BENEFITS ADVISORY COMMITTEE

MINUTES OF MEETING

SEPTEMBER 30, 2004

[In these minutes: Open Enrollment Update, UPlan Annual Report Update, RFP Base Plan Design Issues]

[These minutes reflect discussion and debate at a meeting of a committee of the University Senate or Twin Cities Assembly; none of the comments, conclusions, or actions reported in these minutes represent the view of, nor are they binding on the Senate or Assembly, the Administration, or the Board of Regents.]

PRESENT: Gavin Watt (chair), Linda Aaker, William Roberts, Karen Wolterstorff, Rhonda Jennen for Rita McCue, Don Cavalier, Michael Marotteck, Carla Volkman-Lien, Carol Carrier, George Green, Carl Anderson, Susan Brorson, Don Harriss, Fred Morrison, Richard McGehee, Peh Ng, Theodor Litman, Rodney Loper, Dann Chapman

REGRETS: Pam Wilson, Peter Benner, Jody Ebert, Joseph Jameson,

ABSENT: Ronald Enger, Frank Cerra, Keith Dunder

GUESTS: Watson Wyatt representatives Scott Keyes and Tamra Lair

OTHERS: Linda Blake, Ted Butler, Karen Chapin, Amos Deinard, Jennifer Durocher, Shirley Kuehn, Gladys McKenzie, Kathy Pouliot, Ruth Rounds, Jackie Singer, Phyllis Walker

I). Gavin Watt called the meeting to order.

II). Employee Benefitsπ Announcements:

• Employees will be receiving their open enrollment materials the week of October 8 – October 13, 2004 in campus mail. Beginning Monday, October 4^th employees will be able to go on-line and view their current benefit elections. Then, once open enrollment begins on October 16^th, employees will be able to make changes to their current elections. Employees need to complete an on-line enrollment form if they are making one or more of the following changes to their benefit elections:
• Changing or waiving medical coverage
• Adding or canceling family medical coverage
• Changing tiers (for PatientChoice members whose cost group is changing)
• Setting up a Flexible Spending Account for 2005
• Electing or increasing long-term disability coverage (if eligible)
• The UPlan Annual Report will be presented to the BAC once RFP plan design discussions conclude. The Executive Summary of this report will be on the Employee Benefitπs website soon. Once the Executive Summary is on the web, Employee Benefits will notify BAC members via email and provide them with the link to this report.

III). Members discussed plan design issues for the base plan as it relates to how the RFP should be drafted. Items discussed included:

• Should the base plan use a co-insurance model or a co-pay model? After much discussion, members concluded that the base plan should use a co-pay model. While it was recognized that many employers are choosing the co-insurance model over the co-pay model, providers are still working the kinks out of this system in terms of collecting co-pays, etc.
• Assuming the current co-pay system is retained in the base plan, should there be any adjustments to any of the co-pay levels, particularly for urgent care and emergency room visits? Members thoughtfully debated this question. Members did not believe there should be any changes to the current office co-pays, but before making a recommendation either way regarding urgent care and emergency room co-pays, members requested they receive more information on what percentage of UPlan urgent care and emergency room visits were made out of convenience rather than necessity. It was noted that nationally, on average, 30% of urgent care/emergency room visits are not medically necessary.
• In addition to the regular base plan, should the UPlan offer a less comprehensive (≥leaner≤) base plan at a lower employer premium? Members concluded that while such an option may have its pluses, it also increases the risk for UPlan participants to incur significant out of pocket expenses before reaching the out-of-pocket maximum; therefore, members rejected this idea.
• Should plan participants be incented to use more efficient, less expensive hospitals? Hospitals are a significant cost driver for the UPlan. This discussion was postponed to a later time.
• Should the UPlan eliminate the outer metro zone and reduce its zones from 4 to 3? UPlan participants currently in the outer metro zone would be transferred to the greater metro zone. All UPlan participants would have a base plan option, however, it may not be with their current vendor. Overall, members agreed the Universityπs zone structure could be modified and it was worth having the RFP be bid accordingly.
• Should the UPlan offer multiple base plans, each with the same plan design, but different networks and possibly different premiums? After much discussion, members recommended bidding the RFP so it would offer multiple base plans.
• Should the UPlan specify a host of criteria for vendors to respond to in the RFP in an attempt to ensure quality and control costs? If so, what criteria should be used to select the base plan – quality, cost, both? Quality criteria, which were discussed included: eValue8 standards, use of electronic medical records, low total cost of care on a risk adjusted basis and/or low cost of care on a risk adjusted basis by condition. Cost criteria, which were discussed included: efficient administrative cost, low reinsurance cost, efficient cost of care measures, high discounts where achievable, ability to trade less provider access for a reduced cost. Members overwhelmingly agreed that networks should be selected based on their quality/performance as well as their price, and this could be achieved by carefully monitoring networks and carriers adherence to criteria set forth by the University.

IV). Hearing no further business, Gavin Watt adjourned the meeting.

Renee Dempsey

University Senate