# Urban County Council Special Meeting - November 9, 2010 > Auto-transcribed civic record · Council · November 9, 2010 - **Permalink**: https://meetings.lexingtonky.news/meeting/1740 - **Source video**: https://lfucg.granicus.com/player/clip/1740?view_id=14&redirect=true - **Date**: 2010-11-09 - **Body**: Council - **Last revised**: June 18, 2026 - **Length**: 13,146 words > ⚠️ **Auto-generated content.** Audio from the official Granicus video was auto-transcribed by OpenAI Whisper-1. Structured facts were extracted with GPT-4o; the narrative summary was written by Anthropic Claude Sonnet. Speaker labels and verbatim wording may contain errors. See [methodology](https://meetings.lexingtonky.news/about/methodology) or [report a correction](mailto:editor@lexingtonky.news). --- ## Meeting Overview The Lexington-Fayette Urban County Government Council convened on November 9, 2010, at 3:00 P.M., with Mayor Newberry presiding. The meeting featured a single agenda item — the Consideration of Employee Health Insurance Contributions — which was taken up for informational purposes rather than resulting in a formal decision or policy change. Over the course of the meeting, the Council conducted 4 votes and heard 1 public comment. The session was focused and limited in scope, centering on the health insurance contribution discussion without additional legislative or administrative items on the agenda. ## Attendance The following members were present at the November 9, 2010 Council meeting: - Mayor Newberry - McChord - Myers - Stinnett - Beard - Blues - Ellinger - Gorton - Gray - Henson - James - Lane - Lawless - Martin **Absent:** Crosbie, Feigel No members were recorded as late. ## Votes and Decisions All four motions brought before the Council on November 9, 2010 passed unanimously with 14 ayes and 0 nays. No transcript timestamps are available for these votes. Voting in favor on all four motions were: McChord, Myers, Stinnett, Beard, Blues, Ellinger, Gorton, Gray, Henson, James, Lane, Lawless, Martin, and Mayor Newberry. - **Employee Health Insurance Presentation:** Moved by Myers, seconded by Gorton, the Council voted unanimously (14–0) to move forward with the presentation on employee health insurance options. - **Wellness Program Referral to Intergovernmental Committee:** Moved by Myers, seconded by McChord, the Council voted unanimously (14–0) to move the issue of a Wellness Program and incentives for employees into the Intergovernmental Committee for further consideration. - **Request for Assistance from Commonwealth of Kentucky Personnel Cabinet:** Moved by Gray, seconded by James, the Council voted unanimously (14–0) to ask for help from Commonwealth of Kentucky Personnel Cabinet officials in examining the health insurance situation. - **Adjournment:** Moved by Gorton, seconded by Henson, the Council voted unanimously (14–0) to adjourn the meeting. ## Public Comment One member of the public addressed the Council during the public comment period. [timestamp: 0:00:32] - **Michael Harrison**, president of the Colony 4 Community Association, spoke regarding concerns about his community's tax district classification. Harrison expressed opposition to the downgrading of Colony 4 from tax district one to tax district three, arguing that the lower classification does not align with the service needs of his community. ## Contested Items - **Employee Health Insurance Contributions:** The council engaged in a heated discussion regarding a proposal to increase employee health insurance contributions as a means of addressing a budget shortfall. The debate centered on concerns about the timing of such a change and the potential impact on employees. The structured data does not indicate a specific outcome or identify the individual council members involved in the exchange. ## Consideration of Employee Health Insurance Contributions The Council discussed options for addressing a budget shortfall stemming from employee health insurance expenses. The discussion centered on two primary approaches: raising employee contribution rates or maintaining current contribution levels and adjusting the budget accordingly to absorb the difference. Key participants in the discussion included Mayor Newberry, along with Council members and staff identified as Myers, Gorton, Barrow, Jarvis, and Dhuwaraha. The group weighed the financial and practical implications of each option, considering the impact on both the municipal budget and employees. No final action was taken on this item; the discussion was informational in nature, serving to outline the available paths forward and gather input from Council members before any formal decision would be made. --- ## Decisions - **Motion** — passed (14-0): Move forward with the presentation on employee health insurance options - **Motion** — passed (14-0): Move the issue of a Wellness Program and incentives for employees into the Intergovernmental Committee - **Motion** — passed (14-0): Ask for help from the Commonwealth of Ky. Personnel Cabinet officials in examining the health insurance situation - **Motion** — passed (14-0): Adjourn the meeting --- ## Full transcript This district, let me call that public hearing to order and ask if anyone wishes to address the council on that issue. All right, if you'll come forward and please give us your name and address, you'll have three minutes. My name is Michael Harrison. I'm president of the Colony 4 Community Association. We have a note, we received a notice that we were going to be downgraded from full services tax district one to a tax district three. I don't believe that that really fits with where we are in our services, so let me state for the record where I think we should be. The Colony 4 Community Association consists of 54 residents located on John Owen Lane, Plymouth Rock Court, and Standish Way, all are public streets. We are presently in general services tax district one. We believe that the purpose of this notice was so that Lexington-Fayette-Urban County government could stop street cleaning on the streets in Colony 4. For five years, the residents of Colony 4 have been getting billed and paying for periodic street cleaning that we have not received. If this is the case, the proper general services tax district for Colony 4 are as follows. 4,025 to 4,205 John Owen Lane and 1,200 Plymouth Rock Court to 1,213 Plymouth Rock Court. These 48 residents should be in general services tax district five. They receive refuge service and have public street lights. 1,277 to 1,299 Standish Way. These six residents should be in general services tax district three. The Standish Way residents do not have public street lights and only receive refuge services. The reason there is a problem with the street cleaning is we have what I would term illegal speed bumps in our subdivision. The developer put them in. I don't know who blessed them, but there was never a public hearing on them and the residents of the Colony 4 never received a notice that these speed bumps were putting in. There has been an issue about getting winter services in our subdivision because of these speed bumps and street cleaning. They came in and tried to clean the streets twice and have problems because they can't get over the speed bumps. So Mr. Mayor, I would like to leave copies of my exhibit. Thank you. If you would, please leave that with the clerk. Thank you. I would appreciate it. Does anyone else wish to address the Council on Urban Services District? Seeing none, we will adjourn that public hearing and move on to the special council meeting. Madam Clerk, could you call the roll, please? Mr. McCord? Here. Mr. Myers? Here. Mr. Stennett? Here. Mr. Beard? Present. Ms. Brews? Here. Ms. Crosby? Here. Ms. Gordon? Here. Mr. Gray? Here. Ms. Henson? Here. Ms. James? Here. Mr. Lane? Here. Ms. Lawless? Here. And Mr. Martin? Here. Thank you. We have a quorum, so we will proceed. There is only one item on the agenda today, and let me give the Council just a little background about that. Last Wednesday afternoon, I had a meeting with the Commissioner of Law, the Commissioner of Finance, the Chief Information Officer, and the Directors of Budget, HR, and Revenue. And during that meeting, they indicated to me that we had higher-than-anticipated claims in our Employee Health Insurance Fund for the first quarter, which could result in an annual budget shortfall somewhere in the neighborhood of about $7 million if the current claim experience continued. Normally, this is something we would deal with just over the course of the entire budget year, and we would make the necessary midcourse corrections to make up for those additional health insurance expenses by finding additional cost savings elsewhere. But another option would be to increase the amount of the employee contribution in order to offset some of the added claims expense, or to at least offset some of it. The critical issue with regard to that is one of timing. I learned last week that in order for us to make any adjustment to the employee claims or the employee contribution rate, and by that I mean an increase in the employee contribution rate, we would need to do that this week because of a series of events that had to take place with our IT department prior to open enrollment, which is scheduled a little bit later on this month. And therefore, if we were to want to increase the employee contribution, we would need to do so this week. The Thursday night council meeting was too late and therefore went ahead and convened this meeting for purposes of having a discussion about that. Now, along the way