I have a team that's really willing to help me. So I think that's I'm not as concerned about that part. And I I worked with this plan and I was part of Zitas County when they moved to
this. So I am familiar with the plan. I'm familiar with the questions. I'm familiar with how the plan design is and I'm familiar with how people reacted with it and I've had a lot of communication with our retirees. I've we have a lot of them and I know a lot of them by name already. So I think there's been a good relationship built up to
help them through this transition as well. >> Thank you. >> Good question. I do think one of the things and and I haven't spoken about this with um with any other members of the team, but you
know, some of the retirees were like if we're not part of the active group anymore, where's our voice in the process at all? you know, um because they don't have a seat at the fringe, uh which again maybe wasn't as relevant
when they were they were on a plan that was sort of, you know, part of the the nucleus of plans we were offering, right? Um, and so I I think there's at least a discussion needed about Fring's
makeup and and I don't because at some point, you know, if we wanted or if there was a need or a desire to shop this around again, like how would that come to our attention? And I think there needs to be a vehicle for that. And I think the fringe is probably the vehicle
for that. So I I think that's something that we need to work out is what's the process there. Um you know 80% 90% maybe 95% of what the fringe is talking about won't affect the retirees
uh or it'll affect them less and less as more and more in this group. Um so maybe not every meeting but so anyway I think there's some there's some thought that needs to go into that. question that's
partially I don't think it is but there's a climate that's develop I can't not hear what's very
negotiated when they say doesn't necessarily mean they've done a great job on both sides of the table over the years a certain amount of distrust
And that's my it's not it's our father to say there is someone watching. Yeah. I'm a little disappointed
because it was easy for me to get around my colleagues. I'm passionate passion about this and there is
I wish I could say that there is a level of trust and transparency this whole we can't erase this we have to deal with And it's open dialogue. This has been very important.
But you have to know that we have we know you can't take this legally. You cannot brought you into the state department as a negotiated
process. school. The answer is what you want to hear is yes and no. So you got yes and no if that line is crossed it's going to
what happens and we have some very questions as retirees and as a chief negotiator some of these contracts is
I'm not hold I can't blame we have to live but nobody's ever given me an answer why did you le instead of 100% we wouldn't be in this room doing this
[Music] I don't want to be in here. So the goal here all along Dan has been to make sure that retirees have an equal or greater benefit than they did. That's been the whole process here.
>> I can see >> I can see that I know it's a lot of work and I can't imagine Thank you very much. >> More discussion from the board. >> Well, and I I just want to point out one
thing and and I I do appreciate the effort. Um, you know, I think everyone needs to be aware. Um, you know, as with all insurance, right? It's all based on aggregates. You're going to find outliers that are going to fall out of the you know, it's not hard fast rules,
right? You know, it's an aggregate and there's going to be some exceptions, but I but based on what I've seen, it's it's really the direction that's best for this district. Um, you know, and provides comparable for for taking care of our
our requirements and the people who made this district what it is. Um the other uh the other comment was um well actually I lost it so
>> I got too long. >> Yeah, that's all I have, Mr. Chair, unless there's other questions. >> Any any other questions or discussion? I'm familiar with them through
Who's behind the screen? I don't see that change. Sometimes these type of things are going to be handled forward a lot more.
Thanks Any other discussion or questions? George, >> thanks for uh thanks for joining, George. Sure. Appreciate you taking time out of your evening. >> Yep. You're welcome. Thanks, everybody. >> Thank you, George. >> Thanks, George. >> And I I guess if anybody has uh further
questions, we have staff available to talk with them. Otherwise, uh this time we're ajourned. >> Mark, thank you.