HomeMy WebLinkAboutAgenda - 10-03-2006-5eORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 3, 2006
Action Agenda
Item No. ,5 - ~
SUBJECT: Employee Health Insurance for 2007
DEPARTMENT: Personnel PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
1) 2/6/06 NCACC Letter to County
Manager
2) 3/24/06 Benefits Manager Memo to
County Employees
3) 7/27/06 County Manager Letter to
NCACC
4) 8/10/06 NCACC Response Letter to
County Manager
5) 9/21/06 Personnel Director Email to
County Employees Addressing
Employees' Vision Benefits Concerns
6) Health Insurance Estimated Costs for
2006-07 (Chart)
7) 2007 Health Insurance Rates (Chart)
INFORMATION CONTACT:
Tyrone Jackson, Personnel Director
(919) 245 - 2550
Michael Edmonds, Benefits Manager
(919) 245 - 2558
PURPOSE: To consider renewal of employee health insurance plans through the North
Carolina Association of County Commissioners (NCACC) Health Insurance Trust effective
January 1, 2007.
BACKGROUND:
Notification of Change in Plan Administrators for Health and Pharmacy Services
In December 2005, the County Manager was notified of the Group Benefits Pool Board of
Trustees' decision to end the Pool's service contract with Blue Cross and Blue Shield of North
Carolina (BCBSNC) effective June 30, 2006. The Manager was further notified that effective
July 1, 2006, the Pool's Board had chosen CIGNA and Caremark to serve as the new plan
Administrators for health and pharmacy services. This notification arrived following Orange
County's contract renewal with the North Carolina Association of County Commissioners Health
Insurance Trust (NCACC), and had not been discussed during the renewal process. At the time
Orange County renewed its health insurance contract with the NCACC, BCBSNC served as the
third party administrator.
Pre-CIGNA Actions
On February 1, 2006, the County Manager and key staff met with the NCACC Marketing
Representative to discuss the alternative platform the Group Benefits Pool would have in place
effective July 1, 2006. On February 6, 2006, the NCACC Executive Director responded to the
Manager's concerns.by letter stating that CIGNA had agreed to honor all of the current plan
designs used by Orange County members and that current benefits of member employees
received would remain the same (Attachment 1). With this commitment in place, the County
proceeded to partner with NCACC and CIGNA to prepare employees for the transition. On
March 24, 2006, employees were notified of 22 sessions at various locations in the County
where representatives from CIGNA and NCACC would provide an overview of the transition
process (Attachment 2). In addition, full information packets from CIGNA were mailed to
employees' homes, and were available in the Personnel Department by late May.
Post-CIGNA Transition Actions
After the July 1, 2006 transition to CIGNA, the Personnel Department identified and reported to
the Manager the initial problems that Orange County employees, retirees and their dependents
were experiencing utilizing their health and pharmacy benefits.. On July 27, 2006, the Manager
addressed his deep concern over the problems encountered during the transition to CIGNA
(Attachment 3). On August 10, 2006, the NCACC Executive Director addressed those
concerns and provided an information attachment on "What's Enhanced/What's Different"
(Attachment 4). The senior management team was provided a copy of the NCACC's letter and
on August 23, 2006, the Benefits Manager and HR Director met with the employee consortium
to hear their concerns and provide them with an update on the transition. During that meeting
the number one reported concern related to vision care. A subsequent meeting with
department heads to update them on the transition revealed the same concern. A meeting was
coordinated with NCACC and CIGNA to address the issue of vision care, and, on September
21, 2006, an email was sent to all employees with the NCACC response to vision benefits
concerns (Attachment 5). During the first 90 days of the transition from BCBSNC to CIGNA,
there has been a determined effort to address and resolve employee health benefit concerns
and problems resulting from the transition. During this initial period, the Personnel Department
met with Department Heads, the Employee Consortium and individual employees to identify
and resolve any outstanding health benefit related issues.
Finally, several requests had been made in July and August for NCACC to provide the
Personnel Department with the renewal rate quotation. The NCACC believed that the rate was
normally not provided until October. This was incorrect. The renewal rate quotation was
provided only after a meeting in which the Personnel Department provided historical
documentation to show that the rate had been provided in early September. This abstract is
submitted for the October 3, 2006 consent agenda to keep us on administrative track in
developing benefits packets for the October 20, 2006 -November 3, 2006 Open Enrollment.
Current Status
The County has received a renewal rate quotation for employee health insurance effective.
January 1, 2007. The renewal rates quoted by the NCACC Health Insurance Trust represent a
1.9 percent increase. The budget outlined for the 2006 plan year is based on a 16.0 percent
increase in expenditures. The Manager recommends that the Board approve the renewal of the
County's contract for health insurance coverage with the North Carolina Association of County
Commissioners Health Insurance Trust, and that the Health Insurance Budget for the 2006 plan
year be adjusted to 1.9 percent. Additional information is provided below.
Current Health Plans
Currently, Orange County offers two health insurance plans:
^ Open Access Plus In-Network Co-Pay Plan
^ Open Access Plus Co-Pay Plan
Both health plans are contracted through the NCACC Health Insurance Trust. The Open
Access Plus In-Network Co-Pay Plan is an HMO. The Open Access Plus Co-Pay Plan is a type
of traditional health insurance plan. The chart below shows the number of employees enrolled
in each plan.
