1. health and fitness

(PLEASE FIND THE AGENDA/TABLE OF CONTENTS ON PAGE 4.)
REGULAR MEETING
OF THE
BOARD OF DIRECTORS
March 3, 2015
9:30 AM
Alfredo R. Santistevan Board Room
2nd Floor Suite 207
4308 Carlisle Blvd. NE
Albuquerque, New Mexico 87107
New Mexico Retiree Health Care Authority
Regular Meeting
BOARD OF DIRECTORS
ROLL CALL
March 3, 2015
Member in Attendance
Mr. Sullivan, President
Mr. Montaño, Vice
President
Mr. Crandall, Secretary
Mr. Propst
Ms. Goodwin
Mr. Johnson
Mr. Linton
Ms. Padilla-Jackson
Ms. Sucher
Mr. Eichenberg
2
NMRHCA BOARD OF DIRECTORS
March 2015
Mr. Julian Baca
Alternate for PERA Executive Director
33 Plaza La Prensa
Santa Fe, NM 87507
PO Box 2123
Santa Fe, NM 87504-2123
[email protected]
Ms. Jan Goodwin, Executive Director
Educational Retirement Board
PO Box 26129
Santa Fe, NM 87502-0129
[email protected];
(W) 505-827-8030
(F) 505-827-1855
The Honorable Mr. Wayne Johnson
NM Association of Counties
Bernalillo County Commissioner
One Civic Plaza, NW
Albuquerque, NM 87102
Ms. Karen Brown
Deputy County Commissioner
Bernalillo County, District 5
[email protected];
505-468-7212 (office)
505-462-9821 (fax)
Mr. Terry Linton
Governor’s Appointee
1204 Central Ave. SW
Albuquerque, NM 87102
[email protected];
505-247-1530
Mr. Joe Montaño, Vice President
NM Assoc. of Educational Retirees
5304 Hattiesburg NW
Albuquerque, NM 87120
[email protected]
(H) 897-9518
Ms. Olivia Padilla-Jackson
NM Municipal League
Deputy Finance Director
City of Albuquerque
[email protected]
Mr. Wayne Propst
Executive Director
Public Employees Retirement Association
33 Plaza La Prensa
Santa Fe, NM 87507
PO Box 2123
Santa Fe, NM 87504-2123
[email protected];
W: (505) 476-9301
The Honorable Mr. Tim Eichenberg
NM State Treasurer
2055 South Pacheco Street
Suite 100 & 200
Santa Fe, NM 87505
[email protected]
(W) 505-955-1120
(Fax) 505-955-1195
Ms. Karen Sucher
NEA-NM, Classroom Teachers Assoc., & NM
Federation of Educational Employees
PO BOX 1983
Tijeras, NM 87059
[email protected]
Phone: 505-286-8702
Mr. Tom Sullivan, President
Superintendents’ Association of NM
800 Kiva Dr. SE
Albuquerque, NM 87123
[email protected];
505-330-2600
Mr. Doug Crandall, Secretary
Retired Public Employees of New Mexico
PO Box 20607
Albuquerque, NM 87154-0607
[email protected]
3
Regular Meeting of the
NEW MEXICO RETIREE HEALTH CARE AUTHORITY
BOARD OF DIRECTORS
March 3, 2015
9:30 AM
Alfredo R. Santistevan Board Room
2nd Floor, Suite 207
4308 Carlisle Blvd. NE
Albuquerque, NM 87107
AGENDA
1. Call to Order
Mr. Sullivan, President
Page
2. Roll Call to Ascertain Quorum
Ms. Beatty, Recorder
3. Pledge of Allegiance
Mr. Sullivan, President
4. Approval of Agenda
Mr. Sullivan, President
4
5. Approval of Regular Meeting Minutes
February 3, 2015
Mr. Sullivan, President
6
6. Public Forum and Introductions
Mr. Sullivan, President
7. Committee Reports
Mr. Sullivan, President
8. Consent Agenda – Out-of-State Travel (Action) Mr. Tyndall, Executive Director
15
State and Local Government Benefits Association
2015 Annual Conference
May 3rd – 6th, Bonita Springs, FL
Express Scripts
2015 Outcomes Symposium
May 12th -14th, Orlando, FL
9. Executive Directors Update
a.
b.
c.
d.
e.
f.
