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Public Employees' Benefit Board Meeting Minutes
January 20, 2009
Public Employees’ Benefit Board
Tues., Jan. 20, 2009, 10:30 a.m. to 4:30 p.m.
DAS * East - General Services Building
1225 Ferry St SE, Salem, OR
Approved 02/17/2009
NOTE: Time codes for the video stream (x:xx:xx) are provided at the beginning of each section.
Board Members Present
Sue Nelson, Chair
Rich Peppers, Vice-Chair
Paul McKenna
Peter Callero
Bret West
Rocky King
Diane Lovell
Jeanene Smith
PEBB Staff Present
Wendy Edwards
Lydia Lissman
Joan Kapowich
Bobbie Barott
Ingrid Norberg
Chérie Taylor
Larie Nicholas
Chelsea Hollingsworth
Guests Present
Megan Myrick, Willamette Dental
Cynthia Platanov, ODS
Renee McDonald, Regence
Jennifer Aberg, VSP
Deborah Trembley, ODOJ
Sally Hill, Providence
Kristina Herron, Providence
Jean Poling, Kaiser
Julie Marshall, Cascade Centers EAP
Paul Pfnister, AFLAC
Consultants Present
Mikel Gray, Mercer
Welcome and Approval of Minutes: December 16, 2008
Administrator Updates
Tier Structure
Public Comment
Optional Benefits
Opt Out
Rural Subsidies
Operations Subcommittee Report
FSA Utilization and Report
Board Governance and Procedures
NOTE:  Agenda order was re-structured to accommodate Board member schedules.
Welcome and Approval of Minutes (info/actionBdattach. 1)
After welcoming Board Members, PEBB staff, and guests, Chair Nelson called for a motion to approve the Board’s December 16, 2008 Minutes. Diane Lovell moved to approve the Minutes and Vice Chair Peppers seconded her motion.
Action: The Board unanimously approved the December 16, 2008 Minutes.
Meeting Overview
Administrator Kapowich summarized the meeting agenda.
Administrator Updates
The Board heard brief updates from Administrator Joan Kapowich regarding video streaming protocols, program integrity, WeightWatchers, smoking cessation, the many Bills dropping from the 75th Legislative Assembly having health relativity, the state of employee benefits and an in-depth explanation of various Bills germane to health and benefits. Ms. Kapowich also expressed her appreciation to the Board for its involvement in dependent certification and for participating in PEBB’s recent self-insurance survey.
Self-Insurance (info/discussion/actionBdattach. 2)
The Board reviewed and discussed the work plan of key actions and timeframes to implement a fully self-insured medical PPO PEBB plan in 2011. Wendy Edwards and Mikel Gray presented the work plan to the Board, describing its three-phase approach, including RFP development, evaluation and vendor selection. Board subcommittees would quantify each work plan phase and report their findings to the full Board for approval. Following discussion and clarification, Vice Chair Peppers moved to adopt PEBB staff’s work plan for a subcommittee approach of a three-phased RFP process for self-insurance. Peter Callero seconded the motion.
Action: The Board unanimously passed the adoption of PEBB staff’s work plan utilizing Board subcommittees to quantify the three phases of a self-insurance RFP who will report their findings to the full Board for approval.
Optional Benefits (info/discussion/actionBdattach. 4)
Bobbie Barott presented an overview of products various vendors have requested be considered by the Board for inclusion as PEBB-sponsored optional benefits. Because this item has supportive written and oral public comment, the Board decided to hear Public Comments before acting on Optional Benefits. After hearing public testimony from Paul Pfnister, AFLAC representative (see, the following Public Comment record), the Board held action on this item, pending any comments from Jeanene Smith upon her return to the meeting. There being no further comment, Rocky King moved to add no optional benefits at this time or in this economic climate. Peter Callero seconded Mr. King’s motion.
Action: The Board voted unanimously to add no Optional Benefits.
Public Comment
Bobbie Barott recited a written public comment from Robin Webb, Safety Officer for the Oregon Military Department, who supports adding supplemental insurance, specifically AFLAC, to PEBB-sponsored optional benefits.