Health Plan Employees Enrolled
Open Access Plus In-Network Co-Pay 745
Open Access Plus Co-Pay 44
Past Years Health Insurance Rate Changes
The chart below lists past increases implemented by the NCACC Health Insurance Trust:
Plan Year Percentage Increase
2006 16.5%
2005 -3.6%
2004 13.8%
2003 25.0%
2002 8.0%
2001 18.9%
2007 Rate Quote
The NCACC Health Insurance Trust has provided renewal rate quotations effective January 1,
2007 for the current health plans as follows:
Plan Rate Increase
Open Access Plus In-Network Co-Pay Plan 1.9
Open Access Plus Co-Pay Plan 1.9
This increase in rates for the Open Access Plus In-Network Co-Pay and Open Access Plus Co-
Pay Plans was due largely to:
^ Implementation of a $250 deductible (effective January 1, 2006) as a part of an overall
strategy for the reduction of the 2006 health insurance renewal quote and as an important
first step in proactively managing the County's services utilization, projected future utilization
and rate increases. - -
^ County claims experience during the 2006 plan year to date. Orange County's net claims
during the period of July 2005 through July 2006 were 2.8 percent lower than those incurred
during the prior review period.
^ Overall reductions in claims cost on a per member/per month basis.
^ The County was at or below pool .averages in key areas including hospital facility services,
inpatient. admissions, emergency room admissions, and hospital outpatient costs (including
diagnostic testing). Additionally; the NCACC Health Insurance Trust included an increase in
health plan administrative costs.
In conjunction with the renewal, the NCACC Health Insurance Trust has advised that there will
be no changes to the benefits structure or plan design for the Open Access Plus In-Network Co-
Pay Plan, or the Open Access Plus Co-Pay Plan.
Budget for Fiscal Year 2006-07
The County budget for fiscal year 2006-07 provides funding for up to a 16.0 percent health
insurance increase effective January 1, 2007. In dollars, this is $374,168 budgeted for the
projected increase.
Based on the 1.9% quoted renewal rate for 2007, the cost of the County contribution for
individual coverage and dependent coverage is well within the amount budgeted for health
insurance for 2006-07. The budget savings yielded by the actual renewal rates quoted for fiscal
year 2006-07 are about $321,761.
County Contribution for Employee Health Insurance
For the 2007 benefit plan year, the County's contribution for employee health insurance is the:
^ Full cost for individual employee coverage and
^ 52 percent of the cost of dependent coverage based on the Open Access Plus In-Network
Co-Pay Plan rate. The County then applied the dollar amount of the dependent contribution
calculated based on the Open Access Plus In-Network Co-Pay Plan rate to the Open
Access Plus Co-Pay Plan. The County has maintained a dependent subsidy of 52 percent
since the 2003 plan year.
The draft monthly health insurance plan rates (Attachment 6) are based on renewal of the
current plans with the continuation of the current 52 percent dependent subsidy, based on the
Open Access Plus In-Network Co-Pay Plan. Continuation of the subsidy at this level maintains
a key "family friendly" policy offered by the County that is highly valued by a large number of
County employees. This is a.family friendly policy in that it makes health insurance coverage
for dependents, whether spouse, domestic partner, children, or entire family more affordable,
and thus, accessible. It particularly benefits lower salaried employees for whom dependent
health insurance coverage is a significant cost.
Next Steps
With the Board's approval of the health insurance renewal and rates, staff will proceed to
develop the employee open enrollment packets,- distribute these to employees in early October,
hold the open enrollment period October 20 through November 3 with the Benefits and
Wellness Fair tentatively scheduled for Friday, October 20. Payroll deductions at the new rates
will begin in the pay period beginning November 20 for coverage effective January 1, 2007.
FINANCIAL IMPACT: As noted, the County budget for 2006-07 provides funding for up to a
16.0 percent health insurance cost increase - or about $374,168. Attachment 7 shows the
current costs for health insurance and the projected costs for the renewal of the current plans.
Renewal of the current plans offered by the NCACC Health Insurance Trust is within the
amount budgeted.
The 2006-07 cost increase for the renewal of the health plans is approximately $52,407. This is
$321,761 less in cost than the amount budgeted.
RECOMMENDATION(S): The Manager recommends that the Board:
^ Approve renewal of employee health insurance plans with the NCACC Health:lnsurance
Trust continuing the current health plans. The effective date for the renewal will be January
1, 2007.
^ Adopt the health insurance rates for coverage effective.January 1, 2007, including
continuing the dependent subsidy at 52%.
- - ~ iTic~~c~~~~ti t
N O R T H C A R O L I N A
ASSOCIATION OF COUNTY COMMISSIONERS
February 6, 2006
Mr. John M. Link, Jr.
Orange County Manager
P. O. Box 8181X
Hillsborough, North Carolina 27278
re: Orange County Request
Dear John,
Michelle Love, the Marketing Representative that covers Orange County, met with you and your staff on
February 1 to discuss the alternative platfornz the Group Benefits Pool will have in place effective July 1.
I understand there were a number of assurances you wanted to receive in writing from the management of
the Risk Management Pools.
Cigna has agreed to honor all of the current plan designs used by our members. This means that the
current benefits member. employees receive will remain the same. Orange County will have the
opportunity to make changes to their benefits and plan designs at renewal time. Orange County's current
participation agreement with the Group Benefits Pool has a 1/1 renewal date with a provision that rates
are in force for 12 months from the renewal date. Orange County may maintain a 1 / 1 renewal date, which
means that Orange County will not receive a rate increase on 7/1/06 and all deductibles and co-insurance
amounts will be based on the 12-month period from 1/1/06 to 12/31/06. The Group Benefits Pool will
provide Cigna .with an accumulator report that itemizes what deductible and co-insurance levels have
been met by each employee in order to carry over these amounts after 7/1/06.
