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Self-Insured Healthcare Trust Board
Goodyear City Hall - Work Session Room 125
1900 N. Civic Square
Goodyear, AZ 85395
Tuesday, March 4, 2025
11:30 a.m.
Meeting Minutes
CALL TO ORDER
ROLL CALL
Present:
Chair Michael Balsan; Vice Chair Wade Foster; Boardmember Jennifer Preyer-Bonton; Ex-Officio Jared Askelson; Committee Member Kathleen Koncel
Staff Present:
Human Resources Director Lyman Locket; Total Rewards Manager Chi Herrington; Benefits Analyst Chanda Washington; Benefits Analyst Maria Carrillo
Attendees:
Charlie Broucek, Senior Vice President, Brown & Brown, Paula Campbell, Benefits Consultant, Brown & Brown, Graham Davis, Underwriter, Brown & Brown
BUSINESS
1.
APPROVE MINUTES
Approve draft minutes from the Self-Insured Healthcare Trust Board meeting October 30, 2024
MOTION BY
Chair Michael Balsan,
SECONDED BY
Vice Chair Wade Foster to APPROVE the draft minutes of the Self-Insured Healthcare Trust Board meeting held on Tuesday, March 4, 2025.
AYE:
Chair Michael Balsan, Vice Chair Wade Foster, Boardmember Jennifer Preyer-Bonton, Ex-Officio Jared Askelson, Committee Member Kathleen Koncel
Passed - Unanimously
2.
Recognition of Service for former board member Richard Newcomer
Chanda Washington shared the plaque for former board member Richard Newcomer. He was unable to attend the meeting, but she expressed Thanks for his seven years of service to the board and she will coordinate getting the plaque to him.
3.
Review, discuss and take possible action on financials
Jared Askelson briefed the board on the financials. There are approximately 10.2M in total sources coming in, which includes 9.8M from contributions from the city and employees and approximately $400K from rebates and investment income. There are approximately 10.6M in uses of funds and a change in net assets as -$408,722. The trust remains above the reserve requirement.
4.
Review, discuss and take possible action on Wellness Center Request for Proposal (RFP) update
Lyman shared that the city went through an RFP for the wellness center. The contract was renewed with CareATC. In July 2023, the wellness center moved to a new location and with the growth of the city, service hours have expanded, and a naturopath has been added. CareATC was the selected bidder among 10 bids total and their service level and past performance was considered as well as anticipated growth. There was discussion on the advanced primary care model, pharmacy and dispensary which is open to employees. Chairman Balsan asked about children and Lyman added that children can get their school physicals at the location. In addition to physicals, primary care and some occupational services are available and a mental health care provider is available through EAP. There is also a lab at the wellness center where vaccinations are available. Cigna data shows EAP utilization is high.
5.
Review, discuss and take possible action on renewals
Charlie Broucek introduced underwriter Graham Davis. Graham went through the preliminary renewal projections data. Graham noted that we have two lasers that are accounted for. He reviewed the high case analysis tool that looks at all claims above $50K with a stop loss of $250K. Data covered 2022 claim year, 2023 claim year and 2024 year-to-date, which includes seven months of data from July 2024 to January 31, 2025. The claims above $50K in 2022 was $1.1M, 2023 is $550K and 2024 year-to-date is almost $400K. The expected liability for claims between $50K-$250K was $1.9M in 2022, $2.1M in 2023, and $1.5M in 2024. From there claims were normalized but accounted for the two lasered claimants. Graham explained in detail the medical claims projections and formulas and noted a 7.3% annual trend for medical and a 10.3% annual trend for pharmacy. Board member Kathy Koncel asked about seasonality of data and its impact on the projections. Charlie discussed the rolling 12 supports that and the three methodologies are all used to evaluate and they should line up. The per member per month claims projection using the preferred normalization method for medical ($4.37.72) and pharmacy ($160.08) resulted in a $16.5% increase in the projected annual fixed and claims budget. Medical makes up 75% and pharmacy making up 25% of the total claims spend. There was discussion of the high-cost claimants noting the difficulty in predicting large claims year in and year out. There was discussion of the high case analysis tool and moving the stop loss from $250K to $275K or $300K. Recommendation to move individual stop loss limit to $300k as that was used in the calculation. Chair Balsan asked about reference-based pricing. Charlie shared that it is not highly used and looking at peer cities of Goodyear using reference-based would be significantly different. Charlie added that Cigna does not offer reference-based pricing and there would have to be an arrangement with Cigna to do so. There was further discussion of reference-based pricing versus network negotiated pricing, vendors, and value. Lyman added that the city will go out to bid next year. Charlie noted the bundled arrangements are nice, but an unbundled arrangement can offer opportunities. Charlie addressed the 16.5% increase and recommended that instead of applying the full increase apply 7.5% and drawn down the reserve approximately $1.4M. Jared shared that there would be an offset of about $500K-$600K due to other sources of revenue and that we would not want to draw down the reserve fund balance all in one year. Jared further explained that as costs increase so does the fund balance requirement. Lyman shared that a 7.5% would be the largest increase in approximately 9 years. Board member Wade Foster noted the city is covering 9% of what could be a 16% increase. There was discussion of retiree claims and employee engagement on plans, design, sustainability and quality. Dental claims were -3.1%. The recommendation is to keep the plan rates the same. Chair Balsan asked about how each plan is performing. Charlie discussed the plans noting the HSA plan has the best loss ratio and 15% of employees are enrolled in the HSA plan. Lyman added that there are two benefits analyst providing education, but there has not been a lot of migration between the plans. There was further discussion on the benefits of an HSA.
6.
Review, discuss and take possible action on setting rates for FY Plan Year for Medical and PPO Dental Plans.
Lyman proposed a 7.5% increase in the medical and pharmacy and status quo for the PPO dental plan. There was discussion that the 7.5% is greater than the previous year 5% increase, but the team will continue to work to keep costs down.
MOTION BY
Chair Michael Balsan,
SECONDED BY
Vice Chair Wade Foster to APPROVE a 7.5% increase in medical and pharmacy and no change for the PPO dental plan.
AYE:
Chair Michael Balsan, Vice Chair Wade Foster, Boardmember Jennifer Preyer-Bonton, Ex-Officio Jared Askelson, Committee Member Kathleen Koncel
Passed - Unanimously
INFORMATION ITEMS
Comments, Commendations, Report on Current Events and Presentations by Board, Commission or Committee Members, staff or members of the public. The members may not propose, discuss, deliberate or take any legal action on the information presented pursuant to A.R.S. § 38-431.02.
NEXT MEETING
Tentatively scheduled for October 23, 2025
Board Chair Balsan advised the board that the next meeting is tentatively scheduled for October 23, 2025.
ADJOURNMENT
MOTION BY
Chair Michael Balsan,
SECONDED BY
Vice Chair Wade Foster
AYE:
Chair Michael Balsan, Vice Chair Wade Foster, Boardmember Jennifer Preyer-Bonton, Ex-Officio Jared Askelson, Committee Member Kathleen Koncel
Passed - Unanimously
There being no further business to discuss, Chairman Balsan adjourned the meeting at 12:35 p.m.
Respectfully Submitted by:
_____________________________
Lyman Locket, Human Resources Director
__________________________
Michael Balsan
, Board Chairman
Date:___________________
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