001Good evening everyone. Uh welcome to the November Finance and Shared Services Committee meeting. I have with me tonight Dr. Layman, Miss Allen, Dr. Peek, uh Mr. Zikner, who was an alternate tonight because Miss Sharma couldn't be here, Miss Deayne, and Mr. Piro. Um we also have uh Mr. Parseek here from Gallagher uh insurance and risk management and consulting company um for an important agenda item. Before we jump into that, because that's going to be majority of our meeting, I would just want to check with any of the board members have any questions on their attorney invoices or the bill list? >> I do. >> Yes, sure. Go ahead, G. I I was checking I was adding them up and I was wondering how we're behind on some of our payments there to >> I just
002wondered why we're like that. Is it how we pay things to them? Is that >> Yeah. So there's two months worth of >> Right. I saw that year. So So one of the October is going to show the September balance still and just a matter of when the board meeting hits and when they get paid has paid after the board meeting. So that's why so in the timing of when we get their bill. So they may not have received >> the check before they sent the other bill. >> I see. >> So it's they're we're not holding any checks that >> No, no. I think so. I'm just wondering if that was the process or not. >> I had same concern >> because I saw we did pay them 6,91750. There's always 50 cents in
003there. Can't they round it up or down? >> I mean it down uh and make it 69. No, 1750. We could use every penny again. But I that was my question. I just I was looking at it going, "What the heck?" >> I I had the same concern and Laura told me, "We're okay. We're not backing up any payments." >> And then B. Thinklestein on the report. What is that on one of the reports? Um I saw the name B. Thinklestein. It was >> It's on the bill list. >> Yeah, it was on the bill list, I thought. >> Do you have a check number on it? >> No, I didn't. I'm sorry. I I just wrote it down and I was wondering what it was. >> It's okay. We can find it. >> I'll
004don't worry. >> Anybody else? Any questions on the bill list of the attorney Edmonds? So, the next item on the agenda is a discussion on health insurance. There's been a lot of chatter around it. Um so people in the community would know that the state has gone up significantly and for that reason we have um this discussion in the meeting tonight. And Laura, would you like to introduce um Mr. Carson? >> Mr. Mario Carich Gallagher um who has been working with us for several months now since actually the state came out with these very high rates. So he's been working hard for us trying to get us um the best the best we could do um for insurance. So he's can explain it. I we we appreciate his help and him being here tonight. >>
005Yeah, thank you. So, uh, what I handed out the the the front of it is just kind of giving you an overview of the state of the SEV pick, um, which if you haven't been paying attention, has been in the news since March. Back in March, they released the midyear um, projections, which they did that significantly earlier than they'd done in the past because of how it was looking. And then shortly thereafter the treasury released their own report where they coined the term the death spiral that the SHBP which is on the local government and the state side and the SEBP the school side is in dire financial trouble. Uh and when they talk about the death spiral, what they're talking about is the groups with the good experience like us coming out of the
006state and the only people who are joining the state are people who are getting severe increases and it's financially better for them to be in the state. So bad risk going in, good risk coming out and it's only going to continue to get progressively worse. Um when you look at what's going into effect as of January, uh we're looking at a 32% increase, which is really significant. But when you looked at that Treasury report, the thing that really stands out is it's a 32% increase this year. They're already projecting a 35% increase for next year and a 50% increase for the year after that. And there's a lot of factors leading into that, right? there's just a not enough money coming in for the amount of claims that are going out. Um the state has
007done a poor job of filing their uh their claim stabilization reserve, right? And that's the the pool of money that they have to pay claims. >> Um I've been with Gallagher for 11 years. Prior to that, I worked at Horizon and at that time the state CSR was six months. That's six months worth of claims uh to be paid on hand at any point. And over time it's been reduced and they said okay well target no longer six it's four and now the target is two months and the CSR has enough in it for two weeks. It is severely underfunded >> and CSR means what? >> Claim stabilization reserve. Um and in this budget that they passed or these rates that they passed, they say that this is not going to improve the claim stabilization
008reserve. Uh they were talking about in the middle year possibly doing a midyear um assessment to bring more money in, but there's just a lot of factors that are playing into it. And when you look at the bottom of the page, I think this is the most telling that, you know, for somebody in the direct 10 who has a family enrolled, it's $75,000 a year. Now, if you have somebody new coming into the district, they're going on to the educator's health plan, still $52,000 a year, $51,000 a year. So, if you bring somebody in at $50,000 in salary, right off the bat, you're you're already at $100,000 for somebody coming walking in the door. Um, and at what they're projecting happening in the future, within two years, it's going to be at $100,000, which is