last Thursday, I advised both the vice mayor and the chair and vice chair of the Budget and Finance Committee of this issue so that they might be aware of it. And we scheduled this special meeting on Friday so as to afford the council the opportunity to act to increase the employee contributions because obviously I'm not going to be managing the budget and somebody else will have to be confronted, this group will have to be confronted with budget decisions going forward. So yesterday I believe all of you received a presentation that outlined what some of the options were. And I think from a procedural standpoint, it boils down in essence to this. If you wish to increase the employee contribution level, and I haven't had anybody on the council come to me and indicate that was their desire, although I have not spoken with everybody, a motion to do so would be in order. If on the other hand you prefer to leave the employee contribution levels at the current level, a motion to adjourn would be in order. And we'll just leave those contribution levels at their current level without any adjustment and then the budget can be adjusted during the course of the year as necessary. But given the timing, I wanted to give the council the opportunity to first be made aware of the issue and second to the extent you wanted to deal with it by increasing the employee contribution levels, you could do so today. So the floor is open for a motion either to increase it if that is your desire or a motion to adjourn in which case the rates will remain the same. Thank you, Mayor. I guess I have a question and that would be does the administration have any idea what the increase would need to be to offset? That was contained in the presentation materials that were circulated to you yesterday. There are a number of different options there that were set forth in the presentation. If you've got a copy, you can look at that. If not, I'll share mine with you. I was kind of wondering if someone was going to make a presentation so that everybody listening would understand what the options are. If there is a motion to increase them, we can go ahead with the presentation as part of the discussion. But if there's no one interested in increasing them, then a motion to adjourn would be in order and we can move on to the work session. Well, personally, I'd like to see a presentation because we've got a choice to make and either we're going to deal with it on the back end, as you said, or we can do it on the front end. But the citizens need to know what our options are and what it's going to look like to do it now or later. So I would appreciate if we could have a presentation on those options. You wish to move then to increase the rates? No, I move that the administration provide for this body and for those watching the information on what the options would be if we decided to increase the premium input from the employees. So moved. We have a motion to proceed with a presentation on the available options. Any discussion? Council Member Stennett. I just have probably a legal question. I assume whether or not council says we want to keep them the same or increase them, it's really an administrative function at this point that we really can't pass a resolution either way to keep them the same or increase them. It's really your purview as mayor and administration. Well, I'm not going to increase them in the absence of a council resolution to do so because we approve the budget on the basis of certain employee contributions being made. I intend to proceed down that path unless the council concludes by resolution otherwise. Thank you. Motion on the floor is to proceed with a presentation on the employee contribution issue. Any discussion? Yes, Council Member Myers. I would say that I did not receive a copy of the presentation you're talking about in my box today or yesterday, so I'm not sure what those numbers are. It should have been there yesterday afternoon. Did everybody else receive them? My council agent. It was by email only. Electronically. Okay. Thank you. All right. All in favor of the motion, please. I'm sorry. Council Member Gordon. Yes, Mayor. My only comment is that I think that most council members, at least I was shocked at this information, and I am supportive of the motion because I would like an opportunity to ask questions. Thank you. All right. Any further discussion? All in favor of approving the motion to proceed with the presentation, please indicate by saying aye. Aye. Opposed, no. Motion carries. And let me ask Ryan Barrow, our budget director, to come forward and proceed. Thank you, Mayor. I do want to kind of start off saying this was a very good learning experience for me. I started here in April. It was an opportunity to work across the finance team to dig into some of these numbers. It really is an issue that touches HR, finance, budgeting, revenue was involved, law was involved, as mentioned earlier. What we're going to talk about today is the reason we're all here, which I think the Mayor touched on earlier. We're going to turn it over on the actual nitty-gritty of the medical plans. I myself have very little experience in medical plans, so Leslie is going to cover that. I'm going to cover, on the math side and analytics side, we're going to switch back to me and go over kind of the subsidy. Now I'm going to say this and say this again. These are based on projections end of first quarter. We do self-insure, so these numbers could vary widely, and you will see estimates on there. We're going to talk about some approaches. If there is an underfunding, staff is responsible to bring forward some analysis so that the policy makers at the table can make some informed decisions. As an extension of that, we're going to talk about some what-if scenarios. Real rationale here today is, are we going to do any adjustments to the medical premiums for the calendar year? One of the things I want to also give background, our medical plan rates are on a calendar year, whereas budget, we go on a fiscal year. There will be some nuances with analysis that you'll see later that that will be applicable. One of the groups that I did not mention in terms of some background, and I think this may be of interest to some of you, some background associated with this analysis and timing, I did not mention the IT group, but we compiled all information that we had worked on interdivisionally and really what kicked off this in-depth analysis that we're going to go over today was IT, and that was the week of 10-11. Concurrent with that week in terms of cleaning up some of our cash flows and our financial statements for the Budget and Finance Committee, the financing team had initiated a process because we have budgeted an underfunding. We've budgeted an underfunding in this fund, which is 6002, our medical fund. After the first quarter was done and the primary focus of accounting is transitioning off the audit, we went through an analysis to allocate some of this, because all numbers today are all funds, so we went through some accounting analysis to then generate that and push that out to the various funds, urban funds, sewer fund, general fund. That analysis was complete 10-18, where that was the first instances where we could kind of look at a cash flow basis on fund where expenditures didn't reside in 6002 fund, it was actually pushed out to the various funds, and obviously the general fund where most employees in the government work received the most of that liability of that expenditures. And then on the 20th, accounting was able to do a soft close of financials. So it was the first instance where our PeopleSoft systems would have real data for nerds like myself to go in and do the mathematical analysis. That's where the data analysis started. My formal request to participate in this came on 10-21. Bill Vonda and I spent a lot of time that week and requested a big piece of the data, which came from Humana on 10-26. So really that put in place with our financial systems being days before and Humana giving us actual claims cost, some actual information to model our analysis on. And that really went through the 2nd of November, and as the mayor alluded to before, we were able to get it into a position where we can go to some of the decision makers and talk about it. We also reached out to the mayor-elect and the budget and finance chairs on that next day. And just taking a minute to explain the plans that we offer, Humana right now is our provider for the medical piece, and we utilize CareMart for our pharmacy. We are a self-insured plan, meaning what that means is basically as it says, we pay an administrative fee per employee per month. In calendar year 2010, we were paying $33.60 per employee for them to administer the plan for us. In calendar year 2011, we asked to extend that contract for one more year. So we're going to keep Humana for one more year, and they did raise that administrative fee to $35.27 per employee per month. But being self-funded or self-insured, what that means is every week we pay Humana for our medical claims. That could be $400,000 for the week, that could be $600,000 for the week. We are responsible for our claims cost. In addition to that, and it's not on the slide, we also are responsible for various other fees. An example of that, we pay approximately $90,000 a year to Humana for disease management. One of the things that we've been looking at in the last few months is the claims that are coming in, are we fully utilizing that disease management program, meaning some of our