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Pensions and Benefits
SCHOOL EMPLOYEES' HEALTH BENEFITS PROGRAM
PLAN DESIGN COMMITTEE MINUTES 2011
 

Meeting No. 1, Minutes
July 27, 2011, 2:00 PM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on July 25, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Wednesday, July 27, 2011 at 2:05 PM. The meeting was held at the Division of Pensions and Benefits, 1st floor board room, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Matt McDermott, Chief of Staff, Lt. Governor’s Office (Arrived at 2:15)
Jean Pierce, AFT/AFL-CIO
Wendell Steinhauer, NJEA
James Christ, Vice President, Aon Hewitt
Susan Marsh, Vice President, Aon Hewitt
Michael Morfe, Aon Hewitt
Eileen Den Bleyker, Senior Deputy Attorney General
Rubin Weiner, Deputy Attorney General
Diane Weeden, Deputy Attorney General
Florence Sheppard, Secretary
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Health Benefits, Policy and Planning

1. Sunshine Act Statement

The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Welcome and Introduction of Committee Members and Staff

Florence Sheppard welcomed the Committee and everyone around the table introduced themselves.

3. Election of Chairperson

This issue was discussed following issue #6.

4. Summary of Chapter 78

David Pointer gave a brief overview of Chapter 78 as it pertains to health benefits.

5. Role of the Committee

Eileen Den Bleyker explained and referred to Chapter 78, page 84, Section 45, which established the Committee and to page 92, Section 47(J) which describes the plan options the Committee is to provide to employees effective January 1, 2012. 
 
6. Aon Hewitt Presentation

Jim Christ, Aon Hewitt, introduced himself and in Ed Fox’s absence, explained Mr. Fox’s role and provided some of his experience. He also introduced Susan Marsh and Mike Morfe.   

Mike Morfe from Aon Hewitt gave a Power Point presentation which provided an overview of options for Medicare Prescription Drug integration.  He explained that currently the SEHBP receives a subsidy for Medicare retirees through the Retiree Drug Subsidy and he proceeded to give an overview of another option available, the Employer Group Waiver Plan (EGWP) Plus Wrap, to familiarize the Committee with the differences between the integration options.  A discussion ensued concerning the projected savings in changing to an EGWP Plus Wrap.  There was concern expressed that prior authorizations would not be transferred under the proposed change.  David Pointer offered to find out more information on how that could be handled.   Committee member Kelleher asked if the SEHBP could change without the SHBP Plan Design Committee making the same change and was told yes.  He also asked if the EGWP needed to be implemented at the beginning of the calendar year.  There was some discussion and overall it was suggested that it would be better to start at the beginning of the year to avoid greater member disruption.  Committee member Steinhauer asked if numbers could be run on the last ten years data.  Mr. Pointer said in order to implement EGWP Plus Wrap for the first of the year, a decision would be needed by the third or fourth week of August at the latest.  No action was taken.

Aon Hewitt provided a background of the SEHBP.  Mr. Christ led the first portion of the Power Point presentation and provided a background on Aon Hewitt highlighting the team’s experience with the State Health Benefits Program (SHBP) and the SEHBP as well as Aon Hewitt’s public sector experience.  He also gave a general overview of the types of health benefits plans, deductibles, copayments, and out-of-pocket (OOP) maximums that are common in state governments across the country.  He discussed the percentage of plans that require an employee premium contribution.  He also gave a brief summary of the SEHBP and the projected costs.  He ended with an overview of the SHBP/SEHBP vendors. 

Susan Marsh spoke about the plan design features of NJ DIRECT10.  She reviewed several graphs that compared New Jersey to other states including a comparison of physician copayments, OOP Maximums, and generic, preferred brand and non-preferred brand prescription drug copayments.   She also explained the current amount SEHBP employees and retirees contribute for health benefits and what the new contribution arrangement is under Chapter 78.  These contributions were expressed as a percentage of total plan costs.  Finally, Ms. Marsh compared New Jersey’s employee contributions against what other state employees pay.  Committee member Kelleher requested a comparison of the SEHBP to similar entities such as school districts in other States.  Aon Hewitt will follow up to determine how many other States split out State, Local Government and Local Education as separate groups and what other NJ boards of education offer their employees.

 3. Election of a Chairperson.

Committee member Kobylowski nominated Committee member Egea as Chairperson of the Committee for the next 12 months. Committee member Kelleher seconded the motion. Committee member Steinhauer made a motion to close nominations; Committee member Kelleher seconded, all voted in favor. The nomination of Committee member Egea as Chairperson was put to a vote and all voted in favor.

