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April 18, 2006
Public Employees’ Benefit Board
Tuesday, April 18, 1 to 5 p.m. - Minutes
Willamette Education Service District, Marion Room
2611 Pringle Rd SE, Salem OR
                                                                                                                                                         Approved May 16, 2006
Board MembersPresent
Diane Lovell, Chair
Peter Callero
David Hartwig
Rocky King
Paul McKenna
Rich Peppers
Jeanene Smith

PEBB Staff Present
Bobbie Barott
Dena Comer
Isabel Joslen
Lisa Krois
Lydia Lissman
Susan Pritt
Ingrid Norberg
Jean Thorne
Consultants Present
Pam Hodge, Aon
Dennis Tierney, Aon
Guests Present
Ryder Eggleston, Willamette Dental
Sally Hill, Providence Health Plans
Gordon Hoberg, ODS
Diana Jones, Regence BCBSO
Kelley Kaiser, Samaritan Health Systems
Bill Lindekugel, Kaiser Permanente
Julie Marshall, Cascade EAP
Paul Pfinster, AFLAC
Sara Rengler, Willamette Dental
Deborah Tremblay, Judicial Dept.
Ryan Webster, Providence Health Plans
Cheryl Willcoxen, SEIU
Denise Yunker, Oregon University System
Welcome and Approval of Minutes
Operations Subcommittee Report
Election of Vice-Chair
Overview of Meeting
Board Assignments, Structure and Decision-Making Process
Draft Wellness Plan
Possible 07-09 Budget Packages
Other Business
General Public Comment
Welcome and Approval of Minutes
Diane Lovell called the meeting to order.
Rich Peppers moved to approve the minutes from the February 21, 2006, meeting.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
Rocky King moved to approve the minutes from the March 21, 2006, meeting.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
Operations Subcommittee Report
Diane Lovell provided a report from the April 11 Operations Subcommittee meeting.
Incoming calls received through PEBB’s automated phone system can now be categorized in order to determine the types of calls and concerns from members. The first meeting of the PEBB Agency Advisory Committee occurred in March. The group now has a charter, and will provide an opportunity to examine how benefits are administered for all entities so that members are served consistently. PEBB is considering creating a special email address for pebb.benefits administration for systems issues.
Draft Policy Option Packages for 2007-09 Budget
PEBB’s draft administrative policy option packages are as follows:
  • pebb. benefits – (1) Permanent Program Analyst Position
  • pebb.benefits – Systems Improvements
  • PEBB Operations – (1) Permanent Clerical Support Position
  • PEBB Office Space – Funding for Relocation to State Facility
  • PEBB Vision – Support to Quality and Prevention Initiatives – (2) Permanent Positions
Additionally, the Subcommittee discussed contracting a part-time (15%) medical consultant for PEBB. Staff is preparing the necessary information for the Board’s consideration at its May meeting.
Administrative Rules
The current self-funded contracts define PEBB as the Plan Administrator. The contract language must be revisited to clarify PEBB’s role as a Sponsor rather than an Administrator. PEBB is working with DOJ to ensure that the Administrative Rule is clear regarding PEBB’s role in processing claims. This clarification will provide more structure for both PEBB staff and members regarding what medical information is shared as claims are processed.
Kaiser Incentive for Part-time Employees
The Board decided last year to include part-time employees in a one-time payment of $250, to be prorated according to the amount of hours worked per month, into the employee’s FSA as incentive to enroll in the Kaiser HMO. The system is not set up to examine the FTE in order to apply the proration. It becomes a workload issue for PEBB staff to determine, and it is difficult to offer an incentive when the actual amount cannot be determined until after the part-time member is enrolled. The Subcommittee is recommending that 50% of the incentive be deposited for part-time employees, rather than utilizing the prorating system. This will provide a fair and consistent method for incentives for all part-time employees.
Rocky King moved to adopt the Subcommittee’s recommendation to deposit a one-time payment of $125 (50% of the amount for full-time employees) into the part-time employee’s FSA if they newly enroll in the Kaiser HMO.
Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
Current Budget 
The closing of the Wellness Center incurred additional costs, and PEBB now has to pay for the lease of the whole space, which is paid monthly (formerly 58% had been paid by the Health Center according to their contract). Additionally, DOJ costs have been higher than expected with the contracts being different this year. PEBB is working with DOJ to address the way the work is done and how the agency is billed, and PEBB is hopeful that the cost will go down.
Aon Contract Amendment
The current Aon contract not-to-exceed (NTE) amount for 2005 and 2006 is approximately $310,000 less than the amount of commission included in the premiums. The current contract is NTE $1,298,000. During the first year of the contract alone, Aon’s billable costs were almost $1.8 million because of the extensive work involved in the medical RFP. Aon will also be providing additional assistance to PEBB not anticipated in the original contract: 1) consultation on development of strategies to engage diverse groups in the development of communications materials; and 2) research on ramifications of making a policy change to extend benefits to over-age dependents who are mentally ill.
Diane Lovell moved to adopt the Subcommittee’s recommendation to amend the Aon contract ending 12/31/2006 by increasing the not-to-exceed amount for the current 2005-2006 period to $310,000.
Paul McKenna seconded the motion
Hearing no further discussion, the motion passed unanimously.
Aon & BHS renewals
PEBB’s contracts with Aon and BHS will expire in 2006, and the Board will need to decide whether to renew or issue RFPs. The Subcommittee will consider staff reports at its May meeting and bring the information to the Board.
Election of Vice-Chair
Diane Lovell explained that with the resignation of Sheryl Warren, the Board has one vacant management position. With the Board’s approval, Rocky King has agreed to serve as interim vice-chair until the Board fills its vacant management position and can review its new structure.
