City of Knoxville Benefits Presentation PRIMA 2012

1. Personal Responsibility in a
Health and Wellness Program
Gary Eastes, Risk/Benefits Manager, City
of Knoxville
Christine Stickler, Benefits Coordinator,
City of Knoxville

2. New Role of a Health Plan
• A vision of health “needs to be perceived
as a priority business asset and has to be
recognized as having a big and important
impact on the ultimate success of the
enterprise. It has to be viewed as critical
to the strategy of the organization.”
Dr. Catherine Baase
Global Director of Health
Dow Chemical Company

3. Health Program History
• From 1970’s till 2004 the City operated a
traditional onsite medical clinic, poorly
managed
• Many employees relied on the clinic as
their only medical care
• From 1990’s till 2006 the City was in State
of Tennessee medical insurance pool
• In the 5 years prior to 2006, premiums had
increased 141%

4. Employee and Member
Demographics
• City claims per member historically have been
above average of Tennessee employers which
forced City out of self-funding in 1990s (28.3%
above BCBST norm in 2007)
• Prevalence of chronic disease significantly
higher than norms (40% above HC21norms) .
• Average employee age was 4 years older than
the average Tennessee employer
• Very heavily weighted with males over 40 in high
risk occupations

5. Chronological Steps
• 2004 Closed the on-site clinic and contracted for
uniformed annual exams and full time nurse to
provide on-site screenings with 3 on-site offices
• 2005 Began cash incentives for exercise and
tobacco-free, in fall began Disease Mgmt
Incentives for 5 diseases with logs
• 2006 Left State plan, added $1000 deductible,
100% preventive coverage, lower-salary HRA
contributions, included spouses in incentives

6. Chronological Steps
• 2007 Reopened The Health, Education and
Wellness Center, fired DM vendor/made local
provider DM vendor, added obesity and
hyperlipids to DM, moved incentives to HRA,
incentives for participation and A1C in contract,
began combining data from insurance and
biometrics
• 2008 Added Oxy preauth, step and OTC
programs, prenatal incentive

7. Chronological Steps
• 2009 Added hypertension to DM, reduced
DM script copays, added 2nd disease coach
• 2010 Expanded Oxy preauth to all
schedule 2, increased $300 deductible to
$500, made acute care at The Center
available to retirees and dependents

8. The Leap
• Simplicity was a large contributing factor
for change
– Employee – easier to understand
– Employer – easier to administer

9. The Leap
Logically, “paying people cash incentives to
lose weight, quit smoking, lower their
blood pressure or engage in other healthy
behaviors should work. But it doesn’t. Or
at least, not in the long run.”
Linda K. Riddell
Health Economy, LLC

10. The Leap
• For 2011, we combined all of the carrots in
creating the My Health Program
• The difference in premium between My
Health and Medical Only created the stick
to engage more of the population to do
more.
• While carrots are much better received,
research studies have shown that the risk
of losing is a far greater motivator than the
opportunity to win.

11. Medical Plan Offerings
My Health
 Medical and prescription drug coverage
 Built-in rewards if you commit to health-conscious
lifestyle
Medical Only
 Medical and prescription drug coverage only
 Higher employee contributions (more out of your
paycheck)
 No built-in rewards

12. Medical Plan with Cityfunded Wellness Rewards

13. Why My Health?
It’s working!
73% of employees enrolled
13

14. Why My Health?
“I’ve lost 40 pounds!”
-Kathy Fox, Retiree

15. Why My Health?
“My Health saves me
money on my
premiums every
month. And I get
money that I can
use for doctor bills.”
-Philip Reyes,
Maintenance
Technician

