University of South Alabama
Fringe Benefits Committee – Meeting Minutes
Date:
Time:
Place:
1
July 27, 2010
3:00 p.m.
HR Learning & Development Center
Members
Mr. M. Wayne Davis
Dr. Elizabeth Adams
Dr. Lanier S. Cauley
Dr. Thomas Chilton
Dr. Jim Connors
Mr. Pat Downing
Mr. Charles Dunnam
Ms. Amy Fleet
Dr. David Johnson
Mr. David Knight
Mr. Andy Lightbourne
Mr. John Pannelli
Ms. Kelly Peters
Dr. Victoria Rivizzigno
Dr. Robert Shearer
Ms. Barbara Shirvanian
Dr. J. Allan Tucker
Ms. Karen Watts
Ms. Carolyn Williams
Chairman - Financial Affairs
Chair, Faculty Senate Fringe Benefits Committee
Mechanical Engineering
Associate Dean of Education
Chair, Faculty Senate
USA Brookley Center
Maintenance Dept.
Marketing
Academic Affairs
Supply, Processing & Distribution
Computer Center
COM Business Office
Business Office
Earth Sciences
Office of the President
Dean of Students
College of Medicine
Nursing-Quality Management
College of Medicine
Present
Present
Present
Absent
Present
Present
Present
Absent
Present
Absent
Absent
Present
Present
Present
Absent
Present
Absent
Present
Absent
Others Present
Ms. Pamela Henderson, Assistant Vice President Human Resources
Mr. Gerald Gattis, Associate Director of Human Resources
Ms. Tina Stalmach, Assistant HR Manager, Employee Benefits
Mr. Ed Kahalley, Jr., Benefits Consultant, Secretary to the Committee
Mr. David Cooper, Ms. Lori Schneider, Ms. Anne Ruzic, Blue Cross Blue Shield
Call to Order & Meeting Minutes
Chairman Wayne Davis called the meeting to order and asked for approval of the April 27, 2010,
meeting minutes. A motion was made, seconded and the vote unanimous to dispense with the
reading of the meeting minutes and approve same as prepared by the Secretary.
Mr. Davis introduced Ms. Tina Stalmach stating that she had recently been promoted within the
Human Resources Department to Assistant HR Manager, Employee Benefits.
University of South Alabama
Fringe Benefits Committee – Meeting Minutes 7/27/2010
2
Pharmacy Benefit Manager
Ms. Anne Ruzic introduced herself stating that she represented Prime Therapeutics, LLC, the
pharmacy benefit manager which had partnered with Blue Cross Blue Shield of Alabama
effective July 1, 2010. Prime is an independent company owned by 12 Blue Cross Blue Shield
Plans and has more than two decades of experience providing pharmacy benefit management.
Prime has a proven track record and consistently competes with other leading PBMs in both
annual drug trend and in delivering low net-cost. Ms. Ruzic stated that she had been the clinical
pharmacist with Blue Cross Blue Shield of Alabama before moving to Prime and she would be
working on the transition. She stated that Prime should be transparent to the claim payment
system except for providing a high level of service, more cost effective purchasing and systems
to better manage the cost and utilization of prescription drugs. Ms. Ruzic thanked the committee
for the opportunity to discuss the new program and the Blue Cross Blue Shield representatives
left the meeting.
Experience Report
The Benefits Consultant distributed the June 2010 Experience Report. He stated that the sixmonth period shows a positive balance of $339,652 compared to $(1,230,331) this time last year
and the reserve stands at $8,696,200. The University’s contribution covers 75% of total cost
compared to the target of 75%. The Plan is doing better than expected. The benefit changes
have reduced trend with a reduction in the cost of physician, major medical, pharmacy and dental
benefit costs. The Nexium replacement program has reduced the cost of that prescription by
25% compared to this time last year for a saving of about $60,000. The Plan reflects that where
there are USA Health Plan providers the benefit paid to those providers accounted for 34% of the
total benefit paid. The Consultant completed his review of the experience.
Tobacco Cessation Program
Ms. Henderson stated that the tobacco cessation program went live on 5/1/2010 and all was
doing well. Twenty-six eligible plan members have enrolled in the program. Counseling is being
provided to participants along with a 24-hour hot line and a nicotine replacement program.
Tobacco Cessation workshops are being offered to all employees. She stated that there had not
been a firm decision on the wellness incentive for the coming year but that it would be discussed
when the cost projection is provided by the claims administrator and benefits consultant.
Patient Protection and Affordable Care Act (PPACA)
The Consultant provided a brief review of compliance issues under PPACA. He stated that the
USA Health & Dental Plan’s effective date for PPACA compliance would be January 1, 2011.
He explained the compliance requirements for that date stating that the cost impact should be
between 1% and 1.5%. The Plan’s first year of compliance is not expected to be difficult. He
stated that the lifetime maximum will be eliminated, coverage expanded for a dependent to age
26 and no pre-existing condition provision for individuals under the age of 19. Additional
information will be provided as regulatory clarifications are issued.
University of South Alabama
Fringe Benefits Committee – Meeting Minutes 7/27/2010
3
Long-Term Disability Insurance
Mr. Gerald Gattis reported a successful competitive review of the University’s long-term
disability policy. This insurance plan fully paid by the University provides valuable salary
protection for employees. He stated that the plan has been insured with Sun Life for some 30
years. Based on responses to the request for proposal, Reliance Standard offered the lowest cost
duplicating the existing benefits. Mr. Gattis stated that the University would save approximately
$3 million over four years or about $750,000 annually. He stated that Reliance Standard also
offered some additional benefits to further enhance the benefit to the employees. Reliance
Standard is the sixth largest insurance company issuing long-term disability and is rated
excellent by financial rating firms. He stated that the transition is set for October 1, 2010, and
employees would be notified accordingly.
Adjourn:
There being no other business to come before the Fringe Benefits Committee, the meeting was
adjourned at 4:15 p.m.