higher claims, should we be putting them through special disease management services so they get special services for some of the identified diseases or procedures so that they avoid or can possibly avoid more time in inpatient care. So that would reduce some of those claims costs. Our Humana plan does have a vision plan with it, so that is self-insured. Now the other two programs, the dental and the vision, are fully insured. So what we do is we pay an advisor fee per employee per month to Delta Dental and the IMEDD, and then the claims are covered fully by Delta Dental and IMEDD. We offer two different, again, there's a vision component through our Humana, but we also offer separate vision through IMEDD for the people who may not have the Humana program. Now what that bottom sentence is referring to is that we're just proposing that we make the rates whole to cover the cost. Right now we're not covering the complete cost or the complete administrative fee for those programs. For example, the Delta Premier, the employee is paying us right now for this calendar year $28. What we're paying Delta Dental is $29.11, so we propose raising it to the $30 so that we're covering, recovering our cost for that administrative fee. Sorry, that was a challenge there. We offer three different plans under the medical, or there's three different tiers to look at, the first one being the Humana Platinum. Humana Platinum is a zero deductible plan, so what that means is we pay 100% of the claims for the employees that have the Humana Platinum. We have 2,682 employees, or 89% of our employees are taking that plan with the zero deductible, and that's reported the 2,682 employees as of September 1st this year. We offer Humana Silver to our employees. We have 89 employees now which are taking that, or 3% of our employee population taking the Humana Silver. What it is is a high deductible health plan, and it pays for its own, or the employee is responsible for the pharmacy piece of that. What the Humana Silver plan is, is meaning a high deductible plan is the employee for individual is responsible for $2,400 or $4,000 for the cost. So once the employee meets that deductible, then the LFUCG would start paying 100% of the claims after that. The third that we offer is the Humana Gold, and as of September we have 229 employees in the Humana Gold. It goes back to the CVS Caremark Prescription Plan, and it's again what's referred to as an 80-50 plan, meaning once the employee reaches the $300 deductible for individual, the 900 for family, if they stay in that work, LFUCG pays 80% of the claims and 50% of the claims if they go out of network. Attached there, what it's showing you is the current rates. What the employee is responsible for if they pick up the Humana Platinum. The cost for that for the employee is 356, but if you notice at the bottom is the benefit pool dollars. We provide our employees a benefit pool. For the noncollective bargaining employees, we're providing $355.74 that they can apply toward that plan. Corrections bargaining employees are getting 455.74 a month, and the police and fire are getting 530.74 per month. Okay. Switching back to the math associated with this, one of the things that I found somewhat surprising, and I asked myself, how could this happen, have any shortfall in this fund? It's happened for years. In 2009, you can see the expense number there. The actual expenditures associated with medical costs to the urban county government was about $31.1 million. The contribution, the piece that was generated through the rates we're talking about today was $22.5 million. LFUCG kicked in, wrote a check, however you want to call it, roughly $8.6 million in fiscal year nine. In fiscal year ten, tracking what most of us would believe, medical expenses went up. They went up to 32.5. There was an adjustment in rates, excuse me, there was no adjustment in rates. And there was about a $9.8 million subsidy that the urban county government kicked in. Now, what's changed? There's also the way we can analyze. The urban county government up until this year has never done any of what I referred to before as soft close. There's a soft close done at the first quarter, and as most of us should, we did analysis on it, and that's where we arrive at today. Basically the budget number that was put in in the beginning, that went in the budget book, was $34 million in expenditures. We have less satellites that go through our insurance program, so you'll see that reflective in the total revenue generated by employees, and that would be $21.8 million. There was a budgeted subsidy of $135 million per person that was put in the budget, and that's about $5 million that the urban county government at the beginning of the year anticipated this fund being short and that they would have to be kicked in. It wasn't a part of that, but what I have been able to investigate is that there was a belief that expenses would decrease associated with less satellites being insured, less people, less medical expenses. And then there was also some assumptions generated for the 8% increase in rates that did go into effect there. But again, that rises today. We're looking at first quarter numbers. It's very difficult to project who in this room potentially would become sick, and that's some of the analysis you have to go through. But we're annualizing the first quarter numbers, and that would generate an estimated $7.2 million. Again, that's across all funds. So there was a lot of analysis done associated with this. It's not all my time the last two weeks, along with most of the finance team, but we broke it down. We got some decent information from Hanna, and we pulled pretty much every piece of medical data we had at PeopleSoft and tried to kind of drill down and see where a lot of this liability is existing. And what we did here is we looked at the three plans, the platinum, the silver and the gold. And this is last year numbers, so they will differ against a little bit in terms of the projections. But basically I draw your attention to the far right column. In the platinum plan, in terms of what it costs for us to pay your medical claims and what you pay in premiums, we lose about $218 a person per month for everyone that's on the platinum plan. And on top of that, the $135 we've already budgeted. The silver plan, a little bit less. We lose 40. Now, again, in any type of data analysis, you have to look at the set, and there's such a small amount of people on silver and gold, there are nuances, and one individual claim can kick those numbers out of whack. But the majority of the people do reside in the platinum plan, and that is where the biggest liability for the urban county government is. As the mayor alluded to before, this kind of highlights some of the analysis. Like any budget issue, the government, in terms of what can you do about it, the government can absorb the full $7.2 million. And as the mayor alluded to, that would probably be the option that would have been dealt with had circumstances not led to today. The second option would be the employees fit the bill. Now, again, this liability has existed the entire fiscal year, we're only talking about increasing rates for the end of the fiscal year. So in order to true up this fund, it would be an exorbitant rate increase to be able to generate all that revenue, because the liability that does exist through the first quarter to $2.2 million, you would have to backtrack and make up that money. So it would be a very large increase. The second option would be to review options to see what kind of adjustments could be made. The third, if some type of shared relationship could exist where not all in the first category, not all in the second category, but if you did want to adjust rates and made that policy decision, how would that really shake out in terms of revenue? So just took a very vanilla approach in terms of option one, it's a what if. I just said what additional revenue could be generated. Now, we're going to go off the 7.2 number. So anything less than the 7.2 number, we're going to go off the 7.2 number. So anything less than the 7.2 million that's projected for the deficiency would be good. So 10% rate increase, again, across the board, those would be the rates that would be represented if you so choose to make that adjustment. Now, then we calculate it in terms of what revenue would be generated for our health, our dental, and our vision. All those come out of this fund and arrive at a total revenue figure, and then we back out the budgeted number. So again, on the right column, this is the projected annually. All this analysis was done annual. But as I alluded to before, our cycles do not run concurrent. So any change, if you elected to make it, would not go into effect until January, which would only be a half of a year. So instead of the $5.2 million hole or underfunding, projected underfunding in this fund, it would be roughly 6.2. So that's kind of some of the detail analysis that was walked through. Now, what we did is just a what-if matrix, trying to anticipate any options that you may want to see. But there's the 10% right there across the board, the 20%. We came at it with a tiered rate increase. What happens if it's 20 in platinum, 10 in gold, and 5 in silver? You can see the liabilities that would exist. Again, for us, it would be the projected fiscal year 11 column in terms of how we can make it up or the number that we need to make up by budgetary cuts somewhere else. And then the third option is that we sit on an annual basis. Again, it's