Special committee on Duval Doge to order.

Let's start with introductions to my far left.

Stephen Libby, Council Research.

Mary Stefopoulos, Office of General Counsel.

Ryan Parks, Council Auditors Office.

Philip Peterson, Council Auditor.

Good morning, Rory Diamond and George, district 13, the beaches.

Good morning, Chris Miller, at large group five.

Ron Salem, group two at large.

My gay district two.

Will Lane and District Three visiting.

Councilmember Lane, we appreciate you coming.

I know this is an area of interest to you.

Um I don't know that we have an update on the P cards.

I think the presentation was made at the last meeting.

Is anyone else have any questions on the on the P card audit or anything like that?

Okay.

We'll we'll move on from that.

Do I have any P cards?

No, I don't.

Did you I just want to make sure it was on the record that you didn't have any public speaking?

I didn't see any public comment cards, so I assume we didn't have any.

No, I don't have any P cards.

I don't use them.

Telehealth report.

Um, Mary Ann or Councilmember Diamond.

Mary, thank you.

Thank you.

Uh, through the chair to the committee, you should have each of you at your seat um a copy of the special the final report um of the special committee on Duval Doge pertaining to telescope health.

Um this is the report that was distributed for initial discussion at your last meeting.

And what I did is went through and you have a clean copy and a red line, just so you can see the changes that were made and what the final product would look like, which if adopted by the special committee today, I would take the draft watermark off of it at that point, and then it would be available for you, Mr.

Chair, to forward to the council president as the report of this committee on that particular matter under your charge.

Um the the red line reflects the changes that were made.

Most of them were non-substantive changes, they were really just kind of wordsmithing, scrivener's corrections, formatting corrections, etc.

What I would direct the commit the special committee's attention to are the recommendations that begin on page 17 of the red line report, as same page on the clean copy, whichever one you're referring to.

And those were the items that you had some general discussion on at your last meeting, and I would like to just draw the special committee's attention to those to make sure that I captured the intent of the special committee through its preliminary discussions last time with respect to changes to the recommendations.

One of the most stamp substantive changes was that we deleted the recommendation with respect to directing the Office of General Counsel and the F ethics office to review the dual employment matter for Dr.

Elias, recognizing that that analysis was done previously, and so the discussion with councilmember Diamond was that it was no longer needed and therefore could be struck from the recommendations.

Um, and then just added some additional clarification language with respect to the other recommendations to reflect the committee's discussion last meeting.

I had asked um Mr.

Peterson to do an analysis of the um dollar amounts for cost savings by telehealth.

Are you still working on that, Mr.

Peterson?

Through the chair or to the chair, yes, sir.

We have uh reached out to uh the administration and also to telescope uh to we had some questions about some of the numbers that were presented um to uh the individuals who uh prepared this report.

Um we are waiting to hear back from them on uh some of our questions uh that will enable us to have a uh report back to you rather on uh the methods that they use, the numbers where they were pulled from, whether or not we believe it's a proper um presentation, if you will, of the costs that they are claiming.

Um, so but we hope to have that for you at the next meeting.

Okay, anything we need to do to facilitate that, or you're making good progress.

Everyone has been cooperative so far, so I don't think there's anything needed at this point.

Okay, perfect.

I think it's important because they're uh for that is the fairly significant uh cost savings that are that are a part of the report.

I stand by my comments, they're not to the city of Jacksonville.

Um, they may be to the federal government, Medicare, whoever, but um there's no impact on our budget by those cost savings, but even the cost savings themselves.

I have some questions on.

Uh, Councilmember Diamond.

Uh, thank you, Mr.

Chair.

Uh, just uh three things.

One, thank you, Mary, for all the work on this, and council auditors, I appreciate it.

This is a heavy lift.

Uh so great work.

Uh, two, I think we've proven that we could save literally the city millions of dollars, and given the fiscal situation that we know the city's gonna be facing, um, especially when some sort of property tax reform is passed.

Um, this is low-hanging fruit in my book, uh, especially when there's a free service available to do the exact same thing.

And uh I'll just move to approve the final report.

Is there a second?

Okay, I have a motion and a second to accept this as the final report.

Mr.

Chair, before you vote, can I just ask a quick question?

So, in the uh subject line of the of the memo, it calls it the final report of the special committee on Duval Doge pertaining to telescope health.

Uh, that was kind of a carryover from what we had previously looked at.

