HomeMy WebLinkAboutResolution - 2014-R0387 - Renewal Of Stop Loss Coverage Policy - Blue Cross Blue Shield - 11/20/2014Resolution No. 2014-RO387
Item No. 6.14
November 20, 2014
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute for and on behalf of the City of Lubbock, an Application for renewal of a Stop
Loss Coverage Policy, by and between the City of Lubbock and Blue Cross Blue Shield
of Texas, and related documents. Said Application is attached hereto and incorporated in
this resolution as if fully set forth herein and shall be included in the minutes of the City
Council.
THAT the City Manager may execute any routine documents and forms
associated with said coverage.
Passed by the City Council on November 20, 2014
GLE .R RTSON, MAYOR
ATTEST:
Reber aG�arza, City Secretary
APPROVED AS TOC TENT:
Leisa Hutcheson
Director of Human Resources and Risk Management
APPROVED AS TO FORM:
gs:ccdocs/RES.Risk Mgmt-Application-Slop Loss Coverage Policy
October 31, 2014
Resolution No. 2014-RO387
BlueCross BlueShield
of Texas
APPLICATION FOR STOP LOSS COVERAGE
Employer Group Name: City of Lubbock
Employer Group Address: 1625 13th Street
City: Lubbock State of Situs _TX Zip Code: 79401
Account Number: 010097
Employer Group Number(s): 010097, 106837
Effective Date of Policy 10/01/2014
Policy Period: These specifications are for the Policy Period commencing on 0 1/0 1/15 and ending on 12/31/15
The specifications below shall become effective on the first day of the Policy Period specified above and shall continue in
full force and effect until the earliest of the following dates: (1) The last day of the Policy Period; (2) The date the Policy
terminates; or (3) The date this Application for Stop Loss Coverage (herein called the "Application") is superseded in
whole or in part by a later executed Application.
A. Aggregate Stop Loss Insurance: ❑ Yes ® No
If yes, complete items 1 through 9 below.
1. ❑ New Coverage ❑ Renewal of Existing Coverage
2. Stop Loss Coverage Period:
❑ New Coverage (Select one from below):
❑ Standard: Claims incurred and paid during the Policy Period.
❑ "Run-in" included: Claims incurred on or after and paid during the Policy Period.
"Run-in" includes claims paid by Policyholder's prior claim administrator: Yes ❑ No ❑
If yes, such claims must be reported by the Policyholder to the Company (Blue Cross and Blue Shield of
Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company) within 12
months of the Policy Effective Date and paid by the Policyholder's prior claim administrator within 6
months after the Policy Effective Date.
❑ Renewal of Existing Coverage:
Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period.
3. Aggregate Stop Loss Insurance shall apply to:
❑ Medical Claims
❑ Outpatient Prescription Drug Claims
❑ Dental Claims
❑ Other (please specify):
A Division of Health Care Service Corporation, a Mutual Legal Reserve Company
an Independent Licensee of the Blue Cross and Blue Shield Association
TXStopLossApp-11110
4. Average Claim Value: per Employee
Attachment Factor: % of the Average Claim Value
5. Aggregate Claim Liability and Run -Off Claim Liability Factors
a. Employer's Claim Liability for each Policy Period shall be the sum of the Monthly amounts obtained by
multiplying the number of Coverage Units for each Month by the following factors:
$ for each Employee Coverage Unit
$ for each Employee/Family Coverage Unit
Please use the continuous text field directly below for any other structure (leaving the fields above blank).
Note: you can use the "return" key to create additional rows, if needed:
b. Employer's Run -Off Claim Liability shall be calculated by multiplying the sum average of all Coverage Units
during each of the three calendar Months immediately preceding termination by the factors shown below.
Settlement for the final accounting period will be described in the section of the Policy entitled
SETTLEMENTS, Run -Off Period subsection of the Policy.
$ for each Employee Coverage Unit
$ for each Employee/Family Coverage Unit
Please use the continuous text field directly below for any other structure (leaving the fields above blank).
Note: you can use the "return" key to create additional rows, if needed:
6. CAP Arrangement ❑ Yes ❑ No
7. Aggregate Stop Loss Claims
a. The amount of Paid Claims during the current Policy Period, less:
i. Individual (Specific) Stop Loss Claims
ii. Any claims in excess of the Individual (Specific) Stop Loss Claims per Covered Person per
Lifetime Maximum
iii. Any claims in excess of the Individual (Specific) Stop Loss Claims maximum Point of Attachment
that exceeds the Aggregate Point of Attachment. The Aggregate Point of Attachment shall equal the sum of
the Employer's Claim Liability amounts calculated Monthly as described in Item 5.a. above for the indicated
Policy Period.
b. In the event of termination at the end of a Policy Period, the Final Settlement Aggregate Point of Attachment
shall equal the sum of the Employer's Claim Liability amount for the Final Policy Period and the Employer's
Run -Off Claim Liability calculated as described in item 5.b. above. However, for the indicated Policy Period
the minimum Aggregate Point of Attachment shall be $
c. Aggregate Stop Loss Claims shall not exceed a lifetime maximum of for the indicated Policy Period.
8. Premium (Select one):
❑ Annual Premium (Due on the first day of the Policy Period): $
❑ Monthly Premium shall be equal to the amounts obtained by multiplying the number of Coverage Units for a
particular Month by
$ for each Employee Coverage Unit
$ for each Employee/Family Coverage Unit
TXStopLossApp-11110 2
Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note:
you can use the "return" key to create additional rows, if needed:
9. The premium is based upon a current membership of Individual Coverage Units and Family
Coverage Units.
B. Individual (Specific) Stop Loss Insurance: ® Yes ❑ No
If yes, complete items 1 through 6 below.
1. ❑ New Coverage ® Renewal of Existing Coverage
2. Stop Loss Coverage Period:
❑ New Coverage (Select one from below):
❑ Standard: Claims incurred and paid during the Policy Period.
❑ "Run-in" included: Claims incurred on or after and paid during the Policy Period
"Run-in" includes claims paid by Policyholder's prior claim administrator: Yes ❑ No ❑
If yes, such claims must be reported by the Policyholder to the Company (Blue Cross and Blue Shield of
Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company) within
months of the Policy Effective Date and paid by the Policyholder's prior claim administrator within
months after the Policy Effective Date.
® Renewal of Existing Coverage:
Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period.
3. Individual (Specific) Stop Loss Insurance shall apply to:
® Medical Claims
® Outpatient Prescription Drug Claims
❑ Dental Claims
❑ Vision Claims
❑ Other (please specify):
4. Individual (Specific) Stop Loss Claims
a. For NA -who is identified by the health identification (ID) number NA, the amount of Paid Claims during the
current Policy Period in excess of the Individual Point of Attachment of $NA. Such amount shall apply for
the Policy Period.
b. For each other Covered Person:
The amount of Paid Claims during the current Policy Period in excess of the Individual Point of Attachment
of $350,000 per Covered Person but not to exceed a maximum Point of Attachment of $ Unlimited per
Policy Period. Paid Claims in excess of the maximum point of attachment shall not be eligible to satisfy the
Aggregate Point of Attachment. Such amount shall apply for the Policy Period.
c. Covered Person per Lifetime Maximum:
The Individual (Specific) Stop Loss Claims shall not exceed Unlimited per Covered Person per Lifetime.
