HomeMy WebLinkAbout168-01 RESOLUTION(
RESOLUTION NO. 168-01
A RESOLUTION APPROVING THE RENEWAL OF THE BLUE
CROSS/BLUE SHIELD GROUP MEDICAL PLAN CONTRACT
FOR POLICY YEAR 2002.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council hereby approves the renewal of the Blue
Cross/Blue Shield Group Medical Plan Contract for policy year 2002, with a
deductible of $500.00 and all other proposed changes. A copy of the contract is
attached hereto marked Exhibit "A" and made a part hereof.
Section 2. That the City Council authorizes the Mayor or his duly
authorized representative to sign said contract with Blue Cross/Blue Shield of
Arkansas.
PASSED AND APPROVED this 4th day of December, 2001.
y:�
ATHER WOODRUFI{ City Clerk
APPROVED:
By: _ 'tilt
• DAN COODY, Mayo,
•
NAME OF FILE:
CROSS REFERENCE:
Resolution No. 168-01
•
12/04/01
Resolution No. 168-01
Renewal of the Blue Cross/Blue Shield Group Medical Plan Contract for
Policy Year 2002
Amendment No. 1083 (Amendment to the Arkansas Blue Cross/Blue
Shield Comprehensive Major Medical Group Benefit Certificates)
12/04/01
Staff Review Form
12/06/01
Memo to Don Bailey, Personnel Division, from Heather Woodruff, City
Clerk
NOTES:
Arkanst
BlueCross BlueShield
An IMpwq.n, LC."s.. al N. Okra Goss and Blue Sisal Auoaation
SRGE GROUP
EMPLOYER APPLICATION
APPLICATION by:
City of Fayetteville
(hereinafter called "Policyholder")
for a Group Policy covering the employees of the Policyholder
The Policyholder intends hereby to establish and maintain
Policyholder's employees and eligible dependents, to contribute
and
an
the eligible dependents of such employees.
employee benefit plan (the "Plan") for the
to the cost of the Plan, and to actively promote
the Plan to the Polio holder's em do ees.
SECTION 1. GROUP INFORMATION
Legal Name of Business: City of Fayetteville
D/B/A:
Street Address:113 West Mountain Street
Mailing Address: (if different from Street):
City, State, Zip:
Fayetteville, AR 72701-6069 I County:Washington
Telephone #:501-575-8279
Fax #:501-718-7698
Group Administrator Beff Ray
Exec. Contact: Don Bailey
E -Mail Address :•brav( ci.favetteville.ar.us
Fed. Tax I.D. #: 7/- 60/844Z
Exact Nature of Business: Municipality
How long have you been in business?
Business Type:
•
Sole Proprietorship
• Legal Partnership • Corporation X Government Entity
Do you have more than one location?
•
Yes g
No (If yes, please list the addresses of all other locations)
Have you ever filed for bankruptcy, or has your firm ever been placed in receivership?
(If yes, please give details and dates.)
•
Yes de No
SECTION 2. PRESENT CARRIER INFORMATION
nsas Blue Cross and Blue Shield's group
plan intended to replace
any existing
cov e?No
What is the na our
present insurance carrier?
How long
has your coverage
. : - orce7
Has your company
ever had BI
- - . : ue : . erage in the
past? • Yes • No
If yes, please a' • - -s of
coverage and business name at time of cov- . .
Do you carry Workers' Compensation
coverage
on your employees?
•
Yes
•
No
If yes, please give name of carrier
SECTION 3. PROXY
The
Shield
appointment
Th
be
ABCBS
If the
next
than
in
writing
Policyholder
Policyholder hereby
("ABCBS"), as
shall include
s proxy gives the Board,
voted upon at any
located at 601
third Monday of
day after, which
ten (10) or more
effect during the Policyholder's
by advising ABCBS,
may also
appoints the Board of Directors ("Board")
its proxy to act on its behalf at all
such persons as the Board may designate
or its designee, full power to vote for
meeting. The annual meeting of Members
S. Gaines Street, Little Rock, Arkansas,
March is a legal holiday, then the meeting
is not a legal holiday. A special meeting
than sixty (60) days prior to such meeting.
membership in ABCBS. The
attention Legal Division, of such at
revoke its proxy by attending and voting
meetings
on
will
may
least
in
of Arkansas Blue Cross and Blue
of members of ABCBS. This
by resolution to act on its behalf.
the Policyholder on all matters that may
is held each year at the home office of
the third Monday of March, at 1:00 p.m.
be at the same time and place on the
be called upon notice mailed not less
This proxy, unless revoked, shall remain
Policyholder may revoke this proxy in
five (5) days prior any meeting. The
person at any Members' meeting.