The Committee discussed dates in the month of August for the Committee to meet. Six dates were agreed upon and Division staff was directed to schedule meeting rooms. Committee members will be notified of the location of the meetings. Staff was also directed to find the availability of meeting rooms for monthly meetings of the Committee and to notify the Committee of those dates at its next meeting.

Committee member Kelleher made a motion to adjourn the meeting and Committee member Steinhauer seconded the motion, all voted in favor. The meeting adjourned at 3:47.

  Respectfully submitted,
 

 

 

  Florence J. Sheppard
Secretary
SHBP Plan Design Committee



Meeting No. 2, Minutes
August 4, 2011, 10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State.  The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 1, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Thursday, August 4, 2011 at 10:15 AM. The meeting was held at the Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer (via telephone)
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Charles McKenna, Director, Office of Homeland Security and Preparedness
   (via telephone)
Jean Pierce, AFT/AFL-CIO
Wendell Steinhauer, NJEA
Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Michael Morfe, Aon Hewitt
Susan Fischer, Assistant Attorney General
Rubin Weiner, Deputy Attorney General
Diane Weeden, Deputy Attorney General
Janice Nelson, Acting Secretary
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Health Benefits, Policy and Planning

1. Sunshine Act Statement:  The Sunshine Act Statement and the Executive Session Resolution were read by Janice Nelson.

2. Roll call was taken and five members were present and one, Charles McKenna, was absent.  He subsequently joined the meeting at 10:20 by telephone.

3. Minutes:  Committee member Steinhauer made a motion to approve the minutes.  It was seconded by Committee member Kelleher.  All voted in favor.  Chairwoman Egea asked Committee member McKenna, who replaced Matthew McDermott on the Committee, to introduce himself.  She also asked if there were any additions to the agenda and there were none.

4. Employer Group Waiver Program (EGWP) plus wrap: Mike Morfe, Aon Hewitt, gave a brief overview of EGWP.  There was a request for more information concerning how paper claims can be accommodated.  Committee member Kelleher took exception to the projected copayments for CY2012 used on page 11 of the presentation and expressed his concern that Aon Hewitt is “leading” the Committee. A discussion ensued. There were also discussions concerning member disruption and prior authorizations. It was decided to ask representatives from Medco to attend the next meeting to answer questions about implementation.  Aon Hewitt agreed to provide the five salary strata used to determine retirees who qualify for the low income premium subsidy. There was discussion about whether or not the Committee could approve reimbursing the difference in Medicare Part D premiums for high income retirees or could direct that projected savings of $40 million  be used to reduce copayments for retirees. Committee member Kelleher asked if Medco had to be used for the EGWP plus wrap or if it could be bid separately or even implemented directly with CMS.  Mr. Pointer replied he didn’t think the retirees could be removed from the Medco contract. Mr. Morfe said it is extremely complex to implement an EGWP directly with CMS if not impossible. There was some discussion concerning the process of enrolling the retirees in Medicare Part D and the communication effort it would need.  This issue was deferred to the next meeting when Medco will be present.  There was also a brief discussion concerning retirees who qualify for Medicare due to disability. Committee member Kelleher asked Aon to come up with some suggestions regarding possible use of some of the EGWP savings to benefit participants.

5. Aon Hewitt’s Response Concerning Questions Raised about other Educational Employer Benchmarks:  Jim Christ, Aon Hewitt, gave a short presentation. He said they used data from two sources.  Aon Hewitt has approximately 400 school districts across the nation and the data from 17 of those school districts with an aggregate of 97,000 lives was used for the first portion of the presentation.  The second set of data was obtained from Horizon Blue Cross Blue Shield of New Jersey because they have a significant number of boards of education (150) in NJ that do not participate in the SEHBP.  Mr. Christ noted a correction to Page 3, under the column “SEHBP” the Median Coinsurance Amount for “Inpatient Cost Sharing for Out-of-Network Hospital or Facility Visit” should say 20% or $200.
It was also noted that the data was from 2010. 

A question was raised if there are rate charts available and Mr. Pointer said they are available on the Division’s Web site and that he would mail the charts to the Committee.  Committee member Kobylowski asked if Aon Hewitt could inform the Committee about the kinds of things other States are doing that are not being done in the SEHBP. Mr. Christ said Aon Hewitt could drill down in their data and provide information.

Chairwoman Egea asked for next steps. There was a short discussion about high deductible health plans and it was decided it would be on the next agenda, in context with PPO and HMO plan offerings.  Committee member Kelleher asked Aon Hewitt to address any options a local employer may have with regards to the amount of seed money allocated by the employer for the high deductible health plan.

Committee member Kobylowski made a motion to adjourn the meeting and Committee member Steinhauer seconded the motion, all voted in favor. The meeting adjourned at 11:39.