16. Why My Health?
“The diabetes classes
probably saved my
life.”
-Cliff Thomas, Public
Service Department

17. My Health rewards
• Lower medical premiums
• City-funded HRA dollars, up to $918/year
• Free or reduced prescription copays
– For certain chronic condition medications
• Free testing supplies
– For people with chronic conditions
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18. My Health rewards
• Lower medical premiums than Medical
Only
– $256 to $891/year less, depending on the
deductible and network you choose
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19. My Health rewards
HRA dollars
If you:
You can earn:
Enroll in My Health
$32/month or $384/year (employee only)
$64/month or $768/year (employee +
one or more dependents)
Additionally, if you:
Earn less than $30,805/year
$150/year
Earn $30,805 - $41,458/year
$75/year
Or your covered dependent
participates in prenatal program
$200 upon delivery of baby
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20. My Health rewards
HRA dollars
If you:
You can earn:
Enroll in My Health
$32/month or $384/year (employee only)
$64/month or $768/year (employee + one
or more dependents)
Additionally, if you:
Earn less than $30,805/year
$150/year
Earn $30,805 - $41,458/year
$75/year
Or your covered dependent
participates in prenatal program
$200 upon delivery of baby
20

21. My Health rewards
HRA dollars
If you:
You can earn:
Enroll in My Health
$32/month or $384/year (employee only)
$64/month or $768/year (employee + one
or more dependents)
Additionally, if you:
Earn less than $30,805/year
$150/year
Earn $30,805 - $41,458/year
$75/year
Or your covered dependent
participates in prenatal program
$200 upon delivery of baby
21

22. HRA dollars
• Use for medical, prescription, dental,
vision expenses incurred by you and
eligible dependents:
– Deductibles
– Copays
– Coinsurance
– Other out-of-pocket health care expenses
• Not all expenses eligible
22

23. HRA dollars
• Leftover HRA dollars roll over
– Available as long as covered by Citysponsored medical plan (including COBRA
and retiree coverage)
• Health Care FSA participants:
– FSA funds used first, then HRA
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24. My Health rewards
Prescription drug copay discounts
Chronic condition medications
for My Health enrollees only
Non-chronic-condition
medications for My Health
enrollees and ALL medications
for Medical Only enrollees
Network retail
pharmacy
(up to 30-day
supply)
Home delivery/
90 days at retail
(up to 90-day
supply)
Network retail
pharmacy
(up to 30-day
supply)
Home delivery/
90 days at retail
(up to 90-day
supply)
Generic
$0
$0
$5
$10
Preferred brand
$5
$10
$20
$40
Non-preferred
brand
$20
$40
$40
$80
You pay…
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25. My Health rewards
• Free testing supplies:
– Peak flow meter (asthma and COPD)
– Blood pressure cuff (hypertension)
– Diabetes monitor, lancets, test strips
(diabetes)
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26. My Health requirements
•
•
•
•
•
•
Complete annual health screening
Be physically active
Complete quarterly health education
Manage chronic conditions
Annual well-child visit documentation
Prenatal program (optional)
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27. My Health requirements
• Receive annual health screening
– At The Center
– Within previous 12 months
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28. My Health requirements
• Be physically active at least:
– 60 minutes/week (at least 3 sessions/week,
10 minutes each)
• Submit physical activity affidavit by 10th of
month
– Through BCBST’s BlueAccess website, OR
– Via paper affidavits to The Center
• Honor System – but it’s working
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29. Why My Health?
“I clean everything
from Cumberland to
the Old City. I walk
so much I went
through three pairs
of shoes last year .”
-Arturo Cano, Public
Service Department

30. My Health requirements
• Quarterly health education
– Lunch and learns
– Internet classes
– CDs, DVDs, printed literature available from
The Center
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31. My Health requirements
• Manage chronic conditions through The
Center’s health coach program:
– Asthma, chronic obesity (BMI greater than
35), congestive heart failure, COPD, coronary
artery disease, diabetes, hyperlipidemia (high
cholesterol), high blood pressure
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32. My Health requirements
• Tobacco users must:
– Participate in health coach program
– Complete Tobacco Certification section of
enrollment form (if enrolling in My Health for
first time)
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33. My Health requirements
• Annual well-care visit for children
– All covered children under age 26
– Documentation required (visit within past 12
months)
33

34. My Health requirements
• Prenatal program (optional):
– Enroll by 10th week of pregnancy
– Receive HRA contribution upon delivery of
baby
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35. Why My Health?
“It’s not just a quick fix
—it’s a whole
lifestyle change.”
-Jason Scott, Police
Department