009absolutely um unsustainable. It it can't continue to move forward. Um, will they do something about the state plans? If I could answer that, I would also be able to predict lottery numbers. >> That's true. Um, you know, if you paid attention on the state and local government side, they made some pretty significant changes going into effect on January 1st, um, including, we keep on hearing about GOPs, right? So, if you work for Monroe, GOP 1's now, instead of just paying the the uh the $10 co-ay, whatever it may be, it's a $45 co-pay. And sometime in 2026, they are implementing a lifestyle management program that if you don't participate, you now have to pay $145 for the GLP ones. Along with that, they made changes to um deductibles and increased maximum out of pockets. They
010did a bunch of things. On our side, they canled the last two plan design committee meetings and they haven't bumped forward with any solutions for 2026. So you are not unlike everybody else in the state right now who as soon as they put out these reports, everybody requested their their claims experience to see what does it look like? Can we get out of the state? Um and that brings us to the back page. We got all of the data that we needed. We went out to all the carriers. Um everybody declined to quote except Etna. Etna direct. Um, Etna provided us a competitive quote. It gets us out of the state, which is the goal. Um, they provide us an equal to a better than letter where the benefits will match the benefits on the
011state plan. Now, I can't stress this enough because what we hear whenever we do this is you hear somebody say, "Oh, well, my doctor no longer participates with that. This isn't equal to or better than." That's not what equal to or better than reflects. equal to and better than is are the co-pays the same deductibles um any maximums they have things like that the actual benefits themselves so Etna has provided us with the equal to a better than letter ensuring that the benefits will match the state which it does help that we're going to Etna because they also administer the state they have everything already set up so it helps ensure a smoother transition that everything is working the way it's supposed to be the rates that we originally that were for a one-1 effective
012date, but it was there wasn't enough time. There wasn't enough time to come to to to you guys to the board because in order to leave the state, you have to give them 60 days notice. So, we pushed it back 30 days to go effective one. uh given us enough time to do what we need to do administratively with you guys and then also once approved that we have enough time to talk to the membership and answer any questions that they have and and put their minds at rest. Um so when you look at the plan comparison what will happen now is the direct 10 15 educator health plan and garden state health plan instead of having horizon and as an option we are direct with Etna at will be the only carrier and then
013the prescription covered will change them is the state preferred vendor this is all being done directly through Etna CVS and if you're not aware actually CVS owns Etna so it's a really good partnership that they have uh in that integration. When we talk about challenges, uh I would love to sit here and say there's not going to be a single problem and everybody's going to be happy and ecstatic with it. Um I wish that was the case, but there's always going to be hiccups. The one thing I can't stress enough though is if there are issues, that's not your issue. It's not the union's issue. It's not the board's issue. It's our issue. they work with our team. Our team will handle them all the way through to ensure that the issue gets resolved. The
014biggest issue that we're going to have is the integration of a new pharmacy benefit manager because every pharmacy vendor utilizes their own drug formulary, right? The formulary is what drugs are covered, what's not, whether it's covered at a preferred brand name or a non-p preferred brand name, all of all that. That's a big book that they send out. There's always going to be issues. And what I want to really stress is nobody will not have access to double negative positive sorry in a school also I'm very aware of it um everybody will have access to a medication for whatever their condition or ailment is it may be a different brand name but they will have access to a medication. Now, in the event you have somebody who has already tried other alternatives and that's the
015case that they've tried other alternatives and you know there are slight variations in a formula. It could be an allergy could be that they just didn't get the results that they want. Their doctor and I can't stress this enough because too many members are like well I'm calling in for the authorization. No has to appeal it. >> The doctor has to put in an authorization >> right? Y >> and what we find in nine out of 10 times when something like this is denied, it's because the doctor just says, "Oh, I want them to be on floatings. They don't submit the medical documentation showing that over the course of the last couple years, they've tried this. They've had an allergic reaction, whatever that case may be, but there is a pathway for them to try