  Respectfully submitted,
 

 

 

  Janice Nelson
Acting Secretary
SHBP Plan Design Committee

Meeting No. 3, Minutes
August 9, 2011, 10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 4, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Thursday, August 4, 2011 at 10:04 AM. The meeting was held at the Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer (via telephone)
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Charles McKenna, Director, Office of Homeland Security and Preparedness   
Jean Pierce, AFT/AFL-CIO (via telephone)
Wendell Steinhauer, NJEA
Absent:  Kevin Kelleher, NJEA

Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Susan Marsh, Aon Hewitt
Angela Pearson, Medco Health Solutions
Laura Carlson, Medco Health Solutions
Bhavesh Modi, Medco Health Solutions
Rubin Weiner, Deputy Attorney General
Diane Weeden, Deputy Attorney General
Florence Sheppard, Secretary
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Health Benefits, Policy and Planning

1. Sunshine Act Statement: The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Roll Call: The roll call was taken and four members were present and two, Kevin Kelleher and Jean Pierce, were absent. Ms. Pierce joined the meeting by telephone at 10:12.

3. Minutes: Committee member Steinhauer made a motion to approve the minutes. It was seconded by Committee member Kobylowski. All voted in favor. Chairwoman Egea asked if there were any additions to the agenda and there were none.
                       
4. Employer Group Waiver Program (EGWP) Plus Wrap: Medco Health Solutions, Inc. representatives:  Angela Pearson, Laura Carlson and Bhavesh Modi, introduced themselves. They gave a presentation of the member experience in an EGWP Plus Wrap plan. Topics included the following: group enrollment, communications, EGWP Clinical Rules [step therapy (no Preferred Drug Step Therapy (PDST) under an EGWP Plan), quantity limits and prior authorizations], transition supply, appeals and the pharmacy network.  Committee member Kobylowski had a question about the GASB liability and Mike Morfe, Aon Hewitt provided an explanation of the liability which is currently $71 billion. Committee member Steinhauer asked for a list identifying the quantity limit edits which will change under the EGWP plus wrap plan showing which six will be more restrictive and the number of members who would be impacted, the 28 that will be less restrictive and the remaining 23 that will stay the same.  Ms. Pearson will provide that information to David Pointer who will distribute it to the Committee.  Regarding the pharmacy network, Committee member Steinhauer asked if other pharmacies are close by for those 78 members who utilize VA pharmacies.  Ms. Pearson said she could have an access report run and sent to Mr. Pointer. There was some discussion about paper claims. Thereafter a discussion concerning a comparison of the SEHBP copayments versus other school boards’ copayment ensued.  Chairperson Egea asked if the Committee preferred to wait for the information or make a motion and vote on the EGWP Plus Wrap plan. Committee members Steinhauer and Pierce said they wanted to wait for the information. Chairperson Egea asked that all of the information requested be provided by Friday so that it could be distributed to the Committee. There was discussion that the School Employees’ Health Benefits Commission (SEHBC) would need to approve the EGWP Plus Wrap if/when it is approved by the Committee. Committee member Steinhauer made a motion to go into Executive Session. Committee member Pierce seconded the motion and all voted in favor. Upon return from Executive Session, there was a discussion about different options.

Mr. Morfe noted that he would need to update the savings written in the footnote of the document.  Committee member Steinhauer asked for a verification of the savings total and a comparison of the SEHBP’s benefits. Chairperson Egea requested an option using benchmarks consistent with the market. There was also a request for using 50% of the savings to lower copayments. Committee member McKenna said these would be projections only and Mr. Christ, Aon Hewitt, said they would provide the best estimates. Chairperson Egea thanked Medco.

5. High Deductible Health Plans (HDHPs) Presentation and Discussion:  Mr. Morfe gave an overview of a document provided by Aon Hewitt and Mr. Christ talked about health savings accounts (HSAs).  Both responded to questions from the Committee. Chairperson Egea stated that the SEHBP must offer at least one HDHP and requested a cross section of products available from the current vendors to be presented to the Committee. Committee member Steinhauer raised the issue of employer contributions.

The agenda for the next Committee meeting on August 16 at 10:00 will include: HDHPs, EGWP Plus Wrap, Other Options and Cost Management Initiatives (document which was handed out at the meeting today from Aon Hewitt).

Chairperson Egea made a motion to adjourn the meeting and Committee member McKenna seconded the motion; all voted in favor. The meeting adjourned at 12:02.

