be spoken to just to be calmed or someone that you answer to that needs to hear a voice i can be more articulate than today but please use me. >> all right. thank you very much for your statement. >> thank you. >> so on the item is there any other public comment? hearing none we're ready to vote. all in favor signify by saying aye. >> aye. >> all those opposed. [gavel] the ayes have it. next item is -- we're getting ready to according to the agenda move into the rates and benefits discussion and then finance committee matters and then on to our regular board meeting. i am going to take the prerogative of reordering the item number 12

which is the president's report to this part of the agenda, and also after as we go through the other portions of the agenda item 9 i want to combine with item 11 in our agenda. there will be no special discussion on item 9. it will be combined into item 11 so with the -- and in addition we have item 16 which is designate d as a discussion item. i believe it has to be probably carried over because it is an action item, and item 18 is identified as an action item and it's actually a discussion item and that too may need to be carried over but we will get to those items or

those issues when we get to that portion of the agenda. this is the director's report prior to the rates and benefits committee. we need to be out of this room by 430 this afternoon and that's not a soft time. that's a hard time. there is another city committee that will be meeting in this space. we have an agenda that is extraordinary. we are going to under take the labors of sieve fissous and get through this and the great person, the god condemned to roll a rock up a hill. i happen to be wearing a watch and the face is of this god and i will turn to my fellow commissioners so they can see it, so it can be done, and my hope is that those will be

presenting will be focused in their remarks, crisp in their presentation. that board members -- we all know that we have other commitments. we have another closed session this afternoon. we need a quorum for that, and that public comment i would ask that it be essential and targeted on terms of the topics that may call -- they do all call for public comment, so to the degree that you can help us complete the full agenda today we would be very appreciative, and with that i would like to close my remarks and move to the rates and benefits committee we we're acting as the committee of the whole. let's begin with the item. >> item 3 action item

initiation of black-out period and rfp. >> catherine dodd would you speak to this. >> director dodd. you have the memo in the packet from me. this is pursuant to -- the memo is notification to the health service board that the health rates and benefits in 2016 is issuing rfp for vision services pursuant to the providers selection policy currently in place and the board must be notified of a black-out period when a rfp is released from the on set to conclusion of the plan with a primary provider and communication between board members and providers seeking contracts with hss solely related to hss contract suggest restricted and communication

includes meetings and telephone. >> >> and email and text messages and letters and faxes and any other social media or contact with service providers pertaining to hss except during board or committee meetings. board members that communicate with service providers for reasons not related to hss agree to disclose in writing to the director and the board. >> this is not a new policy and it is my expectation that every board member will follow it, not only in its spirit but to the letter as we proceed in these deliberations so with that it's an action item i would like to know -- >> i just have a comment. i want to say this applies to the vendor as well as the board members that they're not supposed to initiate any contact either and there is a penalty if you do so.

>> all right. >> which is written in our rules. >> okay. all right. with that additional clarification this is an action item. i am ready to entertain a motion that we adopt the black-out period. >> i move that we adopt the black-out period. >> is there a second? >> second. >> any comments or discussion by the board members. any public comment? hearing no public comment we're ready to vote. all in favor signify by saying aye. >> aye. >> all those? it's passed. [gavel] item 5. >> item four action item approve city plans and administrative fees in employer group waiver plan premium for the 2016 plan year. aon hewitt. >> aon hewitt good afternoon. >> good afternoon and you will be a continuous presence in this process. >> do you want me to stand the whole time? >> no. you don't have to stand there. i thank you for at

least clarifying in this action item what egg whip is. >> okay. so before you have the presentation titled city plan administrative fees and group and egwp presentation f we go to page one we basically say since we're self funded under this program, the city plan funded we have fees that we doarkt with the payer which surks nighted health care they're the administrative fees which are disclosed on page two presently for 2015 for o.k.tives it's $13.54 and the numbers there are the. >> >> same and they're combined rated together. that's the precedent since i got on board and prior to me and have the