The Pool has requested, but has not yet received, a ~ disruption report from BCBSNC. In lieu of the
disruption report, we have provided information about specific providers in the Cigna network and have
used data from the Orange County utilization management report to demonstrate the strength of the
network. We have also provided a geographic access report which shows the number of providers within
a certain zip code. While we await receipt of the disruption report, the Pooi is working with 'irue Cnoii:e
USA to develop acounty-specific network by making aline-by-line comparison of the BCBSNC and
Cigna networks. ~ Identification of the resulting gaps will then allow True Choice staff to target where
contracting activities should begin. As there are cost implications of building a network, it,is important to
note that providers who are not heavily utilized Inay not be considered for our network.,
I realize that Orange Comity experienced data transfer issues when the choice was made to award the
entire account to the Group Benefits Pool in 2004. Going forward, the Pool will have live access to the
eligibility systems of Cigna and Caremark, so~we'll have the capability to update records in an urgent
situation alzd prompt issuance of an ID card. We do not have that capability in the current model.
NORTH CAROLINA ASSOCIATION OF COUNTY COMMISSIONERS ALBERT COATES LOCAL GOVERNMENT CENTER
SERVING COUNTIES SWCE }9O8 215 NORTH DAWSON STREET, RALEIGH, NC 27603
P.O. Box 1488, RALEIGH, NC 27602-1488
phone 919.715.2893 fax 919.733.1065
www.ncacC.org
O
Mr. John M. Link, Jr. - 2 - February 9, 2006
Orange County was trained by NCACC and given access to Manager Self Service (MSS}. MSS gives the
Human Resources Department at each member County a portal into our eligibility system to make
changes, .terminate, and add employees and dependents. Should your staff wish it, we are more than
happy to schedule a refresher on MSS.
Our consultant on the benefits transition, Mercer, is working on a drug formulary comparison between
Merck and Caremark. However, we do not expect too much division of placement of. drugs between the
two formularies. The Pool's intention is to replicate the plan designs currently in place with Merck, so
there is as little disruption as possible. The crucial reason we chose to move the Pharmacy Benefits
Manager (PBM) to Caremark is so the Pool can receive better rebates, improve plan design flexibility and
provide a more attractive mail order program.
I understand there may be some concern about transitioning employees from BCBS disease management
programs to those offered by Cigna. CIGNA does not have the same exact programs or employ the same
techniques as BCBS. However, there are several programs that are similar, such as smoking cessation,
heart disease and prenatal care. Currently, neither the Pool nor Orange County has a high number of
employees participating in the BCBS disease management programs, so their efficacy is tough to
measure. CIGNA's programs are "opt out" programs, so the employee is automatically enrolled in a
pertinent program unless they have themselves removed. The CIGNA nurse call center frequently
reaches out to employees to monitor their progress and compliance. As a result, we believe disease
management will significantly improve under CIGNA. It is the Pool's intention to encourage more
employees to participate in managing their illnesses and improving their health,. and we are confident
CIGNA is the best partner to help us achieve this goal.
The Group Benefits, Pool and Cigna are happy to work with Orange County by providing a letter the
County may use for employee packets, if it is arranged ahead of time. In addition, our Board of Trustees
is provided with an update on the transition every quarter. We will provide you with copies of these
updates so you can stay current on the transition.
If you have additional questions or concerns, please contact NCACC Director of Customer Service
Carolyn Meiners at 919-719-1111. The NCACC has enjoyed along-standing relationship with Orange
County, and we look forward to continuing that relationship for many years to come.
Sincerely,
} C~4
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David F. Thompson
Executive Director
cc: Susan W. Klalcoff, NCACC Assistant Executive Director of Risk Management
Michelle Love, NCACC Marketing Representative .
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208 South Cameron Street
Post Office Box 8181
Hillsborough, NC 27278
Orange County Personnel Department
Tyrone Jackson, EdD, PHR
Director
Tel (919) 245-2550
Fax (919) 644-3009
www.co.orange.nc.us
March 24, 2006
MEMORANDUM
TO: Orange County Permanent Employees
FROM: Michael Edmonds, Benefits Manager
SUBJEGT: Transition to CIGNA Healthcare, Inc.
As many of you may already know through your Employee Relations Consortium
Representative, our health insurance provider, the North Carolina Association of
County Commissioners Health Insurance Trust (NCACC), has decided to end its
services contract with Blue Cross and Blue Shield of North Carolina, and to begin
utilizing the services of CIGNA Healthcare, Inc. {CIGNA).
The effective date of the transition to CIGNA is scheduled for July 1, 2006.
With this transition there will be no changes to the structure of the County's health
insurance benefits. Office .visit co-pays, prescription co-pays, deductibles,
premiums, and all other features of our health plan- will remain the same. No
employees will be subject to exclusions for pre-existing conditions, or ongoing
treatment/care. The network of participating providers available through the CIGNA
network is .virtually identical to the network currently available through Blue Cross
and Blue Shield. Full information packets from CIGNA will be mailed to your
homes, and will be available in the Personnel Department by mid to late may.
As we are sure there will be many questions regarding the transition, special
meetings have been scheduled to introduce employees to the services provided by
CIGNA Healthcare, Inc., to answer any employee questions, and to help make a
smooth transition to our new health insurance administrator. Representatives from
the NCACC, and CIGNA will be providing an overview of the transition process,
highlighting CIGNA services, and will be available for questions. Meeting times and
dates are as follows:
An Equal Opportunity/Affirmative Action Employer
_2_
Date Time(s) Location Location Address
9:00 AM Southern Human Services 2501 Homestead Road
April 10, 2006 10:30 AM Center -Meeting Room A Chapel Hill, NC 27516
April 10
2006 1:00 PM Government Services Center - 200 South Cameron Street
, 2:30 PM Public Meeting Room Hillsborough, NC 27278
April 11
2006 10:30 AM Southern Human Services 2501 Homestead Road
, Center -Meeting Room A Chapel Hill, NC 27516
April 11
2006 1:30 PM Government Services Center - 200 South Cameron Street
, 3:00 PM Public Meeting Room Hillsborough, NC 27278
April 13
2006 9:00 AM
10:30 AM Southern Human Services 2501 Homestead Road
,
1:00 PM Center -Meeting Room A Chapel Hill, NC 27516
9:00 AM
10:30 AM Orange County Deparment of
300 West Tryon Street
April 19, 2006 1:00 PM Social Services -Conference Hillsborough, NC 27278
2:30 PM Room
9:00 AM
10:30 AM Orange County Deparment of
300 West Tryon Street
April 25, 2006 1:00 PM Social Services -Conference Hillsborough, NC 27278
2:30 PM Room
9:00 AM
10:30 AM Orange County Deparment of
300 West Tryon Street
April 27, 2006 1:00 PM Social Services -Conference Hillsborough, NC 27278
2:30 PM Room
Please plan on attending, and share this message with your co-workers.
