K 12 Scholastic Niche - March 17, 2021 by Gallagher Benefit Services - BoardDocs
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Upper Dublin School District
Healthcare Renewal Analysis
March 17, 2021
by
Gallagher Benefit Services
Christine Brown, Area Vice President, Public Entity Niche Leader
Kristin Kotz, Area Vice President
K‐12 Scholastic Niche
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM
Healthcare Renewal Analysis Agenda I. Medical & Rx Trends II. Consortium Overview III. Renewal History IV. Summary of 2021‐22 Preliminary Renewals V. Next Steps VI. Privacy Notice & Disclaimers ©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 2
Healthcare Analysis
Medical & Rx Trends
• Over the past couple of years, Stop Loss carriers have reported high claimants exceeding $1 Million per
plan year. In addition, the quantity of high claimants are increasing year over year
o ACA Mandates
o New Costly Specialty Drugs
o New Technologies
o Rising frequency of multiple newborns
o Cancer Diagnosis are becoming more frequent and more costly
o High Cost of Transplants
o New Costly Specialty Drugs
These Rxs cost approximately $500/year to over $1 Million/year per Rx
In the past, specialty drugs were only used for the treatment of complex, chronic or rare
conditions such as cancer and hepatitis
Over the past couple of years, specialty drugs manufacturers have created new costly specialty
medications for common conditions such as cholesterol
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 3
Healthcare Analysis
Medical & Rx Trends
• In order to curb healthcare trends, many school districts in the Philadelphia 5 County area participate
in Consortiums/Trusts
• Consortiums/Trusts are beneficial to participants:
o Provides the opportunity to self fund their medical and prescription drug plans while maintaining
a fixed budget throughout the fiscal year
o Access to lower stop loss and administration fees
o Joint Labor/Management Decisions
• In general, due to COVID, it is not uncommon to see flat or very low healthcare changes to the 2021‐22
budget
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 4
Healthcare Renewal Analysis
Consortium Overview
• The district has belonged to the Bucks & Montgomery County Healthcare Consortium for several
years.
• The purpose of the Consortium is to use its collective size to negotiate deeper savings on fees,
discounts, etc.
Consortium
Number of Districts 11 School Entities
Number of Employees 5,317 Employees
Moved to Blended Experience
Claim Experience Blending
in 2018
Plan Design 4 Medical Preferred Plans
Medical Carrier Aetna
Pharmacy Benefit Manager Express Scripts
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 5
Healthcare Renewal Analysis
Consortium Overview
• The Joint Labor/Management Consortium currently has 11 participating entities
o 5317 Employees
o 14,418 Members
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 6
Healthcare Renewal Analysis
Renewal History
Renewal History vs. Trend
Plan Year 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 Avg.
UDSD Medical 15.18% 11.39% 9.89% 2.01% 7.93% 9.28%
Trend Medical 7.10% 7.60% 7.70% 7.10% 6.80% 7.26%
UDSD Rx ‐6.41% 11.00% ‐8.93% 4.77% 7.67% 1.62%
Trend Rx 8.10% 11.60% 10.30% 7.50% 7.10% 8.92%
UDSD Total 8.90% 11.29% 5.22% 2.60% 7.88% 7.18%
Trend Total 7.29% 8.34% 8.31% 7.18% 6.86% 7.60%
Combined Renewal History vs. Trend
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 Average
UDSD Total Trend Total
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 7
Healthcare Renewal Analysis
Renewal History
• The Consortium releases a First, Second and Third Look Renewal
o First Look → December
o Second Look → March
o Third and Final Look → April
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 8
Healthcare Renewal Analysis
Summary of 2021‐22 Preliminary Renewals
First Look Second Look
Released December 2020 March 2021
Experience Period March 1, 2018 ‐ February 29, 2020 January 1, 2019 ‐ December 31, 2020
Experience Weighting 30%/70% 50%/50%
COVID Margin None 5%
Provision for Adverse Deviation 0% 3%
Medical Trend 6% 6%
Rx Trend 7% 7%
Medical Renewal 5.9% 8.5%
Rx Renewal ‐16.6% ‐4.2%
Combined Renewal 0.9% 5.7%
The above represents the district specific renewal. The Consortium renewal change is 2.7%
(Medical: 4.1% Prescription Drug: ‐2.5%).
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 9Healthcare Renewal Analysis
Summary of 2021‐22 Preliminary Renewals
• The District is responsible for a total of $857,212 in Stop Loss Fees and Common Pool Allocations.