Paid Claims in excess of the Covered Person per Lifetime Maximum shall not be eligible to satisfy the
Aggregate Point of Attachment.
Point of Attachment ® Includes Claim Administrator's Provider Access Fee
❑ Excludes Claim Administrator's Provider Access Fee
TXStopLossApp-11110 3
5. Premium (select one):
❑ Annual Premium (Due on the first day of the Policy Period): $_
® Monthly Premium shall be equal to the amounts obtained by multiplying the number of Coverage Units for a
particular Month by
$ for each Employee Coverage Unit
$ for each Employee/Family Coverage Unit
Please use the continuous text field directly below for any other structure (leaving the fields above blank) Note
you can use the "return"key to create additional rows, if needed.
120.05 Composite
6. The premium is based upon a current membership of 1178 Individual Coverage Units and 1566 Family
Coverage Units.
Additional Provisions:
12115 Stop Loss Policy - Claims incurred Ol /01 /2015-12/31 /2015 and paid 01 /01/2015-03/31/2016.
Premium is based on 2,744 enrolled.
The undersigned person represents that he/she is authorized and responsible for purchasing stop loss coverage on behalf
of the Employer Group. It is understood that the actual terms and conditions of coverage are those contained in this
Application the Stop Loss Coverage Policy into which this Application shall be incorporated at the time of acceptance by
Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company
("HCSC"). Upon acceptance, HCSC shall issue a Slop Loss Coverage Policy to the Employer Group. Upon acceptance of
this Application and issuance of the Stop Loss Coverage Policy, the Employer Group shall be referred to as the
"Policyholder." /
Tuve Lawhom ✓/,/�
Sales Representative Signa4 re of Avfhorized Purchaser
Benjamin Young AAn' 4-(
Name of Underwriter Title of A thorized Purchaser
November 20, 2014
Date
INTERNAL USE ONLY I Date Application approved by Underwriting.
TXStopLossApp-11/10
ATTEST: nn
Rebec a Garza, City Secretary _
APPR ED 7'0 CONTENT:
Leisa Hutcheson
Director of Human Resources and Risk Management
APPROVED AS TO FORM;
h hite, Fir ssistant City Attorney
City Of Lubbock
ASO Projection
January 1, 2015 - December 31, 2015
City of Lubbock #10097 ASO 2015 Medical Renewal - With Rx -12115 Stop Loss
STOP LOSS
Please refer to the ACA Disclaimer regarding benefits and final
pricing
Mature PPO` Employetts CustomerTotal
PCPM `. :TOTAL _CPM _ , TATA -
Projected Enrollment 2,744 32,928 2,744 32,928
Individual Stop Loss Attachment Point $350,000 $350,000 $350,000 $350,000
Composite
Individual Stop Loss Premium* $20.05 $660,206 $20.05 $660,206
E/O E/F
Individual SL Premium* $ 10.81 $ 27.00
*BCBSTX does not offer stand along stop loss policies. If our medical administration is
not also elected, we withdraw our stop loss quote.
Subject to and contingent upon conditions and caveats outlined In attached addendum.
Division of Health Care Service Corporation, a Mutual Legal Reserve Company,
an Independent Licensee of the Blue Cross and Blue Shield Association
M i l l i m a n
'1120Soaltl 101-sveet
81ll,
Sidle 400
Chu., Adnilriminuion
Omaaa, NE 66124
30"6
USA
R Relates
Tel x1 402 393 9400
I s -
Fax 4023846776
Organ Tanaplant Fee
milllman e0m
September 16, 2014
Mr. Travis Sartain
Partner
D11 MT
8144 Walnut Hill Lane
Dallas, TX 75231
Re: City of Lubbock Renewal Evaluation for the 2015 Plan Year
Dear Mr. Sartain:
At your request, Millintan, Inc. (Milkman) has completed an evaluation of City of Lubbock's 2015
renewals. This letter includes dre executive summary, detailed analysis, methodology, reliance, and
limitations of our findings.
Executive Summary
City of Lubbock currently offers its eligible employees various medical, dental, life, disability, and
other n'pes of coverage. You engaged Milliman to evaluate the 2015 plan year Qanuary 1, 2015-
Dccember 31, 2015) medical, dental, and vision renewals proposed by the insurance carriers. Our
evaluation of the carriers' proposals is shown in the table below:
%I"d"ol (Self -Insured)
Claim.CostKA1
81ll,
Chu., Adnilriminuion
3,(I".
30"6
%,,
3.11
R Relates
I s -
Organ Tanaplant Fee
0.0
0.0%
ill""
Individual Stop -Leas
303,,
30.2%
i.UTL
ACA Face
._
.,'-.6_'1.
Clxuns ce a24.''- e2 t 21 '
n
Claim Adut nistnuinn 0.0"�b
.1Denna1 1 111,7 L:3 ]'o IA2F'n
OI6ua In Pnndol Cities WollOwide
Milliman September 16, 2014
We estimate that self-insured annual claims and expenses for the 2015 plan year will be
approximately:
• $29.06 million for medical and prescription drugs based on current enrollment levels
of 2,743 employees and a projected premium of $882.81 per employee per month
(PEPM);
• $1.33 million for dental based on current enrollment levels of 2,615 employees and a
projected premium of $42.45 PEPM. However, we recommend that the City of
Lubbock continue to budget at $54.74 PEPM for an annual budget of $1.72 million.
See Attachments #1-3 for more details. We will use these figures in our projection of budgets for
the upcoming plan year. Note that these figures also depend on current plan designs, claims
experience that was available to us, and proposed expenses. If enrollment levels, plan designs,
vendors, or locations should change dramatically, this number should be updated with the new
information.
Milliman
Detailed Analysis
L Renewal Evaluation — Medical & Prescription Drugs (self-insured)
Pmjeded Change in Premium - Claims ei F. ,pen.res
September 16, 2014
Attachment #4 shows our calculation of estimated claims costs and expenses for the Blue Cross
Blue Shield of Texas (BCBS of 1N medical and prescription drug plans. Using the carrier's
proposed increases to expenses listed in the Executive Summary above and shown in Attachment
#2, we estimate that City of Lubbock's claims and expenses will be $882.81 PEPM which is 7.8%
more than current premiums. Based on current enrollment, this amounts to $29.06 million in
annual premium. If claims do not trend as much as our estimate or City of Lubbock is able to
reduce expenses, then this amount could be lower.
Expenses - Administralion Fees
BCBS of 11 and other vendors perform various services for the efficient administration and
financial stability of the plan. As referenced earlier, Attachment #2 shows a summary of the current
and proposed fees for 2015 with our assessment. The City of Lubbock is in the second year of a
four year rate agreement with BCBS of TX. Within that agreement BCBS of TX has proposed an
increase of 4.1% including prescription drug rebates. Since this increase has already been
negotiated and is within the 3-5°% increase we typically see, we recommend accepting this proposal.
Additionally, AIG is proposing a 0.0% increase to Organ Transplant fees. Since is lower than the 3-
5% increase we typically see, we recommend accepting this proposal.