I'm wondering if it makes better sense just to say telehealth so that it's all encouraged.

So I could change that if that's acceptable to the committee when I produce the final document.

Thank you.

I think that's fine.

Okay.

Uh all those in favor, please indicate by saying aye.

Aye.

All those opposed, please say nay.

Motion passes.

Okay.

Again, thank you for everyone for putting that together.

I think it's important to get that done.

Uh update on the two percent lapse.

To the committee, uh, we've received no request for um any of the two percent to be restored.

I will remind uh the committee and when Ms.

Taylor presented the quarterly summary of the most recent finance committee meeting.

There were a couple of departments who were projected to go over budget because of the two percent, uh, but we have not heard from uh any of them on the request to have those restored as we proceed into the third quarter.

Uh we will bring that to your attention should that arise.

I hope they'll use their transfer authority to to cover those.

And I would just say to my colleagues, I think this is a tool that can be used in future budgets, particularly as we look at uh um changes to homestead that uh even with the removal of the um direct contract type stuff.

We're still looking at about as I recall about a four million dollar savings if it stays on this line.

Is that correct, Mr.

Peterson?

To the chair or to the chair.

Yeah, that's my memory as well.

I know that we've uh restored a small portion from that related to the citywide activities uh type activities, but I do believe that number is around the four million dollar number.

Pretty pretty significant savings.

Use savings on just two percent.

You can imagine if you went to something like 10 percent, you're you're looking at you know, potentially five times that.

Um, we'll leave that for another time.

Uh the Bailey Group.

Appreciate Mark being here.

Mark will let you kick it off.

Thank you.

Thank you.

Chair Salem, Council members, staff.

My name is Mark Bailey, and we appreciate the opportunity to be here in front of you again today.

And you know Sherry Big very well at this point.

I want to thank her for her continued work on this project.

And today we're going to look at some demographic information, some benchmarking, and then uh really talk about the methodology for the budgeting process and to walk through the way we typically handle that for our clients and show you what those numbers look like in terms of state surplus requirements.

So I think that'll be an interesting discussion.

And uh with that, Ms.

Sherry, I will turn it over to you.

Good morning.

It's great to be back with you all today.

Once again, my name is Sherry Big.

Um, so we're gonna start off by talking a little bit about some demographics and information concerning the group so that you have a general idea of uh how the employee population is enrolled and things of that sort.

I'll talk through a few things that I think are important to note as we look at this as well.

So, first up, you're going to find on this set of charts, we're going to see the different information.

Uh, we'll start with by plan.

Your most popular plan is the uh what we call the blue care PP or HMO product, you have 40% of the population that is enrolled in that.

Right after that, there is a PPO plan that has 20, almost 25% of the population in that policy.

When we look at it by tier, your most of your employees are enrolled in single coverage with employee only at 58 and a half percent.

Next, you'll see we have employee and children.

I'll talk a little bit more about the how those tiers fall out in the different plans as well, and just a little bit.

Your population is uh a little bit heavier on females than males, and then we have by generation.

Your most uh populated pop uh generation is generation X, and if you're like me, I can never keep track of who's what generation.

So generation X is um ages 46 through 61 at this point in time, and then we have by salary salary, you have 58, 55.8% of the population that is in that 40 to 70,000 range, and then lastly, we have by tenure almost uh the a very large percentage, almost 70 percent of your population is uh has been here less than two years, and then 11 and a half percent of the population has been here for 15 to 40 years.

Now, that 15 to 40 years also includes retirees, so keep that in mind because that actually throws that percentage off when you look at that.

But we did look at it as a whole, and so realistically, the number of people that you truly have that are in that that 15 to 40 year population is is much lower, active population.

Sure.

Ask you a quick question.

Uh-huh.

What do retirees pay in terms of premiums?

Uh so I believe they're paying fully insured equivalents, however, those have not been updated for many, many years, from my understanding.

And Mark is going to talk about what those fully insured equivalents are in just a little bit here.

Okay.

So you'll see those numbers.

Thank you.

Yep.

Moving on to the next page.

We've broken it down a little bit further by plan, and we're gonna look at three different sets.

The first one is by enrollment tier.

So you'll notice here that the majority of your population obviously is in that HMO product that is the most populated, and then the PPO plan.

And one of the things that I noticed here is that you have the highest percentage of employee, employee only, excuse me, um, HMO people in the employee and child population.