36. Medical Only
• Medical and prescription drug coverage
only
• Higher employee contributions than My
Health
– More out of your paycheck
• No built-in rewards (HRA dollars, etc.)
36

37. Prescription Drugs
• Over-the-counter (OTC) program
– If OTC alternative available, coverage is reduced
from a normal copay to 50% of the drug’s cost.
• Schedule 2 narcotics program
– If a schedule 2 narcotic prescription exceeds a
60-day supply, you must obtain prior
authorization.
– To fill a prescription beyond 60 days, your doctor
must be in the BCBST network and prescription
must be considered medically necessary.
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38. Prescription Drugs
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39. The City of Knoxville’s
Health Education &
Wellness Center

40. The Center
“The Center
discovered I had
diabetes, which I
might not have
known otherwise.”
-Betty Davis, Public
Service Department

41. The Center
“The Center is more
than a doctor
relationship. It’s
more like an
advisor, where you
can ask all kinds of
questions.”
-Linda Clevenger,
Public Service
Department

42. The Center
• Free wellness/health coaching services
– Offers health education classes
– Assists with researching treatment,
medication and other self-care information
• Treatment for short-term illnesses for
copay
– Pay with cash, check, debit/credit card or
FSA/HRA
42

43. The Center
• Acute care for children
– Children age 13 and older can be seen at The
Center an
– Ages 6-12 can be seen at a Summit Express
Clinic (SEC)
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44. The Center
• Operated by Summit Medical Group
• Staff follow HIPAA privacy rules; health
information is confidential
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45. It Works!
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46. It Works!
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47. Recognitions
2006: City of Knoxville’s employee health plan featured in the journal of
the College for Advanced Management of Health Benefits
2006: City of Knoxville named finalist for Employer Excellence in
Value-Based Purchasing Award by the National Business Coalition
on Health
2010: selected as finalist for Benefit Manager of the Year and named to
the Benefits Management Honor Roll by Business Insurance.
2011: Champion Award for Excellence in Workers Compensation Risk
Management, presented by National Underwriter to the City of
Knoxville.
2011: Achievement Award for Excellence in Human Resources,
presented by the Tennessee Municipal League to the City of
Knoxville for its health program.
2011: Featured in the October issue of Public Risk.
2011: Silver Pen Award presented by the Middle Tennessee chapter of
the International Association of Business Communicators (IABC) to
the City of Knoxville for its benefits communication program.
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48. New Role of a Health Plan
• A vision of health “needs to be perceived
as a priority business asset and has to be
recognized as having a big and important
impact on the ultimate success of the
enterprise. It has to be viewed as critical
to the strategy of the organization.”
Dr. Catherine Baase
Global Director of Health
Dow Chemical Company

49. National Employer Trends
• “Value-minded employers are engaging
directly with quality-focused providers to
explore and test new business
arrangements and collaborative
approaches to health management
programs, services and benefits.”
Research Study conducted by
Benfield and the American
Medical Group Association

50. National Employer Trends
• Employers with 500 or more employees
vary employee premiums for smokers by
an average of 12%. Employers with
20,000 or more employees vary premiums
for smokers by 24%. Two-thirds of firms
with 200 or more employees offered
smoking cessation programs in 2011.
Mercer

51. National Employer Trends
• By 2012 four of five medium and large
companies plan to offer financial rewards
to individuals who participate in their
health management programs. Use of
penalties rose from 8% to 19% from 2009
to 2011, and 38% of medium and large
employers expect to have penalties in
place in 2012.
Towers Watson Survey

52. National Employer Trends
• Consumer-driven health plans are now
12% of the medical plan market.
Employee Benefit Research Institution

53. National Employer Trends
• “Although the top human resources
executive is still the primary champion of
employee benefits consumerism, we saw
an uptick in respondents reporting that the
CEO, president or another member of the
senior leadership team is their primary
advocate.”
Lenny Sanicola
commenting on a survey by WorldatWork

54. Question/ Answer Session