Expenses — Indhidual Slop -Doss Pirnihims
Attachments #5-7 show our analysis of the risks of large claims and stop -loss coverage. Details of
the risk associated with various levels of individual stop -loss can be found in Attachment #5 and are
summarized in the table below:
Individual Stop-
Probability of a Claim
Number of
Loss Deductible
over the Deductible
Members
$400,000
0.03%
1.7
$375,000
0.04%
2.0
$350,000
0.04%
2.3
$325,000
0.05%
2.8
Additionally, Attachment #6 shows expected stop -loss reimbursements at various levels of
individual stop -loss coverage. Note that as the individual deductible increases, the expected
'r' :. ,
M i l l i man September 16, 2014
reimbursements decrease. Since the current insurance carrier has provided preliminary quotes for
various levels of stop -loss, we have compared the additional premium to the calculated additional
liability using our proprietary pricing models. Generally, the guideline is that the appropriate
deductible would be one where the additional claims liability is minimized compared to the
corresponding premium savings. In this case, at all of the higher deductibles, we have calculated
that the expected additional claims liability will be less than the corresponding premium savings.
Attachment #6 also shows the potential variance in reimbursements and corresponding net savings.
Attachment #7 compares recent years' paid stop -loss premiums to reimbursements received and
calculates a loss ratio over the time period. The combined loss ratio since 2011 has been 3.5%.
Stop -loss carriers typically target paid loss ratios between 70% and 80% for groups of this size. The
stop -loss carrier may wish to base the proposed premium more heavily on their risk pool and less on
City of Lubbock's actual experience. City of Lubbock should take this into account when
considering increasing the deductible level with this carrier or another one.
BCBS of "IX has proposed a 30.2% increase to the current individual stop -loss premium levels. We
believe this increase is much too high given the group's low historical loss ratio. Therefore, we
consider further negations before accepting this proposal.
In this calculation, we have used the proposed individual stop -loss premium rates from BCBS of Tl
with the current deductible. However, we recommend the City of Lubbock to continue considering
higher deductibles of $375,000 or $400,000 should revised stop -loss quotes become available.
Expenses — Aggregate Stop -Loss Premiums
Self-insured employers may also purchase aggregate stop -loss coverage to protect against aggregate
claim fluctuation. Groups with fewer employees will generally have a lower tolerance for risk than
groups of a larger size. Typically, for a group this size, the probability of an aggregate
reimbursement occurring is insignificant.
The following table highlights the inherent variability of aggregate medical claims. The "No
Deductible" and current ISL deductible scenarios are displayed in Attachments #8-9.
Individual Stop-
Loss Deductible
ProbabilityofAggregate Claims Exceeding
105% of Expected
115% of Expected
125% of Expected
No Deductible
17.3%
0.7%
—0.0%
$400,000
14.7%
0.2%
—0.0%
$375,000
14.4%
0.2%
—0.0%
$350,000
14.3%
0.2%
—0.0%
$325,000
13.9%
0.1%
—0.0(
e
Milliman
September 16, 2014
To assess the aggregate stop -loss risk, we performed a Monte Carlo simulation on the current
enrollment. The spread of expected claims without and with individual stop -loss is shown in these
attachments. The vertical axis shows the probability of exceeding a certain level of expected claims.
The horizontal axis shows a range as a percent of expected average claims. Assuming that City of
Lubbock's 2,743 enrollees in the census data correspond to 5,470 covered lives, we simulated 10,000
scenarios, or 10,000 years of claims experience. The results of our Monte Carlo analysis indicate
that, with no individual stop -loss as displayed in Attachment #S, there is a 0.7% probability that City
of Lubbock will realize an aggregate claim total greater than 115% of the expected claims resulting
from pure randomness. This probability drops to approximately 0.0% at a level of 125%. With
individual stop -loss set at $350,000, as displayed in Attachment #9, the probability of aggregate
claims greater than 115"/ of the expected claims drops to 0.2%, and the chance of having aggregate
claims greater than 125% of the expected claims is approximately 0.0%. Note that this assumes that
the attachment point is set correctly.
We do not recommend aggregate stop -loss coverage for City of Lubbock.
Tirnd Ana#sis - Claims
Using a six-month rolling average, we performed a linear regression analysis of City of Lubbock's
monthly paid claims and enrollment to calculate that the claims in the BCBS of '11 self-insured
plans have been decreasing at an annualized rate of 0.3% for medical and increasing at an annualized
rate of 11.2% for prescription drugs. The results are displayed in Attachments #10-11- Nationally,
based on the Milliman Mid -Market Survey of employers, annual trend for medical and prescription
drugs combined is approximately 5-10% for 2013 with expectations for 2014 at the same or slightly
higher level. Regionally, trends are at the lower end of this range at 5.5%. Additionally, the 111illi»lan
Aledical Index (AIA11), which examines the total cost to deliver healthcare, saw increases of 5.4% from
2013 to 2014. In order to mitigate variations due to the inherent variability in claims data on
individual groups, we blended the calculated trends for City of Lubbock with national and regional
averages as appropriate to arrive at the trend levels used in the budget calculations.
Milliman
September 16, 2014
2. Premium Equivalencies & Employer Subsidies
Pmliminag Bndgeling — Pmininm Equivalencies for the 2015 Plan Year
Attachment #12 contains our findings and recommendations for distributing the previously
calculated total premium on a PEPM basis over the relevant plan options. Based on our actuarial
cost model, Health Cost Guidelines, n.2012, the relative values of City of Lubbock's medical plan
designs are 100.0% for the Active/COBRA plan, 148.4% for the Non -Medicare Retiree plan, and
72.6% for the Medicare Retiree plan. That is, the benefits provided by the Non -Medicare Retiree
plan are worth about 48% more than the Active/COBRA plan's benefits. Additionally, tier pricing
levels for a 4 -der plan should be 1.000 for EE Only, 2.133 for EE + Spouse, 1.668 for EE +
Child(ren), and 2.962 for Family. That is, the cost of a spouse is expected to be about 13% greater
than the cost of an employee.
City of Lubbock's current plan pricing levels vary from these relativities and their tier factors vary
from our expectation of the cost of coverage for each tier. For this analysis, we kept the current
plan and tier pricing levels in place. However, moving to Milliman's relativities and then adjusting
the employer subsidy for each plan and tier to meet City of Lubbock's subsidy level goal could help
keep each plan funded properly should a large enrollment shift occur.
Based on the factors above, we "spread" the premiums over the plan options and tiers to reflect the
assumed variances, while maintaining the same average total premiums calculated in Attachment #4.
Referring to Attachment #12, we arrive at the "CY 2015 Proposed" premiums. The variances
between these and the current premiums are shown in the bottom rows of the attachment, and the
total costs are shown in the far right column.
F,mployer Subsidies and Employee Contrrbnlions
At this time, we have assumed that City of Lubbock will keep the employer subsidy for 2015 at the
same percent as it is currently. As a result, City of Lubbock's portion of total medical costs is
remaining flat at 73.4% of the total cost. Please refer to Attachment #13 for details.
