Insurance Committee Meeting Minutes
TOWN OF SIMSBURY INSURANCE COMMITTEE
Subject to Vote of Approval - Regular Meeting Minutes
June 24, 2015
The meeting was opened at 7:38 a.m. in the Board of Education conference room by committee member, Nick Mason. Other committee members who were present included Peter “Chris” Peterson, Kateryna Lagun, and Paul Mikkelson. Burke LaClair, the Board of Education Business Manager; Joseph Mancini, Finance Director; Thomas Cooke, Director of Administrative Services; Nancy Haase, Deputy First Selectman; Robert Lindberg, of Arthur J. Gallagher & Co., and Carol Fitzsimons, of CIRMA, were also in attendance.
Mr. Peterson made a motion to approve the minutes from the Insurance Committee meeting on March 25, 2015. Ms. Lagun seconded the motion. All were in favor. The minutes were approved and the motion passed.
1. Employee Benefits Update - Robert Lindberg, Arthur J. Gallagher & Co.
Mr. Lindberg distributed a 5-page report titled, “Simsbury Town and Board: Insurance Advisory Committee, June 24, 2015.” Page 1 to 2: Meeting Outline. Page 3: Experience Update Outline: Recent Claim Activity and Renewal Results / Medical and Dental / July 2011 through July 2015. Page 4: Combined ASO Medical & Pharmacy Paid Claims / July 2011 through July 2015. Page 5: Scatter Graph of ASO Medical Claim Activity / July 2010 through June 2015.
ASO Medical Consolidation. Through June 2015, Simsbury results are favorable by a half million dollars. Mr. Lindberg reported that the first year after consolidation has run as expected. CIGNA has been very engaged and active, and the program has been well run. He credited the town and the Board of Education with doing an excellent job educating its employees about the new plan during open enrollment. Mr. Lindberg will not know how many more employees have signed up for the HDHP for FY 2015/2016 until the open enrollment period ends. Member feedback about the HDHP’s deductible and HSA in the previous fiscal year has been positive.
Around October 2015, Mr. Lindberg has been notified by CIGNA that the HDHP Health Savings Account platform will be migrating from Chase Bank to HSA Bank. He expects that employees will be able to shift funds to the new platform, or maintain their own personal account. Mr. LaClair noted that HSA Bank is a subsidiary of Webster Bank. He wondered whether employees will be able to go to local Webster branches for HSA questions. Mr. Lindberg believes that this will be an option at certain local branches, but will follow-up once he knows more.
Running Claims Activity. The open policy year continues to be below the prior year, and is tracking with target cost (98.5%). Overall claim activity is better than the prior two years.
Market Trends. The annual medical trend is running at 9-10%. Costs are mixed in the prescription drug market. 8-16% this cycle.
ACA Update. Mr. Lindberg acknowledged that the two most significant issues that will impact benefits for municipal employees will be: 1. The Affordable Care Act (ACA) and 2. The Cadillac Tax. In the next 10 days, he expects the Supreme Court will unveil a subsidy ruling on the ACA. It would not directly affect our state, since Connecticut has its own exchange, but it will indirectly affect everyone. Both issues are being planned and budgeted for as best as possible without knowing what the final versions will be. Thankfully, budgeting is easier with a consolidated single platform. Employee educational sessions will be provided as more concrete information becomes available.
Other. The committee briefly discussed the mergers that are poised to happen in the insurance vendor marketplace. In the next fiscal year, vendor options may drop from 5 to about 2 or 3.
2. Property Casualty Insurance Issues – Carol Fitzsimons, CIRMA
On behalf of CIRMA, Ms. Fitzsimons offered a 1-page discussion outline and a 4-page bar graph report illustrating WC and LAP losses for the town and the BoE as of May 31, 2015. She included a letter-size flyer of the free training programs CIRMA is offering throughout the state from July through December 2015. A copy of CIRMA’s 2013-2014 Annual Report was also attached.
Loss Experiences. Ms. Fitzsimons gave an update on undeveloped loss experiences as of May 31, 2015. For worker’s compensation, there were 18 losses—each over $25,000—totaling over $1.4 million. For LAP, there were 11 losses—each over $25,000—totaling over $741,000. Loss changes since the last committee meeting on March 25, 2015 included no new WC or LAP losses over $25,000, although the police WC reserve increased to almost $125,000 in March.
Renewal Budget Indication. 6% overall.
Update on Risk Management and Underwriting Issues.
• CIRMA offered two risk management workshops to town employees: “Preventing Sprains & Strains” and “Employee Fraud Theft.”
• The property at 1 Old Bridge Road was recently added to the town insurance policy.
• In April, the Board of Education took 4 International trips which were insured by CIRMA, for a
value-added cost savings of $6,012.
• Currently, CIRMA does not offer any “Cyber Liability” policies. Ms. Fitzsimons noted that it is
an emerging market. CIRMA will keep abreast of the trend.
Marketplace. No new entrants so far. There is still one week left, though.
CIRMA Update. CIRMA’s president and C.E.O., Bruce Wollschlager, will be retiring on June 30. David Demchak will replace him on July 1. Since Mr. Demchak has been with CIRMA for over 20 years, it is expected to be a smooth and easy transition. There will be a member equity distribution of $24,619 this year. CIRMA is beginning to offer online training courses. Three courses will be offered starting July 1: “Blood-borne Pathogens,” “Personal Protective Equipment,” and “The Globally Harmonized System.”
3. Other Insurance Matters
Joe Mancini discussed ways in which the town could see savings on insurance for the 2016-2017 budget cycle.
Mr. Peterson made a motion to adjourn the meeting. Mr. Mason seconded the motion and adjourned the meeting at 9:00 a.m.
Respectfully submitted,
Lorrie McElligott, Commission Clerk