Joint Insurance Committee

Regular Meeting

Oklahoma City, OK · December 3, 2025

By The City of Oklahoma City Office of the City Clerk at 4:47 pm, Nov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and MEETING NOTICE DATE: December 03, 2025 TIME: 8:30 a.m. PLACE: 420 W Main Ste 110, Oklahoma City, OK 73102 Basement Conference Room AGENDA: I. Call to Order II. Approval of Minutes A. June 11, 2025 III. Information from Vendors --No Vendor Reports Presented IV. Information from Employee Benefits Division A. Plan Performance 3EPTEMBERº " " "" September 03, 2025 #?2,16?5;41#?200,66##?0##6,1(?<5?+#/?21??#36#0B#4 ? ? 6 0?,1?9#?,:?;1,-/? ;,/!1)? ??,1?6#?? 5#0#16? 4(#?21%#4#1#?220? 25#?,1?78$11#?<#4# ? " " 211?.,"24#?%7,5%%C%0"%5C #'?223#4?C3$)%CC%0"%5C 31C#4$$%1C ,;C)%5C %6,)1%%C+,/?0,6+? ,7,B%1C%0"%5C C/'C ,7,B%1C%0"%5C 6#C3#.%C C%45%6%177,?% C "" " " Jason Long, Total Rewards Manager Richard Mahoney, Asst Municipal Counselor III Taylor Atherton, Benefits Systems Specialist Brogan Feeley, Benefits Coordinator " " %35)%C,1C "" 521?21(? #/%$C73C35$%5C7*%C3,28C 16<5#%C 300,77%%C%%:1)C!C C !"" *%C0,1>%6C3&C7+% September 10CC0%%7,1)C@%5%C4453?%$C@,9C13C3"-%#7,31 ""6 )6 ""%Y"""$!",CK""C"HROUGHº *ULYº Review minutes from previous meeting: September 10, 2025 Motion to approve minutes - Motion approved. Overall Plan Performance (Actives & Retirees) Loss Ratios: • YTD plan-wide loss ratio: 94.9% (compared to 84.1% YTD prior year). • Variance attributed to EPO plan integration and claim maturity. Historical Context: • Prior year had immature claims due to new EPO population. • Current ﬁgures reﬂect normalization as that population’s claims mature. Stop Loss Claims Tracking • 2025 YTD: 2 claimants have exceeded the ISL deductible. • 2024 YTD Comparison: 9 claimants over stop loss last year. • Financials: $240,000 in stop loss reimbursements received so far in 2025, compared to $1.3 million in the prior year. Expectations: • Projected to remain under stop loss for 2025. • Annual marketing for stop loss carriers is underway as a due diligence step, comparing Blue Cross’s pricing to the wider market. Enrollment and Claims Trends Plan Enrollment: Stable; little change in the number of enrollees. Claims: • Gross and net claims were reviewed. • Per-enrollee annual claims cost rising, but in line with national trend. • Anticipation of further cost escalation into 2026-2027, especially for pharmacy. Medical and Pharmacy Cost Split Current Split: • 60% medical / 40% pharmacy (actives). • Considered average for this population. Monthly Performance: • Only two months in 2025 have had loss ratios exceeding 100%. Actives vs. Retirees Performance Active Employees: • Loss ratio: 92% (prior year: 77%). • 2 stop-loss claimants in active population. • July claims spike attributed to EPO integration. • Overall trend aligns with projections and market expectations. Retirees: • Ongoing loss ratios above 100% for over two years (currently 106%). • High claims attributed to higher care utilization, not to high-cost/stop-loss claims. • No stop loss reimbursements for retirees. • Per-enrollee claim costs appear lower than actives, but largely because most retirees are Medicareeligible (true underlying costs are higher). Cost Mitigation Strategies for Upcoming Year Population Health Programs Summary: Four mitigation concepts were presented, with two population health program highlights: 1. Hinge Health: • Musculoskeletal health program. • Conservative, exercise/therapy-based (not medication-focused). • Employee cost: $0 (prevention claim). • Runs through health claim; intended ROI of “even” or possibly 2:1 or higher. • Potential to reduce reliance on medications and improve outcomes. 2. Teladoc: • Chronic condition management (diabetes, cardiovascular health, hypertension). • Supplies/resources delivered efficiently; no employee/retiree cost. • Runs through the medical claim, no additional RFP needed. • Implementation: Both programs available via Blue Cross partners for easier integration. • Other programs may be considered upon committee suggestions. Pharmacy Program Adjustments Prior Authorizations Current State: • No prior auth for many medications, especially GLP1s (diabetic/weight loss drugs). Proposed Change: • Add prior auth for GLP1s and other high-cost drugs. • Guardrails would limit use to clinically appropriate patients (e.g., type 2 diabetes, sleep apnea if covered,not strictly for weight loss). • Physicians already accustomed to prior auth process; minimal member impact expected. • Best practice to control off-label prescribing and unnecessary costs. Potential Impact: • Savings for the plan by reducing inappropriate utilization. • Data revealed approx. 