hypothetical because the calendars don't sync up. But on an annual basis, I was very surprised to see that it would roughly take us 36.3 across the board rate increase on an annual basis. So if we approached it from a cost of service study, we'd like to actually charge what it cost us to provide the service. It would be 36.3 if that's the decision made. Or if we did the tiered approach, also surprising, it was 60% in the platinum, 35.5 in the gold, and 15.5 in the silver. But again, even if that trued us up on an annual basis, it would still leave roughly 3.6 or half the 7.2 of liability to make it up. One of the things, Leslie talked about some of the tweaks. First of all, the largest option that would be available would be to change the types of policies, raise deductibles and make those kind of changes, historically what other local governments have done. Unfortunately, the contract has already been signed and we are with Caremark and Humana. So again, the options that was presented there was more from a mathematical, which kind of falls in my shop, mathematical approach, taking off the table one of the biggest mechanisms that you would have to make policy decisions. So with that, in terms of opportunities or process improvements, last year this conversation would have probably been had at the end of the fiscal year because there was no soft close. There was no kind of monthly financials that allocated the liability in this fund out. And as I said before, $8.6 million and $9 million last year. With no fund balance, we felt it was very important to do a soft close. Accounting felt it was very important to get that information out there, and I was able to do this analysis. So clearly this issue touches a lot of divisions. So what improvements on the process side can be made? Well, HR has been historically the keeper of this data. They're going to continue to be the single point of contact. They're going to receive the information from Humana, and actually that's going to be a senior manager for total compensation, which is already on staff. So that's why we've been running the analysis, because last year we looked at this annually. This year, or here today, we looked at it quarterly. We believe now we need to look at this monthly. So that individual will be charged to do that monthly analysis, monthly reconciliation. That analysis will then come to the finance team for review and to allocate out from the medical liability fund to the individual funds. The proportionate share of overfunding, underfunding, whatever the case may be. And then accounting will go out and then book those journals, and then maybe that's where my little group in budgeting will come into in some more additional oversight and participating in the finance review. With that, I'm open for questions. Thank you, Mayor. I didn't discuss in your presentation, one, discuss about the prescription drug benefit and what our costs are on that annually. And then I know there's ways immediately to jump in and discuss with CVS Caremark to start changing how much we're charged for prescriptions going forward. We can do that now. That will help alleviate some of this, but you want to explain that as well as how this impacts collective bargaining employees, because it doesn't impact non-sworn people. So I think everyone needs to understand that if we increase it, it really impacts non-sworn a lot more than it does sworn based on the contract. So can you explain that, too? In going forward with Caremark, what our prescription costs are averaging out to be is approximately 7 million a year is what we're paying our share for the pharmacy. And then there are things such as mail order prescriptions when you have a maintenance prescription. That will reduce. Now, will it reduce it by millions of dollars over the next six months? No. But it could substantially save us a couple of hundred thousand over a course of a year if we start mandating that our employees use the mail order prescriptions for their maintenance medications. The example about the impact that it will have more on the civil service employees refers back to the slide with the benefit pool. Employees who are in non-bargaining units get $355 for their benefit pool. Meaning they have $355 that they can apply toward the cost of that medical plan. So if an employee in waste management carries the family plan for the Umana Platinum, they subtract their $355. A police and fire member would subtract the $530 from that. And that is going to have a greater impact on the non-collective bargaining employee because they don't have as much in their benefit pool to apply toward that cost. But don't the benefit pools adjust too if we adjust the go plan upward? The benefit pool numbers adjust if we change the go plan pricing so that it equals the single person coverage for the collective bargaining, correct? You would have to, the collective bargaining benefit pools are established by their contracts. You would have to make the motion to change that benefit rate for the benefit pool for the non-collective bargaining employees. Where that rate has historically been established was to pay for the single plan for an employee only. It's how that amount has typically been established. You know, this is not an easy fix and it's not going to happen overnight. Being that this is what I do for a living, there's not an employer out there, or I'm sorry, a health insurance company that offers a zero deductible plan anymore in Fayette County. Groups that still have those clients that we have that still have zero deductible are getting off the plan because they can't afford it because human anathema has increased the rate so much to encourage them to get off the zero deductible. So one thing that has to change long term, actually three things. One, we need to focus on wellness. I know Councilman McCord has preached this over the years, but we've got to step that up and we've got to focus on wellness. We can't keep offering a zero deductible plan and obviously with 90% of our participants using that plan, it's going to be a challenge in the educational experience. But most of them would actually save money using the gold plan because they don't use it enough. Actually, if you do the math, you have to go more than 14 times a year to benefit from the platinum plan. You have to go to the doctor more than 14 times. How many people can say they do that? So that's why we really don't need the platinum plan if you do the math right. Now, long term, that's not going to help us now. That's not going to help us the next several months. But looking at the prescription drug changes, that will help too. But with $178 of claim difference between the platinum and gold, that's significant. But even if we get every employee off the platinum and into the gold, it still doesn't make an $8 million difference a year right now. So long term, we've got to make some serious changes beginning in February when you put the RFP out to look at a new vendor for our health insurance. The other thing we have to do is to get it on a calendar year or off a calendar year onto a fiscal year basis so it coincides with the budget. Because it makes budgeting for this impossible almost. Because this number at the end of the year could be $9 million. If we have two more big claims like we've had, it could easily go up to $9 million or could easily drop down to $6 million if we're better off the next six months. So the problem is here, I'm not in favor of changing the rates at all. I think we leave it the same. I think we've asked our employees to do a lot. I think there is a way to balance the budget and make the necessary changes going forward. Now, keep in mind, though, council members, we only have a $30 million operating budget for 12 months. That means we have $15 million to work with to find $8 million. That's the challenge. I mean, that's the simple math. And that's without touching, obviously, we can't touch the debt service. We'll have an important debt meeting Thursday night. So if we choose any additional bonds, that impacts this going forward. So we've got a lot of information on the plate to go over. It's not going to be an easy fix, but I think we can do it. Thank you, Mayor. I have a few questions, and the first one is I wanted to be sure I understand why, Mayor, I think you said we need to do this this week. Rama, can you just explain why that is so we all, at least so I can understand? The primary reason is we have to do a lot of testing before open enrollment in our system. And there is a certain amount of time we need for that, typically about nine days after the rate is set. So and we have to test it with payroll and other things in the enterprise solutions team. So the closer we get to that, the amount of risk you take on is quite high. And that's why I've got a calendar up there. So if you make a decision today, that would give us two extra days to test. But if you do it by Thursday, then we could still have open enrollment start on the 19th and go all the way to the 30th. So it would really help us establish. And could open enrollment be done in December, which it has been done before? Yeah, well, we have to turn in our rates. I mean, we have to turn in our files to Humana by the 6th of December. So we really can't do it. That's the drop dead last date. If we don't do it by then, then the employees will not get their insurance card in the mail and have insurance by the 1st of January. Okay. Thank you. And Leslie, if I could ask you some process questions, please. I was surprised to hear you say