Departmental Administrative Personnel:
Please post the attached meeting schedule on departmental bulletin boards,
and in break areas.
~~.AN~~ ~~TLTI~T'~~~
HILLSBOROUGH
NORTH CAROLINA
lllana9er's ~f~ce
July 27, 2006
Mr. David Thompson,
Executive Director
North Carolina Association of County Commissioners
P.O. Box 1488
Raleigh, North Carolina 27602-1488
Re: Issues Related to Transition to CIGNA Healthcare Inc. as Health Plan Administrator
Dear David:
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I am writing this letter to express my deep concern over several issues that have been brought
to my attention following the North Carolina Association of County Commissioners Health
Trusts' (NCACC) transition to CIGNA Healthcare, Inc. (CIGNA), and Caremark, Inc.
(Caremark) as Third Party Administrators for the Pool's Health and Pharmacy Plans.
As you know; in December 2005, you notified me, by letter, of the Group Benefits Pool
Board of Trustees' decision to end the Pool's services contract with Blue Cross and Blue Shield
of North Carolina (BCBSNC) effective June 30, 2006. Additionally, your letter went on to
explain that, effective July 1, 2006, the Pool's Board had chosen CIGNA and Caremark to serve
as the~new Plan Administrators for health and pharmacy services. I directed my staff to contact
the NCACC to obtain information related to the transition process details/communications, plan
design, network availability, claims processing, and customer service. Additionally, we arranged
a meeting (February 1, 2006) to express our concerns with representatives from the NCACC and
CIGNA. During our February meeting, and in subsequent communications with the NCACC
and CIGNA, we were assured that ,our plan design would remain the same, that CIGNA's
network of providers was substantially similar to that provided by BCBSNC, dedicated customer
service representatives would be trained and knowledgeable xegarding our health/pharmacy
benefits, and that performance guarantees would be established to ensure a smooth transition in
July. .
In the weeks preceding, and since the July 1 effective date Orange County employees,
retirees, and their dependents have experienced problems utilizing their health and pharmacy
benefits, including (but not limited to):
Enrollment Kits -Information packets sent to employees in May we labeled as
"County Health Plan Enrollment Kit". Staff had to spend many hours addressing
concerns of confused employees who had been advised that re-enrollment was not
required. .
Missing Cards -Many employees reported that their entire family, or members of
their family have not. received cards even though all address information is correct
AREA COC7E (919) 732-8181 968 -4501 0 688-7331 m 227-2031 ~ FAX (919) 644-3004
Ext. 2300
ii
I am requesting your assistance in handling this matter, and would like to see the NCACC
take the following actions:
1. Provide a letter responding to the issues outlined above including a detailed
explanation of the NCACC's decision to discontinue coordination of benefits for
pharmacy services.
2. Provide a report outlining known changes (including any improvements) between
Orange County's health and prescription coverage prior to, and following, the
transition to CIGNA and Caremark.
3. Provide a report detailing the status of efforts to enroll non-participating providers
forwarded by County employees.
4. Provide a letter to Orange County employees and retirees regarding the issues
outlined above, other known issues, and corrective actions taken by the NCACC,
Caremark, or CIGNA.
David, I am sure this. transition has been very challenging and I appreciate all the work you
have done on the behalf of Orange County employees. Thank you for your prompt attention to
my concerns and please contact Benefits Manager Michael Edmonds, or me, if you have any
questions.
cc: Kim Kilday, Director of Marketing, NCACC
Carolyn Meiners, Director of Customer Service, NCACC
Michelle Love, Marketing Representative, NCACC
Denise Simms, Client Service Specialist, CIGNA Healthcare, Inc.
/Dr. Tyrone Jackson, Human Resources Director, Orange County Government
Moses Carey, Orange County Board of County Commissioners
-3-
N O R T H C A R O L I N
.ASSOCIATION OF COUNTY COMMISSIONS
August 10, 2006
Mr. John M. Link, Jr.
County Manager
Orange County Government
P.O. Box 8181
Hillsborough, North Carolina 27278
RE: Issues Related to Transition to CIGNA Healthcare
Dear John:
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The NC Association of County Commissioners appreciates the chance to offer feedback about the issues
that you and the employees of Orange County are experiencing as a result of the NCACC transition.
I have met with my staff with regard to your concerns and have addressed each item individually below.
We recognize that a transition can bring positive and negative attributes to members and their employees.
The NCACC expects to provide value to members participating in the County Health Plan. Some of
these.values include greater information through reports generated from our data mining tool for
management to understand how the group is performing. Recognizing that our members have interest in
wellness programs, the NCACC offers employees free access to health risk assessments that can
supplement the existing wellness initiatives Orange County has in place. As a companion to the health
risk assessments, employees have access to programs working with entire groups of employees diagnosed
with diabetes, asthma, lower back pain, heart disease, and COPD rather than waiting for the employee to
join a program. Last year, Orange County was a recipient of a Safety and Wellness Grant from the
NCACC that assisted with bringing on-site wellness programs to employees. The NCACC expects to
offer members access to providers not only participating in the Cigna network but also through CAPE as
a network unique for our members.