10% of population on GLP1s; concern some are prescribed for non-covered (i.e., weight loss) purposes. Prescription Drug List Changes Current state: • Open drug list (all drugs mostly covered). Proposal: • Move to a “Balanced” drug list (fewer covered drugs, with some high-cost brands removed if generics exist). Rationale: • Savings potential. • Employee/member impact depends on overlap/disruption. Sample Impact: • Members may lose brand choice if effective generics exist (e.g., only one of two similar insulins covered), with exceptions possible for medical necessity. Co-pay structure: • Flat dollar co-pays by tier (not %). Assistance: • Flex Access program ﬁnds manufacturer coupons, etc. Rx Sourcing Programs Summary: Use third-party services to source high-cost specialty drugs (cash-only, Canadian, European pharmacies). Legal/Compliance: • FDA previously prohibited (enforcement less strict now); legal/compliance implications under review. Local Example: Fire department has adopted this, reporting large savings. Member Impact: Small number of specialty drug users affected; likely small transition disruption but minimal ongoing impact. Health & Pharmacy Plan Design Discussion Plan Options: Actives: Standard PPO and EPO (one plan each). Retirees: Two plan options (standard vs. another). Discussion: • Consideration of high/low (deductible/out-of-pocket) plan options for actives. • Potential for negative selection (healthy employees self-selecting cheapest plan, undermining risk pool). • Administrative complexity considered. • HSA plans mentioned as option elsewhere. • General support for employee choice but caution regarding long-term impact to plan health. Process for coverage exceptions: Would be available for unique medical needs (e.g., insulin pump compatibility). Proposed Meeting Dates for 2026 • March 4, 2026 • June 3, 2026 • September 2, 2026 (week before Labor Day) • December 2, 2026 No objections to proposed dates. Open Enrollment Dates & Plan Changes Active Employees Onsite Enrollment: October 27–31, 2025, at the convention center (vendors present). Virtual Option: Via American Fidelity. Self-Kiosk Enrollment: Reduced post-enrollment corrections. Plan Guide Distribution: Expected around October 10, 2025. Retirees Open Enrollment: October 21–22, 2025, at Will Rogers Center. Reason for Venue: Parking is better; prior venue had a conﬂict. Plan Guide Distribution: Aiming for early October 2025 to meet Medicare disclosure deadline (before Oct.15). Dental Plan Enhancements Effective 2026: • Missing tooth clauses removed. • Preventive cleanings no longer count toward annual maximum. • Annual maximums for low plan: $1,000, increasing by $100 per year of continuous enrollment (capping at $1,300 after 3 years). • If coverage lapses and reinstates, resets to base maximum. Purpose: More value for employees/retirees and encourages preventive care. Long-term Disability (LTD) Plan Changes Current: Only 180-day waiting period; no Short-Term Disability previously. New Option: Add 30-day waiting period option (acts like STD). Rationale: Simpliﬁes administration, gives employees ﬂexibility based on tenure/leave balance. Employee Paid: Both options remain employee-paid beneﬁts. Carrier: American Fidelity. Upcoming: RFP for all ancillary products (including LTD) for plan year 2027. Other Discussions • Co-pay structure affirmed as ﬂat dollar amounts across tiers; no percentage co- pays. • Examples of real employee/retiree scenarios discussed (e.g., needing to switch insulin brands, pharmacy • substitution practices). • Emphasis on not mandating generic substitution if medical need is demonstrated. Action Items 1. Monitor Stop Loss Market: Continue annual RFP-like comparison for stop loss pricing to ensure competitiveness and, if out-of-line, initiate formal RFP. 2. Track Emerging Stop Loss Claims: Ongoing monitoring until end of the year for potential new high-cost claimants. 3. Review Population Health Program Options: Further exploration of Hinge Health, Teladoc, and other chronic care management programs—speciﬁcally tied to employee/retiree needs and available partnerships. 