that we just got our first quarter actual claims. I think you said our actual claims cost. When we pay out, since we're self-insured, when we pay out by the month all that money, do we not get any information back as we go through the year on our status? We get, Humana sends an invoice. We are billed and they draw down from our account weekly. So we pay our medical claims weekly to Humana. We have asked for some more specific detailed reports such as pending claims so we can start being aware of instead of just seeing that the claim has been paid, are there any pending large claims out there so we can start anticipating when they will hit our account? So how is that followed? Is that followed in budgeting? Is that followed in HR? Where is that followed throughout the year? It comes in through Human Resources. I've only been handling this since March of this year. It comes into Human Resources from Humana. They bill us electronically. They send us the invoice. Then we reconcile to make sure that that isn't appropriate and then we send it to, we give the approval for the finance team to pay that invoice for us. Okay. And then thank you. Ryan, if I could ask you a question, please, about something you said. I believe you said that we dropped our satellite agencies because it was believed that with fewer people in the pool, we would have lower cost. Did I understand you to say that? No, it wasn't clear at that time. But it was believed, what I've been told, nobody has it directly nor have I seen the actual analysis. But it was believed that there would be savings associated with insuring less people. We lose money on everybody we insure, so you have less people. It was believed that there would be some savings associated with that. So the people left are the higher risk, higher medical users? That's a more expensive pool? If I can clarify also, there was the belief that it would make our claims cost lower. But the biggest reason, the reason that we got out of that is because basically we were serving as a broker. They weren't our employees and it was suggested to us by the state that we stop providing insurance to people who weren't our employees. So that was our number one reason for removing the satellite agencies. I know that some of them, I believe some of them are not yet off. It's official this year, but some are. So do we have data to show us, for instance, I believe the health department is off, is it not? Do we have any data to show us if taking that agency off increased our cost? I don't have the data of what the medical claims for removing the health department. The pharmacy claims, when we removed them for 2009, their pharmacy claims that we paid were a little over a half a million. So removing the health department from the pharmacy standpoint is a savings from what we were paying for them. I don't have that information. One other question about mandatory mail order prescriptions for maintenance meds. How common is that, that employers mandate mail order for maintenance medications? We had that discussion with our provider of whether that was considered a plan change. Could we change that midstream? I don't know how many employers are going to mandating the mail order prescriptions, because it could save substantially, you know, $500,000 to $800,000 a year for the employer if they utilize it appropriately over time. Did they give an estimate for our pool, how much that might save? Yes, the estimate they gave us for the first year if we went to mail order I believe was about $150,000 that we could save. For the first year? For the first year. And then does it go up or down or stay the same? It just depends on the number of employees, because what you're putting on the mail order would be the maintenance drugs. So it just depends on how many employees you have on maintenance drugs. I too find this very disturbing to get this information at this point in the process and in the year. And I've heard so much about all the different modules of PeopleSoft working flawlessly for a long time. And now it seems that you're just now getting this information from PeopleSoft. So that being said, I think this also illustrates how desperately we need to have an RFP and a broker who negotiates the best deal we can get. And we don't do that. We don't do that because the administration or whoever waited too long. But I think that that is something that we need to do. But I think that that is something that needs, that process needs to start immediately of getting a broker, sending out an RFP and choosing a broker who can negotiate this for us. I was on, I'm on the partner agency committee and we were told several things about the satellite agencies including that, and I believe there was even an article in the paper about it was costing us several million dollars to, I can't remember what the number was, to have the satellite agencies there and were never able to kind of nail down exactly where those numbers came from. I mean I think we have no choice but to keep these the same, keep the rates the same for our employees, because open enrollment for almost any government or private industry has been in October. So if we have employees who find themselves in a place where they can no longer afford this, they can't get on their spouse's insurance because open enrollment is over and this wouldn't be a qualifying event. And that's pretty serious. The other question I have is, it's my understanding that our retired police and fire are insured out of our active employee insurance pool rather than having a broker that gets them a policy, and that's very, very expensive. Can you give me some information about that? Information as to the plan that the police and fire are utilizing for the retirees? The retirees. Yes, they are on the Humana plan, and then there are some on the Humana Medicare. I would prefer to get that information to you, I didn't bring any of that information with me. But they used to be in their own, it was paid out of the retirement fund, as it is with KERS, et cetera. But now it's paid out of our active employee insurance pool, is my understanding. If you could get that information, because that's a big deal. And having a broker that could get a plan for them, I mean, you're talking about people who may be older, the insurance cost of retirees, so we, through their contract and their negotiations, we have to supply them with insurance, but having them in our active employee pool and paying out their health cost out of that is a huge liability, and one that makes no sense whatsoever. So if you could get some information about that, I'd really appreciate it. Thank you. Councilmember Myers. Excuse me, Councilmember Henson. Thank you, Mayor. Honestly, I've got some questions for you about the plan. I know that there's not a lot we can do about it, because the contract has already been signed. That's done annually. Well, we asked for, we did an RFP this year. We asked for the medical to be quoted through fully insured, self-insured. I don't know, I think we had four or five that responded to that. When we had a committee together that consisted of representatives from government, police and fire, there was a lot of questions being asked, like what was our claim? Should we be self-insured? Should we be fully insured? That was the reason that we asked to extend with Humana one more year, because like you said, we felt like we needed more time to fully analyze what we were offering to our employees. So that was the reason for that delay, and yes, we can't, we have one more year with Humana. We need to do an RFP so that we can start talking about some of those plan designs. So is it a two-year contract? It's one year. It will take us through the end of 2011. Okay. Now, I, Council Member Stinnett said that there's no deductible on the platinum, but in reality that is your co-pay, right? You pay a co-pay. People in the platinum plan are paying a co-pay, but there is no deductible for them to meet. Humana, in speaking with Humana, we are the only customer that they have that offers a zero deductible plan, so that it's very uncommon to find any employer that offers that. Right. But yes, you do pay the co-pays, you do pay the emergency. So there is an out-of-pocket expense in addition to your premium. Yes, there is an out-of-pocket expense for certain services. And then the Humana silver is like a health savings account. Yes, it's a health savings account. And is there an incentive, because there's like $90 difference in the premium? There is an incentive. The health savings account for a single, we give $250, I think, at the beginning of the year, $250. We do give an incentive for the single and for the family to help them with some of the cost immediately that they would have, when they're paying their full cost when they go to the doctor, or for their prescriptions as well. Now, what happens with the difference in the premium? Like the platinum is $355 per non-collective bargaining. The Humana silver, well, you're allowed $355. You have $355 in your pool that you're given, the non-collective bargaining, and then they can apply that for the Humana platinum, then that would be what they would use that cost for. But in the Humana silver is actually lower. It would be $270. So then they would pay the $270 out of their $355 and comply the rest to their dental or their vision plan. So it's not like you lose the money, but it couldn't go into your health savings account, correct? I don't know if it can go in a health savings account, but you can apply money to a health savings account