10-101LG R11 /01
Ret
Cro
Gro
SECTION 4. POLICYHOLDE..'AS PLAN ADMINISTRATOR
The Policyholder, as Plan Administrator, assumes responsibility for the accuracy of information
presented to Arkansas Blue Cross and Blue Shield ("ABCBS"), including all information on the
employment status and eligibility of individuals to be covered under the Plan, as well as medical
information provided with respect to each such individual. The Policyholder agrees that if
misrepresentations are made in any of the information provided for rating or in this Group Application
or any of the materials submitted with it, including, but not limited to, individual applications and
medical information, then ABCBS may cancel or rescind this Group Policy. The Policyholder further
agrees that if misrepresentations or false or misleading information is presented in filing of any claims
hereunder ("improper claims"), ABCBS may cancel or rescind the coverage of any individual involved
In presenting such a claim. Further, ABCBS may cancel or rescind the entire Group Policy if the
Policyholder or any representative of the Policyholder knew or should have known of the improper
claims, or if the Policyholder's action or inaction contributed to presentation of improper claims.
SECTION 5. ACKNOWLEDGEMENT OF COBRA OBLIGATIONS
This document is executed on the date signed by the Policyholder, a Group Employer that is entering
into a Group Insurance Contract ("Group Contract") with Arkansas Blue Cross and Blue Shield, A
Mutual Insurance Company, ("ABCBS") to acknowledge the following:
1. The Policyholder is subject to the provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1985, commonly know as COBRA.
2. The Policyholder understands that ABCBS will provide benefits set forth in the Group Contract to.
any of the Policyholder's employees or their eligible dependents who qualify and elect to accept
continuation of coverage under COBRA, but not for any period in excess of the period required by
COBRA.
3. Although ABCBS has introduced the Policyholder to a COBRA administrator, Ceridian, the
Policyholder desires to perform its own administrative duties to comply with COBRA. The
Policyholder will not depend in any respect on ABCBS in administering COBRA.
4. The Policyholder understands and agrees that ABCBS is only obligated to comply with properly
documented request for continuation coverage under COBRA, which requests are to be supplied
in a timely manner by the Policyholder. Proper documentation includes proof that the Policyholder
timely offered COBRA to the eligible employee, proof that the employee timely accepted COBRA
pursuant to federal regulations and proof of COBRA beneficiary's payment of premium in full and
on a timely basis.
5. The Policyholder agrees to notify ABCBS at least 180 days in advance of the exhaustion of any
employee's or eligible dependent's COBRA benefits
6. The Policyholder agrees to indemnify ABCBS for any damage, claim or loss ABCBS may suffer by
any action, litigation, suit, or claim brought by any individual arising out of the Policyholder's failure
to perform duties under COBRA.
a. Is your group required to comply with COBRA law in the current calendar year? ft Yes 0 No
b. If "Yes," would you like to utilize the services of Ceridian? }I Yes 0 No
c. If you answered "No" for (b.), who will handle COBRA administration for you?