Mr. Tyndall, Executive Director
Senate Bill 169/House Bill 436
Investment Policy Update
January 2015 Investment Report
Legal Services RFP
FY16 Operating Budget
NMRHCA Anniversary
18
20
21
23
25
28
10. 5-Year Strategic Plan Review
Mr. Tyndall, Executive Director
29
11. FY15 Contract Amendments (Action Item)
Mr. Archuleta, Deputy Director
34
12. Date & Location of next Board Meeting
April 7, 2015, 9:30 AM
Alfredo R. Santistevan Board Room
2nd Floor, Suite 207
4308 Carlisle Blvd. NE
Albuquerque, NM 87107
Mr. Sullivan, President
4
13. Other Business
Mr. Sullivan, President
14. Adjourn
5
ACTION SUMMARY
RETIREE HEALTH CARE AUTHORITY/REGULAR BOARD MEETING
February 3, 2014
Item
Action
APPROVAL OF AGENDA
Approved
3
APPROVAL OF MINUTES:
December 2, 2014
Approved
3
PUBLIC FORUM & INTRODUCTIONS
Informational
3
COMMITTEE REPORTS
Informational
3
Informational
Informational
Informational
Informational
4
4
5
5
Informational
6
LIFE INSURANCE RFP SELECTION
Approve contract negotiations
6
FY 15 2ND QUARTER BUDGET REVIEW
Informational
7
FY16 LFC/DFA REC COMPARISON
Informational
7
DISPOSAL OF IT EQUIPMENT
Approved
8
IT SECURITY REVIEW
Informational
8
EXECUTIVE DIRECTOR’S UPDATE
Senate Bill 169
Investment Policy Update
December 2014 Investment Report
Operational Updates
Wall St. Journal Editorial on
Retiree Health Care
Page #
DATE/LOCATION OF NEXT REGULAR BOARD MEETING:
March 3, 2014, Albuquerque
6
MINUTES OF THE
NM RETIREE HEALTH CARE AUTHORITY/BOARD OF DIRECTORS
REGULAR MEETING
February 3, 2015
I.
CALL TO ORDER
A Regular Meeting of the Board of Directors of the New Mexico Retiree Health Care Authority
was called to order on this date at 9:30 a.m. in the Alfredo R. Santistevan Board Room, 4308 Carlisle
Boulevard, N.E., Albuquerque, New Mexico.
2. ROLL CALL TO ASCERTAIN QUORUM
A quorum was present:
Members Present:
Mr. Tom Sullivan, President
Mr. Joe Montaño, Vice President
Mr. Doug Crandall, Secretary [by telephone]
Mr. Julian Baca
The Hon. Tim Eichenberg, NM State Treasurer
Ms. Jan Goodwin
Mr. Wayne Johnson [present 10:00-11:00 a.m.]
Mr. Terry Linton
Ms. Olivia Padilla-Jackson [arriving 10:30 a.m.]
Members Excused:
Ms. Karen Sucher
Staff Present:
Mr. Mark Tyndall, Executive Director
Mr. Dave Archuleta, Deputy Director
Mr. Tomas Rodriguez, IT Director
Ms. Deb Vering, Chief Financial Officer
Ms. Judith S. Beatty, Board Recorder
Others Present:
[See sign-in sheet.]
3. PLEDGE OF ALLEGIANCE
Mr. Linton led the Pledge of Allegiance.
New Mexico Retiree Health Care Authority: February 3, 2015
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4. APPROVAL OF AGENDA
Mr. Crandall moved for approval of the agenda, as published. Ms. Goodwin seconded the
motion, which passed unanimously by voice vote.
5. APPROVAL OF REGULAR MEETING MINUTES: December 2, 2014
Mr. Montaño moved approval of the minutes of the December 2 meeting, as submitted. Mr.
Crandall seconded the motion, which passed by voice vote, with Treasurer Eichenberg in
abstention.
6. PUBLIC FORUM AND INTRODUCTIONS
Chairman Sullivan welcomed State Treasurer Tim Eichenberg to the Board.
There were no speakers from the floor.
7. COMMITTEE REPORTS
Finance Committee
Mr. Crandall reported that the Finance Committee met last week. The topics discussed will be
covered by Mr. Archuleta later in today’s agenda.
Legislative Committee
Mr. Montaño reported that the committee has not met, but remains on task with various issues.
He noted that Sen. Gay G. Kernan is sponsoring SB 169, increasing the employer and employee
contribution rates, and there is also a potential sponsor on the House side. He commented that this
will be a challenge, but committee members are resolute and dedicated to the task.
Health and Wellness Committee
Ms. Goodwin said the committee continues to hold regular meetings, and recently decided to
work with Research & Polling to see what sorts of wellness options the members are interested in, if
they are interested in having reduced deductibles or premiums, etc. She said the committee will
meet with Research & Polling next week to finalize the survey.
Mr. Tyndall said the survey will cost in the range of $15,000 to $20,000 and will be covered
through the healthcare budget.
Mr. Linton asked Mr. Tyndall if there has been any progress with the Project ECHO. Mr. Tyndall
responded that information has been sent to Project ECHO head Dr. Sanjeev Arora for review, and a
meeting will be set up in March.
New Mexico Retiree Health Care Authority: February 3, 2015
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Mr. Linton commented that the committee plans to make a proposal at the annual meeting in
July for the Board to act on.
Executive Committee
Chairman Sullivan said the committee met last week to review and prepare the agenda for
today’s meeting.
8. EXECUTIVE DIRECTOR’S UPDATE
a. Senate Bill 169
Mr. Tyndall said the NMRHCA met with Sen. Gay Kernan last week and expressed the agency’s
extreme appreciation for her support over the years, and specifically for carrying this bill. He said
Senate Public Affairs is expected to hear the bill this week.
Mr. Tyndall stated that SB 169 amends the Retiree Health Care Act by increasing employer and
employee rates. The employee increase will begin in FY17 from its current level of 1 percent to
1.375 percent over a three-year period. The employer increase will begin in FY17 from its current
level of 2 percent to 2.75 percent over the same time frame (FY17 – FY19). Upon full
implementation in FY19, an additional $45 million per year ($30 million from employers/$15 million
from employees) will be directed to the Retiree Health Care Fund. Total recurring general fund
impact will be approximately $15 million.
