State employees covered by PEBB are coming up on some important deadlines. PEBB is the Public Employees Benefit Board, which administers health care plans for all state workers.

As PEBB finalizes decisions on 2013 benefits, many are heartened that the agency previously announced the abandonment of the controversial waist measurement mandate that formerly was part of the Health Engagement Model (HEM) program. Still, you and your spouse or domestic partner will have new choices on HEM during Open Enrollment this fall.

• Signing up and participating by completing HEM Step 1 as scheduled will give you a monthly monetary incentive. Not signing up, or signing up but not participating by completing HEM Step 1 as scheduled, will add a deductible to your health plan in addition to the plan's standard deductible.

• Sign up and complete HEM Step 1 as scheduled: As a HEM participant, you'll receive $17.50 ($35 if both you and your spouse or domestic partner participate) as a taxable amount with your pay beginning January.

• Sign up but don't complete HEM Step 1 as scheduled: You and your spouse or domestic partner will be dropped as HEM participants, and you'll have an additional $100 per person deductible (maximum additional deductible of $300 per family) in your medical plan.

• Choose not to sign up: You'll have an additional $100-per-person deductible (maximum additional deductible of $300 per family) in your medical plan.

Additional details are available on the PEBB website and in the July issue of the agency's Connection newsletter, which is attached to this article. This month's missive also includes links to help you complete two e-lessons if you're a current HEM participant and timely summer skin-health tips from Thanh Nguyen, FNP, a provider with Providence Health express.

State employees should note that PEBB will soon be introducing a Health Engagement Model (HEM) into its mix of insurance options. PEBB, the Public Employees' Benefit Board, administers health insurance programs for all state employees.

"Because it's new, people naturally have a lot of questions about the HEM," said Diane Lovell, a Council 75 staff representative and the union's longtime representative on PEBB.

"The board wants to make sure all PEBB members understand the 'what,' 'why' and 'how' of HEM, and why it's so important in our combined efforts to sustain the cost and quality of our health care benefits."

Lovell says that PEBB has posted an extensive Frequently Asked Questions (FAQ) section on its website devoted to the new Health Engagement Model. You can jump to that FAQ here.

There is follow-up to the Public Employees' Benefit Board's recent plan design changes that will impact all AFSCME-represented state employees.

Council 75 Staff Representative Diane Lovell is this union's longtime representative on the PEBB Board, which consists of an even split of labor and management seats. Attached to this article is a fifth audio-enhanced PowerPoint presentation that focuses additional 2012 plan design changes.

This presentation includes updates on changes coming in 2012, as PEBB takes steps to meet a $5 million cost reduction. To accomplish that goal, the board has decided to discontinue coverage for a small menu of items — warts, corns, varicose vein surgery and breast reduction, among others. Additionally, four items will continue to be covered but have been moved to PEBB's "additional cost tier," meaning members undergoing these procedures will be required to pay an additional either $100 or $500 co-pay. Those four procedures are outlined in this PowerPoint presentation.

Lovell's first four PowerPoint presentations are available in the PEBB Update tab of this website.

Here are some viewing instructions:

• This seems obvious, but you do have to have PowerPoint on your computer to view the presentation.

• Depending on your computer, it will take a little bit of time to download the program, so be patient.

• Starting the program will vary slightly, depending on what version of PowerPoint you have. But somewhere in the PowerPoint tool bar there should be a "Slide Show" option (a pull-down menu on the newer versions), and once you select "View Show" the program and audio should start right up.

• If you get the first slide on your screen but nothing else happens, trying clicking on the little audio icon in the lower left corner. Note that you may have to click on the audio icon to start the audio on each slide.

• You can use the arrow buttons on your keyboard to advance when prompted by Lovell's audio to go to the "next slide," but again, you may have to click on the audio icon to start the audio for the slide.

The Public Employees' Benefit Board is nearing final decisions on plan design changes that will impact all AFSCME-represented state employees.

Council 75 Staff Representative Diane Lovell is this union's longtime representative on the PEBB Board, which consists of an even split of labor and management seats. Attached to this article is a fourth audio-enhanced PowerPoint presentation that focuses on potential changes. This presentation includes updates on the semi-final plan designs, medical and dental renewals, discussion of preference-sensitive and evidence-based changes that are under consideration as well as an update on retiree options.

Lovell's first three PowerPoint presentations are available in the PEBB Update tab of this website.

Here are some viewing instructions:

• This seems obvious, but you do have to have PowerPoint on your computer to view the presentation.

• Depending on your computer, it will take a little bit of time to download the program, so be patient.

• Starting the program will vary slightly, depending on what version of PowerPoint you have. But somewhere in the PowerPoint tool bar there should be a "Slide Show" option (a pull-down menu on the newer versions), and once you select "View Show" the program and audio should start right up.

