Deferred Compensation - Jim Martin
Nationwide Retirement Solutions, Inc. is the administrator of the Deferred Compensation Plan. Nationwide insures that we keep our plan document up-to-date in accordance with all Federal Laws. Effective January 1, 2006, Nationwide will administer the deferred compensation program in accordance with the Plan Document (see attached summary).
Motion was made by Lee Wessels to approve the Deferred Compensation Plan Document.
Seconded by Eleanor Riss.
GASB-45 Discussion - Mike Swift
GASB-45 (Government Accounting Standards) is effective July 1, 2007 which applies to other post-employment benefits such as retiree's health and life insurance. The new requirements are that we account for health and life liability, just as we currently do for the pension plan. Currently, in the pension plan, we make contributions based on actuary calculations for earned credit this year that employees will get in future years after they retire. For insurance, we now pay it on a year to year basis. Under the new requirements this is no longer allowed. Currently, we are working with our Actuary to complete and evaluation of the current liabilities. Once we have a final report from the Actuary, this information will be shared with the UPPC.
SEGAL - New Consultants
We recently put out a bid for a benefits consultant on four of our major insurance plans - life, disability, dental and cancer. We anticipate looking into these plans during this coming year. We have always employed the help of professional consultants who work with us in making changes to these plans. We have chosen the SEGAL Company, a national consulting firm based out of New York and Washington, who had a significantly lower bid. We are currently in the process of completing a contract with them. As we bring specific issues to the Committee, SEGAL will be working with us to bid and make recommendations on our insurance benefits.
CuraScript – Specialty Pharmacy
Our pharmacy provider, ExpressScript, tells us that the largest numbers of drugs for approval to the market are Specialty drugs which cost over $1,000 per month. Specialty drugs are generally biological drugs rather than the typical chemical drugs most of us take on a regular basis. One of our plan participants is on a drug that cost $22,000 per month. We have approximately 20 to 25 people in our drug plan that uses specialty drugs. ExpressScript has within their organization a specialty pharmacy (CuraScript) that handles these types of drugs. Not only do we get bigger discounts by going through their specialty pharmacy, but they also manage the cases. They have case workers that talk with the doctors and patients, check on compliance, and track it very closely to be sure the drugs are prescribed properly. The benefits we currently have will not change (co-pays, etc.). It only requires that as of March 1, 2006, anyone getting a specialty drug must go through ExpressScript.
Healthcare Update
The Health Plan is at 85% which means the plan is doing very well in terms of the dollars we are spending vs. the dollars we are taking in. Within the next 30-60 days, we will have a very detailed update with all of our carriers (ExpressScript, CIGNA and United).
Life and Disability Insurance
We are having difficulty with both disability plans and our life insurance plan.
Short-term Disability - STD is voluntary (employee pays the premium) and is doing very well. The loss ratio is about 66%. The insurance companies normally look for a loss ratio of 74%. The reason it is doing well is because of our very generous sick leave plan.
Long-term Disability - The loss ratio for LTD is 232%. We went from paying $1.3 million to about $2 million when we renewed this year. We definitely will go out for bid on disability this year.
Life Insurance - We are not doing much better with Life Insurance with a 19% increase last year on renewals. Although we haven't had a recent update, we will be meeting with our carrier within the next 30 days. Not only will we go out for bid on life insurance, but also on our optional dependent life insurance and optional life insurance programs.
Other Business
Paid Time Off - No news on PTO.
Family Medical Leave - Paul Boyd and his staff are looking for ways to give managers more firepower in terms of asking questions and conducting audits on FMLA certification forms.
Motion was made to adjourn by Steve Stamsom. Seconded by Ellie Riss.
Respectfully submitted,
____________________________________
Shasta L. Sharp, Committee Recorder
February 3, 2006