Mr. Tyndall said SB 169, combined with other elements of the agency’s 5-year strategic plan,
would ensure the program’s financial viability through 2040.
[Mr. Johnson joined the proceedings.]
b. Investment Policy Update
Mr. Tyndall reviewed the Private Investment Pool Policy provided by the SIC.
Mr. Tyndall stated that, in follow up to the Board’s approval in December of the revised asset
allocation policy, the SIC would like the NMRHCA to attest to three things in order to participate in
the SIC’s private investment pools: That the NMRHCA Board and its financial advisors: (i) have made
an independent analysis of the Private Pool investments and, in so doing, (ii) have fully considered
this policy as well as investment risks related to the Private Pools, and (iii) are not relying in any
manner on the SIC or the SIC’s members, employees, managers, consultants, or agents.
Mr. Baca asked for clarification about the NMRHCA’s approval process, i.e., would the Finance
Committee approve the policy first and then send it to the Board.
Mr. Crandall said the Finance & Investment Committee reviewed the asset allocation and gave
approval before sending it to the Board in December.
Mr. Tyndall said it was staff’s understanding that the Board’s December approval of the revised
asset allocation, while not adopted as a resolution (the term used in the policy document), fulfilled
New Mexico Retiree Health Care Authority: February 3, 2015
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9
the requirements of the SIC policy. He said the information being attested to within the SIC policy
was all part of the December vote.
Mr. Baca said he wanted to be sure that there was transparency and proper reporting for the
alternative investments, fees, and so forth.
Mr. Tyndall stated that the JPA requires full transparency and full pass-through with regard to
the NMRHCA’s portion of the fees for any particular pool. He added that the NMRHCA is not in a
position to guarantee the degree of transparency the SIC has with its particular relationships,
however.
Board members noted that the Board unanimously approved on the revised asset allocation
plan, as recommended by the Finance Committee and NEPC, at the December meeting, and that no
further action would be necessary.
c. December 2014 Investment Report
Mr. Tyndall reported that the fund’s market value at December 31, 2014 was $393,831,237.
d. Operational Updates
Mr. Tyndall presented the 2nd Quarter FY 2015 Operational Update. Some highlights:
-- NMRHCA managers and supervisors had a six-hour training session with the State Personnel
Office’s training group. It was a very positive session.
-- NMRHCA has committed to be one of the original participants in the NM Coalition for
Healthcare Quality. Cost will be about $15,000. A lot of the group’s work will center around valuebased purchasing and payment reform with the provider community.
-- On December 22, 2014, Express Scripts announced an update to its National Preferred
Formulary to include access to Viekira Pak for the treatment of hepatitis C. Viekira Pak is clinically
equivalent to Harvoni and Sovaldi. To date, the NMRHCA has spent about $3 million on hepatitis C
treatment.
-- Effective January 1, 2015, Viekira Pak became the exclusive option for patients with
genotype 1 hepatitis C, regardless of symptoms or disease progression. At the same time, Sovaldi,
Harvoni and Olysio became excluded from the National Preferred Formulary, although all three
drugs will continue to be available for patients who have already begun treatment regimens. It is
expected that Viekira will cost 20 to 30 percent less than what NMRHCA was paying for Sovaldi.
-- In the 2nd quarter, NMRHCA experienced a 31 percent increase in call volume and 48
percent increase in the number of face-to-face transactions compared to the first quarter. This was
driven by the switch enrollment period between October and mid November.
-- Neil Kueffer has been hired as new Director of Product Development and Health Care
Reform.
New Mexico Retiree Health Care Authority: February 3, 2015
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Mr. Tyndall reviewed the 2014-15 switch enrollment results, noting that over 70 percent of
members are on a higher deductible option on the pre-Medicare plan. This says that, as people are
retiring, they are choosing Premier rather than Premier Plus. The switch enrollment was successful,
and trends continue that help improve the NMRHCA’s long-term viability.
e. Wall St. Journal Editorial on Retiree Health Care
Mr. Tyndall discussed an article in the January 15 Wall St. Journal, which reported that, based on
a Standard & Poor’s study, underfunded healthcare obligations are now at about $1 trillion, and
many cities and states are facing serious problems because of OPEB liabilities. While the article
states that only 11 states have funded more than 10 percent of their retiree healthcare liabilities,
the number of states has since increased to 12 with the addition of New Mexico.
Mr. Tyndall commented that the NMRHCA Board has already incorporated several suggestions
made in the article. He commended the Board on making some tough decisions as part of the
strategic planning process.
[Ms. Padilla-Jackson arrived at the meeting.]
9.
LIFE INSURANCE RFP SELECTION
Mr. Tyndall reported that, in response to the RFP that was issued in October 2014, proposals
were submitted by Cigna, Dearborn, Hartford, Minnesota Life, Prudential, Standard and Voya. He
said each of the four finalists made a presentation before the Evaluation Committee on January 15.