So that is what one of the things that you want to kind of think about as you're looking at this, and then when we look at the employee and spouse population, the majority of your employee and spouse population is in the PPO plan at 35% compared, um, well, except for the employee only a piece of it.

Um, so just keep that in mind there.

One thing that I also will mention is that there, and we'll look at this a little bit further on.

What I'm noticing is that there is not a lot of population in your high deductible qualified high deductible health plan, which is the uh blue care 128-129 HMO.

That population is very, very small, and one of the things that I would recommend is making some differentials in the premiums to help drive more people into that consumer driven product.

Because that can really help overall.

People make better decisions when they're in those types of policies.

If I can again just jump in, that's a new plan to us as our recall.

I am not a hundred percent sure when it was added on, but it based on the number of people, I would I believe that's probably possible.

I believe, and I wish somebody from the administration would was here to answer these kind of questions, but I believe this is the first year of the highly of the high deductible plan.

I see Brian shaking his head that I'm wrong.

Brian, has it been around for a while?

We have had at least various high deductibles.

I don't know if on that one in particular, it's what I'd have to look in because with they added on the UF Health Direct one as a no cost piece, and so I'd have to go through that history to get we have traditionally had some sort of option that could be free to the employee.

Maybe what I'm thinking of is I think the administration is promoting more, and maybe they increase the um the dollars available to the high deductible plan to encourage um more employees to pick the high deductible plan.

Mark, can you jump in there?

And that's Sherry's right.

The the way to help control trend increases long term is try to move as many people into the high deductible plans as possible.

That's proven it's worked in all of our accounts.

It's important as your your shifting population there.

Typically, it's via contribution differences, less costs to go into those plans to pay attention to the net costs in each one.

So we we look on a monthly basis at the claims costs of each one of the plans.

If a group has three different plans, look at the employee contributions and those plans, and then we have a net cost to the plan sponsor, and so we can track that, and if we get into uh typically, you know, we'll see that the high deductible plan early on has so much lesser cost to the plan that you know we can continue to drive a little bit more population there.

I mean, the goal obviously is to get as many bodies in that plan as possible.

But you also have that have enough people in each one of those plans to make the claims credible, because you have a small population in one and you have significant large claims, then it can you know throw off the average cost.

But typically we'll we'll work with an account when they add these with new plan designs.

We have a three-year strategy to try to get as many people in the right seat on the bus in order to help control costs long term.

Okay.

I'm sorry, I just as these questions come up, I think it's helpful to get them answered.

Mark and I work well together like that, so totally fine.

Um, so on the next page, you're going to see the population by those generations.

Uh generation X is ages 16 through, sorry, generation Z is ages 16 through 29.

Uh so very young population here.

The majority of these individuals are in the uh UF Health Plan, which is the plan that's in red.

This is the plan where the majority of your high qualified high deductible health plan people are, and that is 5.4% of that population is in that that um high deductive qualified high deductible health plan.

The millennials, the majority of your population, and for the millennials are in the HMO at almost 40 percent.

Um and then generation X, again, that's where the majority of your population is.

Period, and it is ages 46 through 61.

Again, HMO is the most popular there, and your baby boomer boomers, which is ages 62 through 80.

Again, this includes your retirees, and again, the majority of those people are in the HMO at 45.3 percent, and that is going to be important, those percentages and where they're falling is going to be important in a couple of slides when we look at some recommendations for various popul uh generations.

Next is the years of service.

Um again, we've broken that down in into each individual one.

The majority of your people again are still in that HMO product, but I think it's interesting as we start looking at people who have been here for longer periods of time, we're going to see it shift a little bit from that HMO product into the um UF health policy, which is in red, and the PPO policy.

Um those are become become more popular as they as people have been here longer periods of time.

On that bottom one, the people 15 to 40 years, again, that includes those retirees.

So that's why we see so many waivers on that, because a lot of those individuals will be taking Medicare and Medicaid, and so they may not be enrolled in your medical policies.

This is my favorite slide on this demographic report because I think what it does is it really helps us identify different things that we can do and what's super important to different individuals.

And so a couple of things that I will mention, as I mentioned on the previous couple of slides ago, the highest population of that qualified high deductible health plan with a health savings account is in your generation Z, which is the first population there.

And that is a group of individuals that are really concerned about things like well-being, making sure that they have good mental health, good physical health, they are thinking about those kind of things.