Milliman September 16, 2014
3. Renewal Evaluation —Dental (self-insured)
Projected Change in Pn'milan — Claims 6 Expenses
Attachment #14 shows our calculation of estimated claims costs and expenses for the BCBS of'rx
DPPO. Using proposed expenses, we estimate that City of Lubbock's claims and expenses will be
$42.45 PEPM which is 22.5% less than current premiums. Based on current enrollment, this
amounts to $1.33 million in annual premium. However, we recommend that the City of Lubbock
continue to budget at $42.45 PEPM for an annual budget of $1.72 million. If claims do not trend as
much as our estimate or City of Lubbock is able to reduce expenses, then this amount could be
lower.
Expenses - Administration dr Otber.Fees
BCBS of Thi has proposed a 0.0% increase to claims administration fees. This is very favorable and
we recommend accepting the proposal.
Trend Analysis - Claims
Using a six-month rolling average, we performed a linear regression analysis of City of Lubbock's
monthly paid claims and enrollment to calculate that the claims in the BCBS of Tl self-insured
plans have been decreasing at an annualized rate of 1.7%. The results are displayed in Attachment
#15. Nationally, based on the Alilliman Alid-Alarket Srnvey of employers, annual trends are
approximately 1-5% for 2013 with expectations for 2014 at the same or slightly lower level.
Regionally, annual trend has been lower at approximately 0.0%. In order to mitigate variations due
to the inherent variability in claims data on individual groups, we blended the calculated trends for
City of Lubbock with national and regional averages as appropriate to arrive at the trend levels used
in the budget calculations.
1"tr minary Budgeting — Premium Egnh alenties for the 2015 Plan Year
Attachment #16 contains our findings and recommendations for distributing the previously
calculated total premium on a PEPM basis over the relevant tier options. Tier pricing levels for a 4 -
tier plan should be 1.000 for EE Only, 2.043 for EE + Spouse, 2.302 for El- + Child(ren), and
3.656 for Family. This indicates that, on average, children in a family unit incur more claims than a
spouse incurs.
City of Lubbock's current tier factors vary from our expectation of the cost of coverage for each
tier. For this analysis, however, we kept the current tier pricing levels in place. However, moving to
Milliman's relativities and then adjusting the employer subsidy for each plan and tier to meet City of
Lubbock's subsidy level goal could help keep each plan funded properly should a large enrollment
shift occur.
• Milliman
September 16, 2014
Based on the factors above, we "spread" the premiums over the tiers to reflect the assumed
variances, while maintaining the same average total premiums calculated in Attachment #14.
Referring to Attachment #16, we arrive at the "CY 2015 Proposed" premiums. The variances
between these and the current premiums are shown in the bottom rows of the attachment, and the
total costs are shown in the far right column.
Employer Subjidiej and Employee Contributions
At this time, we have assumed that City of Lubbock will keep the employer subsidy for 2015 at the
same percent as it is currently. As a result, City of Lubbock's portion of total dental costs is
remaining flat at 74.2% of the total cost. Please refer to Attachment #17 for details.
Milliman September 16, 2014
Assumptions and Methodology
The steps we used to arrive at the results are outlined below:
1. We collected enrollment information from various vendors through NIFIBT. We assumed
that those employees electing coverage would continue to elect that same coverage and that
employees waiving coverage would continue to waive coverage.
2. Claims and expense information was also provided by various vendors through NIHBT.
3. Our expected claims range encompasses the current plan designs offered to employees.
Should plan designs change, the Benefit Plan Design Factor should be updated accordingly.
4. We calculated trends using a regression analysis and blended those results with national
averages where appropriate.
S. For the specified plans, we calculated a manual rate on the group based on demographics
and plan designs using our proprietary actuarial pricing model, Health Cort Guidelines, 11.2012.
G. Using claims experience, the calculated manual rate where indicated, and assumed trend
factors, we calculated a projected claims costs on a per employee per month basis.
7. We performed an analysis of aggregate claim variability to determine an appropriate level of
individual stop -loss coverage.
8. Using plan pricing levels, tier pricing levels, and enrollment assumptions, we calculated
premium equivalency rates by plan and coverage tier.
9. Using employer subsidy assumptions, we calculated employer subsidies and employee
contributions by plan and coverage tier.
Reliance and Limitations
In performing our analysis for City of Lubbock, we relied on the data provided to us from various
vendors through MHBT. We have not audited this data, but we performed a limited review for
reasonableness and we found no material defects in the data used in this report. If the underlying
data is inaccurate or incomplete, then the results of our review may be inaccurate or incomplete.
Differences between our projections and actual amounts depend on the extent to which future
experience conforms to the assumptions made for this analysis. It is likely that actual experience will
not conform exactly to the assumptions used in this analysis. Actual amounts will differ from
projected amounts to the extent that actual experience deviates from expected experience.
Milliman
September 16, 2014
This letter and its attachments have been prepared for the internal use of MHBT in their
relationship with City of Lubbock and are only to be relied upon by these organizations. No portion
may be provided to any other party without Milliman's prior written consent. lvhUiman does not
intend to benefit any other recipient of this report, even if Milliman consents to the release of this
report to that recipient. Please contact us if you have any questions.
Sincerely,
Jason E. Speer, F.S.A., M.A .A.A.
Principal & Consulting Actuary
-Z e.
U.MW `^"
Terry L. Bierman, A.S.A., M.A.A.A.
Senior Actuarial Consultant
Paul Penkc
Benefits Consultant & Financial Analyst
10
Milliman
hm.,l ,
Calendar Year 2015 Renewal Summary
- City of Lubbock -
Percent Amount
CY 2014
CV 2015
Chance' Change'
Renewal Enmllmenti
Total Annual Employee Employer
Total Annual Employee Employer
Total Annual Total Annual
EsSmated
Data Volume
I
Pmmiuni ConGIO.r Subsltiv'
I
Premium° ConWF° SUFsidst
Premiere I Premium
Renewalr
I Milliman's Financial Monitotlng Report (FMFV and IBNR calculation will Provide additional detail ce Mstonwl results.
2. See atMMed wlalation toradditlonal detail.
3. Rales to Milkman alUUments Renewal Evalua4on Summary Raport fwadtlllional detail on proposals, carriers and GVI results.
4, Milkman's Compmhensive Assessment o/Health Plans(CAHP) map willpmvitleb ntlmahiWin(ormationhom Milliman Mid-MaAet SvNey(MMMS).
F'.. m: Wo
aflesoN Mibnan Inc Z0..... WkErck Renewal EVLwticn a,,.
ml.enmeli
Milliman
r Renewal Evaluation Summary - Medical
- City of Lubbock -
1 Eodorants takon fmm the June 2014 FMR
2 Current Rates represent the premium sai ivabnclea Cesad on current dodderers Iron Ide densus Ob.
3. See abandon. dolot additional condition Mention dukWGan.
4. Rhine wkulaaons Inwtpoete, Meliman'a expo Cation of dears In caqu ddion with our projection of expenses.
5. Rggresslve and Conun'ative budgets are potentate for Ilushative pu poses and should not Ce taken as Mehmen'a recommended cudgeling levels
Isseed n V
Rule's Mamn.Im N, 16Utrot...W R—a FreN.4m n,m
Aggressive
BWgela
I Conservative
event,
CY 2014
5043
CY 2015
Total MereP.,,.e-Insured
$77731.301
E3Q1850B2
Percent lnueaSe Over Cunent
3%
Mllllman,
Mllllman
Mllllman
A430,9]6
Chanced' Exceeding Budget
75%
10%
Claims 8
Clelma 8
Claims 8
Current
Carrier
Carrier
Millimen
Coverage
Enrollmond
Rates Total Annual
Initial
Rovisotl
Projected
Sasls
Volume'
PEPM s Coal
Expanses
Ex onse¢
Ex onsea
Ex edetl Claims Cast (PEPM)°
Em oeas
2743
S]4B.58 534,5)3]7
06 571
550550
Parcenl In.... Over Cumnl
8.09:
a.n%
e.0%
Total Annual Cost Over Current
$1,973.037
$1,973,037
$1,973,037
Claims AJministra0on
lEorployea.