Based on the composite scoring by the group as well as the finalist presentations, a selection has
been made to provide Group Basic Life and Group Voluntary Life benefits for the NMRHCA.
Mr. Tyndall said the State Purchasing Division is not ready to make the name of the awardee
public until the contracts have been negotiated. NMRHCA staff would notify the Board of its
selection upon final approval by the State Purchasing Division.
Mr. Tyndall requested approval to enter into contract negotiations effective July 1, 2015.
Mr. Johnson moved for approval. Ms. Padilla-Jackson seconded the motion.
Treasurer Eichenberg commented that he assumed this was a quality-based selection, so
questioned why the name of the awardee could not be made public. He said he thought the process
in this case would be for the Board to select the person approved by the Evaluation Committee,
allow the negotiations, and then vote to accept or not accept the negotiation result.
Mr. Tyndall responded that he was following the direction of the State Purchasing Division. He
noted that the procurement manager in this instance was the General Services Department, which
preferred to go through State Purchasing for this procurement.
Mr. Johnson commented that he was comfortable with this procedure, as it is exactly how
Bernalillo County is required to operate under the State Procurement Code. Negotiation of a final
contract is brought to the County Commission for approval, and the County is prohibited from
New Mexico Retiree Health Care Authority: February 3, 2015
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involving itself in negotiations with any potential vendor. He said any questions or concerns about
something in a particular contract can be sent back to State Purchasing.
Mr. Tyndall noted that NMRHCA Board members had been invited to participate as members of
the selection committee in this procurement.
Mr. Tyndall stated that this approval could be deferred until State Purchasing Division released
the name of the awardee, if the Board preferred. The motioner and seconder indicated that they
had no problem with moving forward with staff’s recommendations.
The motion passed unanimously by voice vote.
10.
FY15 2ND QUARTER BUDGET REVIEW
[Mr. Johnson left the meeting.]
Mr. Archuleta presented this report.
In comparing the budget to actual expenses, Mr. Archuleta noted that 53 percent has been
collected and 46 percent spent midway through the fiscal year. He said NMRHCA could reasonably
expect it would have sufficient budget authority to cover itself for the remainder of the fiscal year,
barring a claim or two that could change that.
Mr. Tyndall said NMRHCA anticipates about $37 million will be deposited in the investment
account with the SIC by the end of the year, which is almost exactly the amount projected in the
actuary’s solvency report.
11.
FY16 LFC/DFA RECOMMENDATION COMPARISON
Mr. Archuleta presented a background and overview of what the LFC and Executive
recommendations were for FY16.
Mr. Archuleta noted that, overall, the FY16 appropriation recommendations proposed by the
LFC and Executive provide for a range of growth between 6.5 and 7.8 percent for the Healthcare
Benefits Administration Program, with the LFC recommendation being greater.
Mr. Archuleta stated that the budget scenario as recommended by the LFC provides NMRHCA
with the greatest ability to accommodate projected revenues and expenditures for FY16, but the
Executive recommendation provides for two additional FTE, which would be used to hire two
customer service representatives.
Mr. Archuleta noted that the Executive recommendation provides for almost $18 million in
growth. However, growth last year was $20 million more than the previous year, so it would be
difficult to live within that constraint this next year. The agency has people joining the Medicare
Advantage plans, and there is a little less participation under the pre-Medicare plans as well;
however, there is budget adjustment authority of up to 5 percent, which amounts to almost $15
million. As in past years, the agency can request additional budget adjustment authority depending
on claim costs.
New Mexico Retiree Health Care Authority: February 3, 2015
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Mr. Archuleta commented that it is likely NMRHCA will receive the Executive recommendation.
12.
DISPOSAL OF INFORMATION TECHNOLOGY EQUIPMENT
Mr. Archuleta referred to a list of equipment proposed for disposal. He commented that the list
is long because no disposals have been made for about two years; however, staff plans to
implement a schedule calling for disposals at least annually.
Responding to Mr. Linton, Mr. Archuleta said the General Services Department was not
interested in any items on the list.
Mr. Archuleta asked for approval of the assets listed.
Mr. Crandall moved for approval. Mr. Montaño seconded the motion, which passed
unanimously by voice vote. [Ms. Goodwin and Ms. Padilla-Jackson were not present during the
vote.]
13.
INFORMATION TECHNOLOGY SECURITY REVIEW
IT Director Tomas Rodriguez reported that CAaNES has conducted an information security
posture assessment, regulatory compliance mapping, and penetration testing of NMRHCA’s
information security controls.
Mr. Rodriguez stated that the overall results summary from CAaNES was as follows:
“Overall, NMRHCA has good information security controls in place to protect its information
technology assets and infrastructure. On the network, 4.45 vulnerabilities per host were identified,
which is better than the average of 7.2 vulnerabilities per host across all CAaNES clients. This
indicates that RHCA is less vulnerable than most organizations its size. The overall security rating of
7 out of 10 also compares favorably to the typical organization, most of which rate a 4 or 5 out of
10.”
Mr. Rodriguez said he was pleased with these results. He commented that CAaNES was unable
to penetrate NMRHCA’s network using common penetrating techniques; they were unable to crack
the website or firewall, and were not able to penetrate other access points.