so that you're building up your account. I was just curious if there were some sort of, with open enrollment, now would be the time to switch your plan if you wanted to, correct? Yes, we have talked with Humana about coming in. They're going to provide someone to come in so that we can have a couple of forums with our employees, because we feel like that maybe our employees aren't fully educated on what plan would be best for them, so that they will come in and provide some education to our employees about what each of those three plans encompasses. Right. And I think, you know, the Humana silver is definitely probably the better option, but there needs to be an incentive for employees to take that, because I know if you live paycheck to paycheck, and there's a possibility that you're going to have to come up with $2,400, which is the deductible, that's scary to a lot of people. So if there was more incentive there that they know, you know, so I just thank you. Council Member Myers. Thank you, Mayor. Thank you, Leslie, for coming in today. Thank you for the three different plans. The co-pays for the Humana platinum for an office visit is 15, for a specialist office visit would be 25, routine physical, the co-pay is 15, the routine physical for a specialist is 25, well child care, the co-pay is 15, and then the ER visit, the plan pays 100% after the $75 co-pay visit. Humana gold, the co-pay for office visit is 20, the co-pay for the specialist is 35, the same for the routine physicals, the co-pay is $20 for the well child, $75 for the ER, and for Humana, you're paying the cost. I mean, excuse me, for the silver plan, the HSA. Thank you. When you talk to other HR specialists around the city, and even around the country, around the state, would you say that they would consider our plans, Cadillac plans that we've got? Humana does. What is most surprising to most people is the zero deductible plan. Which is where 80% of our people, 89% of our people are. Yes. You talked about some things that we could do with prescription drugs in terms of doing the mail order. Can we also mandate that they use generics when possible? Yes. And we can make those two changes now? Yes. The other question is, I've been working for the last five years, I guess now, on a number of different initiatives. And that's really where the impetus came from to remove folks that weren't employees or retirees of our government from our health care plan. And I actually have a motion here today to finish up and clean up a piece of that process. I know I talked to Commissioner Rowe of the Health Department. One day she was out in the audience on a Thursday night. And it was after we'd gotten that initial group off of our plan. And she said it's costing about $4 to $5 million more a year for them. And I realize that part of that is because they have a smaller pool now that they left our pool. But one of the things I asked Commissioner Rumpke to do was put together the numbers for the folks that have been removed from our plan, what their claims history was. And I still haven't seen that. Is that possible to get that? Because that's going to tell us how much money it saved us. But their claims are no longer with us as well. Yes. I believe we do have the information available from calendar year 2009 for the claims of our satellite agencies. We'll have to go back and verify that. And then the Kentucky Uglies, as Dr. Todd likes to talk about, the LTCG Uglies, I think, are one of the things that I've been pushing for and I know I'm going to get some hate mail out of this, for these last five years, is to start to look at lifestyle choices with respect to insurance premiums. And people who smoke cigarettes, we understand what that does to our health care costs. People that are obese, we understand what that does to our health care costs. So I know that we've got this committee, and Council Member McCord and I are serving on that committee that are trying to increase the robustness of our wellness plan. And this community, or this city, has put together, I think, a very robust plan with a lot of different options and opportunities for people that work for us, and with us, to be able to get well, or more well. And some of those things are really being taken advantage of and some are not. What can we do now, midstream? Can we raise premiums on folks who smoke? Can we raise premiums on things that are associated with lifestyle choices? Humana has been steering us toward the Commonwealth of Kentucky. Their plan. They have had a lot of success working with the state, and Humana has been working with the state over the last few years of changing their deductibles and helping their employees work into these changes. The state does offer different rates, a smoker rate and a non-smoker rate. Establishing rates does not affect the plan design. So your question, yes, we could have that. Your question, yes, we could have two different rates. How difficult would that be to put together in the next couple of months? We cannot change the rate once we do open enrollment. Okay. Okay. I would suggest to the council that next year we're going to have to do something along those lines and that we have to start working on it now so that we're prepared for that. I worked at a company back in 1995 and the company addressed this issue with smokers way back then. And what they did was they provided two opportunities for smoking cessation classes, whether it was hypnotism or whatever it is you wanted to do, for both the employee and their spouse or significant other that was in the household that smoked. And the company paid for all of that, each person to go through two different programs. And then once that happened, then you're on your own with those programs, but you had to pay the increase in premium. And I would expect that the city would do something similar to that. We wouldn't expect people to just stop cold turkey without some type of help and some assistance with that help. But I think we need to move in that direction and move in that direction now. So I guess I'll make a motion to put the wellness program and incentives to change behaviors and then adjust the premiums to go along with that into InterGov. So moved. I have a motion by Council Member Myers and a second by Council Member McCord to move the wellness programs to the Intergovernmental Committee. Any discussion? All in favor? And included in that is the adjusted premiums based on different statuses, we'll say. Just a quick question, Leslie. How do you go about policing smokers or nonsmokers or overeaters? We asked Humana that. We approach it two different ways. One, that if as a benefit that will increase and give you more benefits if you don't smoke or two, that we'll apply the stick method that you'll be punished. They said that different companies do different things. Some companies choose to do the mouth swab and do a regular check to see if people are smoking. The state, they said, does it based on your word. The motion on the floor and the contribution rates as well to the Intergovernmental Committee. Let me clarify your motion. Are you intending, if this motion passes, that this will be the conclusion of our discussion and that this agenda item is? Because there's no way that we can come up with that before we have to open enrollment. So you've heard the motion. There's no further discussion. Those in favor of referring the wellness program and the question of rates in subsequent years to Intergovernmental, please indicate by saying aye. Opposed, no. Motion carries. And that's it. Thank you. Council Member McCoy. Thank you, Mayor. I'm not going to vote to increase the rates. I believe they should stay where they are and we'll work on it going forward. With that said, this is a very complicated thing and individuals, households, and companies all over this country are going through this. Every single person out there is dealing with this exact same issue. And nationally, health care premiums are going up. It does not change that. They're going up. And what you need to know, and we've gotten into a lot of complicated analysis and so forth, but I think we need to take a step back and look at a little bit more general, some of the general things that cause this and where we are today as a city, as employees, as a nation. Bottom line to it is that 70% of the medical conditions and issues that we have are preventable. They're from lifestyle choices. And the things that we do and choose to do because we live in a free country and we can do those things cause 70% of the things that are wrong with us. Now that means that 30% are things that we can't change. Chronic illness, an accident, things we're born with. And so companies all over the country, as I mentioned, chronic illness is something that if offered to employees, if paid for or subsidized by an employer, does the employer have a right to actually tell them what kind of things they can and can't do? And something as simple that doesn't have anything to do with us, so I'm going to go use this as an example, is can you use the company credit card to have alcohol at a lunch? If that's something that the company says, they have the right to say that because it's the company's credit card. But in this situation, what drives up healthcare costs, it's very simple. The more times you go to the doctor, the hospital, the pharmacy, the more the healthcare costs go up. And when you have a pool of people, as we do here, that go to the hospital, the doctor and the pharmacy a lot, healthcare costs go up. It's lifestyle