1 2,743 $41 del $1352.189
54231
54231
542.31
"d"'456Over Cu ... or
Parcenl
3.0%
3.0°%
3.0%
Tole/ Annual Co., over Current
$40Aa7
$40,497
140,487
Rx ReOatea
Em o
2)a3
($/..
Paleem luded.. Over Cunenl
Total Annual Coal Over Current
$4,608
Salida
Sg608
O an Transplant Fee
EE Only
1 ]]7 $6 0a 5100.465
56 O6
56.08
EE eFamil
138a St460 5289323
51n 6o
514.80
StO J]
51092
$10.84
Tafel 2,749 510]2 5338.709
Paeonl Increase Ove, C.,
0.0`6
0.0%
5.0%
Total Annual Coat Over Cunenl
$0
$a
$18,989
Individual Ste Los
Em o
2743 $1824 1 5600308
$23.75
c2875
$19.15
Percent hdraded, Ove, C=
30.2%
u,"
5.0%
Total Annual Cast Over Curent
$181,387
$181,367
$30,019
ACA Fees
Educlayeas
2743 $101581 534]490
5769
$7 6,1
57.84
tludat PCOal a Tansmdnyflevounn[e Fee,
Paddled lnnione Over Current
(2re:,l
...z.,
(2704:1
Total Annual Coal Net Carron[
(Sa5,eyr,
/$.11d")
(Sa5,a701
Com ..N.
Employea5
2.7431 Sale.gol 526,954.912
$862.81
"82.811
$878.73
Total Medical -S9lf-Insured
1 2,743 $26 .954.9121
$29,050,541
$29058,541
$20,924183
Percent/ncreaSe Over Current
7.8%
L8%
7.3%
Total Annual Cost Over Current
52,103,629
S2,103,529
$1,969,271
Premlum Reduction
SO
1 Eodorants takon fmm the June 2014 FMR
2 Current Rates represent the premium sai ivabnclea Cesad on current dodderers Iron Ide densus Ob.
3. See abandon. dolot additional condition Mention dukWGan.
4. Rhine wkulaaons Inwtpoete, Meliman'a expo Cation of dears In caqu ddion with our projection of expenses.
5. Rggresslve and Conun'ative budgets are potentate for Ilushative pu poses and should not Ce taken as Mehmen'a recommended cudgeling levels
Isseed n V
Rule's Mamn.Im N, 16Utrot...W R—a FreN.4m n,m
Aggressive
BWgela
I Conservative
event,
Campoelta PEPM
5043
$923
Total MereP.,,.e-Insured
$77731.301
E3Q1850B2
Percent lnueaSe Over Cunent
3%
13%
Told' Annual Cost Over Current
$776.288
A430,9]6
Chanced' Exceeding Budget
75%
10%
1 Eodorants takon fmm the June 2014 FMR
2 Current Rates represent the premium sai ivabnclea Cesad on current dodderers Iron Ide densus Ob.
3. See abandon. dolot additional condition Mention dukWGan.
4. Rhine wkulaaons Inwtpoete, Meliman'a expo Cation of dears In caqu ddion with our projection of expenses.
5. Rggresslve and Conun'ative budgets are potentate for Ilushative pu poses and should not Ce taken as Mehmen'a recommended cudgeling levels
Isseed n V
Rule's Mamn.Im N, 16Utrot...W R—a FreN.4m n,m
E Ana]vmru.
Milliman
Renewal Evaluation Summa - Dental
— City of Lubbock —
Carrier BCBSof TX
1. Enrollment Is taken from the June 2014 FMR
2. Cunent Ratesrepre ntt pmmiume ui lemies Wa onwme enrollment.
3. Sre.=1ur a ds for.6dNorel details on Milliman calculation.
4. Pndn9 calculations incoryorate Milliman's expectation of.aimsNconjuroson Win our projection of expenses.
RepaMm PO
9I16Rnt4 Mint ire. 2015CR/d WYU'h Rensu'al EvYmmn. tlsm
CV
2014
Cy 2015
Milliman
Milliman
Milliman
Claims &
Claims &
Claims &
Current
Carrier
Carrier
Milliman
Enrollment/
Rates
Total Annual
Initial
Revised
Projected
Coverage Basis
Volume'
(PEPM)'
Cost
Expenses
Expenses
Expenses°
Dental
E Claims Csl(PEPM'
JE.No,naes
1 2.61511
51.50
51.6 17,4111111]
83909
$39A91
39.09
Parse nt lnCrvbse Wer Cunent
(Z4.2%)
(I<3%)
12,2;)
TOfdI AnnYdl Cost Over current
(5390,773)13390,]]3)
5390]]3)
Claims Administration
Em
2.6151 33201 5100,016
$320
$3.20
$336
Percent Increase Over Current
0.0%
0. VA
5. WA
Total Annual Cost Over Current
$0
80
$5,021
Com .site
lErnplovess,
1 2.615 $50.70 $1,717,833
$42.291
$42.291
542.45
Total Dental -Self-Insured
1 2,6151 81,717,633
$1,327,060
1 $1,327,060
1 41,332,081
Percent Increase Over Current
(22.7%)l1
(2.55.7
Total Annual Cost Over Current
(5]90,]73)
($390,773)
($385,752)
Premium Reduction
I s0
1. Enrollment Is taken from the June 2014 FMR
2. Cunent Ratesrepre ntt pmmiume ui lemies Wa onwme enrollment.
3. Sre.=1ur a ds for.6dNorel details on Milliman calculation.
4. Pndn9 calculations incoryorate Milliman's expectation of.aimsNconjuroson Win our projection of expenses.
RepaMm PO
9I16Rnt4 Mint ire. 2015CR/d WYU'h Rensu'al EvYmmn. tlsm
:t5o
3en,o
sz
°8
Milliman
7.0 ,
6.0
w
E
E
m 4.0
U
N
a
E 3.0
E
0
a 2.0
E
z
z
0.0 1
Analysis of Individual Claim Variability
City of Lubbock
2.0
1.0
lid 0.0
greater than $325,000
*Does not account for lasers
2.0
0.0 0.0
greater than $350,000
2.0
0.0 0.0
greater than $375,000
Attachment #5
0.0 0.0 0.0
greater than $400,000
o Milliman 25th Percentile aMilliman PY 2015 Expected oMilliman 95th Percentile
o City of Lubbock 2011 Actual o City of Lubbock 2012 Actual nCity of Lubbock 2013 Actual
Prepared on: ptp
9/16/2014 Milliman, Inc. 2015 COL StopLoss.xism
Milliman
Stop -Loss Comparison
Premium vs. Expected Reimbursements
- City of Lubbock -
Individual Stop Loss'
•ESOme1M
NN SavagYrp.f VMarte
LlammY
ISL CMucuEle
F
51 lass Mnual Premumsrvun✓:.irt
oP vingz to Move
EueclaE to
Manual Rale
Estimate!