  Respectfully submitted,
 

 

 

  Florence Sheppard
Secretary
SEHBP Plan Design Committee


Meeting No. 4, Minutes
August 16, 2011, 10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 11, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Tuesday, August 16, 2011 at 10:05 AM. The meeting was held at the Division of Pensions and Benefits, 1st floor board room, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Medco Health Solutions and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Charles McKenna, Director, Office of Homeland Security and Preparedness (Arrived at 10:45)   
Jean Pierce, AFT/AFL-CIO
Wendell Steinhauer, NJEA (via telephone)

Aon Hewitt:
Edward Fox
James Christ
Susan Marsh
Mike Morfe

Medco Health Solutions:
Angela Pearson
Laura Carlson
Bhavesh Modi

Rubin Weiner, Deputy Attorney General
Florence Sheppard, Secretary
David Pointer, Manager, Policy, Planning and Operations
Debbie Bogdol, Pension Benefit Specialist

1. Sunshine Act Statement: The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Roll Call: The roll call was taken and five members were present and one, Charles McKenna, was absent. Mr. McKenna joined the meeting at 10:45.

3.  Employer Group Waiver Program (EGWP) Plus Wrap: Medco Health Solutions, Inc. representatives:  Angela Pearson, Laura Carlson and Bhavesh Modi, introduced themselves. Angela Pearson discussed follow-ups from the Committee’s previous meeting concerning prior authorizations under CMS and member disruption with the non-participating pharmacies. Members were provided a handout detailing the number of members who would not be impacted by the new prior authorizations, those that would be impacted by more restrictive prior authorizations and those whose prior authorizations would be less restrictive. Ms. Pearson also reported that two pharmacies that were previously out of network had agreed to become in-network pharmacies reducing the total out of network pharmacies to 82. Of the 78 VA pharmacies, Medco analysis showed that no member was more than 1-2 miles away from an in-network pharmacy.

A handout was provided to members entitled “SEHBP Prescription Drug Card Plan Comparisons” and Aon Hewitt representatives discussed the chart in detail. Aon was asked whether they had any information concerning plan sponsors who had switched to EGWP and Aon responded that it was still too early to review data since the advantages of EGWP had only been realized since January 1st. Committee member Kelleher asked what percentage of Medicare retirees are reimbursed the increased cost of premium due to higher income standards. Mr. Pointer responded that they represented approximately 10% of the Medicare population. Mr. Kelleher requested the total dollar amount of the Medicare Part B reimbursement.

Committee member Kelleher made a motion to go in to executive session to seek advice from counsel; Committee member Kobylowski seconded the motion and all voted in favor.

Upon return from executive session, Mr. Kelleher asked if the reduced copays proposed would only impact Medicare retirees and Ms. Marsh said no, it would apply to all retirees.

Committee member Steinhauer made a motion to approve the change to EGWP Plus Wrap for Medicare integration; that 50% of the savings realized go towards reducing member copays as outlined by panel #3 on the “SEHBP Prescription Drug Card Plan Comparisons”; and that eligible high income earners be reimbursed their Medicare Part D premiums in the same manner as they are reimbursed their Medicare Part B premiums due to their higher earner status. Mr. Kelleher seconded the motion. A roll call vote was taken. The motion failed to receive the necessary 4 votes for approval (3:3:0, Egea, Kobylowski, McKenna, nay).

Committee member McKenna made a motion to approve the change to EGWP Plus Wrap for Medicare integration and make the increases to retiree copays for 2012 per the usual formula prescribed in the NJAC. A roll call vote was taken. The motion failed to receive the necessary 4 votes for approval (3:3:0, Kelleher, Pierce, Steinhauer, nay).
       
4. Aon Hewitt continued discussion on the High Deductible Health Plans (HDHPs) Options handout. Aon pointed out that under certain scenarios, members would receive more in employer contribution than they were paying in premium contribution. Committee member Kelleher requested that NJ DIRECT10 plan cost comparison be added to the chart on page 2 of the handout. Aon was also asked to add another plan option between HDHP 1 and HDHP 2 on page 2 of the handout as well as adding a column with an employer fully funded deductible. Aon pointed out that a member could not receive HSA money if covered under another plan. Chairperson Egea asked members to review the handout and direct any additional questions to the Secretary. Ms. Egea asked Mr. Weiner if the Committee could have more than one HDHP and Mr. Weiner said yes.   

The agenda for the next Committee meeting on August 18 at 10:00 will include: HDHPs, EGWP Plus Wrap, Other Options and Cost Management Initiatives.

Committee member Kobylowski made a motion to adjourn the meeting and Chairperson Egea seconded the motion; all voted in favor. The meeting adjourned at 12:15.