choices that drive that, 70% of that cost. And everyone in this audience and watching today needs to understand one simple fact, and that is that every time one of us as an employee, as a family member that's covered under this plan, goes to the doctor, hospital, pharmacy, it is the taxpayer of Lexington that is paying for that visit. That is who pays for your visit, not Humana, not LFUCG, it's the taxpayers of this city that go out and earn a paycheck and pay local taxes that pay for you to go and for me to go and for our families to go. That simple fact has never been said up here. The bottom line to it is somebody pays for that and it is the taxpayer who pays for that. And we owe it to the taxpayer to do the right thing with our health insurance. We owe it to our people to make sure they're covered and we owe it to our people to do the jobs that they've been hired to do. So the bottom line to it is that while we've just got analysis today that is causing us to make an immediate decision and so forth, as Councilmember Stennett said, we can address this and probably fix this or at least put the Band-Aid on it, but it doesn't stop the problem long term. And it has been said up here by numerous ones of us. For those that sat here and complained about the EPA, the $500 million shortfall or lawsuit that we had to settle because people pawned it off, or the $270 million for the Police and Fire Pension Fund loss that was pawned off for 30 years, this is the next one of those. This is the next one of those. There is no way around it. It costs more and more and more and more and more and more. We have to absolutely take a leadership role in this as leaders should have done with the EPA stuff and with the Police and Fire Pension Fund. The last thing I'll say is this. The only way, the only way health costs go down is when an individual or a group of individuals who work together get healthier and go to the doctor, hospital and pharmacy less. And while Council Member Myers may say something that causes the smokers in the audience to go crazy or for people who struggle with obesity to go crazy or those of us who choose to do dangerous activities, the bottom line to it is the only way this thing is going to go down is to get healthier. And so the positive in this, and what I would love to see from the employee side is an all-out assault on wellness and laying out a goal of what if, what if we laid out a goal of being the healthiest public workforce in America in five years? What would that look like? Instead of arguing over health insurance premiums and does it go up or down, what if we made an all-out assault as a body of 3,000 employees to say, you know what, 200 East Main will be the epicenter with the new infrastructure of downtown, with the trail that we just built from downtown to the horse park, with farmer's market, these types of things. But I will point you to a company, Logan Aluminum in Logan County, Kentucky. Logan County, Kentucky has the tobacco festival, you all. Okay? So this is in the middle of tobacco-growing Kentucky. Logan Aluminum was recognized as the national model for health and wellness because in 1993 they made an all-out assault effort on wellness. Soup to nuts. They attack this and their health premiums go down every year. They go down. They don't have this argument because what they do is they do the tough things that Councilmember Myers mentioned. So I would lay out that this is a job for us that have been elected going forward. Not to shirk it, but to realize this is a big-time problem and that those who have been elected that are sitting in the audience that we need to focus on this because this will cripple our government. This will cripple our government. And we can see it. It's been called out. And what we do today, we can fix. We can make this work. But it's going forward that's really going to be the measure of this body. Thank you, Mayor. Councilmember Wayne. I agree with what Councilmember Stennitt said about 10% of our general fund budget, which is a lot of money to spend on health insurance. I'm far from an expert on health care, but I think that we need to look at eliminating the city's self-insured coverage and enter into a new agreement with an outside insurance company. I agree with what Councilmember Stennitt said that having a plan with no deductibles, I don't believe that's a financially viable model in today's marketplace. I think we need to look at eliminating the city's self-insured coverage and enter into a new agreement with an outside insurance company. I agree with what Councilmember Stennitt said that having a plan with no deductibles, I don't believe that's a financially viable model in today's marketplace. And there are many unknowns in the health care, things like mandates from the federal government, which are going to be coming out day and night, and the market conditions are changing rapidly. So with that being said, I would encourage us to look at a new plan that we maybe would put in over the next year. That would penalize our employees for changes in the market that they really had no responsibility for. Thank you. Councilmember James. Thank you, Mayor. I have a couple of questions, I guess, first for Ryan. Can you help a little bit with me understanding How much did we budget for insurance? How much did we budget for insurance? This year? The fiscal year 11 budget was about $34 million in expenses. Okay, so that was actually in our budget book for that amount. And based on the shortfall, is that shortfall based on a reduction of premiums paid or an increase in claims paid out? Can you rephrase that? Is what we're looking at as far as the shortfall and the need to increase the subsidy based on a lack of funding that we're going to get from premiums being paid in from the partner agencies not being included or people that didn't take insurance through LFUCG? Or are we seeing an increase in actual claims of Will we see an actual increase of claims paid that will need to be paid by the people that are currently in the pool? I think it's a combination of I think the expense side is correct. $34 million. I think that, again, I'm not in the healthcare arena at all. I'm taking annualized projections based on the first quarter. I think the expense side is fairly accurate. But what I think I think the budgeted subsidy in combination with the employee contributions is too low. Okay. And again, I go back to just what I've been told prior to me being here. I think there was belief that it would generate extra revenue and that there would be more reductions in claims than there actually is. Based on an assumption that we were getting rid of high-risk partner agency employees that were causing the brunt of the claims to be paid out but not necessarily matching up with the premiums that were being paid. That's, again, what I've been told. Yes. Excuse me. The way I look at this is we assumed things would go like this. Total expenses and revenues. What happened was this. Expenses increased year over year. Revenues declined year over year. And that's illustrated here if you look at the middle column and the last column. The total expense for fiscal year 2010, $32.5 million. We have a budget of $34 million for 2011. And if you look at the middle line of contributions, that came in in 10, we've got that at 21.8. There was a discussion in the partner agency... Oversight committee. Yes. I'm in that. And HR had a report and I tried to find a copy of it. I have a stack this tall and I wasn't able to find it here today. But it showed that the average claims loss for satellite agencies was greater than those of LFUCG pool. Hence the assumption that even though you would get less in, regardless of whether it's legal to offer it to them, that's the legal argument. I'm talking about just the history of claims. We thought, yes, we would have fewer people paying in, but our average claim per person would go down. It hasn't happened. Discussions around that may have happened in partner agency oversight committee, but there was no conclusion in that committee that that would be the case. As a matter of fact, I argued I have a history in healthcare and I argued how could we make that assumption just because you eliminate people because things happen. People get sick unexpectedly. You can't really base things on history. I know you love history, Bill. You can't really base it on history necessarily. You have to look at actuals. It probably should have been given some time to get a baseline before there was an assumption of increase or decrease one way or the other because you have to know what you're working with and what actually occurs. We said this is going to do this and do this and make your budget that way because there was no... I didn't mean to imply that it was. I just wanted to clarify that. We were being directed by human resources to make that decision. I was being directed to make that decision based on the fact that we couldn't be a third-party administrator broker for the health insurance and I argued the fact that it would be any type of cost savings because we don't know until the numbers come in. But I wanted to try to clarify. Going back to the budget, we have on our sheet on page 10 of the presentation that has fiscal year 2009 and 2010. Historically, what's it look like over the past 10 years? Are we seeing the same trends over the past 10 years or so? We spent two weeks to compile this so I can't answer the question further back. I don't have it readily available. I don't have it readily available. I think that would be... If