On roll call, the following members were present: Councilmen Cooper, Stewart, Hightower, Serio, Spigener, Green and Burrell. 7. Absent: None.
The Meeting was called pursuant to the following Public Notice:
"PUBLIC NOTICE
PUBLIC NOTICE IS HEREBY GIVEN that the Shreveport City Council will meet in
special session on Wednesday, November 4, 1998, at 4:00 p.m. in the Council Chambers of
City Hall.
The purpose of the meeting is to consider and act on any and all matters related to health
care benefits, including but not limited to reinstatement of authorization to execute
agreements with health care benefit providers and to consider and act on plan design
changes.
No other business will be transacted.
James Edward Green,
Chairman
November 3, 1998"
Chairman Green: The purpose of the meeting is to consider and act on any and all matters
related to health care benefits, including but not limited to reinstatement of authorization
to execute agreements with health care benefit providers and to consider and act on plan
design changes.
The Deputy Clerk read the resolution by title: Resolution No. 224 of 1998: A resolution
reinstating the authority of the Mayor to execute an agreement for the purpose of
providing medical benefits for city employees after December 31, 1998, approving the
change in plan design and otherwise providing with respect thereto.
Councilman Serio: We have worked on this project/program for the last five months and over that time period we have come to, a, I think a very good program for the city of Shreveport. We have spent numerous hours with the hospitals, with the insurance carriers trying to find a program for the city employees to offer all of the hospitals as well as many of the doctors as possibly. Realizing that medical industry is one that is changing on the daily basis, this is not something that is very stagnant, it is a industry that is in constant change, there is a lot of government deregulations that come into play and there is also a lot of financial issues that come in, on a daily basis.
The program that we have put together for the employees have taken a lot of time and it has been a program where we have tried to be favorable to all of the hospitals concerned in the city of Shreveport. We are taking and trying to bring Schumpert, Willis-Knighton, as well as Highland Hospital to the forefront so that the city employees have all of the hospitals available to them, as well as many of the doctors as possible. During this, during the course of this, we have had several issues that have come up and several situations occurring which we have almost felt like we were not going to have all of the hospitals on the program. And I will say this, that it is the intention by the City to give the city employees the best that we can. And if we do this for one year, exactly like we've got it organized at this time, it is very possible that we will have a plan design change by next year. We've discussed this with the hospitals as well because we want to get the best price for you. We also want to have the best to offer, not in price, but in care and that's the key, in the care. At this point, the proposals is out so that we will have Highland Hospital, Schumpert, as well as Willis-Knighton available to everyone. If there is a contract breaker out here right now, to break this program up for the city employees, I will say this: I will ask that the Council accept the proposal as it is written, that we allow for the three hospitals and that if, the carriers and with the agreements that we have reached over the last several days, are not acceptable to all of the hospitals, then I would suggest that they come back and get their contracts together or whatever, and get their numbers together, because we are going to move forward with you or without you. We want the employees to have the best care and if the local hospitals want to participate, that's what we want. If they do not want to participate, then figure your numbers, and come back to us later on. We are going to move forward on the plan, we are not going to take a deal breaker.
At this point, we have a very good proposal out. I'm expecting to move forward on this and my main concern is for the city employees, and that is who, that is who we are working for, the city employees, and they expect to put up a contract out here that will give them the best care for this year and believe me that, next year, when this comes up again you will see a little bit different program and I think you are going to see a little bit different organization.
The only issue, I think, that is, the only issue in this particular piece of legislation that probably needs to be discussed by the Council, because in this we have the three-tier / five-tier program. And we've discussed the three tier and we've discussed the five tier and that is probably the only issue that needs to be discussed. But I'll give the program back to you Mr. Chairman and suggest that we move forward with the resolution to accept the proposal as is.