medicare and integrated with the egwp and the numbers are listed there and the numbers are low are 3% higher and don't have an increase for years and i reviewed the numbers and i believe they're reasonable as presented and i recommend that you approve these numbers so with the next statement we wanted to disclose to you some of the programs that are part of this offering to the city plan member base which is a small amount of early retirees and actives and a large 6700 retirees under the pp o program. there is shared savings and within that is a facility reasonable and customary. what these programs are is uhc goes out and negotiates this and maintain their fee schedules and all claims payments so there is no way -- they are active in

trying to maintain that -- you know, you get the best deal possible and an example would be you go to out of network facility they negotiate it and get it down so they brought it down so there is a savings. okay. they keep 35% of that savings so what we do because this is a pragmatic idea and we accrue it in the ad min fee because we're charged that and the claims invoices and a new program part of the managed care aco, the forward thinking things is that -- let me restate that. they have implemented a value base pricing agenda so they're as current as possible with all opportunities to integrate positions at hospitals and minimize excessive utilization in hospital facilities and keep doctors on point through the

programs they have done implemented to be very strict in how they manage this health care. this is all a benefit to those people that utilize your programs. we made an accrual for that. at the end of the point where you go to some of the physicians and they make savings we pay a portion of the bonus dollars they get for taking these actions. the amount you pay is much less than the savings you will receive. this is the same thing that goes on with blue shield so those are the numbers. with full disclosure we wanted to outline those and what has happened we had these prior numbers in 15 at the bottom of the page. they have gone up. one of the reasons is they come up with a very strong and robust value based pricing. we didn't have that accrual in the ad min 15 item in the ratings so if there are no questions i tried to outline this and keep

timeliness with the presentation and are there any questions because this is basically it? >> are there any questions on the employer plan egwp. >> these are the fees. >> the fees. on this item. >> any questions? >> 14% increase? >> that's my estimate. i put it in there so it's not them wanting it. it's me accruing that in the fee and we're putting in the bucket to pay for the potentiality and when we have invoiced we have the shared savings portion and that's part of it and i want to build that fee into the ad min so we get all of the shared savings after the fact and they save a lot of money and then i divide it by the membership base so they saved a lot of money on claims. then i divide it by low membership base for certain portions of it so it turned out

to be a good estimate and historical data was $2.23 as an accrual so it went up 14% from what i put in there last here. >> catherine dodd. >> director dodd and i asked them do the value pricing three years ago when i look through the notes and that they're implementing it is a sign of the times this. is one of the best practices in the industry in terms of negotiating the best prices and the best quality and i am supportive. >> all right. >> okay. any other questions? >> the recommendation is to accept premiums -- other questions? is there a motion to accept? >> i move to accept. >> second. it's been properly moved and seconded. any additional questions from the board? any public comment?

seeing no public comment we're now ready to vote. all in favor signify by saying aye. >> aye. >> all those opposed? [gavel] it passes. >> now for the last portion of this one item number 4 is the egwp premium. you decided in 2013 to adopt a egwp versus the drug subsidy for the medicare portion of this and egwp is where you act like you have your own plan and all of the benefit from farma and the maximum opportunity to save money. it has saved money and dr. dodd when i came on board and we need a full calendar year. the driver behind that is that i want to egwp. that was very smart and so far it's been great. they are raising the number. i want to give you a little history. we came in at $142. we stayed at that

amount. -- 56-cents and up $156.96 and we were in 142-2013 $142 and we are behind it with united health care and by giving us the low number. that's their decision. i think it's fantastic for the members. they want $171.09 and i see nothing wrong with that number given the marketplace so i want you guys to accept this number. >> you have heard the recommendation. are there questions? is there a motion? >> motion to accept the recommendations. >> okay. >> that's it.