Mr. Rodriguez discussed measures taken in the internal network to address problems identified
by CAaNES.
Mr. Rodriguez stated that, with just two IT staff members, it is a challenge to keep up with
security updates, which come out at least once a week in identifying vulnerabilities. He added that,
once a systems analyst is on board, he will be able to focus more attention on security updates.
New Mexico Retiree Health Care Authority: February 3, 2015
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14.
DATE & LOCATION OF NEXT REGULAR BOARD MEETING
March 3, 9:30 AM
Alfredo Santistevan Board Room, 2nd Floor, Suite 207
4308 Carlisle Boulevard N.E.
Albuquerque, NM 87107
15.
OTHER BUSINESS
Board members wished Mr. Archuleta a happy birthday.
16. ADJOURN
Its business completed, the Board adjourned the meeting at 11:15 A.M.
Tom Sullivan, President
New Mexico Retiree Health Care Authority: February 3, 2015
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Consent Agenda (Action Item)
Out-of-State Travel Request
 NMRHCA staff respectfully requests permission to attend the National
Conference of the State and Local Government Benefits Association held on
May 3 – 6 in Bonita Springs, FL. (see agenda on following page).
 Staff respectfully requests permission to attend the Express Scripts, Outcomes
Symposium on May 12 – 14 in Orlando, FL. (agenda not yet available).
Upcoming Board Member Professional Development Opportunities
 National Association of State Retirement Administrators (NASRA) 2015 Annual
Conference on August 1 – 5 in Monterey, CA. Registration opens April 2015.
 National Conference on Public Employee Retirement Systems (NCPERS) 2015
Annual Conference and Exhibition held May 3 – 7 in New Orleans, LA.
15
2015 SALGBA Conference Agenda at a Glance
Saturday, May 2, 2015
3:00pm-7:00pm--SALGBA Board Meeting
Sunday, May 3, 2015
11:00am--Registration Open
8:00am-2:00pm--SALGBA Golf Tournament at Rapture Golf Course
8:30am-3:30pm--SALGBA Sunday Tour of Sanibel Island (meet in lobby)
4:45pm-5:15pm--SALGBA Board Reception (Invitation Only)
5:15pm-6:00pm--SALGBA Ambassador Reception (Invitation Only)
6:00pm-7:30pm--SALGBA Opening Night Networking Reception in Exhibit Hall
Monday, May 4, 2015
NOTE: A conference namebadge is required for entry to all conference events!
6:30am7:15am
7:30am4:00pm
7:00am5:00pm
7:15am8:00am
Interactive Wellness
Registration Open
Jurisdictional Lounge Open--(Jurisdicitonal Namebadge Required for Access)
Continental Breakfast in Exhibit Hall
8:00am8:15am
Welcome
Pam Palmquist, SALGBA President and Jeff Havens, SALGBA's 2015 Emcee
8:15am8:30am
Giving Back
Delivering Grins presented by Scott Otto and sponsored by UHC Children's Foundation and UnitedHealthcare
8:30am9:30am
Opening Keynote
Elected Officials and Healthcare (Panel Moderated by Paul Campbell with UnitedHealthcare)
9:30am10:00am Break in Exhibit Hall & Delivering Grins
10:00am11:00am General Session
Irresistible Forces and Immovable Objects: When Care and Budgets Collide — Dr. Steve Miller, Express Scripts
Optimize
Comprehensive Health
Data to Improve
Workforce Health, and
Incentives that Drive
Drive Educational
Participation. Participation
11:15amValue Options: A
12:15pm Breakout Sessions Outcomes
Purchasers Perspective that Drive Results
What You Really Need to
Know When Selecting a
Specialty Pharmacy
Partner
Improving the Retiree
Experience in Medicare
Advantage Plans:
Lessons Learned in
Member Engagement
Panel--David Hines,
Metro Nashville School
District
Mark Saiz, City of
Abuquerque, NM
Brian Beasley, City of Farmers Jamie Wong, Lumicera
Branch, TX
Health Services
Rae Godsey, Humana
Jon Harris Sharipo
Christine Brawn, State of
Maine
Lance Pendley, McGriff,
Seibels & Williams
Donna Hundley
Mark Tyndall, State of
New Mexico
12:30pm
1:45pm
Lunch with Rex Havens presenting "One Big Happy Family"
1:45pm2:45pm
Moving the Needle with
Market Research:
Challengin Employees
to Share in Difficult
Breakout Sessions Benefit Choices
Managing Administrative
Expenses for Public
City of Fort Collins-Trend Management: Next
Sector Health Benefit
Capitalizing on a Culture of Generation Solutions to
The Future of
Programs
Well-Being
Lower Trend
Retirement in America
Dana Jepson, Employees
Retirement System of
Douglas Sherlock,
Texas
Sherlock Company
Lynn Sanchez, City of Fort
Collins, CO
2:45pm3:15pm
Break in Exhibit Hall & Delivering Grins