IrI contrast to the enhancements offered to members, we recognize that transition can also bring surprises. .
As the NCACC monitors the transition, we fmd that member education about enhancements or changes is
critical to support the staff who are fielding employee comments. Given the magnitude of the group
benefits transition, we'expected to experience some issues and made preparations to overcome these
issues. With a July 1 start date, the NCACC secured an 800 number should employees have problems
accessing care over the July 4 holiday weekend. When employees had trouble getting prescriptions filled,
the NCACC worked with Caremark to wage an educational campaign targeted to the pharmacists. As the
first thirty days comes to a close,'our field and customer service staff has noticed a decline in many of the
issues members communicated to us.
NORTH CAROLINA ASSOCL0.TION OF COUNTY COMMISSIONERS ALBERT COATES LOCAL GOVERNMENT CENTER
SERVING COUNTIES SINCE 7908 215 NORTH DAWSON STREET, RALEIGH, NC 27603
P.O. Box 1488, RALEIGH, NC 27602-1488
phone 919.715.2893 fax 919.733.1065
www.ncacc.org
~3
Mr. John M. Link, Jr. - 2 - August 10, 2006
As requested, the following detail discusses the individual items outlined in your letter:
Enrollment Kits -The Welcome Kits were labeled as Enrollment Kits and we apologize for the
confusion this labeling caused for your employees. As a companion to the kits being mailed directly
to employees, the NCACC held 22 separate informational meetings for Orange County employees
prior to the mailing. ,During these meetings your employees were informed that they do not have to
re-enroll and were provided the opportunity to receive answers to their questions on all aspects of the
transition. It is highly likely that, for those employees who did not attend, this would have caused
confusion. When we designed the envelopes, the majority of our counties were going through
enrollment for 7/1, and it is understandable how this could confuse our off-cycle members.
Missing C~ -The NCACC provided each member group a list of every employee and covered
dependent that had an ID card printed along with the address that we had in the system. CIGNA
assured us that, if a person was present on this list, they were sent an ID card. We sent this list to the
HR contact at each Member Group in advance of the ID cards being mailed so that they could review
and make note if any employee or dependent was missing. The County was given the option to call
the NCACC and have temporary ID cards created and new ID cards prompted. Even if correct on the
list, however, we did find that the new ID cards, which were sent in CIGNA labeled envelopes to our
members, were often thrown out because employees did not recognize what they were receiving. We
looked at the ability to review the list ahead of time as an enhancement because prior to July 2006,
the NCACC was not given access by BCBS to a list of IDs nor the ability to print temporary ID
cards.
Card Confusion -The Pool is evaluating creating custom ID cards for the next fiscal year. CIGNA is
also a Pharmacy Benefit Manager (PBM), and we hesitated to include co-pays on the front of the card
for fear that the pharmacy would be confused and file the Rx claim with CIGNA instead of Caremarlc.
It is incumbent upon the pharmacists to note the Caremark logo on the front and the Caremark contact
information on the back of each card. We have found that, once the pharmacist figures this out and
successfully gets a Rx claim through to Caremark, the rest of the process has gone smoothly.
Likewise, all participating NC pharmacies were sent a faxed copy of the County Health Plan ID card
and instructions on how to file claims with our plan. Michael Edmonds stated to Michelle Love that
the pharmacy issues were resolved with one phone call-that the issue was really one of confizsion on
the part of the pharmacist. Either way, the NCACC is looking to better the customized card for next
year as a result of the confusion this year.
Customer Service Misinformation -The customer service toll-free lines at CIGNA and Caremark
were open on June 1 and June 16"' respectively prior to the transition for employees to call for
clarification. Individual plan design information, specific to each employee, was not "live" in either
of their systems until ?/1/06, the effective date of the Plan. As a result, in some instances CIGNA did
give out general CIGNA plan information during that time and during the first week following the
transition, as did Caremark. CIGNA had to get up to speed-that they were only the claims
administrator for medical and that Caremark was the handling the pharmacy claims as our new PBM.
If the caller is asking CIGNA if/how the drug was covered, they are going to say that CIGNA doesn't
cover pharmacy: The omission was that CIGNA should have forwarded the caller to Caremark. If a
caller gets the NCACC information line at CIGNA, they are prompted to press " 3" for pharmacy
questions and are directed to Caremark. As a new administrator fresh to the program, there is some
degree of human error we should expect the first couple weeks of the program. This particular issue
Mr. John M. Link, Jr. - 3 - August 10, 2006
appears to have subsided since the early days of the transition. CIGNA and CAREMAILK continue to
commit themselves and their customer service to ongoing education and training on our program.
Delayed Follow-~ on Adding New Providers -Ongoing dialogue between CIGNA, the NCACC,
and the County exist through emails that outline the providers who are critical to Orange County
employees. Ongoing follow up has occurred on the network continuity for Orange County, and we
expect to continue communicating the progress that CAPE has made on your County's behalf. In the
coming weeks, our staff is meeting with CAPE to craft a communications strategy that consistently
educates members when contracting successes occur. We plan to begin a monthly update in the next
month of progress on provider-contracting within each of our counties, as well as addressing
individual county concerns. My staff have advised me of the Women's' Health Alliance issue that
surfaced in mid-July, which is seriously affecting some Orange County employees. CIGNA's
provider relations department has advised the NCACC that the Women's' Health Alliance,
comprised of several large OB/GYN practices, is already the highest contractuall-paid provider in the
Triangle area and on the highest reimbursement schedule in the entire state for OB/GYN. They are
requesting an additional &% increase, over the 5% increase they received this year in May and last
year. Certainly, the provider recognizes the timing of this and they are leveraging their size as a
means to higher reimbursement. CIGNA remains in negotiation with the Alliance as the proposed
9/25/06 termination date nears. In a nutshell, their demand will ultimately increase costs for our
members, as well as for all companies in the area who use CIGNA as their claims administrator. We
are watching this closely.