  Respectfully submitted,
 

 

 

  Florence Sheppard
Secretary
SEHBP Plan Design Committee


Meeting No. 5, Minutes
August 18, 2011, 10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 11, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Thursday, August 18, 2011 at 10:05 AM. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Charles McKenna, Director, Office of Homeland Security and Preparedness   
Jean Pierce, AFT/AFL-CIO
Wendell Steinhauer, NJEA (via telephone)

Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Susan Marsh, Aon Hewitt
Mike Morfe, Aon Hewitt
Rubin Weiner, Deputy Attorney General
Florence Sheppard, Secretary
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Health Benefits, Policy and Planning

1. Sunshine Act Statement:The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Roll Call: The roll call was taken and five members were present and Wendell Steinhauer was absent. Mr. Steinhauer joined the meeting by telephone at 10:10.

3.  Minutes:Committee member Kobylowski made a motion to approve the minutes of August 9, 2011.  It was seconded by Committee member McKenna. Five voted in favor and Committee member Kelleher abstained. Committee member McKenna said he had another meeting and had to leave no later than noon.
                       
5. High Deductible Health Plans (HDHPs): Mr. Christ, Aon Hewitt, gave an overview of three additional options that were requested at the August 16, 2011 meeting (.5, 1.5 and 4.5). There was a discussion concerning the funding of a Health Savings Account (HSA) and whether an employer has the option to put extra money into the HSA. While an employee can add to the HSA, it is not recommended that an employer do so.  The question arose if the current three vendors (Horizon, Aetna and CIGNA) would offer a HDHP with the same plan design. Mr. Pointer stated under the current contract, Horizon’s HDHP design would be based on the PPO design and Aetna and CIGNA’s design would be based on the HMO product.  Once the current contract has expired, different designs can be bid. Committee member Kelleher asked why use a HSA as opposed to a Health Reimbursement Account (HRA). Mr. Christ noted that the way a HSA is structured, the member cannot be enrolled in another health plan. Mr. Morfe, Aon Hewitt, said under the Internal Revenue Code, HRAs are funded exclusively by the employer; members cannot contribute. The Committee would set rollover rules and the plan owns the money in the fund.  There was a discussion concerning the communication efforts that would be needed to guide the members with plan selection.  It was clarified that a HDHP would include a prescription drug benefit.  It was also noted that a member can use the HSA to pay for dental services as well as other medical expenses with some exceptions such as cosmetic surgery. There was a brief discussion concerning employers that provide the prescription drug benefits through a private plan who would be unable to offer HDHPs to their members. There was also a clarification that active employees and early retirees could enroll in HDHPs, but Medicare retirees could not enroll.

6. Other Options: Ms. Marsh gave an overview of a chart, “Plan Design Summary for Illustrative Base, Buy-Up and Buy-Down Plans”.  She explained the buy-down plan was a deductible plan in which a member would need to pay the deductible of $500 before any benefits were paid. Thereafter a member would pay 20% coinsurance in-network and 40% coinsurance out-of-network.  She also highlighted other options in the base and buy-up plans such as a differential between primary care provider copayments and specialist copayments and higher out-of-pocket maximums. Some of the options to change plan design included a higher copayment for the emergency room, a carve out of mental health benefits, and a wellness initiative. Ms. Marsh provided a brief explanation of how the coordination of benefits (COB) between two medical plans works currently and how the COB could be changed to incorporate a non-duplication of benefits. She also responded to questions concerning carving out mental health benefits. This option would require a Request for Proposals (RFP) and is not feasible for CY2012.  Committee member Kelleher asked DAG Weiner if the Committee could change the COB and put a limit on therapy.  He also asked Aon Hewitt if other employers (non-participating boards of education in NJ) use the 90th percentile for the Reasonable and Customary Allowance and if they had therapy limits.

Mr. Fox talked about incentive based wellness programs that use financial rewards.  He said our current vendors have wellness programs. Dave Perry, Horizon, stated they have a robust wellness plan. He said wellness plans are a long term approach which is embedded in their insured plans.

Committee member Kelleher asked what is meant by a “Buy-Up” plan.  Ms. Marsh responded the premium would be higher, so the member would contribute more. Aon Hewitt was asked to provide additional detail on the various plan design options with cost information.  Ms. Marsh reviewed the bottom of the chart which did not include the MMRx plan. Chairperson Egea asked that the plans be numbered (plan 1, plan 2, etc.) with cost differentials and premiums. Aon Hewitt will provide this information at the next meeting.

There was a discussion concerning the prescription drug plans. Currently, the employer selects which prescription drug plan to offer its employees. The retiree prescription drug plan is tied to the medical plan.  Committee member McKenna asked why not offer all of the drug plans to the members.  Mr. Christ said he recommends the prescription drug plan be tied to the medical plan. Mr. Pointer asked the Committee if they envision stopping the employer from limiting plan choice. DAG Weiner said there are two different issues:  1) the Board of Education Employers limiting plans and 2) the Committee making various plan designs available. Committee member McKenna said the Committee is required to offer an array of plans; it isn’t relevant what the employer does.

