Clearwater benefits committee reviews health-plan claims, flags rising specialty drug costs

CLEARWATER, Fla. — The City of Clearwater Benefits Committee on Friday, April 23, reviewed the city’s 2020 medical-plan performance and early 2021 experience, hearing that the plan finished the year under budget but faces rising pharmacy and specialty-drug costs that will factor into insurer and funding decisions this spring.

Jill Paul, benefits committee leader, opened the virtual meeting and said staff would continue to promote the city’s Motivate Me wellness program and to communicate benefit changes to employees and retirees. “We will also continue to encourage employees to reach out to HR if they have any questions regarding benefits or billing questions,” Paul said.

The committee’s consultant, Sean (affiliation listed in the meeting as Goring), presented claims and utilization data. He explained the city self-insures its medical plan and pays an administrative fee to Cigna while funding claims directly. “The city pays an administrative fee, to a carrier or a third party administrator, which is Cigna. And then the city pays for claims as they occur,” Sean said.

Why it matters: committee members said the presentation will inform the city’s renewal and funding decisions in June and shape communications to employees about plan options, preventive care and vaccination logistics.

Key findings presented - Funding and overall costs: For the 2020 plan year the city budgeted about $20.8 million for the medical plan. Total plan costs for the year were about $19.6 million, producing a roughly $2.2 million surplus for the year, the presentation showed. - Claims breakdown: Medical claims were reported at about $12.7 million and pharmacy claims about $4.5 million; combined claims (up to stop-loss limits) were roughly $17.2 million. The plan’s monthly claims per employee averaged about $857. - Administration and stop loss: Annual administrative fees paid to Cigna were reported at about $960,000; stop-loss (reinsurance) protection at the $300,000 per-claim level cost about $1.4 million last year. - Pharmacy and specialty drugs: Pharmacy costs rose sharply year over year. The presentation listed a 24.8% year-over-year increase in pharmacy costs and highlighted specialty biologic medications (for conditions such as rheumatoid arthritis, Crohn’s disease and psoriasis) and new high-cost diabetes drugs as major drivers. - High-cost claimants: Twenty-seven individuals had more than $100,000 in claims last year, representing about 1.1% of plan members but driving about 28% of overall spend.

COVID-19 impact and testing The consultant reported COVID-related activity captured on the plan included 779 individuals tested through the medical plan and 129 positive diagnoses (100 employees, 16 spouses, 13 dependents). Eleven employees were hospitalized for COVID-19 for a total of 79 hospital days; the presentation listed $561,000 in COVID-related plan spending for the year, about 2.9% of overall plan spend.

Sean said the early-pandemic shutdown (April–May 2020) produced a temporary reduction in elective care and a drop in claims for those months that lowered 2020 totals, and that the city’s utilization largely returned toward normal afterward. He described industry uncertainty about whether deferred care will result in higher costs later if screenings and diagnoses were delayed.

Reimbursements and testing costs Jay (City of Clearwater staff) reported the county reimbursed the city roughly $64,000 for lab testing materials submitted for reimbursement. “We have received reimbursement from the county for what we submitted,” Jay said. Committee members and staff noted some testing and PPE reimbursements have been submitted to county channels but said hospital admission costs are not likely to be eligible.

Telehealth and preventive care The plan saw a large increase in virtual-care visits in 2020 — a 553% jump in one measure — and the city reported growth in both general telehealth and behavioral-health virtual visits. The committee heard that Cigna consolidated telehealth providers and the city is now using MD Live (Cigna’s telehealth) for virtual visits.

On prevention, staff said the Motivate Me clinic and incentives appear to be driving higher completion rates for well visits and screenings compared with Cigna’s Florida public-sector norms. The presentation reported: - Motivate Me incentives awarded: about $113,000 total awarded, representing 38% of available incentives and an average of $142 earned per participating individual. - Participation: roughly 800 employees earned an incentive and about 1,300 did not; average age of participants listed as 48.8 and nonparticipants 43.3.

Committee discussion and next steps Committee members discussed participation gaps among police and fire personnel, who sometimes use separate, more comprehensive annual screenings; staff said employees can use a Cigna gatekeeper form (available on myCigna) to have an outside preventive exam count toward Motivate Me, and staff offered to print or distribute the one-page form at stations to improve participation.

“Employees can go on myCigna to get the form that’s needed to be filled out by the doctor,” said Jessica (committee/staff member). The committee asked staff to produce a short flyer and clearer instructions for police and fire to avoid duplicated testing and to help members earn incentives without repeating exams.

On vaccines, Sean said the vaccine product itself is covered by the federal government; insurers or providers can submit a reimbursement for administration time and related service charges. “The actual cost of the vaccine itself is covered by the government,” he said. The presentation cited about $19 as a typical administration reimbursement figure reported to insurers.

Materials and timing Jill Paul said the meeting materials will be distributed to committee members and posted on Benicheck; staff confirmed the committee will reconvene in late May or early June to review updated claims and to begin renewal discussions.

There were no formal motions or votes recorded during the meeting.