4. Assess Pharmacy Plan Adjustments: Develop and propose prior authorization protocols, especially for GLP1s and other high- cost drugs. Evaluate disruption and cost savings for possible switch to Balanced Drug List. Legal review of potential Rx sourcing for specialty medications. 5. Finalize and Communicate Open Enrollment Details: Ensure guidebooks and communications distributed per deadlines. 6. Implement Dental and Disability Plan Changes: Update systems and communications for new rules and beneﬁts. Follow-up Points / Future Meetings 2026 Meeting Dates: As above; no concerns raised. Ongoing: Watch for pharmacy trend developments, particularly GLP1 regulation and off- label use expansion. Next Steps: Routine monitoring of retiree loss ratios and impact of new plan design elements. 2027 Ancillary Product RFP: Set reminder for RFP issuance for plan year 2027. Adjournment: Meeting adjourned at 9:20 AM. City of Oklahoma City Joint Insurance Committee DECEMBER 2025 Agenda 01 Health Plan Performance 02 Pharmacy – Biosimilars 03 Open Enrollment Update LOCKTON COMPANIES | 2 Health Plan Performance 2025 Plan Year (claims through Q3 2025) 2025 Q3 Health Plan Overview (All Plans – Actives and Retirees) LOCKTON COMPANIES | 4 Health Plan Overview (All Plans – Actives and Retirees) Observations Annual per-enrollee costs continue to rise. As of September 2025, the average annual cost per enrollee is $20,326 — a 5% increase from the prior year. This figure includes all plans for both active employees and retirees. LOCKTON COMPANIES | 5 2025 Plan Performance Overview (All Actives and Retirees) Observations Loss ratios exceeded 100% 5 of 9 months year to date, peaking at 110.5% in August, signaling financial strain. Medical claims drive most costs (60%), but Rx claims are unusually high at 40%, indicating rising pharmacy spend is a key contributor to underperformance LOCKTON COMPANIES | 6 Data through Q3 Actives LOCKTON COMPANIES | 7 Data through Q3 Actives Observations Per-enrollee costs have risen above $21K over the past year, showing steady growth in plan spending. LOCKTON COMPANIES | 8 Data through Q3 Retirees LOCKTON COMPANIES | 9 Data through Q3 Retirees Observations Annual per-enrollee costs climbed steadily through early 2025, peaking near $19.1K, before dropping to $18.2K in September—marking the first notable decline in months. LOCKTON COMPANIES | 10 Pharmacy Biosimilars – What Are They? • A biosimilar is a medication that is highly similar to an Key point: existing FDA-approved biologic drug (called the Biosimilars matter because they “reference product”) and has no clinically meaningful offer the same clinical differences in safety, purity, or effectiveness. effectiveness as high-cost biologic drugs at a fraction of the Recent example is Humira price—often 15% to 80% less. Stelara has a biosimilar coming to market next year • Think of it like a generic for biologics—but because As more biosimilars enter the biologics are complex and made from living cells, market, they create opportunities biosimilars aren’t exact copies. They go through for health plans to reduce specialty drug spending without rigorous testing to ensure they work the same way as compromising patient outcomes. the original drug. A clear adoption strategy, including managing rebates and preventing brand leakage, is key to capturing these savings. LOCKTON COMPANIES | 12 Opportunity for Future Savings Biosimilar Strategy: • Humira (brand): List price historically around $6,000 per month (≈$72,000 annually). After rebates from AbbVie (often 50–60%), the net cost to the plan can drop to about $2,800 per prescription. • Humira biosimilars: Some launched with list prices 55–86% lower than Humira (as low as $1,000–$2,500 per month). However, rebates on biosimilars are much smaller, so the net cost after rebates often ends up similar or slightly higher than Humira’s rebated price unless the PBM formulary strategy favors biosimilars. Example scenario: • Brand Humira: $6,000 list → $2,800 net after rebate • Biosimilar: $1,500 list → $1,500 net (minimal rebate) Savings: $1,300 per prescription (≈46% lower net cost) if rebates don’t offset the difference. Key takeaway: Plans only realize meaningful savings if they prioritize low-list-price biosimilars and adjust rebate strategies, because PBMs often structure contracts to favor high-rebate brands over low-cost biosimilars. LOCKTON COMPANIES | 13 Open Enrollment Update Independence changes everything. © 2024 Lockton Companies. All rights reserved. D: 2859452