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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.
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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 :