016to get that medication covered. Otherwise, they would have to try one of the other drugs that are off the formula. uh the provider network, the admin network matches up incredibly well with Verizon on most of our groups that we do a switch. We find it to be about a 95 to 98% match. And what I promise you you won't hear are the people who say, "Well, my doctor was out of network. Now they're in network and I'm paying less." Nobody says that, but there they you will have staff that experience them. There will be people who currently are utilizing a doctor who may not participate with Etna. So depending on what they are using that doctor for, right? And there's this thing called transition of care. If you are in the middle of a course
017of treatment, if you are pregnant, uh cancer, in the middle of multiple surgeries, had a surgery and followup, things of that nature. If the doctor does not participate, it's a form that your employee has to fill out. They pay a doctor. A doctor fills that second part. They submit it to Etna. Etna then negotiates with that doctor to continue paying him at the in network level, holding a member only liable for whatever their co-pay is um until that course of treatment is done. Okay? But I can't stress this enough because you'd be surprised. It's well my chiropractor doesn't participate and I've been seeing him for years. Routine chiropractic care does not fall under it has to be for a major illness ailment something of that sort. Um in those cases we encourage all of your
018staff to reach out to my team where my team will get them the form. When they get the form back from the doctor, give it to us. We're going to push it through our channels to ensure that it gets handled and addressed properly. Would you do the same thing with the prescriptions when the doctor would be easier because some doctors if it's you they have nothing work and stuff to do if they want to I there's two of my prescriptions that I cannot take a generic and I try my doctor has sent in the paperwork will it be easier for the docs to do that because you know it's extra work for them >> it's easier for them to submit it directly okay >> because nine out of 10 doctors and using my own as
019as an example um I just recently went prescription and we knew that was going to require an authorization. She did it while I'm standing there on the system. They log it in, especially being CVS, everybody has access. They log it in and they click on add the notes from this visit, this visit, this visit, and it all gets sent over. >> Great. >> Um, it's just the additional paperwork that that's why we don't have it come through. >> Yeah. >> Or when is the contract up? >> So, >> because the union would have to agree to this change, correct? Now, um we do look for union buyin. Um it does make it a lot easier, but carrier change is not subject to union approval. The union is the benefits are if it's in it's not
020it's by state statute, it's not allowed to be in that. >> But if I may fix those, they've had conversations with members of NTC. So, this has been in the worst. >> We've met with um all of the union reps. Um they had one big meeting where they had presentation um that Mary provided. Um and they were all it was it was a good good meeting. Um very informative. They had good questions and followup and they they seem to be on the word. Um and they've followed up with other questions since then and and Mary was answered everything. Exactly what I'm sharing with you is what we shared with the union and I've been involved in one of the patch. So I know like you said 90% of the people are going to buy in
02110% >> always >> and then 10% could bring a suit and we'll end up to try to figure out the >> the only way that they could bring with the union. The only way they could bring about a suit is if the provider network was not at least a 90% match. Right? And so that's why we don't even bring say a signal to the data because we know the network can't match it. >> It's the same network that the state uses. >> So it's it kind of that it's kind of as long as you >> So part of our staff is already on >> and part is on horizon. So the ones that are not on Edna are going to be the ones impacted if I'm saying this right. >> Yeah. >> Can I ask
022you a question about the finances of it? I know that state is going to be unaffordable. This is also going to be a price hike for us. Significant price hike but state is projecting to be higher and higher the coming two years. What is the projections on Etna for the next two years? So, as we are being rated on our own, that's going to vary on our own experience. Um, ideally in a perfect world, um, we would love to get into one of the trusts. I don't know if you're familiar with your school health insurance fund, which is the biggest one in the state, >> which is essentially a mini state plan. They bring everybody in and then now you're no longer being rated on your individual claims experience. They're rating it on 150 school
023districts that have come together. Um they've done a much better job financially than the state has. Uh they are very financially secure, very financially stable. Um ideally that would be kind of like the next step to get to that because then it's we're all being rated together. Um, we always run the risk uh if we have a really bad claims year, we may see a rate increase higher than what the state is. And if that's the case, we evaluated and if we need to go back into the state, we can we can jump back into the state next year should we need to. >> Do we lock in a number just for 12 months? >> That's what I was going to ask. >> It takes us to the end of the year. >> Yep. I
