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Pensions and Benefits




2013 Meeting #11 Minutes
April 19, 2013
State Health Benefits Program (SHBP) Plan Design Committee

Adequate notice of this meeting has been provided 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 April 10, 2013. The meeting of the SHBP Plan Design Committee was called to order on Friday, April 19, 2013 at 1:05 p.m. 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, Division Staff, and other representatives:

Committee Members:

John Hutchison, Senior Policy Advisor, Department of Environmental Protection
Jeff Keefe, AAUP-AFT
Jim Leonard, Chief of Staff, Office of the Treasurer
Kevin Lyons, NJ State PBA
Brian McMonagle, Labor Chairman, NJ FMBA
David Ridolfino, Associate Deputy State Treasurer, Office of the State Treasurer
Hetty Rosenstein, NJ Area Director, CWA/District 1

Other Attendees:

Carol Banks, Horizon Blue Cross Blue Shield
Susan Barrett, Division of Pensions and Benefits
Christine Brilla, NJ Treasurer’s Office
Dudley Burdge, CWA
Jim Christ, Aon Hewitt Consultants
Kierney Corliss, Division of Pensions and Benefits
John Covello, Independent Pharmacy Alliance
Bart Gerber, Express Scripts
Katherine Impellizeri, Aetna
Carol Katz, Katz Government Affairs
Kevin Kelleher, NJEA
Susan Marsh, Aon Hewitt
Douglas Martucci, Division of Pensions and Benefits
Kimberly Meacock, Aon Hewitt
John Megariotis, Deputy Director of Finance
Jennifer Moyer, Aetna
Robert Murphy, NJPSA
Mike North, Aetna
David Pointer, Assistant Director NJ Public Employees’ Health Benefit Programs
Nancy Ronaghan, Division of Pensions, Health Benefits Financial
Danielle Schimmel, Deputy Attorney General
Florence J. Sheppard, Secretary
Diane Weeden, Deputy Attorney General

1. Sunshine Act Statement.

The Sunshine Act Statement and the Executive Session Statement were read.

2. Roll Call

Roll Call was taken.  Committee Members Constable, Jones, Kreisberg, Kobylowski, and Larkins were absent.

3. Minutes

 Committee Member Lyons made a motion to approve the minutes from the December 12, 2012 meeting.  Committee Member Keefe seconded the motion.  The motion passed. (7:0:0)

4. Aon Hewitt Responses to Motions Passed at March PDC Meetings

Jim Christ, Susan Marsh, and Kimberly Meacock from Aon Hewitt provided a presentation that gave responses to the motions that were passed at the end of the March 15 Committee Meeting.  Committee Member Leonard asked if more information could be given on Patient Centered Medical Homes (PCMH).  Jim Christ stated that the idea behind PCMHs is to coordinate care and maximize efficiency.  He stated that they are also a payment mechanism to put service providers on the hook for patients’ outcomes.  Committee Member Lyons asked if there are any surveys available that the Committee could view.  Carol Banks from Horizon Blue Cross Blue Shield stated that surveys of physicians’ practices have been done and that the PCMH initiative has been received favorably in the physician community.  She added that plan members may not be aware of the fact that they are in a PCMH, but it is up to their physician to perform the required follow up and comply with the terms of the PCMH.  She also stated that PCMHs focus on the patient’s relationship with their Primary Care Physician (PCP).  She stated that there is already a trusting relationship between a patient and their PCP, and that by participating in a PCMH the PCP is provided with additional member data.  Committee Member Leonard asked for some clarification on the Reasonable and Customary Allowance (R&C) listed in the response to motion #3, which deals with a low cost, basic health plan.  Mr. Christ clarified that the plan listed would use the Resource Based Relative Value Scale (RBRVS) as opposed to the FairHealth data base to set the value of what is considered the R&C with which to reimburse out of network service providers.  The differences between the two reimbursement systems were explained.  Chairperson Rosenstein asked if it was correct that the change in R&C would only save the plan 1%.  Mr. Christ confirmed that the savings would be 1%, and that the R&C only comes into play for out of network claims.  Committee Member Leonard asked for confirmation that moving ahead with the plan without switching from FairHealth to RBRVS would add a total of 1% to the cost of the plan, and Mr. Christ confirmed yes.  Committee Member Keefe asked if the presentation’s references to contribution meant premium only.  Susan Marsh from Aon Hewitt answered yes.  Committee Member Keefe stated that plan members are concerned with total out of pocket costs, including copays, deductibles, and any other associated costs.  Committee Member Ridolfino stated that a low cost plan would give members another option, and that a healthy member who does not often use their health plan may find such a plan attractive.  He also stated that a member could change plans on a yearly basis if they find that their selected plan does not work for them.  Chairperson Rosenstein stated that the changes presented do not change the overall cost of health care.  Committee Member Ridolfino stated that the Committee may not be able to lower the overall cost of health care, but has to deal with what it can control.  He continued that the SHBP currently has many plan choices, but due to the fact that the plans are all similar, the cost differential is not substantial enough.  He said that he believes the introduction of a truly low cost, basic plan would provide members with an actual choice.   Committee Member Leonard asked for more detail on the 60% plan that was part of the presentation materials.  Ms. Marsh stated that 60% is the minimum actuarial value that the Affordable Care Act requires plans to cover, and explained that a plan must cover at least 60% of its members’ eligible health care expenses.  Chairperson Rosenstein asked if the Committee has the authority to restrict a plan’s enrollment so that only actively employed members with either single or member and spouse coverage would be permitted to enroll in the plan.  She clarified that idea was to have a plan that would not allow members with family or parent and child level coverage to enroll in the plan.  DAG Weeden stated that she would research the question and get back to the Committee.  Committee Member Ridolfino stated that the Committee should not dictate which plans people are allowed to choose, and asked what would happen if a married couple enrolled in the restricted plan and then had a child.  Chairperson Rosenstein stated that the plan members would then be required to switch plans.  Committee Member Ridolfino stated that he felt that would be a very confusing situation for plan members.  There being no further discussion on the Aon Hewitt Responses to the Committee motions from the March 15 meeting, discussion moved to the next agenda item.

