Item Coversheet
City of Independence
AGENDA ITEM COVER SHEET
Approved

Agenda Title:

Council action is requested to approve implementation of prescription plan management programs and the Health Matters Care Management program to the Stay Well Health Insurance Plan effective January 1, 2019.
Recommendations:

Staff recommends approval of the implementation of the prescription plan management programs and the Health Matters Care management program for the Stay Well Health Insurance Plan effective January 1, 2019.

Executive Summary:

On August 31, 2018, the Stay Well Committee recommended changes to the Stay Well Open Access Health Care Plans 1 and 2 to be effective January 1, 2019 that included implementing Cigna prescription management programs and the Health Matters Care Management program (please see attached Stay Well Committee recommendation memo).  Staff concurs with those recommended changes. 

 

The Committee also recommended increasing premiums by 3%. While a premium increase is likely warranted, due to the timing  of the recommendation relative to the City's fiscal year, staff recommends delaying this for consideration in the upcoming Fiscal Year 2019-20 Operating Budget.

 

The recommended changes include implementing the following Cigna Programs (please see second attachment for a more detailed description of changes). These changes are consistent with plan structures of similar organizations:

 

  1. Changes to the Pharmacy Plan:
  • Value Pharmacy Drug List
  • Enhanced Clinical Audits
  • Mandatory Generic
  • Increase Mail Order copay from 2x to 3x for a 90 day supply
  • Limit Specialty Medications to a 30 day supply at a time
  • Mandatory Mail Order/Cigna 90

 

    2.   Health Matters Care Management (HMCM)

 

The total impact (projected savings) to the Stay Well Health Plan for implementing these programs for the 2019 calendar year is projected to be $1,637,000.

 

Background:

Lockton, the City's benefit consultant, presented projections for the remainder of the 2018 calendar year and 2019 calendar year for the Stay Well Health Plan. According to Lockton's projections, the total plan costs for 2018 is anticipated to be $25,458,668, with an anticipated funding deficit of $727,227.  

 

For 2019, the City's year-over-year costs are projected to increase by 1.8% ($461,831).

 

In order to mitigate the increase in costs, the following Cigna programs are recommended to be implemented effective January 1, 2019:

 

 Recommended Plan Change  Projected Cost Savings (2019)
Value Pharmacy Drug List        $248,000
Enhanced Clinical  Audits                  $194,000
Mandatory Generic                     $84,000
Increase Mail Order Copay from 2x to 3x  $23,000
Limit Specialty Medications $35,000
Mandatory Mail Order/Cigna 90     $224,000
Health Matters Care Management     $829,000
 TOTAL  $1,637,000

 

While the City has not implemented a premium increase for several years, it is anticipated that future increases will be necessary in addition to implementing program enhancements to manage and offset future cost increases (e.g., wellness programs, etc.). City leadership looks forward to working closely with the Stay Well Committee to determine the level and timing of any premium increases and evaluating future program enhancements to improve the overall health of plan participants and manage costs.



Fiscal Impact:

Costs are funded through the Stay Well Health Care Fund and Operating Budget.





Department:          FinanceContact Person:          Bryan Kidney


REVIEWERS:
DepartmentAction
Human Resources DepartmentApproved
Finance DepartmentApproved
Law DepartmentApproved
City Managers OfficeApproved
City Clerk DepartmentApproved

Council Action:          Council Action:          Accepted

ATTACHMENTS:
DescriptionType
Stay Well Committee RecomendationBackup Material
Stay Well Health Prescription and HMCM ProgramsBackup Material
Redlined Stay Well Plan Document ChangesBackup Material