3:30pm4:30pm
Driving Financial and
Smart Consumerism
Predictive Analytics and Clinical Results With An
Begins with Wiser Plan Patient Behavior – From Outcomes-Based Wellness
Program
Data to Engagement
Breakout Sessions Selection
Heidi Williams, Oregon
Dr. Ken Yale,
Educators Benefit Board ActiveHealthManagement John Carew, Karelia Health
Jason Abaluck, Yale
University
4:30pm5:00pm
Giving Back
Dr. Jane Barlow, CVS
Health
Cathie Eitelberg, Segal
Consulting
Current Issues in
Pharmacy - Impact for
Plan Sponsors
Michael Petryna, Aetna
Marilyn Hannan, Palm Beach
County, FL
Delivering Grins Finale
Tuesday, May
5, 2015
1
16
6:30am7:15am
7:30am4:00pm
7:30am8:15am
7:00am5:00pm
Interactive Wellness
Registration Open
Continental Breakfast in Exhibit Hall
Jurisdictional Lounge Open (Jurisdicitonal Namebadge Required for Access)
8:15am9:15am
General Session
9:15am10:15am
Making Changes to a
Large Plan--NC State
Breakout Sessions Health Plan
ACA Panel Discussion with Christina Nyquist, Aetna; Travis Smith, Foster & Foster; Kate Grangard, Gehring Group and moderated by Russ
Dickhart, Aetna
Influencing Choice
through Transparency
Caroline Smart, NC State Chet Loftis, Utah Public
Health Plan for Teachers Employees' Health
and State Employees
Program
Rick Johnson, Segal
Consulting
Navigating the Baby
Boomer Exit--A Rational,
Aligned HR & Benefits
Approach
Meeting the Challenge of Comparing State Retiree
Speciality Pharmacy Cost Health Insurance
Management
Programs Across States
Don Heilman, Gallagher
Benefit Services, Inc.
Carol Bailey, TEAM
Pharmacy Consulting
Tom Weatherup, Truven
Health
Maria Schiff, Pew
Charitable Trusts
Luis Salaveria, State of
Hawaii
William Ashmore, State of
Alabama
10:15am10:45am Break in Exhibit Hall
11:00amJumping into the VBID
12:00pm Breakout Sessions Pool
Anne Timmons, State of
Maryland
Is a Private Health Care
Exchange a Better
Vendor Management Begins Increasing Consumerism
Option to Deliver Health with the RFP--What Benefit in HealthCare – The Role
Care Benefits
Professionals Should Know of Pharmacy
Robert Kelley, NC Office of
Ben Pajak, Towers Watson State Human Resources
Pani Tademeti, NC
Michael Rea, Rx Savings
Solutions
Retirement Session TBA
Neville Arjan, Findlay
Davies
12:15pm1:30pm
Awards Luncheon
1:45pm2:45pm
General Session
2:45pm3:30pm
Break in Exhibit Hall & Grand Prize Drawing
3:30pm5:30pm
Roundtable
Sessions--
6:30pm9:30pm
A Jurisdiction's Story of Health Care Plan Transformation
Local Entities-Jurisdictional
Attendees Only
State Entities-Jurisdictional Attendees Associate Session-Associate Attendees Only
Only
Moderated by Baby
Raley with the Town of
Prosper, Texas
(3:30pm-4:30pm)-Workplace
Wellness Survey Results:
What’s Happening, What’s
Moderated by Denise
Changing, and What’s
Chapel with Missouri
Consolidated Heath Care Working--Presented by Julie
Stich, IFEBP
Plan
SALGBA Tuesday Evening Event Sponsored by CVS Health
Wednesday, May 6, 2015
8:30am12:30pm
8:00am8:45am
9:00am10:00am
SALGBA Informational Table
Business Meeting
SALGBA Jurisdictional Members Business Meeting/Breakfast
General Session
SALGBA Task Force on Best Practices, Moderated by Greg Brannan
Jurisdictional Attendees attending this session will be entered to win a $500 scholarship towards the 2016 SALGBA Conference
10:15am11:15am General Session
2014 SALGBA Challenge Winners Presentation, Moderated by GOVERNING
Jurisdictional Attendees attending this session will be entered to win a $500 scholarship towards the 2016 SALGBA Conference
11:30am12:30pm General Session
12:30pm
State Benefit Comparison Research Outcomes--Research Project conducted by University of Missouri in partnership with SALGBA
Grand Prize Drawing to Jurisdictional Attendee for $1000 Scholarship to attend 2016 SALGBA Conference in San Antonio, Texas (Must be present to win!)
12:45pm2:45pm
Leadership Series
Thinking for Success, Greg Brannan, Deer Oaks EAP Services (Box lunch served during session)
Jurisdictional Attendees attending this session will be entered to win a $500 Scholarship towards the 2016 SALGBA Conference
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Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
if they are used for other purposes.
Current and previously issued FIRs are available on the NM Legislative Website (www.nmlegis.gov) and may
also be obtained from the LFC in Suite 101 of the State Capitol Building North.