Councilman Hightower: The initial reason that we brought back for further discussion this proposal that the Health Care Trust Fund Board had put forth and I think Mr. Pistillo, if he came down---James, if you don't mind coming forward, I'd like to ask you a couple of questions. The reason we brought this issue up again and asked the Mayor not to sign the contract was, and it is still my understanding after having talked to you several minutes ago, that we still don't definitely have a deal with Schumpert and we still don't definitely have a deal with Highland Clinic which encompasses most of the Highland Hospital doctors. Is that still the case, is that correct? Mr. Pistillo: As we understand it right now, that's the case. We are trying to negotiate, continue negotiating from yesterday with the inclusion of Schumpert into the EPO network, which is the point of service side of this dual offer to join the Willis-Knighton and Highland Hospital in the EPO network. There seems to be another piece of the puzzle that has been added as of late yesterday by Schumpert, requesting---I shouldn't say really, requesting, I guess the better word would be making it part of the offering that Bossier has to be involved in this EPO also. And now, that has been a change of thinking with respect to Schumpert with this issue. I think that Schumpert is present and perhaps you can address their position at this time.
Councilman Hightower: And you also do not have the Highland Clinic signed on at this particular time either, right? Mr. Pistillo: Highland Clinic, they have our contract in their possession. They are waiting for a decision by the City as to their movement to sign that contract to be included in the network also. Councilman Hightower: But you do not have a signed contract? Mr. Pistillo: Do not have a signed contract, as I speak at this moment. They are waiting for the decision.
Councilman Hightower: The other thing that I would ask you is, that is there an agent of record or anyone that is being paid a commission to administer the program? Mr. Pistillo: Neither Blue Cross or any agent is being paid a commission as an agent of record letter; no sir.
Councilman Hightower: And then I guess my next question to you and really what I'd like to see is a commitment and I think that's what got the whole process started was that we, and I'll go back to what Phil said, you know our objective is to be sure that we are providing the best package that we can for the employees for the City of Shreveport. We questioned whether that has come about and I still do, given the fact that we don't have everybody participating and obviously we are going to have a bunch of people going out to find new primary doctors if you are not able to solidify a contract with Schumpert and Highland. Mr. Pistillo: That is correct, but understand the development of the network is an on-going event. It doesn't just stop. Councilman Hightower: I understand and that's where I'm going. I want to be sure that the employees understand that we have a commitment from Blue Cross to continue to work to enroll as many of the primary care doctors out there so that we don't have people in a constant state of flux over the next year to try to enroll and participate in the employees insurance and benefit package knowing that we may have a change coming in a year down the road, which certainly Blue Cross is aware of and all of the providers were aware of along with the hospitals. So, I'd just, like I said, like a commitment to you and from the city employees that you are going to continue to work to bring as many as doctors and hospitals into the package as you can over the next several months, certainly over the next several days because we are going to start enrollment, it is my understanding, next week or something? Councilman Serio: We start enrollment Friday, this Friday, sure do. Mr. Pistillo: It's Blue Cross' commitment to the City of Shreveport as well as all of our clients to continue to enrich the programs in the networks that we deliver for service purposes.
Councilman Hightower: And for the record and I may be asking you something you can't answer right now, what would be the most, given the situation we are in now, that any employees rate would go up per month, do you know that. Mr. Pistillo: It depends on what the choice of the classification would be at the time of enrollment. If you had a person that was covering them self only, and went to covering themselves and a spouse or themselves and family---Councilman Hightower: Assuming they stay in the same category. Mr. Pistillo: There would be a change in the rate, perhaps Ms. Copp could give you an exact classification list. Ms. Washington: I have done an analysis for each plan, if you want: Advantage, HealthPlus or Foundation, and if you went to POS plan, what those effects are. It depends on which category you are. If you go from Advantage to Blue Cross, I think you have the highest increase. There is a 10% increase if you go from Foundation to Blue Cross. And if you are going from HealthPlus to Blue Cross, you have the least amount of changes. There are some decreases even.