10-101LG R11/01
a
r
ECTION • . C ENEFIT EL�..TION
•
COMPREHENSIVE
IANSOMMEDICGi4OGMM) (cheek selected Beta, x :t? d' °' ". ,
Lifetime Maximum: 0 $1 000,000
• $2,000,000
Deductible
•
$200 •
$250 •
$300 • $500
•
$750 • $1,000
•
Other:
Co -Insurance
• 90% •
80%
• 70% •
60% • 50%
•
Other:
Calendar Year Co -Insurance Max:
•
$2,500 •
$5,000 0 $10,000
0 Other:
Family Deductible(Max#/family) 0 2X
•
3X
Basis:
• Accumulated
•
Fulfillment
Family Calendar Year Co -Insurance Max (Max #/family)
• 2X
•
3X
Basis:
0 Accumulated
•
Fulfillment
CMM Elected Optional
Benefits:
❑ Air Ambulance Benefit Rider • $1,000 •
$2,000
0 $3,000
0 $4,000 0 $5,000
•
Supplemental
Accident Benefit Rider
% PREFERRED!PROVIDER:ORGANIZATION
(PPO)
(check selected Benefds)•“,„
',A.' ``
Lifetime Maximum: •
$1,000,000
g $2,000,000
Deductible
•
$200 •
$250 •
$300 X $500
•
$750 • $1,000
•
Other:
Co -Insurance •
90%/70% $ 80%160%
•
70%/50%
•
Other:
In -Network Calendar Year Co -Insurance Max • $2,500
X $5,000 •
$10,000
•
Other:
Out -of -Network Calendar Year Co -Insurance Max j(j None
•
2X •
4X
•
Other:
Family Deductible Max (Max#/family)
2X
0
3X
Basis:
XAccumulated
•
Fulfillment
Family Calendar Year Co -Insurance Max (Max #/family)
2X
•
3X
Basis:
• Accumulated X Fulfillment
PPO Elected Optional Benefits:
❑ Air Ambulance Benefit Rider • $1,000 0
$2,000
0 $3,000
0
$4,000
•
$5,000
•
PCP Benefit Rider Office Visit Encounter
Fee
• $10
• $20 0 $30 •
Other
—
X Supplemental
Accident Benefit Rider
&Lrtt
c uhe-imi-t
C6W6Trcf
k4.J4s
X Wellness Benefit Rider .'7PO
•
Prescription.Drug,Riders;(CheckSelected
Benefit)
• 2 Tier Copay Plan
• $3/$10 • $7/$15
•
$10/$20
•
Other:
X 3 Tier Copay Plan
• $7/$15/$25 •
%10/$30/$50 •
$7/$25/$50 •
Other:
$10/$20/$30
❑ Coin. + 3 Tier Copay
Plan
• 20%+$10/$20/$30
•
20%+$10/$30/$50
•
Other:
• Deductible + Coin. Plan
Ded.: •
Coin. PPO:
Coin. CMM:
$25 0 $50
(Medical - 90/70
(Medical Coinsurance
•
$75
or 80/60)
• $100
%)
■
•
• Other
20% (Medical - 70/50)
• 30%
Dental -, Plan:
SECTION 7. ARKANSAS MANDATED OFFER BENEFIT RIDERS
K:S ? 11:You Mus°"T Elect Or Reje"ct'Each1R
der
Type of Benefit Rider
Employee
Employee/
Spouse
Employee/
Child(ren)
Family
44-'.....C.
Elect
Reject
Licensed Professional Counselors:
$3.05
$5.93
$4.89
$9.28
•
X
Mammography:
$2.23
$4.46
$3.35
$4.46
in
X
Psychiatric Conditions:
$12.21
$23.72
$19.56
$37.12
•
)it(
Psychological Examiners:
$3.05
$5.93
$4.89
$9.28
•
12(
Speech & Hearing:
$1.75
$4.56
$3.50
$5.35
0
Substance Abuse:
$1.82
$3.38
$2.42
$5.05
■
TMJ'
$5.74
$11.48
$14.96
$23.20
0
X
10-101LG R11/01
enefit Rtder means covered benefits provided to Covered Persons will not include
temporomandibular joint disorders (TMJ) or craniomandibular disorders.
a
SECTION 8.
EMPLOYEE INh..RMATION
-Time =active employee with a minimum of 30 tits/week & 48 weeks/year
ENROLLING
WAIVING
TOTAL
Full
1. Full -Time Employees who have satisfied their Waiting Period requirement prior to eff. date:
562
/ S (EST)
(77
2. New Full -Time Employees who will satisfy Waiting Period within 3 months after the eff. date:
30
9.. (Esr)
30
3. COBRA Continuees
/.0
/0
4. Total of lines 1, 2 & 3 (Enrolling & Waiving)
5. New Full -Time Empbyees who will NOT satisfy the Waiting Period within 3 months after the eff. date:
0
6. Part Time / Seasonal / Temporary Employees
/S-
7. Total # of Employees (add 4, 5, 6)
632
SECTION 9.
EMPLOYER CONTRIBUTION
Employer Contribution: Employee: /00 % Dependent:
90 %
HEALTH:
DENTAL: N
SECTION 10.
