11 - Annual Health Benefit Broker Fees Disclosure Costa Me sa Sanitary District …an Independent Special District Protecting our community’s health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Memorandum ITEM NO. 11 To: Board of Directors Via: Scott Carroll, General Manager From: Anna Sanchez, Administrative Service Manager Date: March 28, 2013 Subject: Annual Health Benefit Broker Fees and Commission Disclosure Summary As requir ed by Section 1367.08 of the California Health and Safety Code and Section 10604.5 of the California Insurance Code, the Costa Mesa Sanitary District must disclose any group health insurance premiums, fees, and commissions paid to all agents, providers, an d brokers. Staff Recommendation Staff recommends the Board receive and file the report for calendar year 2012. Analysis Section 1367.08 of the Health and Safety Code A health care service plan shall annually disclose to the governing board of a public agency that is the subscriber of a group contract, the name and address of, and amount paid to, any agent, broker, or individual to whom the plan paid fees or commissions related to the public agency's group contract. As part of this disclosure, the healt h care service plan shall include the name, address, and amounts paid to the specific agents, brokers, or individuals involved in transactions with the public agency. The compensation disclosure required by this section is in addition to any other compensa tion disclosure requirements that exist under law. Section 10604.5 of the Insurance Code An insurer shall annually disclose to the governing board of a public agency that is the policyholder of a group health insurance policy, the name and address of, and amount paid to, any agent, broker, or individual to whom the insurer paid fees or commissions
Board of Directors March 28 , 2013 Page 2 of 3 related to the public agency's group health insurance policy. As part of this disclosure, the insurer shall include the name, address, and amounts paid to the sp ecific agents, brokers, or individuals involved in transactions with the public agency. The compensation disclosure required by this section is in addition to any other compensation disclosure requirements that exist under law. Summary of Health Benefits CalPERS administers and negotiates rates and coverage for all District medical plans. Services provided by CalPERS includes: plan design, negotiating with medical and pharmaceutical carriers, developing and printing plan summaries, outlines and brochures, billing, claims processing, hosting an online database for enrollments and changes, participant appeals and grievances, website design and maintenance, and free workshops/seminars for employers, employees, and retirees. All non -medical health plans which include dental, vision, life, long -term disability, voluntary AD&D, and other individual plans such as cancer, and short -term disability are brokered by SDRMA and Aflac. Services provided by SDRMA and Aflac includes: plan design options, negotiating rat es and benefits with carriers, legal and compliance updates and advice, open enrollment support, assistance with claims processing and resolution, free workshops and seminars to staff. Although the District obtains non -medical health plans through SDRMA, the disclosure codes do not apply because the agency only administers the non -medical programs through the California State Associations of Counties Excess Insurance Authority (CSAC -EIA Health) and do not contract directly with brokers or insurance carrier s of the Health Benefit Programs. Agents/ Brokers of Record Medical Broker/ Administrator Non -Medical Broker California Public Employee Retirement Services (CalPERS) American Family Life Assurance Company of Columbus (Aflac) 400 Q Street P.O. Box 15879 Sacramento, CA 94229 San Diego, CA 92175 Strategic Plan Element & Goal No t applicable
Board of Directors March 28, 2013 Page 3 of 3 Legal Review Not applicable Financial Review Plan Year Broker Administrator Coverage Premiums Total Fees/ Commissions Percent of Fees to Premiums 2012 CalPERS Medical $ 98,993.98 $ 394.97 0.40% 2012 Aflac Non -Medical $ 9,485.92 $ 2,885.10 30.41% Pu blic Notice Process Copies of this report are on file and will be included with the entire agenda packet for the March 28, 2013 Board of Directors regular meeting at District Headquarters and on District’s website. Alternative Actions 1. Refer the matter bac k to staff