Also, I find that this is a great group of people to promote that high deductible qualified high deductible with health savings account because if they get in on that bottom floor when they're very young, that that policy can be a really big benefit for them because it builds money into their health savings accounts.

It really can be a good positive thing.

So as we're as you are focusing on communicating to those employees, it's important to make sure that you are using the information that's here about what's important to them to help drive them into those populations.

Next in the Millennials, ages 30 to 45, these individuals are mostly enrolled in the HMO product, and they are very much technical, technology driven, as are the Generation Z, but generation or millennials for sure are as well.

It's really important as we're communicating to these individuals that we are being open and making sure that we're communicating frequently so that they have all of the information.

Things like digital benefit guides, things of that sort can be really a good positive impact for these individuals.

And then also I will point out that they are risk takers, and what surprises me about the way things fell out for you for you is we didn't see more people in this generation in the millennials that are taking that qualified high deductible health plan with the health savings account because we do find that those individuals are risk takers and that policy can often be one that people will choose if they are risk takers.

Whereas the HMO is probably the most conservative of the policies that you have available.

Generation X is all about financial education, making sure that we're recognizing those individuals for their years of service, and they are very concerned about health care costs.

So it is something that you definitely want to keep in mind for those individuals.

One thing that I think will be helpful as we come back next time in two weeks.

One of the things that we will be presenting is contribution strategies, and one of those will be based on the salaries of individuals, and so knowing that these people making an average of 95,811 are very concerned about their health care costs.

We want to make sure that we're focused in on that and helping drive them to the correct plans with contribution strategies.

And then lastly, we have our baby boomers.

Again, this is the population that most of your retirees are going to be in.

Medicare, social security education is very important.

Uh, those individuals are contributing.

If they are enrolled in your plan, those individuals are contributing to your health care costs.

So we want to make sure that they understand what is available for them for Medicare supplements and things of that sort, so that if they if that's a better fit for them, that they are able to move into those types of products instead of being enrolled under your health insurance policies.

Next up, I have some information about uh your plan designs and cost employee contributions compared to our benchmark.

Um, there are some some information here at the top that talks about the group of population that we utilize.

This is all uh public administration as the uh the industry and region is used all around the entire United States, but then we drive down and we look at specific plan types.

So the first is the HMO.

If you take a look, your two plans are the HM.

There is an HMO 48 and an HMO 65.

Almost all of your population, almost 2,000 of your employees are enrolled in that Blue Care A 48 plan.

There are only 143 people that are enrolled in the Blue Care 65 plan.

If you look at the plan design, it is very kind of right in the center of the two policies that you have available to you when you look at the benchmark.

Your your plan designs are not way off when we when I am looking at these side by side.

The contribution strategy, however, the amounts that your employees are paying on average are actually uh quite low, with the exception of the family rate.

You'll see the family rate is is slightly lower on that one plan that almost everybody is enrolled in the plan 48, but the other tiers are substantially lower, and so we could definitely make some adjustments or could recommend making some adjustments to those those make them in line with the benchmark, and then again that's the strategy that we would recommend doing to help drive individuals into the plants that are probably a better fit for people.

Sure, if I can stop you there, the comparison said is that's what you're calling the benchmark.

Correct.

And that data comes, is that Florida data?

It's all over the United States.

The H for the HMO, it's all public administration groups.

There are um 20 groups that have HMOs in our population.

This population is all NFP, our national firm that we are a part of.

It is all of their groups as a whole.

So we only have 20 groups that are offering HMOs nationwide for NFP, and it's a huge firm.

So ours for employee and spouse, employee and children is almost half of what that benchmark is.

What the benchmark is, and then the employee-only coverage is well, well under what we're seeing in the benchmark.

Right.

Okay.

Okay.

Next, we're going to take a look at the high deductible health plan.

This is the qualified high deductible health plan that is paired with the health savings account.

Um, this one has 56 employees enrolled in it.

So again, this is very small population that is currently enrolled in, and the majority of these individuals are those very young individuals that are part of your group.

This your plan is I would say right on on track with what we're seeing.

It's a it in some places it's a little better, in some places it's a little worse.

Um, and your contributions with this plan are not bad.

Um, your family rate is actually a little high with compared to what we see.

Now, here's where my point is that I've kind of been talking about in order to drive people into this policy, we need enough of a differential in the premium as well as contributions into a health savings account to help drive people into this policy.