$asvgYC. o.
(ALonR ]0%
SI�nlb. ss
PGluL.WClams
y�yb Comr¢ct
25N P¢¢enek 9511�Percenbe
Plamium lPEPMr l?]<]Emplgres) IO NlernaY
Eac¢eE ISL
Con ad
pMigiTla
Lon Ratio)
ReimEursemems
LaOillly
S325O00
$0
$2575 1tla]59]
28
$942
$51659
5
_
N50.90
5D5 w
N
SWS781 755 So
9$
N9.m
$052. W
S375,000
50
$2190 $]33090 550,281
2,0
EP39
$399215
SSa 02954.333
N1f32 Gn05L.
NW
50
$20.28 Sfi83,]fi5 5110990
1]
$15.25
$951129
SM975
510,015
190.5$5
1 Note WlxAle expxlM OameYf eM aYPla[a ceimWrsemenb are WseOm MRaa(spmp�ieYry eMwl�emwYnce moNl.eeNu[aMMavelualoEmns mm mem. As cacti. xWM n[iOamay vary
aom roY w. nava e�wareb IYrt.
3 6a>p]on prop9ea 20158085 of ix pemiuma
TMPe(Malcp baa MYBl blbiyilW WMa.
Plepar m PW
91IW2014 MJlimzn,lm. 2015 COL SI fts.Wsm
e
Milliman
Attachment #7
Individual top- oss Comparison
Premium vs. Actual Reimbursements
2011
2012
2013
2014
through June
- City of Lubbock -
Carrier
ISL
Deductible
ISL Paid
Premiums
Reimbursements
Dollar
Difference
Paid Loss
Ratio
HM Llfe
$350,000
$403,439
$58,880
$344,559
14.6%
HM Life
$350,000
S455,962
$0
$455,962
0.0%
HM Life
$350,000
$536,071
$0
$536,071
0.0%
BCBS of TX $350,000
$302,331 $0
$1,697,803 $58,880
$302,331 0.0%
Prepared on: ptp
9/16/2014 Milliman, Inc. 2015 COL SlopLoss.xlsm
Attachment #9
e
Milliman Analysis of Aggregate Claim Variability
$350,000 Individual Stop -Loss
- City of Lubbock
o.aoO
0.375
14.3% chance of
0.350
exceeding 105% of the
0.325
average
m 0.300
U
m 0.275
M 0250
0.2% chance of
0 0.225
exceeding 115% of the
`0 0.200
average
0.175
'm 0.150
'0
—0.0%chance of
0125
0.
exceeding 125% of the
O 1Oo
average
0.075
0.050
0.025
0.000
C ,\o41 413\00Oe\o 9oe\o Op\o O\o \e \o Oe\o po\o \e
10'
\oyer 6 � m e`� ^05 11410,101*,101,
5h ^b5 °
1y5
Range (Percent of Avg Claim)
Prepared on: ptp
9/16/2014 Milliman, Inc. 2015 COL StopLoss.xlsm
Milliman
0.400
0.375
0.350
0.325
0.300
m 0.275
0.250
0 0.225
`0 0.200
0.175
0.150
c 0.125
n 0.100
0.075
0.050
0.025
0.000 '
c6 \0
\ems
Attachment #8
Analysis of Aggregate Claim Variability
No Individual Stop -Loss
City of Lubbock
17.3% chance of
exceeding 105% of the
average
0.7% chance of
exceeding 115% of the
average
—0.0% chance of
r exceeding 125% of the
/i average
^A0\0
\o
Lo
40
00\0
a
0
10O1
'00
y\^
�by10
ye
9
17.3% chance of
exceeding 105% of the
average
0.7% chance of
exceeding 115% of the
average
—0.0% chance of
r exceeding 125% of the
/i average
^A0\0
\o
0\e
14110
'b"10
17.3% chance of
exceeding 105% of the
average
0.7% chance of
exceeding 115% of the
average
—0.0% chance of
r exceeding 125% of the
/i average
Range (Percent of Avg Claim)
^A0\0
Range (Percent of Avg Claim)
Prepared on: PIP
9/16/2014 Milliman, Inc. 2015 COL StopLoss.xlsm
14110
'b"10
Prepared on: PIP
9/16/2014 Milliman, Inc. 2015 COL StopLoss.xlsm
Milliman
$1,200
$1,000
a $800
LU
a
U
$600
N
E
V
$400
a
$200
Attachment #10
Trend Analysis - Medical
City of Lubbock
♦ ♦ ♦ ♦ ♦ ♦♦♦ ♦ ♦ ♦ ♦ ♦
Annualized Trend = (0.3%)
- No No No No NO No �� �� �N �N N� �� �� �� N� �� �� �� �� ����
"I" ��`m�. IV .04o �bac• 'OF 10, �` �o1 1 o0 10 OF 01 ,J 5��, �o,• ,��. ����. 3J (0 moo,, s4, 'e,
'Trend has been calculated based on a 6 -month rolling average
♦ Actual Predicted
Prepared on: ptp
9/16/2014 Milliman, Inc. 2015 City of Lubbock Renewal Evaluation.Asm
Q
0 0 0 0
LO o o04 CN _
69.
(Wd3d) ISOO SLUM p!l8d
0
U')
CL
CL En
X
C
O
U
C
E
m
♦
♦
♦
♦
O
♦
o
♦
N
C
N
N
♦
Q
i
♦
O
♦
0 0 0 0
LO o o04 CN _
69.
(Wd3d) ISOO SLUM p!l8d
0
U')
CL
CL En
X
C
O
U
C
E
m
Milliman
Calendar Year 2015 Medical Plans - Premium Equivalencies
- City of Lubbock -
Assumptions: Self-insured Plans
ra art vevmavau.an:eac a fra ass ae!emurceq Wam fm G�nes�ea.rA1]
Cumvpnm[upkrMax Mwmmnem Ow+�"m v.a5rosmarma pros Giryaeagm psvy levevmNamm
mmsw mupsns
Premium Equivalency Calculations
Tier Pricing Level'
EE Only
EEeSPousw
Plan Pricing Level'
EEeFamily
Proje<tetl
Milllman HCG
HCG Value♦
118%
20.5%
Milliners HCG
Enrollment
Value'
Expenses
Current
Pmpeeee
AptlyeICOBRA
775%
100.0%
100.0%
100.0%
100.0%
No1H4etl.re Retirees
9.0%
153.0%
1484%
100.0%
100.0%
Aletlkare Retirees
13.5%
70.0%
72.6%
100.0%
100.0%
ra art vevmavau.an:eac a fra ass ae!emurceq Wam fm G�nes�ea.rA1]
Cumvpnm[upkrMax Mwmmnem Ow+�"m v.a5rosmarma pros Giryaeagm psvy levevmNamm
mmsw mupsns
Premium Equivalency Calculations
Tier Pricing Level'
EE Only
EEeSPousw
EEKMMIren)
EEeFamily
Prgedetl Enrollment
50.2%
IT$%
118%
20.5%
Milliners HCG
1000
2133
1668
2862
xmerCOBR:.