Councilman Hightower: Do you have the figures on what the highest---what the worse case scenario an employee would face. Mr. Washington: If you are on HealthPlus, the worse increase is $30; that's the employee's portion of that increase. If you are in Foundation in '98---Councilman Hightower: Does this also include Retirees? Ms. Washington: This includes Retirees, as a matter of fact that was the retiree rate, which is the highest---$23.00 is the highest. If you are presently on Foundation. If you are on Advantage, $64. Councilman Hightower: Per month? Ms. Washington: Per month. Councilman Burrell: That's total cost? Ms. Washington: No, that's employee share. Councilman Burrell: What's the total cost? Ms. Washington: Total cost is $160.00 for the program. Councilman Hightower: So the most any employee would be out of, if that's the worst case scenario, would be $64.00 a month? Ms. Washington: Yes, and that for a retiree. Councilman Hightower: And that's on the five tier system that. . . Ms. Washington: Yes, sir.
Councilman Hightower: What is the worst case scenario if we are on the three tier system? Ms. Washington: I didn't run those on a three tier system, I perhaps can get that for you in a few minutes. Ms. Copp: On the three tier system, the worst case scenario would be for a Widow with children and that would be a $126.83 a month. Ms. Washington: Total? Ms. Copp: No, that's not Total, that's the widow--well the widow pays a hundred percent of her premium, so it would $126.83 a month.
Councilman Burrell: Is that increase or. . . Ms. Copp: That's the total increase. Councilman Burrell: From where they are now? Ms. Copp: And that's a widow with children. Councilman Burrell: It was stated earlier that a doctor could be added under you all's plan, on an on-going basis, I think it was stated, that. Can you give any reason or Blue Cross would refuse any doctor from being added there, say a particular doctor, a employee has a certain doctor, any reason why a doctor can not be added under this analysis on the. . . . ?
Councilman Spigener: I have a question and this deals with the five tier and the three tier. It is my understanding that the Health Care Trust Board voted for the three tier systems, and obviously this Board has spent many months studying this issue. They vote for this, I understand, by a fairly large majority and those representing the city employees, voted for this. Tell me why we have this change at this point. Councilman Serio: We were trying to bring a certain amount of parity back into the system with the Retirees, with all of the employees, as well as what the city is sharing in the cost of the program. I will tell you what, Mr. Coty is here and Mr. Coty is the person who has run most of the numbers and can give you the explanation better than anybody because of his expertise with the program and if that'd be okay with the Council, I would suggest that Mr. Coty come up and explain that in detail. Councilman Spigener: That'd be fine.
Councilman Serio: We are talking about the different in the three tier and five tier, the change in the, the rational to changing to the three tier system financially as well as for the city and city employees and why it would make sense to go to the three tier system. And I know that you have been diligent in running the numbers and they have crunched so many of the numbers together for this, that you probably can help us out better than anybody on this one. Mr. Coty: I was in the back of the room, so your question is, what was the----Councilman Serio: In the change from the three-tier to the five tier to the three tier system, rational for the changing to the three tier system expense wise, what it means to the employees in each category and why moving to that system makes sense for the city as well as for the city employees in relation also to their plans that other companies have because we had quite a few tiers in the system that we currently have. Mr. Coty: If we go to the three tier system from the multi tier system that is viewed as the highest, there will be some employees who will pay more, that according to the spreadsheet that we've shown to the Board on several occasions, there is about 1240 employees; there will be some employees that will pay less, that will be approximately 1600. The amounts of more or less varies significantly, so that is something that we have to consider when we are talking about five tier to three tier. The other issue was some employees were, according to research done by the Benefits Office, were in tiers that were not appropriate to their actual family status, and that's what going from a five tier to a three tier system would some of that, with projected savings to that was some $110,000 dollars as I recall, per year to the plan.
Councilman Spigener: Will there be any monitoring by, whomever, I guess the Health Care Trust Board, that employees are in the right tier, paying the right amount of money. It seems to me that that would pretty important as to the amounts that our health care is costing, people paying the right amount that they should pay? Mr. Cody: The Board had discussed that and had discussed some changes that they had recommended be made to the actual plan that would minimize the possibility of that happening in the future.
