the County Board Members and all County employees detailing the upcoming changes in the County’s Health Insurance Program. Mr. Bockman stated that the County had another bad year, in fact, the third in a row. He stated that medical inflation and utilization is on the rise as well as the #1 percentage leader (prescription drugs) which continues to escalate rapidly at a rate of 30% each year. Utilization was in its fourth consecutive year for record expenditures. His dilemma was how to maintain employee benefits without bankrupting employees or the County. He stated the goals of the county were to preserve human capital and to balance competing interests. He detailed the County’s Self-Insurance Program from 1988-present. He showed the claim peaks and pointed to the dips as typical patterns throughout the years. However, since 1997 there have been no dips and the pattern continues to have costs escalate with no end in sight. The balance in the insurance fund now will be at least $600,000 in the red. He turned to the two major changes that will be implemented commencing January 1, 2003. First, is the change from self-funded insurance to a fully insured protection by Blue Cross/Blue Shield (BCBS). Blue Cross/Blue Shield had approached the County just recently, Mr. Bockman stated. Second, is the implementation of plan design changes. Without the changes, the premiums this year would have risen 65%-67%. He itemized three areas needing modification in the plan design change.

1.) Modify behavior

2.) Transfer risk to employee

3.) Transfer costs to largest users

Mr. Bockman detailed the increases and changes in deductibles, out of pocket costs, co-insurance from in network (80/20) and out of network coverage (60/40), vision coverage, prescription drugs, dental and lifetime maximums. Mr. Bockman reported that the County’s consultant went to BCBS and assured the County of two things: 1) The County was to get a twelve month quote and 2) BCBS would have monthly reportings guaranteed in writing. Mr. Bockman also cautioned on issues that needed to be watched and dealt with accordingly. The IRS will allow employees to flex $3,000 and the administrators would like to see the County figure raised. It would cost the County nothing and actually save money.

He stated that the current appropriation levels were sufficient to: a.) fund employer’s share of the cost but liable for costs incurred up through December 31, 2002; b.) fund runoff from the self-insured fund; and c.) retire the deficit in the health insurance fund. A discussion then ensued. Mr. Van Buer stated that Flex Benefits would be lost if you don’t use the promised amount. Mr. Wilson commented that the numbers reflect to cover the cost, but if that incline continues to rise the County will have to have a year’s experience or more to see where the County stands. Mr. Bockman stated that the County would be rated on the County’s experience. "If we have another bad year with Blue Cross, we will cringe. If those discount doesn’t come true, if our purchasing behavior doesn’t change as we hope it will and they do, we will be sitting here next year trying to figure out what our next move will be." Chairman Leifheit asked if the County still had insurance for stop loss through this plan. Mr. Bockman said the County does and is now part of the BCBS Plan. He stated that in an indemnity plan the County can’t have a bad year. A bad second year yes, but no matter what happens this year the County’s losses are capped----those premiums. Mr. Wiegand asked for follow up on the deficit being retired. Mr. Wiegand asked if contents of Mr. Bockman’s notes would be attached to these minutes. They are attached and known as appendage 1 pages 1-6.)