This is going to be the least expensive policy because the uh for the plan itself, because the majority a lot of times employees are uh the plan isn't even paying anything because the employee is paying everything toward up to the deductible with the and they have that hopefully that self-savings account to help offset that cost.

So normally in addition they also make better choices when they're in this plan because they're gonna compare the cost of the true cost because it's falling under their deductible of an emergency room versus going to the telehealth for a visit and that can really help drive costs as well.

It's my experience in my corporate career that this is the only plan that was offered was a high deductible plan.

Yeah.

Because how insurance rates have elevated I don't know uh Councilmember Lane and I know you've been in the private sector as well.

What is your experience?

Was this the plan that that you were offered when you were working?

Uh thank you to the chair uh I don't want to go into specific companies but I've worked for two large companies and one was HDHP uh and a big benefit of HDHP is I mean it's uh I believe the term is triple tax advantage right for the actual employees so I'm a huge fan of HDHP and if if you mind uh can I ask a quick question um I couldn't figure out through the chair ma'am uh so I believe and the auditors may have to back me up I believe it's two thousand dollars is we what we put into the employees accounts at the beginning of the year for HDHP I didn't know if there's a way we could compare that to your uh your data set to see how that would compare for a similar size company uh because again when I think we're gonna talk about PE PM uh per employee per month I think the HDHP is normally one of the cheapest for the employer and the relatively uh inexpensive way to draw more people into it is to uh change the the two thousand to make sure that that is uh a good uh comparison on how other uh cities are doing this so could you answer that question is two thousand uh representative of what uh you see for other similar size HDHPs um do we have information yeah it a lot of times will depend on the deductible so your plan has for single coverage it has a two thousand dollar deductible and so a lot of times that will be the the about the amount that would make sense or slightly less depending on the situation um it's interesting because I have a little bit different perspective I've worked with high deductible health funds for a long time and I've noticed two things um premium is really one of the biggest drivers so if there's not enough of a difference between the PPO plan the HMO plan versus the qualified high deductible health plan a lot of people aren't going to move that because they're that's what's coming out of their paycheck but the the amount that's going into the high deduct the the HSA account also is important.

So we want to make sure that that's the right level we can definitely bring back some more information.

If I can mark before you jump in if that's the case why isn't the UF health plan skyrocketing because that one's free to employees if and it has grown as far as the number of people that are in there my recon the answer to that.

I suspect it could be because that network um is limited and so people may be concerned about that if they're traveling or whatever.

And and I I think the promotion of the various plans and I I I'm not aware of a lot of marking that has occurred trying to to get employees driven to one plan or another jump in councilmember.

Thank you, I can't speak at all for what the city does.

I do know in past uh places of employment that we knew the HD HP was usually the most cost effective per employee and that there would be marketing around it as well.

Um and again, like one of the uh you mentioned that uh through the chair, you mentioned that it makes you think about the medical care you're gonna seek out.

It's because you keep your money if you don't spend it, there's no FSA that expires at the end of the year.

You're growing that money tax-free in your HDHP account if you don't use it, so it incentivizes better behavior.

Uh, and again, that's just in my experience.

So I I think that is one thing to ask the administration what type of marketing are we doing with regards to these different plans.

And the enrollment is in the fall, correct?

September.

I so I'm sure after we finish the budget process that that kicks in, and I'm I'm sure that'll be a topic as we get into that.

I'm sorry, go ahead.

That's okay.

To go back to the question about the the HSA contribution.

We tend to look at the different plans.

So you have one plan that has a thousand dollar deductible.

If the HSA high deductible plan is two thousand, we'll tend to try to close a gap.

So we'll put recommend maybe a thousand dollar HSA contribution.

Now you're normalizing that back to the other plan deductible.

Of course, an HSA doesn't have co-payments and the family deductibles are or could be a little bit higher as well.

So we'll analyze that and to Sherry's point.

What we found is plan designs do matter.

In the end, it's the actual contributions for the employees that really drives people to one plan or the other, and you have to be very intentional about setting those rates each year.

And if the the HSA plan is running well, and we want to move more people there, we increase the employee contributions and the core plans to try to move people down to those plans.

And right now, if you take a look, your high deductible health plan, the employee only cost is $30, and that's the same cost for the HMO product.

So there's not really other than the contribution into the HSA, which people aren't often thinking about, there isn't a lot of incentive out of their paychecks to move into the high deductible health plan.

Okay.

Makes sense.