Councilman Spigener: I guess, I still don't have my question answered. That our Health Care Board decided, representing employees as well as Administration that the three tier system is most effective, or, maybe I say should, is more level across the board as far as differences in amounts and now we've gotten to the five tier; I guess that what's I need explained to me. Mr. Coty: There were some employees, as I said, about 1600 who will pay less. The amounts that they would pay less would vary from $1.91 up to $83 dollars. There are some employees who would pay more that would be from, vary from $5.29 up to $83 dollar a month, if I'm reading this correctly. The Retirees would benefit significantly from the three tier system that was profounded by Blue Cross. They would have a significant, most of them, would have a significantly, well, they will have a lower rate, I'll say that, I'll use subjective words; most of them would have lower rates, monthly rate, the Retirees.
Councilman Burrell: Is the ones who will be paying more, will this group be the group that can least afford to pay more or vice versa. And if so, will there be any reason for us to look into and investigate and see? Mr. Cody: I could only speculate about. If you are saying that, I mean you have to assume that one tier of employees or employees that would be in one or the other tier would have less money than others. I think these tiers spread across the whole spectrum of our salary ranges, I really don't know, I can only speculate. But if you assume that people that are in the tiers that they would pay $80.00 which would be the Employee and Children or Employee and Child, if you would assume that they have less money, yes, then I've to say yes, but that's. . . .
Councilman Burrell: Well, I'm still back to the concerns that Pat had that going from five to three or three to five, what is the problem? Somebody is complaining to the extent that we should be going from one to the other an if so, there has got to be a basis? Mr. Cody: I think that the employees who are going to pay more money, are the ones that are not going to like going from the five to three tier. Those that are going to pay less money, are the ones who are going to like it. And the Retirees who are going to pay less money are going to be in favor of it. In other words, the ones that are on the side that'll pay less money are in favor, the ones that will pay money, will probably not be in favor.
Councilman Burrell: I'm wondering who is influencing it the most, we are talking about one or the other. Whose influencing the decision to go from five to three, also, because we have two options, here? Mr. Cody: Those that oppose it the most? Councilman Burrell: I would assume because what I'm hearing is that, based on the Board then the employees are representing undoubtedly, the persons who are on that Board do they represent the majority of the employees who are going to be affected or they are not and if you are going from a five to a three, then it seem like that should be worked out within the employee body more so than some people saying that this is the way we are going to go. Mr. Cody: All three of the employee representatives of the Board voted for the three tier system, the change from the five to the three.
Mayor Williams: Let me, for the sake of the record, make a couple of comments in regard to the three and the five tier system and Blue Cross/Blue Shield versus the three plans we originally had. As you know, three years ago, almost four years ago, the Health Care Trust Fund Board looked at the issue of health care, recommended to the Council, that they adopt two plans, one Foundation, the other one Health Plus. The Council added the Schumpert system plan to the system and at that time the Council, then also passed a resolution that the City would pay sixty percent (60%) of the lowest tier at that particular point. The Schumpert plan was the most expensive plan at that time, that's the reason that the Board elected not to go with Schumpert, but the Council included in the Council plan and I understand why they did that. However, what has occurred over the past three years is, is we have had a skewing of the employees going to one plan or another. As a result, and that is what we found that the rates, even though they were reduced, they were not reduced to the level that they could have been reduced and probably the best explanation for that is, is that if you look at the quotes that we received recently from Health Plus and so forth, if each one of those companies had all of the employees on one plan, including the Retirees, that would have been the way that the premium would have increased the least amount and that is the reason we are with Blue Cross at this point, or Blue Cross has been selected to be the carrier for the city.
In terms of the issue of the three tier versus the five tier, and remember you are covering the Retirees as well as the employees, on the three tier system, there will be 1711 people pay less premium than under the five tier system, and the bulk of those employees that will pay less money are retired individuals. Under the five tier system, you will have 1246 people, pay more premium. I'm sorry, under the three tier system you have 1246 pay more premium, you have 1711 people pay less premium. The bulk of those, and it ranges from---there are 207 employees will by $80.99 more, at the same time, there are 209 retirees that will pay $70.40 less. No, I'm sorry, 207 at $80.99, more. Two hundred and nine (209) would by pay $70.40 less and then the breakdown is from there on down.