Waiting Period:
Requested effective
(Please
A Employer
WAITING
Contribution:
PERIOD & EFFECTIVE
1 Months
Employee: % Dependent: iyo
DATE OF COVERAGE
(0, 1, 2, 3, Other) E0, 1 of • •ukzoiki lag.
date, pending approval is
Note: If a complete group enrollment
packet is not received by the last working day prior to the requested
effective date, the • rou •, if a • •roved, will be assi• ned the next available effective date.
SECTION 11. SIGNATURES
This Application is made and
States of America This Application
delivered in the State of Arkansas and is govemed by the laws of Arkansas and the United
is incorporated in and made a part of the Group Policy and Benefit Certificate.
referenced coverage and agree the group insurance, subject to the terms and conditions of
effect as of the next available effective date after approval, provided this application is
of Arkansas Blue Cross and Blue Shield. I also understand that my signature below
acceptance of the attached premium rate schedule.
presents a false or fraudulent claim for payment of a loss or benefit or knowingly
connection with an application for insurance is guilty of a crime and may be subject
prison.
I hereby apply for the above
the policies applied for, will take
approved by the home office
represents my agreement and
Any person who knowingly
presents false information in
to fines and confinement in
1. Policyholder
Signed
C 1 TY
at FAYs7TE✓/LLE" A2K this /7 day of —DEC 20 0 L
0 F F4Y��Err
(City, State)
EV/LLE
[full
legal name
134:
of Policyholder]
LEY
By: „c,
/ D -x M .
Author ed Signature Printed
a-rzs. 1712.
Name
is correct to the best of my
coverage (except as noted on the
and have explained in detail the
and the qualifications of
will have no liability until this
Title or Position
2. Agent
I hereby certify that all of the information contained in this large group employer application
knowledge, and I know nothing unfavorable about this firm or any individual proposed for
employee applications). I have complied with the underwriting rules and regulations
coverage to the new member firm and its employees including the preexisting condition limitations
the effective date provisions. I understand that Arkansas Blue Cross and Blue Shield
application has been approved.
Agent Signature Agent SSN/Agency Fed. Tax ID#
Agent Printed Name Date
10-101LG R11/01
%J n/LF.f.IL w11-lt
£vol Cfo A.4.f.444. aFt
12_ Av-vI
�a •
��J J 1E
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
TO: Mayor Dan Coody and The Fayetteville City Council
FROM: Ted Webber, Administrative Services Director
Don Bailey, Personnel Director ,412,
DATE: November 16, 2001
SUBJECT: Employee Group Health Contract Renewal
The contract renewal date for the City's Blue Cross Blue Shield Group Health and
Endorsed Dental Plan is January 1, 2002. Our current group contract was adopted by
the Council 01-01-98. The term of this contract is for one year with four additional one
year options for renewal to be exercised annually with the agreement of the City and
Blue Cross. Exercising the 01-01-02 renewal is the fourth of the four one-year options
for renewal.
The plan has consistently incurred unfavorable loss ratios over the past five years due
to the escalating medical and drug cost. Although costly, this trend has proven
manageable until the year 2002. The extreme escalation during the past 12 months
however, is a wake up call that we cannot afford to maintain the current schedule of
benefits. If we make no change, a combined rate increase of 53.7% is required. Based
on a current participant count, a 53.7% increase equals $1,128,453 annually.
There is no question that the cost of a major illness can lead to financial ruin of an
individual without insurance protection. Major illness however has not been the
defining component driving up the costs in the City's plan. Drug cost is a significant
issue and linked to drugs are the office visits for minor illnesses with the demand for
expensive name brand antibiotics.' There is considerable empirical evidence that the
demand for medical services and drugs to treat these non -threatening illnesses is
driven by the pharmaceutical promotional advertising and society's demand for an
instant cure.2 An economic incentive, ie cost sharing, which causes the consumer of
medical services to more critically evaluate the alternatives, is perhaps the only viable
answer to mitigate some of the plan cost escalation.3
' See Attachment "A" for additional facts specific to our plan.
2See Attachment "B" for facts pertaining to avoidable costs.
3See Attachment "C" for 2002 recommended policy changes.