And then lastly, we have the a the PPO products.

Um the 5782 is your core uh PPO product.

It has a 1,190 1,197 people into it in it.

The uh blue options 3768 is your UF Health plan, and that plan has 644 employees in it.

Again, we see here there's not a lot of differential in the premium.

We're here at the PPO plan is 34 for the employee only coverage.

Um it again, you're you can see compared to benchmark, that benchmark plan is very, very similar to your core PPO plan.

There's not very much difference in there, and then your premiums are a right online as far as that PPO plan is concerned.

Um I like the fact that the UF health plan is lower cost, and I but I would again like to see there be some bigger spreads, especially with employee only contributions between the plans to help drive people where you really want them to go.

And that 34 is per pay period, correct?

Um that should be monthly, monthly, okay.

Yes, I believe.

Yeah, okay.

All right.

Any more questions for anybody?

Sherry?

I've got the presentation up.

So if you if you have a question, please get my attention.

So this will be a uh an interesting discussion.

It for me uh it is, and it really is a discussion about the methodology of setting the funding rates for the plan, and the city is has been uh on a path of of having funding rates that are less than the actual cost, which has required the city to fund the so-called reserve balance with monies from the the general fund each year.

Typically, in a a governmental, the requirement from the state, of course, is is 60 days.

I think most of you probably are aware of that of costs in order to uh to cover the the OR OIR's requirement in case a plan decided to terminate their self-insured status and go back fully insured, for instance, or terminate the plan completely, you have to have funds for the run out.

So in order to get there, the funding rates, or what we would call Sherry's mentioned fully insured equivalence a couple of times, have to be set at a level that cover the cost.

So each year with all of our governmentals, we're looking at their current surplus.

Most of our clients, their goal is to have four to six months of pure surplus.

So we've got the 60-day requirement, we want an additional cushion because they're years that we're going to have spikes in costs.

In this case, the funding rates, when we look at another page and look at the budget numbers, to me, now these were provided by the city, and these are the January 1 26 rates, cover a total cost of almost 40 million dollars.

Now keep in mind that contribution strategies are set off of the funding rates.

So if I have funding rates that are less than they should be, and I'm setting these kinds, and my goal is to have the associates pay 20% of the total costs, but I'm using rates that are artificially low, we're not going to be able to get there.

Currently, when we look at total costs being shared by associates in the city, and Sherry, correct me if I'm wrong.

I think that it's a 87% city share, 13% for the employees, and that includes all the dependent costs as well.

So these were the current funding rates that we were provided.

We took your data and provided it to our actuaries, and you can see there are two different time periods here.

There's a lot of information on this page.

I won't go through it line by line, but that the time periods account for two different 12-month periods, one starting in April of 24 through March of 25, then April of 25 through March of 26.

So we have pretty current data.

You're going to see a separate page for pharmacy as well.

And then they're trending those claims all the way through the balance of 26, and then also through the 27 year because these rates have to be set for the January 1 27 plan year.

Demographic change factors, your reimburs your stop losses at 750,000 currently, is that correct, Sherry?

Is that a million?

Okay.

But when you come down to the bottom here, it's taking the per employee per month cost.

It's taking the totals, takes the average employee counts per month, and gives you what we've talked about in a couple of means of PEPM.

If you take that times 12, you got your per employee per year costs and it blends the prior period at 30%, the current period at 70%.

And then if we go on to the pharmacy, you have the same methodology here, taking those actual claims costs, you've got trend factors that are higher because pharmacy costs are increasing at a higher pace and pure core medical, and then it's blending those two numbers together and it gives you a projected renewal for pharmacy on a per employee per month basis.

Now, when you see this next slide, I don't want you to panic on this, but when we take all the claims costs together, add in the administrative expenses, you're gonna see uh line item six there are your prescription rebate assumptions that are deducted, consulting fees that are included, then you have total net expenses.

So this is showing that your actual they expect our actuaries expect your actual cost to be almost 70 million.

So if you were to take your current funding rates, update them for a 27-year, those funding rates drive all the contribution decisions, and I'm sure that we're gonna be presenting a contribution strategy based on the real number, then it's a 75% increase.

Now that's not your actual increase.

We didn't run.

I'm sure Gallagher is working on the renewal analysis for the city.

They may have already presented that at this point.

So I'll pause there for just a moment.

Mark, just if I can clarify my own mind, and just to state some facts.