• If you get the first slide on your screen but nothing else happens, trying clicking on the little audio icon in the lower left corner. Note that you may have to click on the audio icon to start the audio on each slide.

• You can use the arrow buttons on your keyboard to advance when prompted by Lovell's audio to go to the "next slide," but again, you may have to click on the audio icon to start the audio for the slide.

Should the Public Employees' Benefit Board adopt some changes to medical and pharmacy plan designs in 2012 and more changes in 2013 — or simply make more significant changes in 2012? That's the question the PEBB Board continues to wrestle with as it continues to face the reality of a deficit that ranges from $20.5 million to as much as $104.3 million.

The final number will depend largely on the results of the current state contract bargaining with AFSCME, SEIU and other state unions.

Council 75 Staff Representative Diane Lovell is this union's longtime representative on the PEBB Board, which consists of an even split of labor and management seats. Attached to this article is a third PowerPoint presentation that focuses on the 2012/2013 design changes question.

Lovell's first two PowerPoint presentations are available in the PEBB Update tab of this website.

Here are some viewing instructions:

• This seems obvious, but you do have to have PowerPoint on your computer to view the presentation.

• Depending on your computer, it will take a little bit of time to download the program, so be patient.

• Starting the program will vary slightly, depending on what version of PowerPoint you have. But somewhere in the PowerPoint tool bar there should be a "Slide Show" option (a pull-down menu on the newer versions), and once you select "View Show" the program and audio should start right up.

• If you get the first slide on your screen but nothing else happens, trying clicking on the little audio icon in the lower left corner. Note that you may have to click on the audio icon to start the audio on each slide.

• You can use the arrow buttons on your keyboard to advance when prompted by Lovell's audio to go to the "next slide," but again, you may have to click on the audio icon to start the audio for the slide.

The Public Employees' Benefit Board learned recently that it faces a deficit that ranges from $20.5 million to as much as $104.3 million; the final number will depend largely on the results of the current state contract bargaining with AFSCME, SEIU and other state unions. But whatever the results, it's a problem for state employees.

Council 75 Staff Representative Diane Lovell is this union's longtime representative on the PEBB Board, which consists of an even split of labor and management seats. Attached to this article is a second PowerPoint presentation that focuses on the deficit information the PEBB Board received at its March 23 meeting.

Lovell''s first PowerPoint presentation, a more general discussion of the issues and challenges that PEBB faces, is available in the PEBB Update tab of this website.

Here are some viewing instructions:

• This seems obvious, but you do have to have PowerPoint on your computer to view the presentation.

• Depending on your computer, it will take a little bit of time to download the program, so be patient.

• Starting the program will vary slightly, depending on what version of PowerPoint you have. But somewhere in the PowerPoint tool bar there should be a "Slide Show" option (a pull-down menu on the newer versions), and once you select "View Show" the program and audio should start right up.

• If you get the first slide on your screen but nothing else happens, trying clicking on the little audio icon in the lower left corner. Note that you may have to click on the audio icon to start the audio on each slide.

• You can use the arrow buttons on your keyboard to advance when prompted by Lovell's audio to go to the "next slide," but again, you may have to click on the audio icon to start the audio for the slide.

As noted in a previous article on this website, the Public Employees' Benefit Board has announced significant plan design changes that will impact PEBB-represented AFSCME members beginning April 1.

Council 75 Staff Representative Diane Lovell is this union's longtime representative on the PEBB Board, which consists of an even split of labor and management seats. Lovell recently did a pair of mini-sessions on the PEBB changes in Portland and Salem. Because she is a full-time staff rep for Local 328 at OHSU, AFSCME's largest local union in Oregon, it simply isn't feasible for Lovell to travel throughout the state repeating the PEBB presentation.

In an effort to make the latest PEBB information available to our membership statewide, Lovell has put together the attached PowerPoint presentation. This presentation includes an audio voiceover.

Depending on your computer, it will take a little bit of time to download the program. Additionally, starting the program will vary slightly depending on what version of PowerPoint you have on your computer. But somewhere in the PowerPoint tool bar there should be a "Slide Show" option (a pull-down menu on the newer versions), and once you select "View Show" the program and audio should start right up.

By DIANE LOVELL

PEBB Board of Directors (AFSCME)

[Editor's note — Veteran Oregon AFSCME Staff Representative Diane Lovell is also Council 75's representative on the Public Employee Benefits Board, filling one of the designated union seats on that board. PEBB oversees health care plans for state employees.]

Changes are coming April 1 to your PEBB insurance plans. PEBB's consultants and staff have informed the board that our PEBB costs for plan year 2011 will be 1.7 percent above the 10 percent negotiated contribution cap. This cost increase is the result of extending coverage to employee dependents through the age of 26 and because of additional family members at the employee/children and family tiers. This is almost $12 million.