• •
Access to medical services in Northwest Arkansas under any group plan, whether
insured or self insured with a third party administrator, is accomplished through either
the insurance company's proprietary network or a "rented" network. Otherwise, the
patient and/or the plan is charged a "retail" cost for the visit or procedure. All of our
references and research indicate Blue Cross has the most aggressive network cost
control system of any network in the state. A network which effectively negotiates
discounts plus conducts a stringent administrative audit can yield substantial
savings."
Acceptable competitive alternative sources of coverage for a large group in Fayetteville
is virtually nonexistent. A number of negative factors confront healthcare underwriters
when determining whether or not to compete in the Arkansas market.' These factors
have had a marked influence on the healthcare delivery system in Arkansas. Given the
market situation we requested assistance from four sources other than Blue Cross for
recommendations, possible options and other assistance in formulating a course of
action. The Municipal League was requested to provide details of their group health
plan. Their plan is bundled with some minimum life coverage. The coverage provided
in some respects is less than we now have and in others duplicates coverage in our life
products. The principle reasons for not giving this plan further consideration are (1) the
City has no input or control over terms and conditions of the policy, (2) the policy is not
subject to regulation by the Office of the State Insurance Commissioner and (3) the
policy is written only for a term of six months, ie. the premium could change semi-
annually.
Hagan Newkirk, an insurance, benefits and financial planning company in Little Rock,
and Watson Wyatt, a benefits consulting firm with a nationwide presence, were
requested to advise any options for coverage they could recommend. Each
recommended as a source for insured coverage Blue Cross, United Health Care,
AETNA and Signa who have a presence in Arkansas or as an alternative, self
insurance with a third party administrator. However, of these companies, only Blue
Cross has negotiated inclusion of Washington Regional Hospital in their network of
healthcare facilities. There are two recommended third party administrators in
Arkansas, USAble Administrators (a Blue Cross subsidiary) and CBS. Only USAble
has Washington Regional Hospital in its network.
"See Attachment "D" for Aug 00 - July 01 cost savings report summary.
'See Attachment E for listing of factors.
• •
The City employee group is large enough to be fully creditable, ie. independently rated
as to risk. We have initiated a study to determine if retaining a Third Party
Administrator and becoming self insured would result in a lower total program cost
and/or if it is feasible. Given the status of healthcare economics, a number of questions
must be considered such as: (1) should we terminate an insured plan at this time if
there is a possibility future coverage would be difficult to purchase if self insurance
proved unsatisfactory, (2) total cost of a third party administrator services, (3) cost and
availability of stop loss, (4) large claims and organ transplant reinsurance, (5) the
financial risk and variability of month to month charges, (6) assumption of plan design
responsibility vs hiring a risk management consultant and (7) the possibility the
additional administrative workload would require an additional staff employee.
Further study is underway to evaluate the viability of self -retained risk, a mailorder
prescription option, defined contribution heathcare benefits, or other options that might
be suggested. These are complex and substantial issues requiring careful evaluation.
Any conclusions likely will not be available until early 2002
Irrespective of how the health plan insurance may be administered in the future, the
current escalating medical and drug cost trends suggest the only alternative to much
higher employer costs is to shift more of the cost burden to the employees by perhaps
adopting a plan limited to catastrophic coverage only with a deductible approaching
$1,000.00.
Recommended alternative policy changes for the year 2002 are summarized on
Attachment "C". These changes were identified as yielding the greatest premium
reduction while maintaining essential coverage. If implemented with a deductible of
$300 00 these changes would reduce the 2002 cost increase to 34% or $715,226. With
a deductible of $500.00 the premium would be further reduced to 19% or $399,326.6
The group dental, paid 100% by employees, does not present the renewal challenge
such as we face with the group medical. Access to dental care will improve utilizing
Delta Dental's larger network in Northwest Arkansas and a small premium reduction
was achieved. 2002 premium for an employee will be $13.89 and family $45.84. The
2001 rates were $14.26 and $49.97 respectively.
We recommend the Council adopt the 2002 group plans as amended with the
deductible amount and the actual allocation of premium increase contingent on funding
priorities established by Council action.