Lack of Prescription Coordination of Benefits - We have verified with BOBS that Coordination of
Benefits with-the BCBSNC Prescription Drug Plan was not being provided under the BCBSNC
Merck program. What was actually occurring was an employee filing the Rx claim under both
providers and getting paid at the appropriate level of benefit for both, as if the other had not paid.
Neither BCBS nor Caremark do verify with pharmacy claims whether a participant has other
coverage elsewhere and whether that other coverage has paid on these claims. The result was the
ability to receive greater than 100% reimburse-ment on specific drugs by filing the claim with both
secondary and primary carries. 'That is not COB, but it does appear to be a means for an employee to
have dual coverage and "double dip" on prescription drug benefits between primary and secondary
carriers. The way we have asked Caremark to administer prescription drug claims (as before with
BCBSNC) is, if an employee presents with a prescription and if the medication is covered, it should
be paid. We expect those participants with dual coverage to then decide, on the honor system, which
plan they wish to use to have their prescription drugs reimbursed, their primary or secondary, but not
to file the same claim twice. Under the Caremark plan with the NCACC, they are required to pay a
co-pay only, regardless of the high cost of the brand name or specialty drug. By mail-order, they
have the ability to receive athree-month supply for approximately two and ahalf co-pays.
Coordination of Benefits on the health plan for medical care will continue to be provided.
John, as you can hopefully see outlined here, the NCACC has taken numerous preventative measures to
ensure a smooth transition. It was not perfect. Considering the scope of the transition, it went very well.
We have heard from our member counties, and from Michael Edmonds in Orange County, that issues
have significantly slowed down toward the end of July, possibly due to employees and pharmacists
becoming accustomed to the "change" itself. Many of the issues described can be attributed to
misunderstandings and have since been resolved. The NCACC does recognize its part in this transition,
and we continue to strive to iron out the issues as we become aware of them. You still have our firm
15
Mr. John M. Link, Jr. - 4 - . August 10, 2006
commitment that every measure possible is being taken to ensure that your employees receive excellent
care and customer service with The County Health Plan.
You requested that the NCACC provide you and your employees with some additional information on
these issues. We are attaching the following to be used by your staff with employees, and in the
meantime, the NCACC will work with its communications staff to draft something more formal for their
use:
• A highlight of "What's Enhanced /What's Different" between the plans.
• A list of 230 providers who have been added to the County Health Plan provider network by since
1/1/06. Since some employees receive care in counties other than Orange, we've included all of them
and they can be sorted by county in an on-line document. The program will continue to update HR
with new additions to the network statewide so that you all will be kept abreast of the progress the
program is making for all Member Groups.
I encourage you to utilize Michelle Love, your point person with the NCACC. She is able to meet with
you to discuss these and other needs that may surface. I also am available to meet with you should the
.need arise.
Thank you for bringing your concerns to our attention. I am confident that, as we move through the
second month post-transition, your staff will experience greater alleviation of issues, and I encourage
you to contact me if that is not the case. The NCACC stands behind the commitments made by our staff
to Orange County prior to the transition in February. As your membership organization, the NCACC
expects to exceed the expectations of our members by offering a robust group benefits program.
Sincerely,
David Thompson ~~
Executive Director
cc: Susan Klakoff, NCACC Executive Director of Risk Management
Kim Kilda, NCACC Director of Marketing
Carolyn Meiners, NCACC Director of Customer Service
Michelle Love, NCACC Marketing Representative
Denise Sirnms, CIGNA Client Service Specialist
Valerie Scott, CIGNA Consultative Client Manager
Moses Carey, Orange County Board of County Commissioners
Dr. Tyrone Jackson, Orange County Human Resources Director
Attachment 1
Page 1 of 3
~~
What's EnhancecU What's Different
The simple response to why the new County Health Plan is not exactly the same as the former is
that the Plan is no longer being administered by BCBSNC. When our plan transitioned from one
claims payer and pharmacy benefits manager to another, we attempted to replicate the basic plan
designs and coverages. This is what we did during this move and why we stand behind the
statements made that your "plan design" is the same.
Every nuance of the claims paying operation, list of participating providers, and items such as
disease management programs. will not be exactly the same as before. Clearly, the NCACC had
to make choices based on our membership and most were based on our primary goal of reducing
costs and creating our own program. We are dealing with very different claims and service
providers whose operations are not the same. However, below we have outlined same of the
more prevalent items that are different and/or enhanced with the new program.
Below are the items that the County Health Plan has elected to enhance or add to the program for
you:
• Additional disease management programs offered are Lower Back Pain and Chronic
Obstructive Pulmonary Disease
• Outpatient labs and mammograms are paid at 100% whether rendered alone or with other
procedures.
• Ambulance Services are covered at the in-network coinsurance level even if the hospital you
are delivered to is out of network.
• Comprehensive vision exam is covered at the same level (after a deductible equal to your
PCP co-payment) regardless of whether or not the health care provider is in-network. (May
require a patient to pay in full up front and be reimbursed by CIGNA if the provider is not in-
network, but BCBS paid $0 for out of network vision care)
• Transplants are covered at 100% rather than co-insurance at in- or out-of-network levels.
• Dental Coverage includes a Brush Biopsy and Oral Health Maternity Program
• Prescription Smoking Cessation Drugs are now covered
• Mail Order Program allows for 90 days supply for reduced co-pay and better rebates for mail
order.
• Quantity Limits on Drugs - we only limit sleep aids, Stadol and erectile dysfunction drugs,
as does BOBS. However, we limit far fewer drugs than BCBS.