>> that's it. >> yep. all right. madam secretary. >> item 5 discussion item. review ined but not reported ibnr status. >> aon hewitt. what you have before you is full disclosure what you have on your books for the ibnr reserves and for the self funded programs. since you take the risk you need on the balance sheet the liability. what it is if you stop the program at a given time can you pay the claims, the run ought claims that happen before that time and remitd and invoiced and then you would have to pay after that. that is a financial responsibility of any self funded program and we do these on a physical year basis to

correspond with the audit and these were approved by the auditors and we wanted to bring them to the board so the board members would know where these numbers stood, and the most marked changes is that blue shield has gone up $4 million. blue shield's claims payment was exceptional when they first started under the flex arrangement and right now i can't explain why but we had this reviewed and you need to have on your books 22 mindz so that's the end of my statement. >> director dodd. >> i would like it to be clear that the $4 million for blue shield reflects our payments to the hospitals. it doesn't reflect blue shield increasing their rates. >> no, not at all, not at all. they didn't increase anything.

it's just our reserve and the speed we pay the claims. if we turn it off at this point we should hold $22 million which you are doing. this is as of june 30 and right now you have that amount on your balance sheet. that's all of my comments. >> any clarifying questions from members of the board on this item? >> okay. >> madam secretary. >> item 6. discussion item. review of contingency reserve fund status. aon hewitt. >> i am back again and this is something that my prior actuary you had reese evans who was a exceptional actuary was strong in favor of. he shared with the board where you're self funded and take risk in addition to the

required terminal liability have a contingency reserve. we have reviewed this with the board and you reviewed the scpls this is sharing the amounts on the books now so you have a contingency reserve which means do i have a reserve if this thing got out of hand? i am taking risk and i need money on the books just in case expenses got interesting so you have the amount listed for city plan. you have money for delta dental and for the pp o and 14 million plus on your books so a total of 24 million of contingency reserves. i think this is wonderful. i really applaud the board for letting us review the policy once a year. i am thrilled they're on the balance sheet. before me they were not on the balance sheet. they have

consistently have been and kudos to the ceo and director dodd for this and this is great and i wanted to share the amounts and the auditor has already approved this. >> questions. commissioner lim. >> [inaudible] based on the dates or the study? >> the document that we presented and we look at the various enclaves and study on that and keep what we think is the right amount of money at 99% confidence interval so if it exceeded that we wouldn't have ultimate funds but 99% of the statistically modeled% -- the 99% confidence interval this is the amount of money that the program says it should have so you're comfortably reserved. >> this is based on prior year's experience. >> yes and we forecast it forward and apply the

statistical tool kit and come up with a number. >> based on the last three years? >> 36 months, yes, three years. >> any other questions from members of the board? on these items they're list listed as discussion items and i know public comment should come after each one of them. i have elected at least at this stage to ask the public comment be slightly defer because these items are existing policies and come back for full public comment. this data will be updated in the june period, so if there is any public comment at this point on this discussion item i would invite it or the prior one. hearing none we will proceed. >> item 7 discussion item. review of city plans rates stabilization reserve. aon hewitt. >> all right. you have before

you standard of presentation of how the year's experience in 2014 whether you generated a surplus or deficit and whether or not based on policy the three year amortization stabilization period do we need to add or subtract money to what we applied to the rates? and to step back for a second you have what i think is the most responsible policy of any public sector entity that i have worked for and on the self funded programs if we generate surplus and the premiums were greater than the expenses and take that amount of money and give it back to the people from that plan over which it's generated over three years. there is a gap of one year so when we analyze where we're on the surplus or deficit position with united care, the city flan and look at 2014 to apply to 2016 rates so i

turn you to page two because that's the actual versus the expected. >> >> in 2014 we actually reduced the rates because we had excess money -- did i say 13? 2014 -- yes, we reduced the rates. what happened is this is mainly e -- triggered by egwp and if it happened in theory we would be slightly under funded and we were over funded and we knew that, so at the end of the day when we did all of the math and vetted by the ceo this is what we expected, this is what actually happened, and we have $10 million more to put into the stabilization reserve to carry forward. wow you generated a