Paul Pfnister, AFLAC Representative, presented public testimony to the Board on the benefit of adding AFLAC supplemental insurance to PEBB-sponsored benefit plans. The Board discussed the various manifestations of supplemental insurance available from AFLAC. Bobbie Barott informed the Board that such insurance could not be part of PEBB’s cafeteria plan because optional benefits must be paid for with post-tax dollars and the cafeteria plan is structured on a pre-tax dollar tax basis. Ms. Barott stated that to add such a benefit, an RFP would have to be fielded now, at the earliest, for 2010. Wendy Edwards said that adding an optional benefit at this time would place significant strain on the State’s payroll system, as well.
FSA Utilization and Cost Report (info/discussion/actionBdattach. 7)
Wendy Edwards presented a detailed annual report on the cost and utilization of the Dependent and Health Care Flexible Spending Accounts (FSA), including recommendations for changes in 2010. Based on PEBB’s administrative costs and the time necessary to reconcile accounts, staff recommends that the Board approve a minimum monthly deduction amount of $20. Diane Lovell moved to adopt staff’s recommendation and her motion was seconded by Vice Chair Peppers.
Action: The Board voted unanimously to adopt staff’s recommendation to place a minimum monthly deduction amount of $20 on FSA elections effective with 2010 open enrollment.
Opt Out (info/discussion: Bdattach. 5)
Wendy Edwards and Ingrid Norberg reviewed PEBB’s Opt Out policy, including the history behind Board adoption of an Opt Out option for members. Wendy Edwards summarized the Board’s executive actions, to date, and concluded with a staff recommendation that the Board continue its current opt out structure until the issue can be addressed in the self-insurance RFP. Ingrid Norberg described the chronology of Board discussions on this item.
Peter Callero moved to accept staff’s recommendation to retain its current opt out structure pending self-insurance start-up. Paul McKenna seconded the motion.
Action:  The Board voted unanimously to retain its current opt out structure.
2:01:03Lunch Break
2:02:00Operations Subcommittee Report (info/discussion)
Paul McKenna reported that, in lieu of monthly meetings, the Committee is moving to a quarterly meeting schedule:  Feb., May, Aug., Sept., to better coordinate reporting deliverables due dates with Board meetings. Operations Subcommittee members would then be available between meetings for self-insurance committee work.
Tier Structure (info/discussion/actionBdattach. 3)
Wendy Edwards reviewed the weighting of PEBB’s benefit tier structure, while Ingrid Norberg presented the history behind establishment of the structure. As with the opt out benefit, staff’s review recommends continuing current benefit tier structures pending development of the self-insurance RFP.
Peter Callero moved to adopt staff’s recommendation to retain current benefit tier weighting structure. His motion was seconded by Diane Lovell.
Action: The Board voted 6-1 in favor (Chair Nelson abstained) of retention of the weighting of PEBB’s benefit tier structure. In voting against current tier structure retention, Rocky King shared that, because of rate mutualization, we continue to discriminate against employees electing COBRA coverage upon departure from state service (for themselves only, regardless of spousal or family eligibility).
Rocky King made a motion to ask staff to provide, for plan year 2010, a separate COBRA pricing schedule that reflects nonmutualized COBRA rates. Bret West seconded the motion.
Action: The Board voted 3-4 against (Chair Nelson abstained) production of a COBRA pricing schedule that reflects nonmutualized COBRA rates.
Rural Subsidies (info/discussion/action: Bdattach. 6a6b and 6c)
Wendy Edwards and Lydia Lissman reviewed the history of Board policy for rural subsidies, including previous Board deliberations and the current status of rural subsidies. As with this meeting’s Opt Out and Tier Structure items, staff recommended that the Board not make any decision about rural subsidies until the issue is addressed in the self-insurance RFP.
Diane Lovell moved to retain current rural subsidies at this time and Rocky King seconded her motion.
Action: The Board voted unanimously to approve adoption of staff’s recommendation to retain current rural subsidies.
Board Governance and Procedures (info/discussion/actionBdattach. 8)
Margaret Smith-Isa reviewed draft by-laws developed at the Board’s request. In the drafting process, PEBB statutes, other Oregon Board and Commission by-laws, Robert’s Rules of Order, Governor’s Membership Handbook for Boards and Commissions and Oregon’s public meetings and public records laws were reviewed.
Action: Following lengthy discussion, Vice Chair Peppers remanded the draft by-laws back to staff for refinement and clarification per Board feedback.
3:31:17Reports (info/discussion: Bdattachs. 9a9b and 9c)
Staff responded to questions and comments from the Board regarding the following reports mailed with their meeting packets: