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HomeMy WebLinkAboutGreater Tompkins County Municipal Health Insurance Consortium 2014 Annual Report.PDF125 E. Court Streel fihtra NY 14850 504-274_5590 l N FO. co,?sorrju,4 @nl'cnu. rt c6Yil www -ttrn pkinsc ountyny. govlhcoft sorlium l'lulicipulit,iris buikling a stalde irrsru ance fulurertrk". |I!;n F --I TouprlNs CoT'NTY MuxrcmIr HaALTH h,rsuRANCE cOt tSOnrrUX{ Greater Tompkins County Municipal Health Insurance Consortium2lL4Annual Report May 2015 The Greater Tompkins County Municipal Health Insurance Consortium was created with a mission in min<i; pooling municipal resolrrces to reduce administration costs and leverage purchasing powers to obtain healtn care services at a lower cost while spreading potential large ,losses over a larger number of policyholders. The year 2014 marks the completion of the fourth consecutive successful year of The Greater Tompkins County Municipal Health Insurance Consoftium. The Greater Tompkins County Municipal Health Insurance Consortium received its Certificate of Authority to conduct operations in October 2010 and began providing health insurance for 2002 employees and retirees of thirteen municipalities within Tompkins County on January I, 2011. GTCMHIC is an Article 47 insurance company that creates benefit plans, collects premiums, and pays medical and pharmaceutical claims for its covered members. Currently >5000 employees, retirees, and their dependents of the sixteen (16) municipalities of the Towns of Caroline, Danby, Dryden, Enfield, Groton, lthaca, Lansing, Ulysses, the Villages of Cayuga Heights, Dryden, Groton, Homer, and Trumansburg, the Cities of Corlland and Ithaca and Tompkins County are covered by one of the Consortium's approved benefit plans for medical and pharmaceutical claims. Benefit plans are a contract between the employer, the employee, and the health care providers including pharmacies. The insurance company is the intermediary that provides the mechanism for a large group of persons to pool their risk of health conditions along with their premium payment. Claims are paid that meet the benefit plan criteria. The amount paid to providers is negotiated by the insurance company or its agent for in-network and out of network claims. Operations Highlights: o In 2014, the Consortium received $36 million in premiums and paid $29.8 million in claims resulting in $3.85 million in net income. o With this strong financial result, the Board of Directors increased its Catastrophic Claims Reserve and its retention limit of large loss claims.o The Board also established a Rate Stabilization Reserye and approved a 5%o premium rate increase for 20 1 5. o The Consortium continues to operate very efficiently with 92Yo of its expenses going to pay claims.. The Village of Hornerjoined the Consortium inlate2014.o Two benefit plans were added -- the Medicare Supplement and the Platinum Plan to the Consofiiurns offerings. . For the first time, the Consortium offered flu clinics that were conducted in ten locations.c The Board of Directors created the position of Executive Director.e The Consortium completed the Department of Financial Services Audit for years 2071 and2012.o d Consortium wide educational retreat on basics of health care and where the Consoftium fits in was conducted on September 15,2014. Committees: The Greater Tornpkins Consoftium Board is supported by several special committees that perform the in- depth research and deliberation to propose policies, products, and process improvements to benefit the operation of the Consortium. Greater Tompkins County Municipal Health Insurance Consoftium 2014 AnnualReport In2014 the Audit and Finance Committees were merled. The new Audit and Finance Committee is chaired by CFO Steve Thayer, merged into one comnlittee to better service the Board. The Audit and Finance Committee was instrumental in bringing forward the Membership Dependent Certification Process and the Medical Claims Audit. The Audit and Finance Committee collaborates closely with Steve Locey, the Consultarft, and Rick Snyder Treasurer, to monitor the budget and spending trends while maintaining a strong resewing policy. The Owning Your Own Health (OYOH) Committee,ichaired by Director Mack Cook, implemented a pilot biometric screening program with involvement from the both the City of Ithaca and the City of Cortland. They continue to explore wellness awareness programs and keep the cost controlled by utilizing existing community and vendor programs. The Committee receives support from both the medical and prescription claims administrators. They e-xecuted successful flu shot clinics by partnering with Pro-Act at numerous locations, which was used by 347 members. The Joint Committee on Plan Structure and Design, chaired by Director Scott Weatherby reviewed and provided input on two new products to the Consortium's menu of plan offerings. Both the Classic Blue Medicare Supplement plan and the Platinum metal level look a-like plan were approved by the Board. Financial Highlights: Net position: For the year ending December 3I,2014, the Plan's net position has increased by $3,851,816 to a grand total of $10,900,699. GTCMHIC Board of Directors have been consciously building reserves starting in year one (2011) when required to post the Incurred But Not Reported Reserve (BI.[R) of $2.6 million and Surplus reserve of $1.3 million. In subsequent years, reselves were built to protect the Consortium against an abnormal claims activity which is a statistical possibility. Reserves were also built to retain more "lui*r cost and reduce the Stop-Loss Insurance premium. The Board of Directors felt, with this 2014 posting of net position, that reserves could be used to offset premiums which resulted in a 5Yo increase in premiums as opposed to 8o/o and 9%o in the first years of the Consortium's operation. It should be noted that 8oZ premium increases compares favorably to the industry average. Five percent demonstrates strong performance. Statements of Revenues and Expenses - The Statements tof Revenues, Expenses, and Changes in Net Position present the results of operations of the Plan for the years ending December 31: Revenue Overview Premiums Aggregate write-ins for other revenues Interest earnings Total Revenues 36,063,291 $i 134,659 12,641 34,507,670 $ 146,563 9,871 28,575,531 105,902 7,332 34,664,104 $36,210,591 $28.688.765 Greater Tompkins County Municipal 2014 Annual Report Claims expense Ad.m in istrative fees (3'o party ad m i n is(rators) Other expenses Reinsurance expenses, net of recoveries Total Expenses Health Insurance Consortium Soulces of Revenue for 2014 755,490 988,796 562,919 836,935 Aggregate writg-l ins for olher lnterest earnings 0.03% t#TH["" Expense overview - The following table summarizes expenses by function for the years ending December 31: 28,01 939,946 610,890 310,713 929,502 373,096 (590,041) 32,144,140 $29,875,306 $25,510.592 Operating Expenses - 2014 abovd shows a very efficient structure with >92yo of expenses Other r.75% .Claims 92.57% Please note the expense summation going to pay claims. Reserving for the X'uture: New York state Article_47 Legislation requir$s itscertificate holders to hold a Surplus Reserve equal to 5%of premiums and an Incured But Not Reqorted claims (BNR) Reserve of izy, of the paid claims.Additionally, for 2013 the Board of Director!.established a ;Catastrophic Claims Reserve,, of $600,000 toprovide resources forthe additional risk of ret{ining $50,000 more of claim cost or increasing to $300,000 ofcost per claim prior to Stop-Loss insurance covering such large loss claims. The Board of Directorsincreased that reserue to $1,050,000 and increased the la-rge loss claim retention to $400,000 for 2015. Greater Tompkins county Municipal Health Insurance consontium 2014 Anntal Report Greater Tompkins County Munfuiptl *Icalth fnsurance Conrortium Asset llistribution (n0ll - ?0I4) Cstililrsphir {H{0 {0011{60 rilu ertslt r$!l? EI0II Economic Factors Affecting the Future: . Prior to the start of the 2013 Fiscal Year, (he Consortium renewed its specific stop-loss insurance with an increased deductible level tbf $300,000 in an effort to keep the premium increase at a reasonable level. This increased dreductible does create an additional level of risk associated with the Consoftium's operations. However, the Consoftium experienced fewer catastrophic losses in20l3 and2014. This contributed to the better than expected paid claims result which allowed the Consortium Board of Directors to establish a Catastrophic Claims Reserve to help off-set the increased risk associated with the higher deductible on the specific stop-loss insurance. Ir;r 2014 the Catastrophic Claims Reserve was established at approximately $600,000. During the 2015 budget development process which occured in the Fall of 20L4,the Board of Directors again agreed to increase the specific stop-loss insurance deductible to its cunent level of $400,000. This resulted in an additional increase in exposure and a lower premium expense. To help protect the Consortium's financial position the Board of Directors voted to increase the Catastrophic Claims Reselve to $1,050,000 for the 2015 Fiseal Year. This is an area which will be reviewed by the Borird of Directors on an annual basis to ensure a tolerable balance is achieved between the risk and cost of the stop-loss insurance. $.1,$xti.lli{i.sal $!,*qa,t6*aE i *,rd,rtt.0o 'tr$3grul{r.{xt .t8:dc{F,t0 $J35,ti6,!D fli6,lo&*tr SJEt',?E{,{B s3t 5\l$t.ilt 56.08 *{{t?J{t tl rJ{J,Dl} $3*';frtdll{ l:r9l.1i!.0$ Greater Tompkins county Municipal Health Insurance consortium 2014 Annual Report o The Affordable Care Act's (ACA's) ongoing implementation has resulted in some increased costs to the Consortium with the payment of the Patient Centered Outcomes Research Institute(PCORI) Fee in the amount of $4,448 related to the 2012 Fiscal Year. This fee more than doubled in cost with the $10,252 .46 payment rnade during the 2014 Fiscal Year for the 2013 Fee which was paid in July 2014. Starting with the 2014 PCORI fee this fee will continue to increase each year by an inflationary escalator as determined by the United States Internal Revenue Service until the fee is no longer applicable in 2019.In addition to the pCoRI fee, in 2014, theConsortium was subject to the ACA Transitional Reinsurance Program Fee which requirej theConsortium to pay $376,764 during the fiscal year. ' The Board of Directors is also keeping a close eye on the effect of continuing decreases inMedicare and Medicaid reimbursements to medical facilities and practitioners will have on theConsoftium's paid claims expenses. The main concern is that these same providers of care willseek higher reimbursements from the third party administrators and insurance companies to make up for the losses in Medicare and Medicaid revenue. It is likely that these pressures willlead to contentious negotiations on network reimbursement rates which could also impact theoverall provider network. Although the Consortium does not foresee any immediate financial issues related to this situation, the Board of Directors will continue to monitor paid claims andother data to ensure they make well informed and educated decisions regarding the financial structure ofthe plans. Statement of Position Greater Tompkins County Municipal Health Insurance Consortium Statements of Net Position - December 31, ASSETS Cunent Assets: 2014 2013 Cash and cash equivalents Accounts receivable - stop loss and drug rebates Accounts receivable - ancillarv benefits $7,958,073 540,237 -0- 36,379 997 $3,563,963 4)q ?\L 9,136 277,412 -0- Premiums receivable Prepaid expenses Total Current Assets OTHER ASSETS Noncurent Assets: LIABILITIES Curent Liabilities: Incuned claims liability: Incurred liability Claims payable 6,907,319 6,855,299 15,443,004 r 1,13s.054 8,535,696 4,279,765 953,100 5,953,618 908,100 5,947,I99 3,520,046 280,293 3,204,729 369,664 Total Incurred Claims Liabilitv 3,800,339 3,574,393 Greater Tompkins County Municipal Health Insurance 2014 Annual Report Operating Revenues: Premiums Aggregate write-ins for other revenues Total Operating Revenues Operating Expenses: Claims expense Reinsurance expenses, net Administrative fees Aggregate write-ins for other expenses Total Operating Expenses Excess of Operating Revenues Before Non-operating Revenue (Expense) Non-operating Revenue (Expense): Interest earnings Interest (expense) Total Non-operating Revenue (Expense) Change in Net Position Net Position, January 1, Capital contributed (returned) Adjustment for incurred but not reported claims Net Position, December 31, Conso um Accounts payable Uneamed revenues Total Current Liabilities Total Liabilities NET POSITION Restricted for contingency reserve - Section a706(a)(5) Catastrophic claims reserve Adjustment for incuned but not reported claims Subtotal Unassigned Total Net Position $10,900,699 $7,048,883 386,786 355,1 80 315,382 t96,396 4,542,305 4,086,r11 4,542,305 4,086,17r 1,803,165 606,898 (1,039,1 80) r,725,384 600,000 (824,545) i,370,883 9,529,816 1,500,839 5,548,044 Statements of Revenues, Expenses, and Changes in Net Position For the Years Ended December 31, 2014 i $36,063,291 134,659 2013 $34,507,670 r46,563 ?6 l q7 q50 ?4 654 X? 29,755,490 R?6 q?5 988,796 562,919 28,0I3,757 3r0,713 939,946 610,890 32.144,140 29,875,306 4,053,810 72,64r -0- 4,778,927 9,87r (rr9,426) 12.641 (109,555) 4,066,451 7,049,883 -n- (2t4,635) 4,669,372 4,626,192 (r,422,136) (824,545) $10,900,699 $7,048,883 Greater Tompkins county Municipar Health Insurance consortium:014 Annual Report Goals for 201Sr o creation of remaining look arike ,,metar level,, plans from Affordable care.r complete required review of Municipal cooperative Agreement.o continue to research and establish reserve and fund balance policy.o continue consoftium community education of the operations of aHealth Insurance company.o continue due diligence to ensute compliance with benefit plans and statutory regulations.o Continue to explore wellness opportunities. 2014 Board of Directors Judith Drake, Chair Rordan Hart, Vice Chair Steven Thayer, Chief Fiscal Officer Deborah Prato, Secretary* Mack Cook John Fracchia Mary Ann Sumner Herb Masser Glenn Moreyx Richard Goldmanx Michael Murphy Charles Ranl<in Kathy Miller Peter Salton Laura Shawley Scott Weatherby Doug Perine* * Membership changed in 2015 Consortium website: www.tomp Executive Director: Don Barber - Consortium e-mail: Town of lthaca Village of Trumansburg City of tthaca Tompkins County City of Cortland Town of Caroline Town of Dryden Town of Enfield Town of Groton Town of Ulysses Village of Dryden Village Qf Groton Town of Lansing Village of Cayuga Heights Town of Danby Chair, Joi.nt Coinm. on plan Structure and 2no La bor Representative judy Drake Chair of Board of Directors idrake@town.ithaca. nv.us ha rt(Otrumansburg-ny.eov stevet@citvofithaca.o rg d prato @tom pki ns-co.o rg mcook@cortland.org supervisor@drvden.nv. us he rbm asser(ogm a i l.com gem5@cornell.edu goldman (@ulvsses. nv. us d rvd e ntru stee m u rp hv(@ gm a L co m cra nkingroton (dgma il.com kcm il le rl-54 (dtwcnv. rr.com Psalton @cavuga-heights. nV.us h ishwav@townofda n bv.ors weathes@tc3.edu Design do ug. pe ri ne (odfa.state. nv.us Don Barber Executive Director Respectfully submitted :