• Prior Authorization for Drugs - We require prior authorization on just Arava, Growth
Hormones and Anti-fiingal which are far fewer drugs on the PA list than BCBS so fewer
lassies for you and your physician.
• Enhanced Reporting -With the purchase and implementation of MedStat, our program will
provide a higher degree and frequency of useful claims reports for your group.
Attachment 1
Page 2 of 3
I "7
• Appeals Process -NCACC will allow CIGNA to handle medical claims appeals. The
NCACC will manage drug-related appeals for quantity limitation issues. Since we had no
control over what was allowed or disallowed by Medco, the NCACC decided to take this on.
The County would have to support and initiate the appeal in order for it to be reviewed by the
NCACC. So, the County is in control of what its own employees get to have reviewed or not
on the drug program and medical once it has gone through CIGNA appeals.
• ID card -One plastic ID card for each covered member and family member. The ability to
create and send temporary ID cards for members waiting on the "real thing."
Below are the most prevalent items that are not the same as our previous plan:
• Disease Management - In general, Disease Management programs that were offered before
may not be the same programs offered now and are managed differently (opt out, different
programs for different diseases or conditions and different free stuff, different suppliers).
Disease Management programs are different with CIGNA and Weight Management,
Migraine are not included.
Weight Loss Medications - Xenical and Meridia weight loss drugs. will not be covered under
the new program. Weight loss medications were excluded from the BCBS program, however
with the BCBS Disease Management program, you were able to get either Xenical or
Meridia covered only if you were in that DM program and had been determined to be obese.
The NCACC does not cover any weight loss category drugs, and we do not have an Obesity-
based Disease Management program. Last year, of the over 40,000 members on the plan
only 21 members were on weight loss medications, Xenical or Meridia, so disruption over
this program should be min;,i,al.
• Specialty Drugs -Specialty medications are available only through the specialty mail order
program at Caremark. A member can no longer go to a retail pharmacy and fill a specialty
medication prescription.
• Drug Formulary -The NCACC Primary Preferred Drug Formulary may have drugs listed in
different tiers than MedcoBCBSNC, some on higher tiers and other on lower tiers.
• Quantity Drug Limitations and Prior Authorization -Caremark did not replicate the same
limits on the same drugs nor the drugs that require prior authorization. However, the list is
much smaller than BCBS as to what is limited and what needs prior authorization.
• Mail order through Edgepark -The County Health Plan does not contract with Edgepark mail
order service for DME or testing supplies. This is a contractual arrangement BCBS has with
Edgepark. CIGNA has its own list of providers for DME.
• Generic Co-pay -The generic co-pay holiday does not currently exist with the County Health
Plan, which means members must pay for their generic drugs at the generic co-pay. While
Attachment 1
Page 3 of 3
~~
the Pool investigated the cost of recreating this program, we decided that our money was
better spent in other ways. BCBS's program is due to expire this December.
• Blue Points -The Blue Points exercise and "get free stuff 'program does not currently exist
with the County Health Plan, although we will be rolling out the County Lifestyles program
in the 2007, which will be more geared to our Counties and their wellness initiatives.
Retail Dispensing Quantities - At retail, your prescription drug benefit is available for up to
an initia130-day supply. According to BCBS they allowed some maintenance drugs to be
filled more often and in some cases for up to a 90 day supply. The NCACC will allow up to
a 90-day supply, but only through our Caremark Mail Order program. You are limited to a
maximum of 30 days at a time at retail.
Vision - Your ID card does not have vision listed on it as the plan includes vision for all
members. It also does not list your pharmacy co-pays, so that the pharmacist would not
confuse CIGNA with Caremark and send a drug claim to CIGNA.
• .Participating Provider Network Differences -Aside from the physician disruption between
CIGNA and BCBSNC, which both CIGNA and CAPE are working to eliminate, there are
other areas where a new or different network for health care services will be applicable with
the County Health Plan. See examples below:
Dialysis Centers -BCBS has and exclusive arrangement with the corporate dialysis centers
called BMA. CIGNA uses several different facilities and has contracts with Gambaro and
Dialysis Care
CIGNA Behavioral Healthcare - CBH provides the mental health benefits for the program,
whereas BCBSNC used the Magellan Behavioral Health network.
Durable Medical Equipment -CIGNA uses several different local facilities and has contracts
with APRIA Healthcare and several others.
In-network optical centers - In order to receive discounts for eye glasses and contact lenses,
these items must be provided by a "Health Rewards" network provider. CIGNA uses several
different opticians and has contracts with Pearle, Target, Sears, and several others.
While it was our intention to make this program as close to the former program as possible, we
were not able to replicate everything. However, we did strive to include some very important
program enhancements, while making sure your plan designs were the same. Financially, we are
striving to spend your healthcare dollars on the items that make the most sense and provide the
best services.
Page 1 of 2
~I ~ i~~1 z~~icw~ ~i
Tyrone Jackson ~ ~
From: Tyrone Jackson
Sent: Thursday, September 21, 2006 4:25 PM
To:. Everyone
Cc: 'Michelle Love'
Subject: From The HR Director -Vision Benefits
Team:
Your representatives on the Employee Consortium and your Management Team have raised the
questions that you presented to them concerning your vision benefits under the NCACC County Health
Plan and CIGNA. Your Benefits Manager, Michael Edmonds and I have met with representatives from the
NCACC and CIGNA to address your concerns. Michelle Love from the NCACC has been attentive to all
the issues that we have presented concerning the transition from BCBSNC to CIGNA and has provided
the below information in regards to your vision benefits.
We are diligently working in partnership with the NCACC and CIGNA to resolve any issues you may
encounter during this transition period. It is important that you first call CIGNA customer service at 1-
866-622-2288 with questions concerning your health care benefits under CIGNA. Trained personnel are in
place to assist you and your call will enable CIGNA to .track the types of customer inquiries received and
the actions taken to address them. 1 also encourage you to log on to "myCIGNA.com" for valuable .
information concerning your benefits under CIGNA.
