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3. RFP for International Prescription Provider (IPP) Services — Staff also recommends that the <br />County, through the services of our insurance broker, solicit an RFP for IPP services. IPP's <br />contract with government -licensed physicians, pharmacies and pharmacists in Tier -1 countries <br />as designated by Congress (e.g. Canada, the United Kingdom, Australia, and New Zealand)'to <br />supply brand name medications packaged and sealed by the original manufacturer for direct <br />delivery to plan members. This service would be optional for employees. Each employee <br />interested in such a program would enter into an agreement with the provider to obtain available <br />prescription medications through the program. <br />One provider of this service, CanaRx, has provided an analysis based upon the top 100 <br />prescription medications on the County health plan. This analysis shows that County Plan <br />expenditures for the 36 medications available through the program totaled $806,859. In addition, <br />members paid $95,609 in copays. <br />Assuming full participation in the program, the County Plan expenses would have been $354,310 <br />during the same time period. Therefore, the County would realize an estimated savings of <br />$452,549. Furthermore, there is no copay for medications meaning employees would realize a <br />savings of $95,609. This results in savings on such medications for both the employee and the <br />employer. It is important to note that participation is not mandatory, so actual savings would likely <br />be less than this amount. <br />4. Post Employment Health Plan (PEHP) — The International Association of Firefighters (IAFF) <br />has requested that the County explore establishment of a PEHP Plan offered by Nationwide. A <br />PEHP plan is a tax advantaged savings vehicle for employees to fund eligible healthcare related <br />expenses during retirement. Employees pay no Federal income taxes, Medicare or Social <br />Security (FICA) on contributions to the PEHP Plan, per Internal Revenue Code Section 501(c)(9). <br />The employer realizes a savings as well, since the employer matching contributions for FICA are <br />not required. This results in a savings to the employer equal to 7.65% of contributions, while the <br />employee saves 7.65% plus their applicable Federal income tax rate. Contributions to the PEHP <br />Plan can be made by the employer, mandatory employee contributions, or funded solely with <br />accrued sick and/or vacation leave time. <br />Based upon sick and vacation payouts from calendar year 2015, the County would have realized <br />a savings of about $44,000 in matching FICA contributions for all bargaining units. According to <br />representatives from the provider, employee participation is mandatory if implemented, but this <br />can be separated by bargaining unit. Staff is agreeable to implementing a PEHP Plan with <br />employee contributions if agreed to by each bargaining unit, but we are reluctant to unilaterally <br />make these contributions mandatory for all employees. Therefore, staff recommends exploring <br />implementation of the PEHP Plan through the collective bargaining process with the County's two <br />(2) bargaining units. <br />239 <br />