lot of surplus. i want everyone to know in 15 we basically said let's reduce the rates for city plan so we dropped the rates the first time for 18% and early retirees and 22% for medicare retirees and this stabilization creating the reserve will not happen going forward. we have money to go back into the rates but you don't see a large surplus on a forward going basis. with that being said unless there are questions i want to carry us through what happens with the money now that we have a estimate which i think is the final estimate of this. this is a reconciliation of 14. okay. so we actually go back to the first page and we say okay $10 million. so we take that amount of money and we go back to page one, and if you look at

page one last year we ended up with a carry forward balance of $14 million, and as soon as we adopted egwp these numbers got big fast. okay. we add the $10 million. we have $25 million that we basically -- if i can say this in the correct way. we have to give back $25 million over three years. that's just the way it is based on the policy so we're going to put 8.5 million dollars back into the rates in 2016 and allocated on membership and everyone gets a certain amount and i will show you that in the next presentation but that's where we're at in terms of surplus for this particular program. any questions? questions by members of the board. >> >> any public comment? okay.

thank you for this discussion item. >> is this a discussion item? >> [inaudible] >> yeah i actually need you to approve it. you can't? my bad. >> it's an action item. >> it's listed as a discussion item on the agenda and we will carry it forward for the next meeting. all right. madam secretary. >> item 8. review of city plan hhv utilization and claims experience with preliminary rates. >> this is a discussion item. >> yes, sir. you have the experience for the united health care plan. all that we have been talking about leads up to this and a set of preliminary

rates for 2016 so i turn you to page two, and there's not a lot of people in this program. this is the active cohort of individuals covered under the uhc city plan. as you can see we're at 600 and e plus ones at 76 and we're at 33 people in the family. most of these people are in areas where there is a special stipend that allows them to not have to pay the now $400 contribution rate based on the recent contribution formula and if you look at the premium levels those controlled to blue shield and kaiser rates are very big, and so the policy has been to continue carrying this forward and at some point and time i recommend that we consider what we're going to do besides just -- at some point either do we change this?

reignite the plan, close the plan? i don't know but we need to address it at this point and it's hard to rate when it's some small so that's the data there we turn over to page three. we look at the early retiree program, the experience is slightly better. i want to point out i have a little issue with membership but we carried forward what we thought is the correct membership. this won't change the answer. this is running okay. this early retiree program and then we look at the third and big piece which was shared before and which is the medicare experience. we have the egwp and the 171. we are interested if we could possibly look at fully insured examples of this down the road since this is preliminary. we're keen on talking to entities because a lot of people are aggressive about this

program and put this together on a cpo basis but right now i have given numbers with the existing program as it stands so we haven't finalized it but we're curious what is out there to keep the numbers low so that's that experience so now in the interest of time i know i'm going fast. are there questions about the general experience? we expect that the retirees are doing great. >> any questions or comments from the board? and before i call for public comment these items are something i call up teeing up of process of rates and benefits and let's be clear what's transpired over the last 20 minutes. there are policy issues, commitments around stabilization reserves, contingencies, all those things so we're setting the table if you will in the public forum to go into a more substantive

discussion around rate, programs and designs and rfps if they're on certain activities and so on, so this is administrative today in large measure but we're trying to inform you to give you our best interesting of where some of the items stand so they should be used as a reference going forward getting to that final time in june when the chamber will be full i am sure to hear the ultimate result of all of this work. okay thank you. >> okay. so with that there are no questions on the data. >> no questions from the board of. is there any public comment? okay. >> the next section is the claims methodology and request of hss it's getting more difficult because the data sets for the actors and early retirees are very small to come up with a case specific trend we made the best effort with this

data and what we would do with the preliminary rate so i have outlined on the next couple of pages what we came up with, and unless there are any questions about that it's out there and in its actuarial glory and we have what i think are reasonable trends. the data is kind of flat and the medicare data -- even though it's 6700 people it looks like they're not going to the doctor that much and used to be the case with early retirees so the trend rates are very nice so with that being said unless there are questions i will just move on. okay. >> question here. >> oh there is a question. yes, sir? >> no, i am just going ahead of you and looking at the 2016 rates. >> these right here. >> yeah. >> okay. you have a question or