And uh the reserve account was depleted, and we put about as I recall, five million dollars into that reserve account and wrote a letter to the state that we have our general reserves that we use as a backup if we needed if we had a catastrophe of some sort.

And the employees are picking up 13, and the average you said was roughly an eighty-20.

Is that what I heard you say?

Well, the average I would say is it for an account this size, a governmental that's closer to the average.

When we come back with the contribution analysis, we'll double check the current number, but that's what we tend to see.

Most of our accounts, we have a lot of school districts and a lot of public entities want to try to get to that place, which is higher than the private sector, the planned share because salary levels are typically lowered, so you're trying to make up for it here with with uh quality benefits.

But 13% is the number that was 16.

Yeah, I was told 13.

Okay.

So we're gonna double check that and we'll email you back that actual number.

Regardless, those funding rates need to be, in our opinion, set at the right level.

And I'm not sure.

And when you look, there is a letter here from the OIR.

You can see, according to this, this was in March of uh March twelfth and twenty-six.

Looks like the city had pledged 17 million, had to pledge an additional amount.

Now we're we were showing, and you'll see on a Gallagher report, I think your surplus requirements closer to 12 million dollars.

But the the clean way to do this, and again, in our opinion, get get the budget, the funding rates in the right place, get in compliance with the state every year, set a goal for what the reserve should be so that you don't have to go through this, you know, shifting of funds from the general fund.

Again, I don't know why the city, it appears they've been doing this for many years.

There may be a reason I don't know about that staff could help with, but it's it's not typical.

The other point that that I would make to you, um salaries of of city employees were much lower, I think, uh 10 20 years ago, and the health insurance was was kept low because of the lower salaries.

I'm not sure if that's still the case if you compare um salaries today of city employees to comparable people in the private sector.

Brian, did you want to say something?

I'm I I can't uh uh through the chairs of the committee.

I wanted to touch on the reserve piece.

That's only a recent couple years.

So we went self-insured.

I'm gonna say it's one one fifteen, is my memory.

I might be off by one year on that.

We haven't changed the rates since then because when we went self-insured, we built up a very large reserve because we saved so much money, and so rates never change for that.

So you have no change in this piece, and so slowly it built up, and then all of a sudden it's sort of taking from that, and then we use some other things to help cover to reduce that so the rates wouldn't change in time.

So that's kind of a history.

There's only like that past two, and so yes, you have the updated chart where we should be good up until about twenty-four, is what I my memory would say.

I can't look at this quickly.

That's about where it turned, it was almost eight million dollars at the end end of 24, and then it was pretty flat in 25 and right.

And so there was a discussion we had on the comments during many of those budget years.

We have to start looking at these rates.

The issue is that there wasn't a big urgency to go change those because it was hard to make maybe with the unions and everybody else where you have these reserves.

Why would we be changing the rates?

So that's kind of that history that I want to make sure that we keep in mind of how we kind of got here is how high did the reserves get uh Brian.

Do you recall?

I can't tell if it's on this 29 million, it looks like in 21.

I I actually almost had a 40 million.

Yeah, there's a 38 closing surplus in 20, and I can't remember if it was higher one year prior because I've done a history for you.

I'll try to pull that up, but it's we were way up there, and so and that wasn't necessary, but you couldn't pull the money back necessarily, so it kind of had to sit there.

So um, and also as I recall, in my first term, we we put a bunch of COVID dollars into the uh uh into the reserve to cover.

We moved some claims expense over to COVID, is how that worked.

But yes, there was a little bit of that piece that was more with workers' comp, but we did do it for at least one year with some health as well.

You have a good memory on that.

Any questions?

Thank you for that.

That that helps to explain, and I I wasn't sure why the decisions were made then.

Once the surplus started to get below the state threshold, there was no action taken to typically that's what would happen.

You take some action to make sure corrective action, but you know, if there's a lot of fun sitting somewhere else, so they know they're gonna transfer over.

I just personally as a broker consultant, I'd like to have it clean.

I want the numbers all to be together.

I want to know exactly what my reserve is so that we can make the proper decisions going into the new year about the contribution strategies and the plan designs.

That is all that I had in that regard.

Any any questions on the financials before I turn it back over to Sherry on the timeline?

Any questions?

Go ahead.

Councilmember Lane.

Chair, I had a question on the timeline, so I'll concede my time to her since she's about to cover that.

Okay.

So we are scheduled to come back in two weeks on June 16th.