024will tell you >> the carriers were um very short per time ago they were given a second year rate renewal cap. They're no longer doing that just because of volatility in the marketplace right now. >> So this is though it's it would begin February 1st and end December 31st. Correct. So it's not the school year. It's based on calendar, >> but then we're going to have to do it >> yes for 11 months and starting in August. A uh August and September is when we will know what the next year will start to look like. >> And what's the price? >> Um I don't have it on here. The price is saving the district about $800,000 for the calendar year. versus if we were to not make any changes and continue with safe, we would
025be paying $800,000 more at this point. >> Yeah. Yeah. I would say we're not spending the money. It's an $800 $800,000 approximately $800,000 state reduction in the increase. It's still a significant increase. >> My question is they pay a percentage >> of their healthcare. Yes. So the percentage is even with changing is still going up. >> Is going to go up. Yes. So >> some of it. >> Yeah. >> And and and that's the the challenge when they implemented chapter 44 back in 2020. Chapter 44 wasn't sold as healthcare reform. It was sold as chapter 78 relief. So chapter 44 for the educators and the garden state health plan the employees contribution is just based on a percentage of their salary. Correct. which sounds great from an employee standpoint, but from a B board standpoint,
026you're seeing diminishing >> Yeah. >> employee contributions as the rates are going up. >> Yes. >> Because for the most part, nobody's salary is going up 32% to make up for that difference. >> That's what I mean. >> People that are in the chapter 78 plans are it's based on the premiums, the percentage. So, it's it's it's it's different. So it's going to be for them they're going to see a little bit more of a savings that's based on the premium. [snorts] So it could be that's what I mean between employee it'll look different >> depends on which plan they're in right but now they're only going to have one >> somebody health plan >> they're paying the exact same in December January February because it's just a percentage of their salary >> the people
027who are in the 10 or 15 they're in a percentage of premiums >> so they'll pick the plan they want >> correct correct so we we've just gone through open enrollment with the state And we told everybody go through the open enrollment like they were, they will have an opportunity to make a change if need if they want to. Um the the great thing is if they don't want to make a change, there's nothing for them to do. We're going to take the enrollment uh file out of benefit solver and that's what we're going to use as our enrollment file to go to Edmond. >> I have a question. I know you were talking about the shift program and I know um a superintendent who has it in his district and he was telling me
028that it could go they could go up to and they can come down to correct in that program. So if we get through this do you see us possibly getting into that program? >> That's the goal, >> right? That's the goal. >> Okay. That's what I would like. >> It's all going to be dependent on MLAN's experience over the course of the next 10 months. So, it's a 10-month thing and then you can is it 10 months or a year? Well, we're >> Yeah. Right. >> Come fourth quarter of next year, >> you could start looking. >> We're going to Well, before the fourth quarter, we're going to start going out to quote. Okay. >> And see if we can get competitive quotes. The ship will accept us. There is a relatively new trust on
029the market, uh, NJ Solutions, uh, significantly smaller. They're about two years old, three years old. um we will go out to market with them also because you know in full transparency and and I'm just totally making up numbers if the shift comes in and says okay well we're at 15 right >> and NJ solutions comes in and said we're at 10 >> we're going back to the shift to say hey look this is what they're giving us right >> can you match it >> so in essence of time I just want to kind of summarize so what has happened in the last Laura correct me four months five months since we got the news and we started working the business office did get the claim experience report for Monroe and then went out to shop
030with you know multiple like you said we try to get to see who would take us working with Mr. Cor and now we have only >> one >> and even that one is so state would have cost us a lot more we got approved we didn't want to go that route we got approved by EDNA is still going to cost us more so the summary of this is that health insurance is going to cost much higher but to what you said in the beginning we're not alone a lot of school districts are going through this um the action that the board needs to take immediately in the next meeting would be to give the notice allow you know approve the notice to state because there's a 60-day notice period while we continue to work with