Committee member Kelleher asked if we have five plans will they be grouped together for pricing. Ms. Marsh expected they would be grouped together for pricing but that could vary from year to year.

4. Employer Group Waiver Program (EGWP) plus Wrap: Chairperson Egea said that Medco agreed to wait another week for a decision on whether or not to implement an EGWP plus Wrap.  She said next week there would be a vote on all of these options and EGWP plus Wrap.  She suggested a shorter meeting on the 25th or 26th. Committee member Kelleher said there is a meeting already set up for Monday, August 29th.

Committee member Kelleher made a motion to adjourn. Committee member Kobylowski seconded the motion and all voted in favor. The meeting adjourned at 11:44.

  Respectfully submitted,
 

 

  Florence Sheppard
Secretary
SEHBP Plan Design Committee


Meeting No. 6, Minutes
August 22, 2011,10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 18, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Monday, August 22, 2011 at 10:06 AM. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Charles McKenna, Director, Office of Homeland Security and Preparedness
Jean Pierce, AFT/AFL-CIO
Wendell Steinhauer, NJEA

Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Susan Marsh, Aon Hewitt
Mike Morfe, Aon Hewitt
Rubin Weiner, Deputy Attorney General
Diane Weeden, Deputy Attorney General
Florence Sheppard, Secretary
Jean Williamson, Health Benefits, Policy and Planning

1. Sunshine Act Statement:The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Roll Call: The roll call was taken and all Committee members were present.

3. Minutes: Committee member Kobylowski made a motion to approve the minutes of August 16 and August 18, 2011. It was seconded by Committee member Steinhauer. All voted in favor. Committee member Pierce made a motion to accept the Executive Session minutes of August 16, 2011 and Committee member Kobylowski seconded it. All voted in favor.

6. Other Options: Ms. Marsh gave an overview of proposed plan designs and cost summaries. She reviewed the current plan designs and three options: Plan A, Plan B and Plan C, with their correlating prescription drug plan for Active employees and the cost differences from NJ DIRECT10. She provided similar information for retirees. Aon Hewitt recommended a cost differential of at least 5%. It was noted that the employer determines the prescription drug plan for its employees while the prescription drug plan for retirees is tied to the medical plan.

There ensued a discussion of which of the proposed plans might be eliminated. Committee member Kelleher noted that new plan offerings will not affect most retirees. There was also discussion concerning the number of High Deductible Health Plans (HDHPs) and the expected enrollment in them. The discussion then led to vendors for the plans and if the current vendors would continue to administer them. Committee member McKenna made a motion to go into Executive Session. Committee member Kobylowski seconded the motion and all voted in favor. Upon return from Executive Session, the discussion continued on the number of HDHPs there should be. Committee member Steinhauer made a motion to consider only one HDHP, Option 1.5. Committee member Kelleher seconded the motion. There was discussion concerning obtaining firm pricing and whether or not to offer a number of choices to the members or to keep it simple the first year.

Committee member Steinhauer restated his motion to obtain firm pricing on all of the plans on page 1 of the document and the HDHP Option 1.5. Committee member Kelleher seconded the restated motion. Approved (4: 2: 0, Committee members Kobylowski and McKenna nay). Chairperson Egea made a motion to obtain firm pricing for all of the plans on page 1 and two of the HDHPs: Options 0.5 and 1.5. Committee member McKenna seconded the motion and all voted in favor. Aon Hewitt agreed to provide the pricing and update the document by Wednesday, August 24 at noon.

Chairperson Egea directed the staff to start to draft a resolution summarizing the plans and EGWP. Committee member McKenna left the meeting at 12:06. Committee member Kelleher asked DAG Weiner if the HDHP has to be offered to everyone. Committee member Kelleher made a motion to go into Executive Session. Chairperson Egea seconded the motion and all voted in favor.

Committee member Kobylowski made a motion to adjourn. Committee member Steinhauer seconded the motion and all voted in favor. The meeting adjourned at 12:10.