And at that meeting, we will present some contribution strategies and recommendations as well as some estimations that we will have from uh for your stop loss.

Now, keep in mind stop loss is normally something that's negotiated and finalized much closer to the renewal date.

So the numbers that we will provide will not be final, but we hope to have some good estimations at that point.

Uh thank you, Chair.

A couple of questions, and I thank you for the presentation.

Uh, I was surprised by some of our demographics, and I'm just kind of curious if this is normal with what you've seen.

Uh, I was surprised that only six percent are enrolled for employee plus family, and that's 70 percent have been here less than two years.

Is that something common you see?

Especially the 70% less than two years.

I was really surprised by that.

I do uh I do think that's unusual, uh, especially for a government entity.

I have found that most of our government entities do have longer tenure than that.

Um, but so that one I I agree it is a little bit unusual.

As far as the um I'm sorry, what was the first one?

Uh the through the chair, that only six percent are employee plus family covered employee plus family.

You know, it all depends on the contribution strategy that is utilized uh for some of my groups that have premiums um that are in line with yours.

I would say that they probably have a few more employee and family coverage options.

Um, those that can make a difference as well.

Um, and I think that go ahead.

I think the second aspect is there are a lot of two income families today with inflationary pressure.

So we have seen that that drop as as at other family members taking coverage on a single basis of their employer as well that's had a little bit of chair thank you and then uh my final question is actually for you chair I guess they're gonna come back with recommendations where do we kind of go from there because clearly we can't do this by ourselves is the administration open to embracing that because June to open enrollment is not that long a time to make changes that hopefully uh uh put us back to where uh the funding is matching the premiums better.

As we stated when we started this process this is clearly an executive function and uh we had members of the administration attending some of these meetings early on you can look in the audience today.

I think that as we go through the uh the the budget process I think that's one way to to have these more serious discussions I know for the pharmacy aspect of this where there was a uh as I recall a five to seven million dollar potential savings um there are um deadlines in terms of setting setting those so that you can change to the new plan and uh I have no I have not been told if the administration has moved in that direction they have not had any contact with me but uh it it's it's uh I mean I think this is where we could work together and uh I mean it's very clear to me from just what you've just said that the premium itself drives this process to a large extent um if one is 30 and one is 50 um the employees got normally other than the UF plan which is free and I understand the concern about a very closed network like UF Health but if the high deductible plan was significantly less expensive than the other plans I think you would drive a lot more people into that plan.

Thank you Chair I look forward to seeing actionable recommendations and then hopefully we can uh push the administration to embrace it uh I know you've been on finance with me for three years now and I've said my three biggest concerns were the trash fee completion grants and group health we fixed the first one we make great progress on completion grants but this is still one of the outliers to uh make some improvements on and it's a lot like the trash fee I mean we've known six years now from 39 million down to zero in that reserve account and so uh we we know we need to uh start making action on this so we get to a better place and we're not trying to fund it from the general fund which is probably going to get smaller in the coming years as well so thank you yeah I I think this this topic is so pertinent as we look at the the uh homestead issue and what could happen there um 20 to 30 million dollars a year that we're subsidizing this could come in very handy as we move forward um and I think it can be accomplished with some strategies that would not impact the employees a great deal if it's done correctly okay other questions comments um one thing Mary uh we we had a discussion last time about those plan uh those uh um entities that are quasi city that were getting benefits can you update us on that to uh to the chair and through the chair to the to the committee so I did speak with deputy general counsel sean granite about that matter he has referred that to our ERISA attorney who is an outside um attorney that we have engaged that uh handles those ERISA matters um the housing authority really isn't an issue because it is part of the consolidated government so we're focusing on the other two entities the Northeast Florida Regional Council and I can't recall the name first coast workforce development um I've I'm going to secure copies of those contracts to send to Sean so he can share those with the attorney and he's gonna he's gonna look at that and just do the analysis to make sure we're in good standing and haven't compromised our exemption or if there's any changes that need to be recommended that we would address those.

Okay.

So our our last Duvall Doge meeting will be in two weeks uh we will get the final recommendations from the Bailey group uh I made a commitment to uh President elect Howland that we would do everything we could to complete this at the end of this year and I think we're on track to do that so he has as much flexibility that we can provide him on moving forward with with whatever initiatives he wants to conduct in his uh presidential year.

So if there are no other comments we stand adjourned.

Thank you so much.