If for any reason your concerns are not addressed by contacting CIGNA customer service then call
Michael Edmonds at 245-2558 or Gwen Capers at 245-2550, and yes feel free to contact me at 245-2552.
Have a great day!
Tyrone
..~. .-
(~ f~. T Ei ~ ~~ It. C t, g: LET A
~c~~a}ti't t+o~ o~ C+~ ~ Cc~~~tts~i~~lrt~
County Health Plan Vision Benefits Explanation
Vision Benefits
The NCACC County Health Plan and CIGNA want to provide you with information about your vision benefit and
how your benefits have been enhanced. Your plan covers one routine vision exam per contract policy year. Under
the County Health Plan, this benefit is covered at the same cost to you as it was when BCBSNC served as the
County Health Plan's claims administrator. (If your medical plan also includes "lens and frames" coverage, this
benefit mirrors what you had with BCBSNC with a maximum annual dollax for prescribed eyeglasses, lens and
frames. Please refer to your Employee Benefit Summary.) Unlike BCBSNC, which required members to utilize
providers in their network, the County Health Plan does not restrict you to in-network providers. We made this
improvement for. two important reasons:
I) . Some members did not use the vision benefit because there was not an in-network ophthalmologist or
optometrist within a reasonable distance from their home. In order to make it easier on all employees to
use their vision benefit, we decided not to limit the plan to in-network providers.
2) Covering the routine eye exams at the same cost to you at ANY provider gives you more choices.
9/27/2006
Page 2 of 2
ad
Healthy Rewards
For more information on the vision discount program through CIGNA's Healthy Rewards program, please call
CIGNA member services at 1-566-622-2288, or you can log onto www.lnyCIGNA.com. The CIGNA Healthy
Rewards Discount program includes discounts on lens, frames ,and non-disposable contacts. Once you have
registered and signed in, click on the Health Resources/Web MD link at the top of the page. Near the bottom of
the next webpage is the information on Healthy Reward Discount programs. Click on the drop down box and
select Vision and Hearing Care to see the discounts and search for Healthy Rewards discount vision providers.
The. discount program is very simple. All you have to do is show your CIGNA ID card and ask for the Healthy
Rewards discount. There is no claim to be filed by you or the provider. Your ID card is your "savings" card at
these Healthy Rewards providers. Remember, just because a provider offers a substantial discount on hardware,
that doesn't mean it is the best deal. When in doubt, ask your chosen provider about discounts available to you as
a patient. The discounts offered through Healthy Rewards are different than the cost of the eye exam benefit.
Determining benefits: You or your provider can call CIGNA at 1-866-622-2288 to confirm the routine vision
benefit. Once the provider verifies this information, they usually collect only the amount of the routine vision
deductible. However, if they ask you to pay the full amount, please file the claim with CIGNA to be reimbursed
for the claim minus the deductible amount.
In-network providers: If your provider is part of CIGNA's Open Access Plus network, they are required to file
the claim on your behalf. You will get an Explanation of Benefits (EOB) showing the amount of the bill, what is
paid and what is due by you: What is due by you should be the same as the routine vision deductible on your
employee benefit summary. After you receive the EOB, if you have paid more to this CIGNA provider (i.e. the
specialist copay amount) than the routine vision deductible, call the provider to be reimbursed the difference.
Out-of-network providers: If your provider is not part of CIGNA'S Open Access Plus network, they will most
likely make you pay the bill in full. You will then submit a claim to CIGNA to get reimbursed for the amount that
is more than the routine vision deductible. CIGNA claim forms are available in the Administrative Manual
provided to your Human Resources department or on www.mvCIGNA.com.
Specialists: If you choose to go to an ophthalmologist or optometrist that is listed under specialists in the CIGNA
Open Access Plus Only online or paper directory, they may charge the specialist copay listed on your ID card.
9/27/2006
Attachment 6
al
DRAFT
2007 Monthly Health Insurance Rates
Open Access Plus In-Network Co-Pay Plan (HMO)
Total Cost Paid by the County Paid by the Employee
Old New Old New Old New
Employee Only $398.24 $405.64 $398.24 $405.64 $0.00 $0.00
Employee/Child(dren) $768.62 $782.90 $590.84 $601.82 $177.78 $181.08
Employee/Spouse $839.92 $855.52 $627.91 $639.58 $212.01 $215.94
EmployeelFamily $1,194.72 $1,216.92 $812.41 $827.51 $382.31 $389.41
Open .Access Plus Co-Pay Plan (PPO)
Total Cost Paid by the County Paid by the Employee
Old New Old New Old New
Employee Only $467.16 $475.84 $467.16 $475.84 $0.00 $0.00
Employee/Child(dren) $901.56 $918.30 $590.84 $601.82 $310.32 $31.6.48
Employee/Spouse $985.62 $1,003.94 $627.91 $639.58 $357.71 $364:36.
Employee/Family $1,401.42 $1,427.46 $812.41 $827.51 $589.01 $599.95
Note: Rates are based upon a dependent subsidy of 52 percent calculated on the Open Access Plus In-Network Co-
Pay Plan with the same dollar amount then applied to the Open Access Plus Co-Pay Plan.
Attachment 7
as
2006-07 Health Insurance Cost By Coverage Type
Cost Employee Dependent Total Annual 06-07
Only Subsidy Increase Increase
Present $ 3,717,323 $ 1,009,561 $ 4,726,884
With 1.9% Increase $ 3,787,952 $ 1,028,773 $ 4,816,725 $ 89,841 $ 52,407
MHE 9/28/2006
Hith Cost Increase by Coverage Type (09-27-06) (2)