Narvmeawre Remees
Meairare Re0ee5
1.000
1000
1 000
1.000
1.000
1.000
1000
1000
1 000
t OW
1OW
1 000
ProSpsetl
Equal to Cunenl
axpicsg ieaa mrna.einaa ssivaa pros Rewawiwpmry¢rau ac eaawm
raemam Wd pmisn wtrown� aamr gsrc
haeew wuman5ugpsnev Wiery Vmnum'rspnasrY Wmsrtapga5w mamN/pmunatmnwAl4 WieYErymi
yl� m Im�man. u.a A15Cayd LLLbxs Ra�asn Easma..6m
PmnNm
Enrollment
Cnn
pwuseMmNIy
• amlly
EE ly pouse
lnnl m y
TOUIGnnual
CY 3011
CY2014
CY3014
FCWeF08
NI690 581090
59109) 501050
10]3 211
J10 $dl
$20.W1,601
N mMMieem Retirees
581090 $91890
$91 B.g0 561890
121 fly
12 i5
5211]]9]
1.1 re Refreei
501090 591090
59189) U1350
100 162
1 ]
A6m.916
Oy3016Pmp
CY.15 EstlmaUE
CYWISEUImatea
5882.11 SFA]Bf
549201 586201
10]J 21J
]10 5]I
$2252,81]
==BRA
N on-M6Ek.Va Re1110a5
$982.81 500201
$09201 588281
X 05
12 25
52.605.052
Men- Reetnas
5a9281 MU B1
$11201 $0I
100 102
1 ]
5).919.6]2
Vetlenca
- NIW[e
NMIIco
.nn,e COBRARO
91 56]91
S6J 91 -0
0 0
0 0
S1.WI.21<
NvmMetleare n."_$0::
56391
S6J91 51391
0 0
0 0
5180859
LteOtrare Retiraei
RMI $191
$G9.91 .3.1
0 0
0 0
520],]56
Parcenl
Change
Nntenl Changs
Pncenl C11an0e
Actir=9RA
]e% ]8%
].8% 76%
Olt% 00%
00% 0.01
70%
NomMMirare Rellmes
]0% ]0%
7B% 76%
00% 00%
00"b 00%
]0%
MNkAfa Relireae
70% 70%
70% 70%
00% 00%
00°b 00%
70%
MIIIMen5ug0ealatl
ManNly Premium
E...I
TOul COal
n y • Pouse
♦ h Iron •Family
EE my • pnuav il hvnl m y
Annual
CY 2014
CYM14
CYMIS
ACW =BRA
UW 40 $1052])
$01546 11.4 .10
1073 211 ]le 5]1
$21.1 XR
N-..nre Rellmes
$105515 $2.266.21
5175535 53.IMD
1
124 65 12 25
550]0411
Ma
MeRellrees
$135.69 %,019
$5]550 WM24
180 102 1 ]
52]14,152
CY 2016
PNOaae4
CY 2015 Es11mnW
CY 2014 On - n
Aco. /COBRA
N9S05 SILW 40
5024.5) 51141695
1.W3 213 310 bl
$21 i0PO4
Nm-MMMarc Retirees
5105].]9 52,M1tl
51,]]1-0] 53.1]9]11
124 65 13 25
$+`:34890
IAaydaK RfWeos
$1)9142 $E99A9
$SBt10 $&736
Im 102 1 )
S1J]9 IBi
haeew wuman5ugpsnev Wiery Vmnum'rspnasrY Wmsrtapga5w mamN/pmunatmnwAl4 WieYErymi
yl� m Im�man. u.a A15Cayd LLLbxs Ra�asn Easma..6m
Milliman
Calendar Year 2015 Medical Plans - Employer Subsidies and Employee Contributions
- City of Lubbock -
Assumptions
Employer Subsidies and Employee Contributions
Employer
Subsidy Level
CY 2014
CY 2015 Pmpused
EmpbyttCmWEutian
EEonly
EEaSpouse
EE9CNIId(ren)
EE.Family
Tolai
EE Only
EEaSpouse
EEaCllild(mn)
I EE+Family
Twel
as-CooRn
Non-Medrcare Retirees
Mediare Retirees
100.0%
55.8%
76.0%
63-8%
15.9%
50.8%
48.7%
28.4%
626%
76.0%
50.8%
48.7%
28.4%
62.6%
CYAIs
4tew/CORWI
'1890
552261
559085
8406.36
51666].3fi5
SO.W
Employer Subsidies and Employee Contributions
gnflRpll Wuimanlrc. A15GrydlnWxreemaYEruam.
Empbyer SUEiby
Annual Coit to
EmpbyttCmWEutian
.1 CoslW
• poipe
rent
amity
Employer
my
♦ pwu
EEr m n
EEr army
Em,
CY 2014
CYAIs
4tew/CORWI
'1890
552261
559085
8406.36
51666].3fi5
SO.W
5296.21
522805
VU1
1.2,4215
NorvlAMii'are Retirees
5456.e0
S1Y198
521136
59489495688.92
SW1.1
5826.55
115]641
Me.Erczre Reuleei
W22.65
11511
'9905
823231
S2.2]],1P
5196.25
103,9
11985
558659
51]58]19
CY Nis PmppasE
CY2015Ea11metvd
.wive/COBRA
589281
SYilK
f63fi.96
13801
51]9fie.154
50.00
'1935
524585
1 31
Sf.56a.fifi4
N mMeGcare Retirees
M21
19245
51d0.E6
'2186
59:Fi,5]9
'90.36
37 5
5651.95
5991 Di
51693,424
IAeCrare 2IIrt"
1
544815
150.19
52581
52.454.B.St
52115]
134.56
H5262
X32.3]
SIg64.021
V.N
VarWce
r Me/COBRP
56,91
1019
540.11
St]1
Et Yb.365
'.CO
52J 12
SI]60
53228
SSfOL49
NorvMei¢ere RO-
535.65
$IO.IB
S16W
'5.630
S28.26
ESll3
1141
564.51
SIZ3030
Menirare Reline,
18.59
'31
5114
818.13
811]]14
$1532
'1.4]
'2A
54578
SIM I
Pertm[Qunga
Pertenl Cliengo
ve/C06RA
Ie%
Ze%
].8%
79%
i8%
NIN
]B%
79%
78%
]e%
Nm�AfeEtate Relnevs
]B%
78%
1.9%
7B%
79%
1
78%
79%
79%
18%
MrMare R¢lu¢eS
]E%
78X
]8%
79%
7B%
7B%
7B%
)B%
78%
78%
gnflRpll Wuimanlrc. A15GrydlnWxreemaYEruam.