FISCAL
SPONSOR
REPORT
02/19/15
ORIGINAL DATE
LAST UPDATED
Kernan
SHORT TITLE
IMPACT
HB
Retiree Health Care Contribution Rates
SB
ANALYST
169
Hanika Ortiz
REVENUE (dollars in thousands)
FY17
Recurring
or
Nonrecurring
Fund
Affected
$15,000.0
Recurring
RHCA Fund
Estimated Revenue
FY15
FY16
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY15
FY16
N/A
N/A
FY17
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
$5,000.0
$5,000.0
Recurring
GF
$2,500.0
$2,500.0
Recurring
OSF/FF
$2,500.0
$2,500.0
Recurring
Local
Governments
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
Responses Received From
New Mexico Retiree Health Care Authority (RHCA)
New Mexico Municipal League (NMML)
Department of Finance and Administration (DFA)
SUMMARY
Synopsis of Bill
Senate Bill 169 amends the Retiree Health Care Act (Act) by increasing employee and employer
contribution rates to the New Mexico Retiree Health Care Fund (Fund). The employee payroll
contribution increases from 1 percent to 1.375 percent over a 3-year period, starting FY17. The
employer contribution increases from 2 percent to 2.75 percent over this same period.
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Senate Bill 169 – Page 2
FISCAL IMPLICATIONS
RHCA reports upon full implementation in FY19, an additional $45 million per year ($30
million from employer and $15 million from employee contributions) will be directed to the
Fund as compared to FY15. The recurring GF impact from employer increase is $15 million.
A
B
C
FY Employee Increase
FY16
1.00%
NA
FY17 1.125% 0.125%
FY18 1.250% 0.125%
FY19 1.375% 0.125%
2015 Legislative Proposal D
E
F
Employer Increase GF Impact
2.000%
NA
NA
2.250% 0.250% $5,000,000
2.500% 0.250% $5,000,000
2.750% 0.250% $5,000,000
G
H
Total RHCA Revenue
NA
NA
3.375% $15,000,000
3.750% $30,000,000
4.125% $45,000,000
Overall, net take home pay will be reduced $1.92 each pay period the first year, $3.84 the second
year and $5.76 the third year for the average employee earning $40 thousand annually.
RHCA reports that for every 0.375 increase in contributions, the period of time the program is
expected to have a positive fund balance grows about 3 years while the year the program is
expected to deficit spend is deferred about 2 years. SB 169, combined with other elements of the
board’s 5-year plan to reduce spending, supports a positive fund balance through 2040.
The proposed increase in the contribution rates for employers and employees from July 1, 2016
through June 30, 2019 is in addition to rate increases approved by the legislature back in 2009.
The NMML reports the increase coupled with phasing out the hold harmless provision in FY16
may result in local governments increasing taxes at the local level or reducing services.
SIGNIFICANT ISSUES
DFA notes that non-salary benefits are a signficiant portion of total compensation received by
state employees and are a greater percentage of the total compensation than is typically seen in
other state governments and the private sector. Increases to non-salary benefits may come at the
cost of salary increases and impede the state’s ability to compete with private sector salaries.
As of June 30, 2014, the unfunded actuarial accrued liability (UAAL) is $3.4 billion, a decrease
of $324 million from the 2012 valuation. The ratio of assets to liabilities increased to 10 percent,
from 5 percent, while the annual required contribution decreased to $293 million, from $354
million. NMRHCA has a positive fund balance until 2033 with $400 million invested with SIC.
OTHER SUBSTANTIVE ISSUES
Nearly 100 thousand active government employees make payroll contributions to the program.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
The board may need to consider increasing the age to qualify for a health care premium subsidy
to 60, eliminating pre-Medicare spousal subsidies, or migrating to a defined contribution plan.
AHO/je/aml
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NEW MEXICO RETIREE HEALTH CARE AUTHORITY
CHANGE IN NET ASSET VALUE
FOR THE MONTH ENDED JANUARY 31, 2015
Large
Cap Active
Market Value
December 31, 2014
$61,384,272.12
Core Plus
Bonds
$128,847,613.59
Large
Cap Index
$61,363,179.89
Non U.S.
Developed
$55,293,919.89
Non U.S.
Emerging
Mid/Small
Cap
Total
$41,779,370.96
$45,162,881.48
$393,831,237.94
Prior Month Adjustment
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Contributions
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Distributions/Withdrawals
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Fees
Income Earned
Capital Appreciation/Depreciation
Market Value
January 31, 2015
0.00
0.00
0.00
0.00
0.00
0.00
0.00
32,305.70
382,413.52
1,359.03
26,016.52
46,625.57
11,269.49
499,989.83
266,358.37
(41,836.87)
(1,288,450.39)
$60,128,127.43
2,023,553.42
$131,253,580.53
(1,691,201.22)
$59,673,337.71
$55,586,294.79
$41,784,159.65
(2,113,145.58)
$43,061,005.40
(2,844,722.28)
$391,486,505.50
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NEW MEXICO RETIREE HEALTH CARE AUTHORITY
PORTFOLIO ALLOCATION
FOR THE MONTH ENDED JANUARY 31, 2015
Investment
Equity
Domestic
Large Cap Active
Large Cap Index
Mid/Small Cap
Policy
Range
60,128,127.43
59,673,337.71
43,061,005.40
15%
15%
11%
42%
12.5%
12.5%
10%
35%
20-30%
55,586,294.79
41,784,159.65
15%
10%
25%
15%
15%
30%
10-20%
10-20%
131,253,580.53
34%
34%
35%
35%
30-40%
391,486,505.50
100%
100%
Market Value
$
International
Non US Developed
Emerging Markets
Fixed Income
Core Plus Bonds
Total
% of Total
Long-term
Target
$
5-15%
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March 4, 2015
Barbara Serna,
Bataan Memorial Building
407 Galisteo Street
Santa Fe, NM 87501
Re:
Request Permission to Submit Request for Proposals – General Legal Counsel 34300
Dear Ms. Serna,
The New Mexico Retiree Health Care Authority (NMRHCA) is requesting permission from your
agency to issue a Request for Proposals (RFP) for General Legal Counsel. This request is made
per SBD Policy Memo #FY10-007 “Professional Services RFP Procurement Prior Approvals”. The
scope of work will request the following services – NMRHCA seeks attorneys to perform
General Counsel Services on behalf of the Board of Directors and agency. The bidder will be
expected to provide general legal services including, but not limited to, the following functions:
a. Provide counsel on governance and policy matters including interpretation of laws,
statutes, and rules of federal and state governmental entities that may affect NMRHCA
and its relationship with NMRHCA members institutions and retirees.
