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t The health insurance program experienced net surpluses during the period from FY09 through FY13. While our per capita costs remain below most surrounding local governments, these increases have resulted in losses for the Health Insurance Fund for the last two years. For fiscal year 2014/15, the losses were substantial (approximately $2.8 million). It is projected that the loss in the current fiscal year could amount to $2,300,000 assuming a similar level of expenses to last year. Staff has assumed a 9.0% medical inflation rate, which is the average experienced in the State of Florida currently If the County experiences annual cost increases of 9.0%, this amounts to an additional $1.6 million in costs each year assuming no change in the number of employees. Assuming no action was taken, the loss in the plan could grow to $3.9 million in FY2016/17. Currently, the Health Insurance Fund has a healthy fund balance. However, adjustments need to be made now to ensure the future financial stability of the plan. Recurring plan revenues must equal recurring plan expenses in order to avoid a further erosion of health plan fund balance, which is a one- time revenue source. As claims costs will continue to escalate, failure to make recommended plan changes this year will result in even deeper health program deficits that will require even more drastic future plan design changes or infusions of tax/fee revenue (employer contributions) and greater increases from plan participants (employee contributions). Staff has evaluated several potential adjustments to the Health Insurance Program to address the current shortfall as well as future anticipated cost increases Based upon direction from the February 91h meeting, as well as the magnitude of the projected loss, staff has developed a two-year plan of adjustments to the Health Insurance Program Proposed Changes — Effective Fiscal Year 2016/17 1. Blue Options to Blue Choice Health Plan — The County's insurance broker has recommended a change from the current Blue Choice plan to a similar Blue Options plan. This plan change would not result in any changes in copays, deductibles or out-of-pocket maximums. The proposed Blue Options plan has more current cost containment mechanisms in place than the existing plan. This is due to the fact that not many plans have remained in the Blue Choice plan currently utilized by the County. It is projected that this change will produce a modest savings of 2% of annual claims expense for the County; based on $16 million in annual claims expense, the savings is estimated at $320,000. Florida Blue has also performed a disruption analysis to determine the impact of network changes on the plan members. This analysis showed that only three (3) providers are on the current network that would not be on the new network. This network change would only affect five (5) members. Conversely, there are eight (8) additional providers on the new plan that are not on the existing plan which were utilized by members in the last year. It should be noted that all surrounding local governments with a Florida Blue network are utilizing a Blue Choice Plan. 2. Kannact Diabetes Management Program — Last year, diabetic care costs for the health insurance plan were approximately $1,050,000. Kannact provides a comprehensive system to help manage diabetes. In addition to providing glucometers and supplies, Kannact provides a health coach, real-time monitoring, and tracking with a cellular device, and support to help members with diabetes manage their condition. Kannact projects a 10% reduction or approximately $105,000 in medical costs due -to reduced hospital visits and the ability to slow advancement of the disease. As an additional benefit, employees feel better and are more productive. 238