anam�l x14
Milliman
Calendar Year 2015 Pricing Calculation - Dental Plans
- City of Lubbock -
1 PasNmr+H .i pin 0esgndwgH MNd m�dlmml ttun6 p4WW b/UYdIMbF
7 Egmses usmn�ms cdr�laxn ae eauamine ealwvsrol5rmexda
J �:.tiElvnO��m���'dmces ana nralm[nl lro'n IM )une2]�e FNn
&fYA14m st"...Ine .11 Cry a. Renexa Erdi�msi.-
a -
I. Claims Experience
111142/11
1112-1L12
11134413
11144/14
51,173,234
S1.094,932
$1082.402
$570,932
Trial Paid Claims
Emellmenl (tagged far lncurted 5asis)
2515
2.139
2503
2,580
storms of E rience
12
12
12
e
Incurred Claim Cost(PEPM)
$38.88
WAS
538.04
$37.40
II. Adjustments to Incurred Claim Cost
1. Trend
Annual Trend Rate
1.7.5
12%
1 2%
1.2%
Witmer of Mon9ls("in toxin to midpt)
48.0
38.0
240
15.0
1050
1037
1025
1015
Trend Factor
2. eenellt Plan Design Factor
1000
1.000
1 ODO
10oo
3. PmvMer Discount Factor
1000
1000
1000
1.000
4. Maturity Factor
1000
1.000
1000
1.000
Final Adjustment Factor
1.050
1.037
1.025
1.015
Eglactced Ctaims Cost atter Pdjusrenls
SAO at
144.23
Safi92
S37P7
Coextoliry 101endmg) Factcr
10%
20%
40%
30%
III. CY 2015 Experience Rated Claims Cos[ PEPM
139.09
IV. Experiences
Claims Administration 8 Commalown
$320
Total Expenses
$3.20
Current Budgeted Premium (PEPM)3
554 74
Calculated Actuarial lnereasel(Decrease)
1 PasNmr+H .i pin 0esgndwgH MNd m�dlmml ttun6 p4WW b/UYdIMbF
7 Egmses usmn�ms cdr�laxn ae eauamine ealwvsrol5rmexda
J �:.tiElvnO��m���'dmces ana nralm[nl lro'n IM )une2]�e FNn
&fYA14m st"...Ine .11 Cry a. Renexa Erdi�msi.-
�Milliman
Trend Analysis - Dental
City of Lubbock
$70
$60
IW
a
CL
$40
0
a
£ $30
R
32
a
a $20
$10
Attachment #15
♦ ♦ ♦♦♦ ♦ ♦♦ ♦ ♦♦ ♦♦ ♦♦
Annualized Trend = (1.7%)
lb
4� 4� �S`a�, 5�'� 4a 01 Ste`, 5�J �r 'o sa�,
'Trend has been calculated based on a 6 -month rolling average 0 Actual Predicted
Prepared on: PIP
9116/2014 Milliman, Inc. 2015 City of Lubbock Renewal Evaluation.xlsm
.... ,....
Milliman
Calendar Year 2015 Dental Plans - Premium Equivalencies
— City of Lubbock —
Assumptions
r awnnCCa rwaewuuam¢ew reYesd qan eesyvaeennmeagond me Gwsaie¢, r.MrJ
} Onanl penprin}bv<bw monnnl premum Envwmnsawssgans. Pro{mMpW ptmpM Nwuaaee mrxemmeMN
paean 6emdittnaawes psn ua
Premium Equivalency Calculations
Ther Pricing level]
EEOnly
Plan Pricing Level}
EEKnlldlrenl
Projected
illiM DG
DCG Value+
16.9%
122%
21.7%
Enrollment
Value'
Expenses
Current
Proposed
Active/COBRA
80.5%
1000%
100.0%
100.0%
100.0%
Rebrees
19.5%
100.0%
100.0% I
00.0%
1 100.0%
r awnnCCa rwaewuuam¢ew reYesd qan eesyvaeennmeagond me Gwsaie¢, r.MrJ
} Onanl penprin}bv<bw monnnl premum Envwmnsawssgans. Pro{mMpW ptmpM Nwuaaee mrxemmeMN
paean 6emdittnaawes psn ua
Premium Equivalency Calculations
Ther Pricing level]
EEOnly
EESllnuse
EEKnlldlrenl
EE+Famlly
"acted
EarallTent
49.2%
16.9%
122%
21.7%
Milkman DCG
1.000
2043
2.302
3.656
AtaheuC0BFtA
Retirees
1000
1.000
1.335
1.335
1.268
1.268
1.590
1.590
Proposed
Equal to Culleat
]. Cwrtnl lietgvpkvelaart Lassd on anw pe
cnrttommeneM gxa.nemn4wons avoxs pav
brpe aeuuG
PIP
9n6�.ep MAxmary c }01SGe/d luMxh Pem'.L EreYauar.Wm
Monthly Premium
Enrollment
TOY1 Annual Cost
ny
• Oouse E e dlr..
mly
Only
a pouse aChilUOeT
E • m y
CY 2014
CY 114
CY 2014
.49]
56006 $57W
$]148
1,051
217 3t37
$1388280
Sn69]
S60 0" $5]GO
$]1 nB
295
225
$329,553
CY 2015 Proposed
CY 2015 EstimatedCY
2015 Estimated
ACOBRA
$d69]
$50.04 $17.
$]t da
1051
21] 3$1]882809]
560114Si CU
$]l d8
235
325
$320553Varian
wSOW
VarianceVariants
s000
SO.W
5000
0
0
50SOW
SO.W $O.W
SO.W
0
0
50
Pence" CFan9e
Perp.Tebnge
lament Change
ActvUCOBPA
006.
00'i 006
1 4
00%
am DO%
�
00°h
0 M
ReOrma
00%
ORe 00%
0a.
DON.
0.0% DO%
001,
1 09%
brpe aeuuG
PIP
9n6�.ep MAxmary c }01SGe/d luMxh Pem'.L EreYauar.Wm
Milliman
Calendar Year 2015 Dental Plans - Employer Subsidies and Employee Contributions
-City of Lubbock -
Assumptions
Employer Subsidies and Employee Contributions
WP
BnekOv M�liiman, inc A15 Gry M4amek Renewal EVVWa�mdam
Em'Ioye,Sub:ldy
pnnua costes
Employee
0-16buoon
Mnun Caar le
E ny
EE+'Ease
+Childpen�
amity
Em to eea
Em lE er ny + 'Ease ♦ M1ild�ren� +Family
LY 2of0
LT 2016
A6vUC08RA
5669]
Sdd 9]
Sdd 5i
5<69]
s1,135,9dZ
$000
5150]
51203
52651
5352330
RHireca
432]]
522 i]
522.]]
42P]
513934
53220
33].2]
53d Z3
568 ]1
5190.200
S442,538
T..I
LY 2016 Pmposa0
CY i015 Eatimat
AaiWCOBRA
56d 9]
Sdd 9i
Sd<5]
644 9]
s1.1354R
S.
$150]
51203
S2651
5251339
Re4re65
S23 ]]
s22 ]]
532P
s22]]
s1393i2
433 Z0
53].2]
53623
548 ]1
SIW2�
Vatlmn
Vananca
Active COBRA
5000
5000
SO.W
5000
$0
30.00
Sa.W
S0 a0
4000
S0
RHo-ees
SOoo
s00o
5000
S.
so
SOOO
4000
SO aO
SO ao
sa
Pe Change
PertmecMnpe
ParcUCO8RA
00%
o0`a.
O.o96
00+
00
wA
00%
0
0M
00x.
Rnireez
0 V
O0A
00%
Oa%
caz
0006
0.0%
0M
OOX
00=s
WP
BnekOv M�liiman, inc A15 Gry M4amek Renewal EVVWa�mdam