5. Health Care Reform Impact on 2014 Plan Offerings

The Committee Members reviewed the educational material that Aon Hewitt provided ahead of the meeting.  The materials dealt with a proposal to add a $6,500 cap to SHBP plan members’ total out of pocket costs on a yearly basis, beginning in plan year 2014.  The cap on members’ total out of pocket expenses is required by the Affordable Care Act.  Chairperson Rosenstein asked what impact the $6,500 cap would have on the plan.  Susan Marsh explained that the cap would have very little impact on the overall costs of the plan, since very few plan members would reach $6,500 in costs in a year.  Committee Member Ridolfino asked when the cap needed to be in place in order for the SHBP to comply with the ACA.  Jim Christ responded January 1, 2014.  Committee Member McMonagle made a motion to accept the proposal to add a $6,500 out of pocket maximum to SHBP plans, beginning in plan year 2014.  Committee Member Leonard seconded the motion. A vote was taken, the motion passed.  (7:0:0)

6. Proposal to Offer a Dental Provider Organization (DPO) Plan to Retirees

Discussion moved on to the proposal from the Division of Pensions and Benefits to offer a DPO plan to retirees.  Dave Pointer clarified to the Committee that a similar proposal that also included changes to the Dental Plans for active employees was made to the Committee at the September, 2012 meetings.  He stated that the current proposal dealt solely with retirees, and that the Division wished to offer a lower cost Dental Plan option to retirees upon the award of the Dental Program RFP that is currently being drafted.  Chairperson Rosenstein asked if this proposal would have an impact in locations where Collective Bargaining Agreements mandate that Dental coverage for retirees is paid for by the employer, and whether this would give employers the opportunity to shift members into a lower plan.  Mr. Pointer responded that it shouldn’t have an impact, and that any changes to those agreements would need to be negotiated.  Committee Member Keefe made a motion to accept the Division’s proposal that a DPO plan be offered to retirees upon the award of the Dental RFP.  Committee Member Lyons seconded the motion.  A vote was taken.  The motion passed.  (7:0:0)

Committee Member Leonard brought up the fact that at previous meetings, the idea of a subcommittee to work with a subcommittee from the School Employees Health Benefits Program Plan Design Committee (SEHBP PDC) on the issue of a wellness program was discussed.  He noted that Kevin Kelleher, the Chairman of the SEHBPDC was in attendance, and that a motion was passed at the previous SEHBP PDC meeting to form a subcommittee to deal with this issue.  He asked that the SHBP PDC also form a subcommittee.  He stated that the goal is to have any plan design changes ready in time for the May PDC meetings.  Jim Christ added that the timing is important, both for rate renewals, and to allow for communications regarding the proposed wellness program to be drafted and sent out.  Committee Member Ridolfino stated that offering the same wellness program to both SEHBP and SHBP members saves on administration costs.  Chairperson Rosenstein agreed that the subcommittee should be formed in order to discuss the issue, and indicated that she wanted to inform absent Committee Member Kreisberg before subcommittee members are chosen or a meeting date is set.  She indicated that she would contact Committee Member Leonard with more information within 48 hours.  Committee Member Leonard made a motion to create a subcommittee of the SHBP PDC, in order to work with the subcommittee of the SEHBP PDC on issues of commonality regarding a wellness program.  Committee Member Lyons Seconded the motion.  A vote was taken, the motion passed.  (7:0:0)

There being no further business, Committee Member Lyons made a motion to adjourn.  Committee Member Keefe seconded the motion.  All voted in favor.  (7:0:0) The meeting of the State Health Benefits Program Plan Design Committee ended at 1:55 p.m.

  Respectfully submitted,



  Florence Sheppard




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