  Respectfully submitted,
 

 

  Florence Sheppard
Secretary
SEHBP Plan Design Committee



Meeting No. 7, Minutes
August 29, 2011, 10:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on August 24, 2011. The meeting of the SEHBP Plan Design Committee was called to order on Monday, August 29, 2011 at 10:15 AM. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt, Medco Health Solutions, and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Wendell Steinhauer, NJEA (via telephone)

ABSENT:

Charles McKenna, Director, Office of Homeland Security and Preparedness   
Jean Pierce, AFT/AFL-CIO

Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Susan Marsh, Aon Hewitt (via telephone)
Mike Morfe, Aon Hewitt
Angela Pearson, Sr. National Account Executive, Medco Health Solutions, Inc. (via telephone)
Eileen DenBleyker, Senior Deputy Attorney General
Diane Weeden, Deputy Attorney General
Janice Nelson, Acting Secretary
Florence Sheppard, Acting Director, Division of Pensions and Benefits (via telephone)

1. Sunshine Act Statement: The Sunshine Act Statement and the Executive Session Resolution were read by Janice Nelson.

2. Roll Call: The roll call was taken and four Committee members were present.  Charles McKenna, Director, Office of Homeland Security and Preparedness, and Jean Pierce, AFT/AFL-CIO, were unable to attend.

3. Minutes: Committee member Steinhauer made a motion to approve the minutes of August 22, 2011.  It was seconded by Committee member Kelleher. The motion also included the Executive Session minutes of the same date.  All voted in favor. 
       
4. CY 2012 Plan Options: Susan Marsh provided an overview of two new documents prepared by Aon Hewitt for the Committee: School Employees’ Health Benefits Plan Design Committee, Plan Design and Cost Summaries, dated August 29, 2011, and its supplement of the same date which provided preliminary projections for Plan Year 2012 for the HMOs. Ms. Marsh also highlighted the modifications from the prior document provided for the August 22, 2011 meeting. Members of the committee raised questions concerning the frequency of prescription drug formulary updates, definition of the prescription drug tiers utilized in the pricing model and the physician network for the HMOs under the new plans. Representatives from Aon Hewitt and Medco Health Solutions responded.  Committee member Kelleher asked if a local employer must offer a payroll slot for an HSA for voluntary employee contributions for the High Deductible Health Plan. SDAG Den Bleyker responded that the Committee could establish this as part of the plan design because participation in the SEHBP is voluntary and the employer accepts the program’s terms.  Committee member Kelleher also asked Aon Hewitt if the existing three health plans had confirmed the ability to administer the different specialist copayments for adults and children as contained in Revised Plan B. Aon Hewitt agreed to obtain this information from the current vendors. Committee member Kelleher also asked Aon Hewitt for an estimate of how many subscribers would be expected to enroll in a HDHP in the first year.  Ms. Marsh indicated that no more than 2-3% of active subscribers and less than 1% of retired subscribers would be likely to enroll in the first year.

A discussion concerning the tier factor revision recommended by Aon Hewitt followed.  Ms Marsh explained an excel spreadsheet and detailed the concerns that would arise if the problem were not addressed as part of the SEHBP Commission’s rate renewal, citing issues created by national health care reform requiring the SEHBP to permit inclusion of children to age 26 under a parent(s) health plan as well as the new contribution requirements of Chapter 78, PL 2011, which vary by coverage tier.  Aon Hewitt cautioned that the financial health of the SEHPB could be at risk if the existing tier factors are not adjusted, since family coverage would require lower contributions in certain income ranges than member and partner coverage, thus encouraging coverage of children under the SEHBP when other coverage may be available under a spouse’s non SHBP/SEHBP plan.

There ensued a discussion of which of the proposed plans might be offered for Plan Year 2012. Committee members Steinhauer and Kelleher spoke in favor of continuing to offer the existing plans and adding Revised Plan B and HDHP 1.5 as additional choices. Chairperson Egea spoke in favor of also offering Plan C as one of the choices. Committee member Kobylowski also advocated for more choice and proposed that HDHP .5 also be included as one of the plan offerings. A 30 minute recess followed.

When the meeting resumed, no consensus was reached concerning plan offerings for CY 2012. Tuesday, September 6, 2011, from 10 AM -12 PM was proposed as the date of next meeting.  Committee members Kobylowski, Egea, Kelleher and Steinhauer indicated their availability, although Committee member Kelleher advised that he would have to attend via telephone. Chairperson Egea directed the Secretary to solicit the absent committee members to determine their availability on that date.

Committee member Steinhauer made a motion to adjourn. Committee member Kobylowski seconded the motion and all voted in favor.  The meeting adjourned at 12:35.

  Respectfully submitted,
 

 

 

  Janice F. Nelson
Acting Secretary
SEHBP Plan Design Committee

Meeting No. 8, Minutes
October 6 , 2011, 11:00 AM
School Employees’ Health Benefits Program (SEHBP) Plan Design Committee

Adequate notice of this meeting was provided and filed with and prominently posted in the offices of the Secretary of State. The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on October 3, 2011.