we're going to be looking at 2009-2010, I'm just interested in the full gamut of everything. If we're looking at trends, just two years doesn't really help. If I may share, I did reach out to the former director of accounting. She did say as long as she was here, there has been budgeted subsidies. We didn't pull historical data. If that's something you want, we'll gladly pull it for you. Yeah, and I'm really curious too about the... Leslie mentioned that she would get weekly or monthly reports in. Was that information that human resources shared? Because it seemed like based on those things that were being paid out, we probably would have known how we were doing a little sooner than the end of this past quarter. I can potentially speak for budgeting. I didn't see them in budgeting, but somebody in accounting would have had to process the payments. Correct? I only started looking at this in March when Mr. Allen left for leave. So I don't know historically what communication has gone from human resources, but what triggered us to start looking more closely at it was the RFP and trying to look at what our claims costs were and deciding on moving forward with a new provider. So it comes to human resources and then we forward it to someone in finance who approves the payment of that. So there's not a regularly scheduled budget meeting with you as the director since March only that says, okay, here, how are we doing? You know, here's what's been expended and here's what we've paid out and here's how it's looking. Do you have that sort of meeting? Not necessarily with budget from a finance perspective. This was just done annually. And that's the budgeted subsidy numbers you see there for 9 and 10 historically or end of the year close of the books. Okay, so that's what you talked about changing and we intend to do this monthly. The finance team. Is the contract that we've already signed, does that say that we have to offer all three plans? It does state that. Does it tell the number of people that are assumed to be enrolled under those plans? No. We pay a fee per person. And we did recognize the platinum plan was the one that had the most liability. And another question was about. Leslie, you mentioned the smoker versus non-smoker, the state plan. Do you know whether that very, if that has a premium variation or a contribution variation? No. I have their benefits packet and I could go through that and provide that to you. Okay, did you already? Contribution variation. Okay, thank you. And do any of the Humana plans have zero co-pays for preventative services? They all provide preventative services, even the silver. Yes. So blood pressure checks, physical, well no, you mentioned physicals have co-pays. Preventative care, 100% for the gold, those are the things like the mammogram, the colonoscopy and those things are. Okay, thank you. Thanks, Mayor. Thank you, Mayor. Is it possible for urban county government to require for employees who are 65 or older to have Medicare be the first payer? We are with our retirees. No, not retirees. With employees who are active, who are 65 and have Medicare. I do not know. Well, is it possible to find that out? I mean, that would be something interesting to know if Medicare could be the first payer. For example, when someone is 65 and Medicare is the first payer, if it's a military person, it's only with retirees that Medicare can be the first payer. And so you can find that out. And then just because I suspect a lot of people are listening and I would like to confirm that if urban county government went to a mail order only, that that would not, there would be exceptions for people who needed to go on medication today that there would be some sort of exception? Is that how that works, so that you can get 30 days at your local pharmacy before your mail order kicks in? Yes. Okay, that's all. Thank you. Thank you, Mayor. It's been a good discussion. I appreciate it. I addressed this issue last Thursday by phone call and asked to join a meeting as soon as I could, and I did Thursday morning at about 11 o'clock. That afternoon, I do what I usually do when in our world and business world when you find an undiscovered mistake or cost of substantial levels, you try to get the best help you can to examine what the solutions are, what the path going forward might be. I called a guy named Joe Longmire who is a Deputy Commissioner of Personnel at the state and the General Counsel for the Personnel Cabinet as well, a guy named Joe Cowles. And the next day, and the next day met on Friday with them, and they had lots of questions, and those questions were really what I asked in the letter to the Mayor. We may have gotten some of those answers, but I don't think we've gotten nearly all of the answers, and I find myself today thankful for the effort that you guys have made, but still with many more questions than we do have answers. Council Member McCord had some good comments about systemic behaviors that we need to address. There are also systemic management issues that this question needs to address, that this issue needs to address. When I met with Mr. Longmire and Mr. Cowles, one of the things that they said was that most institutions, private sector companies, ours is one of those who has, of course, been aggressively managing and trying to manage these issues. The state, with 300,000 employees, began aggressively managing this about three years ago. So I think with the severity of this issue presented to us of ourselves, how have we managed this, what can we learn from this experience, and what do we do going forward? For that reason, I would encourage a resolution. I will make a motion that we ask the state to help us, to intervene, and we need to do it quickly. I went ahead and asked if they could come today. They could not come today to meet with the council, but they are willing, Mr. Longmire is willing, Mr. Cowles is willing. I think that perhaps then you all have some that we're unaware of yet, but in my view of this situation, the severity of it, is that we need to get the best counsel and advice to the table as quickly as we can. So I'll make a motion to that effect that we invite creative solutions that we can develop going forward. I have a second by Council Member James. Any discussion on the motion? All in favor say aye. Just a small question. When the auditor comes over, there's a fee for that service. Is there going to be any fee Well, let me put it this way. I'm confident that the State, the Deputy Commissioner, Mr. Longmire, he and the General Counsel will visit with us and give us their recommendations without sending us a bill. Right. Okay, well that's fine. I just felt before I voted on it, I'd like to know if we're going to be paying for something. Our budgets are tight. Thank you. All in favor of the motion, say aye. Opposed, no. Motion carries. Council Member Stenick. Thank you, Mayor. I had one question on our contract with Humana. Is there an out clause in there, a 30-day out clause, or are we obligated through the end of the year or a full year when we sign it? I believe we're obligated unless there is something that makes a breach in the contract. Can you verify that and let us know, Glenda? Can you look at that from a law standpoint? There's not just a clause where we can give 30 days notice to terminate. There has to be a material breach and an opportunity to correct, so it's not quite so easy to get out of it. Well, what I'm thinking is in six months, change the plan so it's on our fiscal year. If we have an opportunity to do it sooner rather than waiting 18 months, because otherwise we have to wait 18 months to get this on a fiscal year. If you'll take a look at that and let us know. Thank you, Mayor. I need to reset my screen here. For some reason it went to voting mode. Well, does anybody else wish to? Okay, Council Member Lawless. I think that one thing that is extremely important for us to remember is that if we do change to our insurance plan on a fiscal year rather than a calendar year, our open enrollment will be different than almost every other business and institution, state, et cetera. And that is an issue for a lot of families or a lot of individuals. And also an issue on the satellite agencies is my understanding, and I will get that information again, that it really was not illegal for us to provide them with insurance. That being said, all those satellite agencies need to know that their ex-employees who are on COBRA when they are no longer insured by LFUCG, they're going to lose their COBRA and they need to notify their employees who maybe quit six months ago or a year ago or whatever that their COBRA will be dropped. And that's a real big deal. The third thing, I'm all for the smoking, increasing the premium for smoking and the premium for smokers. I think on the obesity issue that we need to also recognize that the greatest statistic or the greatest identifier on obesity is zip code. There are many people in our community who cannot afford fresh fruits and vegetables, don't have access to a good grocery store or, you know, healthy places to eat. Maybe both parents work, don't have time to prepare food. So that being said, I think it's also important to remember that it's a lot easier to be thin when you're rich. Any further discussion? Any motions? If there's a motion, we adjourn. Move adjourn. I have a motion by Council Member Gorton, second by Council Member Henson to adjourn. All in favor, please say aye. Opposed, no. Motion carries. Let's reconvene the work session and give everybody a chance to...