6See Attachment "F" for 2001/2002 premium comparison and allocation.
an Arkansas
Opo BlueCross BlueShield
CITY OF FAYETTEVILLE
FAYETTEVILLE PUBLIC LIBRARY
Illness Burden 0.90
Cost vs Expected for Illness Burden 1.03
Top Eight Episode Types
Rhino Sinusitis (common cold)
Routine exam
Earache
Minor skin rash
Neuropsychiatry/Behavior disorder
Sore throat
Bronchitis
Minor neck or back disorder
Analysis:
The "Illness Burden" is a comparison of the overall health of the City of Fayetteville employees
based on claim diagnoses compared to all Blue Cross statewide membership. The City of
Fayetteville has an illness burden of .90, which means the employees have 10% less severity of
illness than the state average. In general, groups with older, sicker employees will have an illness
burden greater than 1.00; while younger, healthier groups will have an illness burden of less than
1.00. One would therefore expect the City of Fayetteville to have a per member cost of
approximately 10% below the rest of the state if everything else such as benefits and the
efficiency of the community were equal.
The "Cost vs Expected for Illness Burden" of 1.03 indicates that the City's employees consume
health care at a 3% higher rate than would be expected if they are located in the typical Arkansas
community. In reality, northwest Arkansas is more cost effective than the rest of Arkansas.
Medical costs here average 12% less than the rest of the state due to significant efficiency efforts
by the medical communities in both Fayetteville and Rogers. This would indicate therefore that
the City's employees are actually consuming approximately 15% more healthcare dollars than
would a similar group with their illness burden in Washington County.
National studies indicate that approximately 1/3 of all health care expenses are avoidable.
Although some of these expenses are due to physician behavior, a significant contributor to this
statistic is the fact that people today see physicians for more minor problems than they did in the
past. In reviewing the top eight reasons for physician visits, the majority of this groups visits are
for minor problems that would get better 80-90% of the time regardless of physician actions
(colds, skin rashes, sore throats, bronchitis neck and back pain). This generally indicates a benefit
level which encourages over utilization of medical services.
ATT. A
• •
Impact of Potentially Avoidable
Care Is Staggering!
• 1/3 of all health care costs are avoidable
Source: United States Senate Labor and Human Resource Committee
• 60% of primary care office visits result in no direct medical benefit
• 54% of emergency room visits are for non -urgent problems
• 50% regional variation between admits, length of hospital stay, and
procedures
Source: Agency for Healthcare Research and Quality
• 50 million antibiotic prescriptions for colds and flu each year, which
result in no benefit and cause harm in resistant organisms and allergic
reactions.
Source: American Academy of Family Physicians
ATT. B
PROPOSED CHANGES EFFECTIVE 01-01-02
PPO Option Only
Deductible raised from $200 to $300/$500
Drug Card raised from $7/$15/$25 to $10/$30/$50
Adult wellness benefit reduced from 100% coverage to be
subject to deductible and co-insurance. No change in
Preventive Child Care. Adult limit raised to $500 per
calendar year. Members may go in or out -of -network.
PSA test added to adult wellness, subject to deductible and
co-insurance.
Routine annual pelvic exam, pap smear and mammography
benefit reduced from 100% coverage to be subject to
deductible and co-insurance.
Out -of -network stop -loss changed from $4,000 to (-0-) no
stop loss.
CHANGES EFFECTIVE 01-01-01
Dual Option CMM/PPO
Deductible raised from $100 to $200
Drug Card raised from $3/$10 to $7/$15/$25
or
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EXPENDITURE PROFILE
DIFFERENCE
AUG00 - JUL01
AUG99 -JUL00
6
a
b9
e
e e e e o a o 0 e o a (aee ( n O N r CO CCO N r N
io CD O Cr)
R n r t0 n m N Y n N 6 O N6 m
6 V O N. r V) C? C) C) r t0 M C) N r)
1 m
m co o n O iO 0n n o v n n O o
m h o n v CO N n co m CO m m w 0
N N cO r m C) n e n C1 v1 m cn C)
rV (O rN r V (O o (p r O r
O n Nr OD ? N (ON CJ h 0 0 0
C> 69 19 19 f9 V m r M N n r CO
69 "" W W N W W N f9 69
CO
ve O a a O e o 0 e e e e
r N m O O N V' r V N O
r P 0 CO O r 0 (O O7 c0 O O m
N C) N C) N N
co 01CuO0 m1Om a v.rm 03m0o
N OO N r n V (O 0 (p r N C) N^ l9 10
O7 r m r CO N m m V C N OD N OO
N O O O O 10 cD N N m n o h N
Y) N N a cD CD O m O CO m m V OO
O r N 49 r 69 N n c0 co o (D ID
yj W W ofc9 W H f9 N
co V) f9 N 69 N 69
0 0 0 0 0 0 0 0 0 0 0 0 0
N r CO t7 O n r CO N N--
ch O r
m ui O N O N O m o m N O r
r Cl N M N N n
to O 0 co r N h co 0 r V N M co O N
n co n O r m N CO 0) CO N co C9 m 69 'Cr
N N N O m N n n D1 r CO O m N co
O O H c7 N A N O O N Nm C N
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0 r N 69 69 r N CO n r CO O C N
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GRAND TOTAL
COMPLETION FACTOR FIRST YEAR
COMPLETION FACTOR SECOND YEAR
JOINT VENTURE - ALL
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Medipak claims are not included in this analysis.