You may remember that over the summer there was significant "debate" among the management and union PEBB members about taking 5 percent from the PEBB reserves to cover the increased cost of your healthcare, up to the 10 percent cap. While the union folks prevailed in this debate, because the increase was about 10 percent we were forced to modify the benefit design by adding a $100 co-pay for imaging (excepting imaging related to cancer diagnosis and treatment) and sleep studies. 

Now that the cost of our current benefits has crept above that 10 percent negotiated cap, we once again need to reduce our plan design to get back to the 10 percent cap.  The union contingent on the PEBB Board agree that we want to make all value-based changes possible before moving to direct cost-shifts like deductibles and higher co-insurances.

Value-Based Insurance Designs (VBID), also known as Value-Based Benefit Design, seeks to increase the value of healthcare through incentives to use care more wisely. One value-based design reduces or eliminates cost sharing for services that show strong evidence of clinical benefit. Another design increases cost sharing for services that do not show evidence of clinical benefit.

As reported in the Salem Statesman Journal, the PEBB Board discussed this problem at our Feb. 15 meeting. On Feb. 24, we followed up with a special PEBB meeting to decide what changes we would be forced to make, changes made official during a recent teleconference. Outlined below are the plan design modifications that will become effective on April 1, 2011. These changes will take place within both the Providence Statewide and Providence Choice Plans. The savings listed are only for the Providence Statewide Plan and the ODS Crown benefit change.

We recognize that this is very bad news. Unfortunately, the challenges that lay before us are much worse. The state's initial proposal at AFSCME Central Table bargaining is to reduce contributions to the 2010 contribution level. This cut would mean that PEBB would be forced to eliminate another estimated 20 percent: $140 million (all funds) in cuts for 2012; 5 percent to make up for lost 2011 contribution increases; 5 percent to make up for the money pulled from the Stabilization Fund and Standard Demutualization Fund; 10 percent for anticipated increases in 2012; and a yet to be determined additional amount to keep our PEBB reserves funded, albeit at a low level.

A quick note about the rural subsidy issue. The original purpose of the rural subsidy was to protect our members in rural counties where there were insufficient in-network physicians. PEBB did not want members to be forced to pay out-of-network rates simply because there were inadequate numbers of physicians. Currently there are adequate in-network physicians to meet the needs of our members throughout Oregon, including networks in Idaho and Washington. The $1 million savings won't be coming out of our members' pockets, but rather from the physicians in those areas who are currently being paid more than physicians in the rest of the state performing the same medical care.

PEBB Plan Design Changes Effective April 1, 2011

Change                                                                                        Savings

$100 Emergency Room Co-Pay                                                   $1.8 million

Discontinue Rural Subsidy *                                                           $1 million

Bariatric Surgery Co-Pay                                                                 $200,000

Additional Cost Tier of $500 for

Value-Based, Preference-Sensitive Services                                      $4.3 million

(Including outpatient upper endoscopy, spine

surgery for pain, knee replacement, hip

replacement, arthroscopies, shoulder surgery

for osteoarthrosis)

Limit Alternative Care Visits to 60                                                $450,000

Reduce Crown Benefit to 50 percent                                         $1.3 million

By DIANE LOVELL

Council 75 Staff Representative

Patient safety at a hospital? That might seem like a given, but when you think about how large and complex an institution a hospital can be, it's no wonder that safety issues for patients are an ongoing concern.

Regular readers of this space are likely aware that I am our union's longstanding representative on the PEBB Board of Directors. One of my sub-roles is that I am also the PEBB/OEBB representative on the state's Patient Safety Commission. There are lots of interesting issues related to this topic, and to give you a flavor, we have attached the commission's most recent newsletter to this article. I encourage you to take a look at it.

Also attached is the December PEBB newsletter. While PEBB members should have already received this via e-mail, I want to draw your attention to it again and encourage people to participate in the confidential online health assessment. At PEBB, one of the things we are adamant about is that a key to containing health care costs is for all of us to lead healthier lifestyles! Take a moment to do the assessment. It can give you some valuable information about areas where you can make better decisions regarding your health.

PEBB is very pleased to report that through a collaborative process among PEBB staff, PEBB health plans and Weight Watchers, enrollment and re-enrollment in our Weight Watchers program is virtually hassle-free.

Currently members who wish to initially enroll in the Weight Watchers program have to make multiple calls to different entities. Individuals that want to re-enroll have to fill out forms, get them signed by meeting leaders, send them to a TPA (third-party administrator) who sends the information to the member's health plan, who then contacts our member with an authorization code which s/he uses to enroll.

Effective Oct. 1, members will be able to initially enroll with one phone call. Folks who wish to enroll will have their previous participation verified by their meeting leader and will need to make only one phone call to continue their participation in the PEBB Weight Watchers program.