b. Provide legal advice on matters ranging from benefits-related insurance matters,
insurance policy interpretations, contractual matters involving the NMRHCA, as well as
provide services of a general legal nature, including personnel matters. Legal advice
includes providing the Board with opinions, memoranda and direction on legal issues
pertaining to the NMRHCA.
c. Attend Board meetings and other meetings as requested by the Executive Director or
the Chairman of the Board of Directors.
d. Oversee, from a legal perspective, the operation of the NMRHCA’s insurance programs
and the activities of the contracted entities acting on behalf of the NMRHCA.
e. Draft and/or review contracts, including insurance policies and contracts for services.
f. Draft, review, and revise NMRHCA rules and regulations in accordance with the
guidelines promulgated by the Commission of Records and Archives and other
applicable governmental agencies.
g. Interpret state and federal regulations that govern personnel actions, including Human
Resources Development and Equal Employment Opportunity Council issues, and
represent NMRHCA in personnel issues and disputes.
The evaluation criteria for the RFP are as follows:
1. Experience in health insurance related matters, employee benefits, contract issues, and
personnel issue resolution etc. (35 points)
2. Experience with administrative proceedings, state boards, and government agencies (15
points)
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3. Hourly attorney rates and costs attributable to other personnel and functions which will
be paid by NMRHCA (35 points)
4. Interview with selection committee (15 points)
The evaluation committee will consist of the following staff: Mark Tyndall, Executive Director,
David Archuleta, Deputy Director and Debbie Vering, Chief Financial Officer. Board Members:
xxx and xxx.
Please call me at 505-490-0519 if you have any questions.
Sincerely,
David Archuleta
Deputy Director
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Healthcare Benefits Administration Program FY15 Contract Amendments (Action Item)
The FY15 compensation associated with several of the contracts listed below was determined in May
2014, based upon projected participation and claim costs combined with limitations associated with the
50 Percent Rule. In December 2014, several contracts including Blue Cross & Blue Shield and
Presbyterian (Pre-Medicare and Supplement Plan), Express Scripts and United Concordia were amended
to reflect on the ongoing business activities related to the second half of the fiscal year. As the agency
approaches the end of FY15, additional adjustments will need to be made in order to reflect growth in
participation as well as the rates approved for the Medicare Advantage contracts effective January 1,
2015.
Approval of these amendments will leave $7,295,845 unencumbered and available to accommodate
anticipated adjustments to the remaining self-funded contracts prior to the end of FY15.
FY15 Approved/Adjusted
Operating Budget
Contract
BCBS
Presbyterian
Non-Medicare
Medicare Advantage
BCBS - Medicare Advantage
United Health Care
Express Scripts
United Concordia
Delta
Standard
Davis Vision
Total
Unencumbered Balance
$272,085,845 *
Amount
Encumbered YTD
Expended
24-Feb
Contract
Balance
Percent
Remaining
Proposed
Amendment
$108,975,000
$65,902,984
$43,072,016
39.5%
TBD
$37,025,000
$6,500,000
$3,500,000
$1,500,000
$75,000,000
$10,500,000
$6,500,000
$11,150,000
$2,000,000
$24,119,967
$4,517,669
$2,300,408
$1,073,875
$44,078,445
$6,548,825
$4,504,903
$6,900,465
$1,292,528
$12,905,033
$1,982,331
$1,199,592
$426,125
$30,921,555
$3,951,175
$1,995,097
$4,249,535
$707,472
34.9%
30.5%
34.3%
28.4%
41.2%
37.6%
30.7%
38.1%
35.4%
TBD
$825,000
$285,000
$465,000
TBD
$0
$565,000
$0
$0
$262,650,000
$161,240,069
$101,409,931
38.6%
$2,140,000
$9,435,845
$9,435,845
$9,435,845
100.0%
$7,295,845
*Amount includes BAR transferring
$36,155 to other category
Conclusion: NMRHCA staff respectfully requests approval to amend the existing agreements between
Presbyterian Health Plan (Medicare Advantage), Blue Cross & Blue Shield (Medicare Advantage), United
Health Care (Medicare Advantage) and Delta Dental indicated above totaling $2,140,000.
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