ATT. D
• •
an Arkansas
BlueCross BlueShield
u h d.. S Laren M mu Biwa CIS an Y. 91•••10•..c.rwn
FACTORS INFLUENCING HEALTH CARE
COSTS IN ARKANSAS
Indicator Rate
• Women who receive first trimester prenatal care
9% below
US Average
• Births to women under age 18 45% above
US Average
• Infant Mortality 27% above
US Average
• Low birth weight infants 15% above
US Average
• Mortality from auto accidents 24% above
US Average
• Mortality from all accidents 19% above
US Average
• Mortality from heart disease 31% above
US Average
• Mortality from cancer 25% above
US Average
• Mortality from stroke 52% above
US Average
• Mortality from emphysema
*Data source is the U.S. Public Health Service.
19% above
US Average
ATT. E
• •
an Arkansas
Opp BlueCross BlueShield
STATE HEALTH RANKING: ARKANSAS
Since 1990, Arkansas has failed to match other states' improvement in smoking,
reduction in risk for heart disease, or decreases in infant mortality. The state has
decreased the reported rate of infectious diseases.
2000 1999 1990
Overall Ranking 46 50 47
Lifestyle
Prevalence of Smoking 46 40 35
Motor Vehicle Deaths 42 45 47
Violent Crime 29 29 23
Risk for Heart Disease 47 46 19
High School Graduation 20 28 17
Access
Unemployment 32 41 41
Adequacy of Prenatal Care 41 46 46
Lack of Health Insurance 42 48 45
Support for Public Health Care 42 41 41
Occupational Safety & Disability
Occupational Fatalities
Limited Activity
37 45 41
40 47 49*
Disease
Heart Disease 40 34 34
Cancer Cases 45 46 43
Infectious Disease 21 25 35
Mortality
Total Mortality 45 42 35
Infant Mortality 44 38 30
Premature Death 47 45 43
*Data source is from the annual study by the United Health Group. Methodology may have
changed since initial rankings.
ATT. E
AUGUST 1, 2001 GROUP MEDICAL (EXCLUDING DENTAL)
AUGUST CENSUS
COVERAGE CLASS NUMBER OF MONTHLY
EMPLOYEES PREMIUM
CMM SINGLE 51 $197.16 $10,055.16
CMM FAMILY 49 $477.13 $23,379.37
PPO SINGLE 209 $159.84 $33,406.56
PPO FAMILY 283 $382.60 $108,275.80
$175,116.89 X 12 = $2,101,403 ANNUALIZED 01
01-01-02 to 12-31-02 (PROJECTING AUGUST CENSUS) WITH A $300.00 DEDUCTIBLE
2001 PREMIUM SCHEDULE
SINGLE FAMILY
CMM
EMPLOYEE PD
EMPLOYER PD
PPO
EMPLOYEE PD
EMPLOYER PD
$37.32
$159.84
$197.16
$0.00
$159.84
5159.84
$144.33
$332.80
$477.13
$49.79
$332.81
$382.60
PPO SINGLE 260 $219.88 $57,168.80
PPO FAMILY 332 $534.79 $177,550.28
$234,719.08 X 12 = $2 816 629 ANNUALIZED 02
$715,226 INCREASE (34%)
2002 PREMIUM SCHEDULE - ALLOCATION EXAMPLES
EMPLOYEES PAYS 100% OF INCREASE
SINGLE FAMILY
PPO EMPLOYEE PD* $60.04 $201.98
PPO EMPLOYER PD $159.84 $332.81
$219.88 $534.79
EMPLOYEE/EMPLOYER SHARE INCREASE 50/50
PPO EMPLOYEE PD* $30.02 $125.88
PPO EMPLOYER PD $189.86 $408.91
$219.88 $534.79
• EMPLOYER PAYS 100% OF INCREASE
PPO
PPO
_EMPLOYEE PD*
EMPLOYER PD
$0.00 $49.79
$219.88 $485.00
$219.88 $534.79
RATES DO NOT INCLUDE 100% EMPLOYEE PAID DENTAL
2002 PREMIUM
EMPLOYEE ONLY $13.89
FAMILY $45.84
ATT. F
01-01-02 to 12-31-02 (PRO• TING AUGUST CENSUS) WITH A $500.00111DUCTIBLE
PPO SINGLE 260 $195.22 $50,757.20
PPO FAMILY 332 $474.81 $157 636.92
$208,394.12