But the net effect is, is that 1711 employees are retired employees, who would pay less; 1246 would pay more. Now, the rates are structured based upon the size of the family and not income. It is based on whether it is the Employee or Employee with Spouse or Employee with Spouse and Children and so forth. It is structured based on that and not who earns how much income, that is the way the premiums are structured. And so a person with a spouse, say a spouse or with children, may make $15,000 a year, pay the exact same premium as the persons that makes $75,000; so, it is difficult to answer the question from an income level, whose paying the most or the least because the rate structure, of course, is based upon the amount of coverage that the individual is taking out.
The Health Care Trust Fund looked at this issue very carefully and I would say that all three, I want to say this for the record, that all three of the employees representatives: one from the Fire Department, one from the Police Department, and one from the Water and Sewer, all unanimously supported the three tier system. And I would urge that this Council modify this resolution that is before Board to go with the three tier system based upon the recommendations of the very people that are involved most with it, that's the employees, on the Health Care Trust Fund, that voted to support the three tier system. So, I feel like that they are closest to the employees, and that's the reason that we should, as a City, vote for the three tier system versus the five.
Councilman Burrell: I've heard the argument about the three tier system, but where is the five tier system? You know, we've been given the stats on how many will pay more, how many will pay less on the three tier, but we are yet to hear anything on the five tier?
Councilman Spigener: I guess I'm having a difficult time even understanding why we are here when we have a Health Care Board elected to take care of this responsibility, to study the issue when we have not have that time and that effort, put in the effort, of studying the issue. And then as we did the last time health care came up, we threw another issue in and I think sometimes when we do things like this we just dig ourselves into a deeper hole. I do agree with part of the resolution that we need to reinstate the authority of the Mayor to execute an agreement for the purpose of providing health care because I do not want us to get to the end of the year, and have our city employees with no coverage on their health care. But I'm not sure that the change here, in the middle of the stream of the tier system, is the most beneficial to the most people who are covered by this health care.
Councilman Serio: I would like to make or two comments. I think that the main issue is to either accept or reject the resolution. But I think that with what we have seen, one of the comments that Ms. Spigener has just made and I think this is something that we need to look at, the Council needs to look at, and I think the Board needs to consider for the next couple of months. And that is the potential of making the Health Care Trust Fund Board a separate commission within the City organization, similar to the MPC to eliminate some of the problems that we've had over the couple of years, putting together contracts like this because to give them the authority, an insurance board the authority to put together a program that would have members still seating just the same as they are from the city employees as well as from the Mayor's Office, as well as from the Council Office, but I think it would be wise for use to consider to adopt a legal entity, a commission, that would then carry forward the insurance programs for the City of Shreveport. Saying that and giving that some food to think about, something to consider for the next couple of months, because once we get this contract, we are going to have to sit down and go right back putting together the next contract because it will take several months, it will probably take five or six months to get that one together as well, that, that is something that I think the Council needs to consider is the adoption of the commission to handle the insurance program to the city of Shreveport.
The resolution is, as stated, the one issue in this is the provision that would allow going back to the five tier. I would suggest that we adopt the resolution, but with the amendment that it stays at the three tier system. With that as a motion to adopt the resolution as is, but with the provision that we go to three tier system and not to the five. I think we'd have the best of the city employees at heart.
Councilman Green: Before we adopt the, I wanted to get all of the discussion out before we adopt it. But on the Board that you were talking about appointing, since I won't have anything to do for a while, I'd like to work on it.