David Hartwig moved to elect Rocky King as interim Board Vice-Chair for the length of time determined necessary, until the vacant management position is filled and the Board has had an opportunity to reconsider its structure.
Rich Peppers seconded the motion.
Hearing no further discussion, the motion passed unanimously.
Overview of Meeting
Jean Thorne explained that the Board will discuss and finalize its assignments. Lisa Krois will present a wellness plan based on discussion at the April Board meeting. The Board will discuss program policy option packages, which are due to DAS by the beginning of June. Lisa Krois will provide an update on the Communication and Engagement Advisory Committee. The Board will then move into executive session to review responses from dental and medical carriers to renewal requests for 2007.
Board Assignments, Structure and Decision-Making Process
Diane Lovell explained that beginning in May, Board meetings will begin at 10:30 a.m. and end at 4:30 p.m., depending on the agendas.  
Board Assignments
Diane Lovell made the following Board appointments:
  • Council of Innovators liaison: Jeanene Smith
  • Agency Wellness Coordinators liaison: Rich Peppers
  • Communications & Engagement Advisory Committee liaison: Rich Peppers (as available)
  • Operations Subcommittee members: David Hartwig, Diane Lovell
  • Operations Subcommittee Chair: Paul McKenna
  • Chronic Disease Management liaison: Rocky King
Peter Callero will remain unassigned until such time as his professional schedule will allow.
In addition to its regular meeting schedule, the Board will consider a future half-day session with Kevin Boyle to discuss governance issues.
Draft Wellness Plan
Lisa Krois referred to Bd attach.4 and provided an overview of the draft wellness rationale and plan. She reported that in terms of benefits and services, the health plans are providing wellness items. At this time, the biggest gap appears to be in staffing onsite health assessments and other agency prevention activities.
Jean Thorne reported that she and Jane Moore of DHS gave a presentation on wellness activities at the Agency Heads meeting last month. Additionally, applications for participation in the Healthy Worksites Initiative and the Agency Wellness Coordinators group will be sent to agencies in May.
David Hartwig reported that DAS Risk Management is considering reinstating the statewide safety initiative. The division will be collaborating with PEBB to incorporate wellness into the initiative.
Lisa Krois explained that strategies for measuring the performance of worksite-based health promotion programs will include exploring ways to capture the return on investments.
Rocky King moved to accept the staff-recommended 2006 Wellness Plan.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
PEBB staff will provide periodic reports to the Board regarding the status of the wellness plan.
Possible 2007-09 Budget Packages
Jean Thorne explained that ORS 243.17 creates the Public Employees’ Benefit Revolving Fund (Stabilization Fund). The statute authorizes the Board to retain the funds to control expenditures, stabilize benefit premium rates and self-insure. Historically, limitation has not been required. The Legislature has now made the uses of the Fund related to the control of expenditures subject to limitation. This means that such uses of the Fund will need to be approved by the Legislature as part of the 2007-09 budget.
At last month’s meeting, the Board did initial brain-storming about possible uses of the fund in 2007-09. These have been further detailed as part of a comprehensive package supporting implementation of the Board’s Vision. As PEBB and its plans move forward with implementation of the Board’s strategic Vision, PEBB wishes to support efforts to:
  • Encourage and hold plans and providers accountable;
  • Accelerate the speed and breadth of changes in the health care delivery system; and
  • Encourage members to make healthy lifestyle choices and changes.
Components of the proposed budget package include:
  • Monitoring performance and outcomes;
  • Evidence-based studies and development of health information infrastructure and exchange;
  • Agency support for employee wellness; and,
  • Plan performance fund.
Jeanene Smith explained that the Office of Health Policy and Research is planning to collaborate with the Oregon Health Care Quality Corporation toward the development of health information infrastructure and exchange, with the hope of having an implementation plan by the end of 2006. PEBB could be a key player in supporting these efforts.
Jean Thorne explained that PEBB must submit its policy option packages to DAS by the first week of June. PEBB staff will attach dollar figures to these suggestions for the Board to review at its May meeting. Once approved, the packages go into the agency request budget for possible inclusion in the Governor’s Budget, which will be released in December. None of PEBB’s packages will involve General Fund, but they still require approval. The Governor’s Budget must go before the Legislature for approval.
Over the coming months, PEBB can work with its stakeholders to determine how the components might be carried out, but they can’t actually be implemented until 2007-09 budget cycle. The first process is to determine whether PEBB’s policy option packages will be included in the Governor’s Budget. In the meantime, PEBB could begin talking about these concepts in the fall with those who would be influential in the legislative process.
Board members expressed support for the concepts. Staff will return in May with estimated costs.
Other Business
Communications and Engagement Advisory Committee
Lisa Krois reported that the Communication and Engagement Advisory Committee met for the first time last month. The roster includes representatives from each medical plan, labor unions, the Oregon University System, and state agencies including Fish and Wildlife, the Department of Education, and Legislative Administration. The group will evaluate current communication strategies, possibly through statewide focus groups.
The Committee will meet on the 4th Monday of each month for the first few months, then move to a quarterly schedule. The next meeting is scheduled for Monday, April 24.
Preview of May Meeting
Jean Thorne provided a preview of agenda items for the May meeting, and explained that the Board might meet in executive session for the first and last parts of the meeting to consider medical renewals. The May meeting will begin at 10:30 a.m.
General Public Comment
Meeting Adjourned
Diane Lovell announced that according to ORS 192.660(2)(f), the Board will move into executive session for the purposes of considering renewal responses for 2007. The public was excused at this time.