2002 PREMIUM SCHEDULE - ALLOCATION EXAMPLES
+ EMPLOYEES PAYS 100% OF INCREASE
SINGLE FAMILY
PPO EMPLOYEE PD' $35.38 $142.00
PPO EMPLOYER PD $159.84 $332.81
$195.22 $474.81
+ EMPLOYEE/EMPLOYER SHARE INCREASE 50/50
PPO EMPLOYEE PD' $17.69 $71.00
PPO EMPLOYER PD $177.53 $403.81
$195.22 $474.81
EMPLOYER PAYS 100% OF INCREASE
PPO EMPLOYEE PD* $0.00 $49.79
PPO EMPLOYER PD $195.22 $425.02
$195.22 $474.81
RATES DO NOT INCLUDE 100% EMPLOYEE PAID DENTAL
2002 PREMIUM
EMPLOYEE ONLY $13.89
FAMILY $45.84
X 12 = $2 500 729 ANNUALIZED 02
$399,326 INCREASE (19%)
ATT. F
• •
AMENDMENT NO. 1083
AMENDMENT TO THE
ARKANSAS BLUE CROSS AND BLUE SHIELD
COMPREHENSIVE MAJOR MEDICAL
GROUP BENEFIT CERTIFICATES
add. - o,J.
45, /St -a,
MICROFILMED
Form Nos. 102,114,159,160,161,163,164,186,
186SM,187,187S1vl,188,31-348
ELIGIBILITY AND EFFECTIVE DATE OF COVERAGE paragraph B., subsection 2 d
is hereby amended to read as follows:
d. Medical Support Orders: Dependent Insurance shall be extended, on the
same basis as to other children, to a Child for whom the employee must
provide medical support under a qualified medical support order
regardless of whether the Child resides with the employee or is claimed by
the employee as an exemption for federal income tax purposes If the
employee fails to apply to obtain coverage for a Child, the Company shall
enroll the Child on the first day of the month following the Company's
receipt of a written application of a custodial parent of the Child, a child
support agency having a duty to collect or enforce support for the Child, or
the Child, provided however that the premium is received when due. In
the event a court has ordered an employee of the Group who is not
covered by the Plan to provide coverage for a Child, the employee will be
enrolled with the Child on the first day of the month following the
Company's receipt of a written application from the Employer, a custodial
parent of the Child, a child support agency having a duty to collect or
enforce support for the Child, or the Child, provided, however, that the
premium is received when due.
SERVICES NOT INCLUDED paragraph P. is amended to read:
No benefits or services of any kind are provided under this Certificate for:
radial keratotomies or epikeratophakia procedures or any service performed to
correct disorders of refraction or accommodation;
SERVICES NOT INCLUDED is amended by adding the following new paragraph:
care, services or treatment required as a result of complications from treatment
not covered under this certificate;
OTHER PROVISIONS is hereby amended by adding the following new paragraph:
Insurance Department. Arkansas Blue Cross and Blue Shield is an insurance
company regulated by the Arkansas Insurance Department, 1200 West Third
Street, Little Rock, Arkansas 72201-1904; Consumer Service (501) 371-2640 or
(800) 852-5494.
This Amendment becomes a part of the Arkansas Blue Cross and Blue Shield Managed
Benefits Comprehensive Major Medical Group Benefit Certificate. All other provisions not
inconsistent herewith remain in full force and effect.
23-1083 4/02