Councilman Burrell: I still have one other concern---Councilman Serio: Can we have some discussion. Councilman Green: No, I didn't carry the motion. Councilman Burrell: I still have one other concern, this issue is so important, but yet, I did understand that we haven't had an actuarial study on this and how it is going to affect the employees in terms of the five tier versus the three tier and that is that component that is still left out there. And given the fact that it is a very, very important issue, I'm little concerned that we haven't done the proper homework on this issue to get expert advice on it in terms of an actuarial study to make that decision. Councilman Spigener: Mr. Burrell, this has been studied by the Health Care Trust Board since May, as I understand it. Councilman Burrell: Are they the appropriate body, have they carried out the actual study, are you saying that that has taken place? Councilman Spigener: I would think that anyone that we delegate authority to, we should have the confidence and the trust in them that we give them the authority to do that. Councilman Burrell: I don't have a problem with that, I'm not questioning the Board, Ms. Spigener, not at all, all I'm saying is that on that Board, do we have the expertise there that have done this study that I'm asking about? I don't know a heck-of-a lot about insurance, but I know that in order to make certain determinations, professionals in those areas, should somehow bring to us the information that is needed in order to make a decision on something that's so vital to our employees. And if that has not been done, all I'm asking is, is for the reason why or is it necessary at this point?
Councilman Green: Thank you for our discussion.
Read by title and as read motion by Councilman Serio seconded by Councilman Spigener
for passage (with the provision that we are using the three tier system rather than five as is
stated in the. . . . )
Councilman Spigener: That's is how I understand it. Councilman Green: Can we do that, can we do what they are saying, just by. . . . Ms. Glass: I have written an amendment, if you would rather do it in that form of adopting the amendment first and then the resolution, that would be your normal procedure.
Councilman Burrell: Clarification. This three tier in the amendment, or is this really
(balance inaudible)? Councilman Green: Are we are in order, Lawyer, to do what Mr.
Serio, has requested? Ms. Glass; The Clerk now has a copy of the amendment that would
change to the three tier system if that is what the Council desires, if you want her to read
that.
The Deputy Clerk read the following amendment:
Amendment No. 1:
Delete Paragraph 3, and substitute the following:
The change in plan design from a five tier system to a three tier system is hereby
approved.
Motion by Councilman Serio, seconded by Councilman Spigener for adoption of
Amendment No. 1. Motion approved by the following vote: Ayes: Councilmen Cooper,
Stewart, Hightower, Serio, Spigener, Green and Burrell. 7. Nays: None.
Motion by Councilman Serio, seconded by Councilman Burrell for adoption of the resolution as amended. Motion approved by the following vote: Ayes: Councilmen Cooper, Stewart, Hightower, Serio, Spigener, Green and Burrell. 7. Nays: None.
RESOLUTION NO. 224 OF 1998
RESOLUTION REINSTATING THE AUTHORITY OF THE MAYOR TO EXECUTE
AN AGREEMENT FOR THE PURPOSE OF PROVIDING MEDICAL BENEFITS FOR
CITY EMPLOYEES AFTER DECEMBER 31, 1998, APPROVING THE CHANGE IN
PLAN DESIGN, AND OTHERWISE PROVIDING WITH RESPECT THERETO.
BE IT RESOLVED by the City Council of the City of Shreveport in due, legal and regular
session convened:
The in the plan design to contract with one health care benefits provider rather than
three is hereby approved.
The authority of the Mayor to execute an agreement for the purpose of providing
medical benefits for city employees after December 31, 1998 is reinstated, subject to
the following conditions:
a. The contract shall be with Blue Cross Blue Shield of Louisiana.
The contract shall contain a provision requiring Blue Cross to contract with Willis
Knighton Health System and Schumpert Health System to provide medical services
to city employees under the medical plan.
The contract shall be for a term of one year, with an option to renew for one year at
the city's discretion.
The change in plan design from a five tier system to a three tier system is hereby
approved.
BE IT FURTHER RESOLVED that if any provision of this resolution or the application thereof is held invalid, such invalidity shall not affect other provisions, items or applications of this resolution which can be given effect without the invalid provisions, items or applications and to this end the provisions of this resolution are hereby declared severable.
BE IT FURTHER RESOLVED that all resolutions or parts thereof in conflict herewith are
hereby repealed.
Councilman Green: Thank you for your time to come and also, before we go, would like to
thank you all for your health discussion.
There being no further business, the meeting adjourned at 5:05 p.m.
/s/James Edward Green, Chairman
/s/Arthur G. Thompson, Clerk of Council