Effective Jan. 1, all Weight Watcher participants will be required to complete an annual online health assessment with their health plan. PEBB believes that this action will support our members in understanding their overall health status and risks and will support them in continuing to make positive changes in their health and well being.

In 2009, approximately 5,000 PEBB employees enrolled in over 11,000 13-week sessions of the Weight Watchers program. Employees participated in At Work meetings at more than 70 worksite locations and lost over 67,000 combined pounds during the course of the year! 

Participation in the program remains high in 2010 and the success stories continue. During the first half of this year PEBB employees enrolled in almost 6,000 13-week sessions and At Work meeting participants lost almost 25,000 pounds.

PEBB is very pleased to report that through a collaborative process among PEBB staff, PEBB health plans and Weight Watchers, enrollment and re-enrollment in our Weight Watchers program is virtually hassle-free.

Currently members who wish to initially enroll in the Weight Watchers program have to make multiple calls to different entities. Individuals that want to re-enroll have to fill out forms, get them signed by meeting leaders, send them to a TPA (third-party administrator) who sends the information to the member's health plan, who then contacts our member with an authorization code which s/he uses to enroll.

Effective Oct. 1, members will be able to initially enroll with one phone call. Folks who wish to enroll will have their previous participation verified by their meeting leader and will need to make only one phone call to continue their participation in the PEBB Weight Watchers program.

Effective Jan. 1, all Weight Watcher participants will be required to complete an annual online health assessment with their health plan. PEBB believes that this action will support our members in understanding their overall health status and risks and will support them in continuing to make positive changes in their health and well being.

In 2009, approximately 5,000 PEBB employees enrolled in over 11,000 13-week sessions of the Weight Watchers program. Employees participated in At Work meetings at more than 70 worksite locations and lost over 67,000 combined pounds during the course of the year! 

Participation in the program remains high in 2010 and the success stories continue. During the first half of this year PEBB employees enrolled in almost 6,000 13-week sessions and At Work meeting participants lost almost 25,000 pounds.

June is the month that your PEBB Board typically winds up all decisions related to the following year's plan design and approves a composite rate for that year. This year, not so much.

A little background ...

PEBB was planning on (and still is) issuing an RFP (Request for Proposals) for plan year 2012. It was our intent to move to self-insurance in plan year 2011. However, when we received extremely high proposed rate increases from Regence last spring we decided that our only viable option was to move to self-insurance for plan year 2010.

This brought the rate increases for plan year 2010 down to approximately 6.7 percent — still more than the 5 percent negotiated in our state contract, but manageable within the required reserves (savings) that PEBB had accumulated which enabled us to move to self-insurance.

Reserves are an essential factor for a self-insured plan.  Best practice, based on advice from our consultants, Mercer, and based on the National Association of Insurance Commissioners (NAIC) Risk Based Capital (RBC) requirements for Underwriting Risk for medical plans, are a range of 250 percent of premium at the low end, 275 percent at mid-point and 300 percent at the high end. PEBB moved to a self-insured model based on reserves at the low end, although building our reserves to the mid-point would be preferable.

Fast forward to the present; our healthcare increase for 2011 is 10.4 percent. As specified in our state contract, PEBB has been requested to take 5 percent out of reserves to cover the state General Fund gap. This amounts to approximately $10 million through July 2011 General Fund only. Funding the 5 percent gap, General Fund only, until December 2011 will cost approximately $15 million. The actual gap, all funds, is approximately $34 million. To fund the gap at either $10 million or $15 million will bring our reserves below the low end.

The PEBB Board must also make plan design changes to reduce the rate increase down to 10 percent. At the board's June meeting we approved the following modifications which will save approximately $3 million in the self-insured plans:

• Sleep Studies — Require a flat co-payment of $100 that will not apply to the maximum out-of-pocket benefit.

• Imaging — Require a flat co-payment of $100 for advanced imaging (CT, MRI and PET) that will not apply to the maximum out-of-pocket benefit.

The PEBB Board also agreed that in reaching a final decision on how to fund the $10-$15 million gap we will think about and discuss further:

• Use the Standard Reserves, currently dedicated to an increase on the basic employee life insurance, to fill in the gap and maintain our PEBB Reserves at the 250 percent of premium (low) level.

• Rate retiree health care on its own, rather than pool their experience with our active plan. This would have a very significant impact on retirees, but would lower our increase and save agencies money. We would also need to make sure that all of our PEBB retirees would have the opportunity to move to the PERS health plan.

• Begin to communicate more bluntly with our members about the financial challenges of funding health care in 2012 and beyond, and the need to focus our health care dollars wisely on preventive care and health care that is based on evidence and best practices as defined by nationally-recognized Physician Specialty Societies and our own Oregon physician experts.