031Mr. Gall Gallagher oh sorry Mr. Cors and get our employees educated which the benefit solver team yours is going to will the education start while the notice is served. So yes. Yes. So if we decide to move forward at the next board meeting, we need to uh pass the resolution saying that we're leaving the state for medical and prescription um because it's more than 60 days. At that point, it's going to trigger things on their side, but once we have board approval, um we already have a website set up for employees. >> And this is something that we've just started doing where I'm not going to lie, it's very a very rudimentary website, but it works because it's here's all the information you need. And if you go out to the website today, you will
032see that there's a sideby-side plan comparison, how to look up your doctor on the ETNA website, how to look up your prescription on the ETNA website along with the formula for January 1 that if you don't want to bother with the ETO website, here's a 70page PDF that you can do a search on to find your medication. >> Um, I'm trying to think what's out there. The transition to care, >> the cost calculator. It's a simple Excel calculator where they put in what their estimated salary is >> and then it tells them what the cost is for everything, right? It'll tell you the direct pen single parent child to adult family. So like this way if somebody's considering, oh, should I put my my my wife on a plan? Should I take her off a
033plan? They will see by page I put across. I think it's important that um either our our staff and members of the MTA are listening in or they see this recording to hear everything that we have shared tonight. I know that you guys have met with the leadership team in NTA and you have also been part of that. This one pager is great for us board members and honestly from our seat the decision is pretty straightforward but we do want them to have the opportunity to go through it come to us with concerns if there were any maybe you could be there at the meeting to answer those at the next meet I'm not sure if that's >> we can make ourselves available the next steps is once the board adopts this we will be
034planning with the board about this right after Thanksgiving we're going to do virtual seminars um it's kind of one good things that came out of COVID because we used to do these live meetings and I'd sit in an auditorium for four people to come walking in. We do these meetings at 600 7 o'clock at night that you can bring your spouse. Um in some cases people bring their kid because they need somebody to just help explain things and we do a relatively brief presentation on it. What are the changes? What are the things to look out for? And then we open it up to a Q&A, right? They have the opportunity they can chat. um they could raise their hand, ask a question live. And then we also do stress because somebody might not feel
035comfortable saying, you know, my kid is in the middle of >> Chemotherapy, right? My kids in the middle of chemotherapy. They don't want to announce that. So if you have questions, contact my team and we'll walk you through. >> Those meetings will be recorded. The recordings will be put on the website. So this way if somebody says, "Well, I sat there and I thought they said something." They can always go back and look. >> That's a great resource. So a time is of essence. So, we will be bringing this up at the next board meeting. >> And what do we know the difference in price? Like >> it's >> Yeah, I provided the board office with a sidebyside and we all have that before the >> You could probably make it with executive attachment tonight's
036committee meeting. >> At least we have an idea. >> We know it's an $800,000 savings, >> right? >> And then Right. And then at least you've already spoken to um >> and to EA and they know that we have their interest at heart in order to bring things down. That's why um Laura and and this gentleman from Mario Yes. >> Mario Dr. Layman have been working so hard because we want to get them the best quality insurance. >> Absolutely. >> At a reasonable rate for them nowadays. I mean, I have two children that are teachers, and I know the one in New Brunswick, it's going to go up because they're in the teach they're in the teachers plan, >> estate plan. Yeah. >> So, I said to her, "Uh oh, you better be ready, honey."
037So, uh they won't leave it. I know they >> if I can say one thing since [clears throat] the state report came out and then they put out the initial rates um we have gone out and tried to quote 26 schools and municipalities out of 26 four came back as violent. >> We are one of those. Is there a reason why >> Thank you for saying that in the reporting is um >> um I think in this case Edna came back very competitive because of their relationship with CVS um not to get too deep in the woods but whenever you go to the pharmacy and you fill out a brand name prescription there's a rebate that goes back to the insurance carrier right so you fill out a prescription with the state the state gets
038rebate we never see it um because it's Etna and CVS in a relationship their rebates are so much better than they're going to give anybody else. >> So, in conclusion, this is a very critical decision that will be made in the next board meeting. I urge everybody to give some time to this um come up with questions, uh reach out to the administration, um and um let us know of your concerns in advance if there are any. This is definitely the need of the hour and we will be taking action in the next board meeting. That concludes the finance and uh shared services committee meeting. We did run over, but thank you everybody for your time and thank you for coming out tonight. Mr. >> Any questions? We'll answer. >> Is your number on here
039in case we have questions? Uh my