• The District received a reduction in claims (as a result of a removal of Large Claimants) in the amount
of $641,524
Fee Monthly Fee Annual Cost
Aetna Administrative Fees $38.44 $240,327
AMCA Fee $1.50 $9,378
Lockton Fee $3.50 $21,882
Wellness Contribution $3.50 $21,882
Healthcare Bluebook $1.75 $10,941
TeleDoc $0.93 $5,814
Common Pool Allocation $85.38 $533,796
Specific Stop Loss $51.73 $323,416
Total Fixed Costs $186.73 $1,167,436
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 10Healthcare Renewal Analysis
Next Steps
• Analyze and Review Third and Final Look Renewal
• New Rx Programs effective July 1, 2021
o Exclusive Specialty
Specialty prescriptions are submitted to Accredo, ESI’s specialty mail pharmacy, and are
delivered to the member’s location of choice
Members will receive telephonic clinical support from ESI’s specialty pharmacy Team
o SaveON SP
The program utilizes the copayment assistance that are available through drug manufacturers
This reduces member out of pocket costs to $0 while providing savings to the district
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 11Privacy Notice &
Disclaimers
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COMPrivacy Notice & Disclaimers
Gallagher Benefit Services, Inc. (GBS) treats your personal privacy with care and respect. Because we value our client relationships, we do not disclose a
client’s nonpublic personal financial and health information with third parties, except for the purposes of placing your insurance coverage(s), and as
otherwise permitted by law.
Applicable law requires GBS to provide our clients with a copy of our Privacy Policy which is enclosed. This policy does not apply to our efforts to market
our products and services to you, so you may receive information from us regarding products that may suit your needs.
GBS has always been mindful of our clients’ privacy. We maintain physical, electronic, and procedural safeguards that comply with federal and state
regulations to guard your nonpublic personal financial and health information and that of your employees.
Thank you for choosing Gallagher Benefit Services, Inc. We appreciate your business and value our relationship.
This Privacy Policy Disclosure outlines our information sharing practices to help you understand how we protect your privacy and that of your employees
when we collect and use information about you and your employees, and the measures we take to safeguard that information.
Information We Collect. We collect nonpublic personal financial and health information about you and your employees as required by the insurance
companies including:
• Information we receive from you and your employees on applications or questionnaires, such as occupation, current employer and social security
number;
• Information about your transactions with us, our affiliates, or previous insurers; such as your policy coverage, claim information, premiums and
payment history;
• Information we receive from consumer‐reporting agencies such as Equifax that is obtained for the purpose of ascertaining credit histories. These
reports are obtained as underwriting tools to determine bill paying habits and credit worthiness for certain individual, personal insurance products.
These reports are not subject to race, gender or income.
Information We Disclose. We do not disclose any nonpublic personal financial and health information about our clients or former clients to anyone,
except for the purposes of placing your insurance coverage(s) and as otherwise permitted by law. For example, we may disclose nonpublic personal
financial and/or health information about you and your employees to market your insurance coverage directly with insurers and providers.
Information Security. We restrict access to nonpublic personal financial and health information about you and your employees to those employees who
need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with
federal and state regulations to guard your nonpublic personal financial and health information and that of your employees.
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 13Privacy Notice & Disclaimers
Solvency While GBS does not guarantee the financial viability of any health insurance carrier or market, it is an area we recommend
that clients closely scrutinize when selecting a health insurance carrier. There are a number of rating agencies that can be
referred to including, A.M. Best, Fitch, Moody’s, Standard & Poor’s, and Weiss Ratings (TheStreet.com). Generally, agencies
that provide ratings of Health Insurers, including traditional insurance companies and other managed care organizations,
reflect their opinion based on a comprehensive quantitative and qualitative evaluation of a company's financial strength,
operating performance and market profile. However, these ratings are not a warranty of an insurer's current or future
ability to meet its contractual obligations.
Coverage IMPORTANT: This proposal [analysis, report, etc.] is an outline of the coverages proposed by the carrier(s), based on
information provided by your company. It does not include all of the terms, coverages, exclusions, limitations, and
conditions of the actual contract language. The policies and contracts themselves must be read for those details. Policy
forms for your reference will be made available upon request.
Renewal This analysis is for illustrative purposes only, and is not a guarantee of future expenses, claims costs, managed care savings,
etc. There are many variables that can affect future health care costs including utilization patterns, catastrophic claims,
changes in plan design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific information or
further details in this regard.
Legal The intent of this analysis is to provide you with general information regarding the status of, and/or potential concerns
related to, your current employee benefits environment. It does not necessarily fully address all of your specific issues. It
should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be
addressed by your general counsel or an attorney who specializes in this practice area.
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 14Thank you!
Christine Brown Kristin Kotz, GBA
Area Vice President, Public Entity Niche Leader Area Vice President
100 Matsonford Road 100 Matsonford Road
3 Radnor Corporate Center, Suite 100 3 Radnor Corporate Center, Suite 100
Radnor, PA 19087 Radnor, PA 19087
610.230.2096 610.230.0890
Christine_Brown@ajg.com Kristin_Kotz@ajg.com
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM 15You can also read