The meeting of the SEHBP Plan Design Committee was called to order on Thursday, October 6, 2011 at 11:05 AM. The meeting was held at Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, Representatives from Aon Hewitt, Medco Health Solutions, and Division staff:

Regina Egea, Chief of Staff, Office of the Treasurer
Kevin Kelleher, NJEA
Ken Kobylowski, Chief of Staff, Department of Banking & Insurance
Wendell Steinhauer, NJEA
Charles McKenna, Director, Office of Homeland Security and Preparedness
Jean Pierce, AFT/AFL-CIO

Edward Fox, Senior Vice President, Aon Hewitt
James Christ, Vice President, Aon Hewitt
Susan Marsh, Aon Hewitt
Angela Pearson, Sr. National Account Executive, Medco Health Solutions, Inc. (via telephone)
Eileen DenBleyker, Senior Deputy Attorney General
Diane Weeden, Deputy Attorney General
Florence Sheppard, Secretary
David Pointer, Division of Pensions and Benefits
Jean Williamson, Division of Pensions and Benefits

1. Sunshine Act Statement: The Sunshine Act Statement and the Executive Session Resolution were read by Florence Sheppard.

2. Roll Call: Ms. Sheppard took the roll call; all Committee members were present.

3. Minutes: Committee member Steinhauer made a motion to approve the minutes of August 29, 2011. The motion was seconded by Committee
member Kelleher. Approved (5: 0: 1, Committee member McKenna abstained).

Chairperson Egea advised the Committee they were going to make a motion on the materials that were distributed. Committee member Steinhauer made a motion for the approval of the three exhibits before the Committee with modifications. Committee member Kelleher seconded it. The modifications were discussed as follows:

Chairperson Egea said the first modification was to the Retiree Plans. On Exhibit B, Plans A and B the out-of-pocket maximum will be $1,318. The Committee accepted. Committee member Steinhauer suggested the following language for the record on risk pooling: “Provided, however, that no plan shall be offered for any plan year commencing plan year 2012 without further Committee action if the participants in such plan are, by action of the State Health Benefits Commission, placed in a risk pool separate from the risk pools for participants in a plan that existed in plan year 2011.” There ensued a brief discussion that the risk pool refers to the SEHBP. Committee member Steinhauer clarified that this is for one year and would be revisited again next year. Committee member Steinhauer verified that the numbers in the documents included the EGWP plus wrap and the retiree copayments would be frozen at the 2011 amounts. There was a brief discussion that the generic mail order copayment was reduced to $5.00.

Committee member Steinhauer agreed that the copayment was reduced to $5.00 and verified that Medicare eligible retirees in the high income category who are reimbursed for Medicare Part B would also be reimbursed for the Part D premium. He also confirmed that the reasonable and customary rates were at 9O% to those plans that have an out-of-network benefit. DAG Den Bleyker asked for the motion to be restated so it was clear for the record. The Court Reporter was asked to read back the motion. The motion was as follows: I’d like to move for approval the three exhibits (Exhibit A - Local Education Active Employee Plans, Exhibit B — Local Education Retiree Plans, Exhibit C — Recommended Correction to Coverage Tiers) before you with modifications that would be needed to forward to the School Employees’ Health Benefit Commission for approval. Committee member Steinhauer said with that being the motion I will summarize the modifications:

  • Exhibit B at the bottom the out-of-pocket maximums for prescription drugs are $1,318 for Plan A and B.
  • The risk pooling, that has been read into the record with the insertion of Employee between State and Health.

Committee member Steinhauer stated the rest of the issues he raised were just clarifications, not necessarily modifications. The motion carried. Vote (6: 0: 0). Chairperson Egea congratulated the Committee.

Chairperson Egea said the implementation of this will take a lot of resources for the next six or eight weeks. We would like to meet at the end of the year or the beginning of next year to get feedback from how the employee selection went. Mr. Pointer brought to the Committee’s attention the Division still had to meet with the carriers to implement the plans. He said the Division is hoping to start open enrollment October 17th; an end date has not been determined, however, changes must be processed by December 15th in order to make that switch effective January 1st.

Ms. Den Bleyker advised the Committee the SHBC was meeting on Wednesday, October 12, 2011 and they would be addressing the rates. Ms.
Sheppard said she would be calling a special SEHBC meeting to approve rates and asked Committee member Steinhauer and Kelleher if they were available the afternoon of October 12, 2011 either in person or by phone.

Committee member Steinhauer made a motion to adjourn. Committee member McKenna seconded the motion and all voted In favor. The meeting adjourned at 11:20 AM.

  Respectfully submitted,
 

 

 

  Florence J. Sheppard
Secretary
SEHBP Plan Design Committee

 

 
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