Planning Commission - Regular Meeting

This meeting.

Okay. Then let's move on to the workforce insight survey assessment. I think we have somebody here from Deloitte. Alright.

Are

we We're ready. One

item real quick before we get started is we received the email copy of the minutes from the last meeting. If everybody's had an opportunity to look over those minutes and test to their accuracy or we'll accept any edits or changes. Is there if not motion been made for the approval. Is there a second motion made in second. Is there any discussion changes if none of those, in favor indicate saying aye. Those opposed Ayes have it. Alright. Now, thank you. Miss Kelly.

Good morning. Thank you. Angela Watts with Deloitte. We are here to present the outcomes and findings from the workforce insight surveys. It's actually a two part survey that was conducted this past fall.

Survey one was conducted in August and survey two was conducted in late October. The the objective of survey one was to understand the everyday fears and pressures that the metro workforce faces. So, things at home that might be impacting them at work and vice versa. Also to identify the challenges that may not be directly related to the employee's work but could be impacting their performance. And then just any any unique needs that would be helpful to improve that would impact in a positive way their effectiveness and productivity at work.

So, all things around employee well-being, benefits, training, development programs, and I'll get into the specific attributes that were surveyed in just a moment. Then, the second survey, the objectives there was to really look more at the benefits. So, measuring the employee satisfaction with the benefit program features and the level of importance each of these features have for each employee and then identify gaps in the programs and determine opportunities for changes that would drive value for the the workforce. Then and to the extent that those changes could result in future program design changes which potentially could be studied as part of the study and formulating. Here is is the applicability.

So, let's dig into a little bit more of survey one. You'll see on the next slide the 19 attributes that were tested. So everything from ability to retire, career development, financial well-being, job security, lots of important attributes tested there. And the way the survey was conducted, it's called a conjoint survey. So you'll see an example on the right of a question where the employee in the survey has an opportunity to compare like way at one attribute versus another and determine is that a bigger concern or or a lesser concern.

Twenty five percent of Metro's employees completed the survey and that's deemed statistically significant. In terms of the results. And we can move on to the next slide just to jump into the results of survey one. And you'll see that the top five aggregate areas of concerns number one was financial well-being at 13.8%. Secondly, the ability to retire, and then physical fitness and healthy living.

And then fourth was safety. And fifth, job security. A few key points there is that and we also I should have mentioned at the beginning. We also did this survey five years ago in advance of the prior study and formulating committee. And so some of the things that you'll see in comments are in comparison of how things trended from the last survey to this survey five, six years later.

So the financial well-being continued to be the big challenge. It's the number one here for 2025. And it was debt. We called it debt in the prior and it was number two back in 2019. So the concern is that wages are not keeping pace with rising cost of living. And then the gap is just causing stress and covering everyday expenses and and supporting their families and saving for their retirement.

Real quick question. On the survey, I noticed 25% of the metro employees responded to the survey. Did y'all break it down by by category? In other words, whether percentage police and fire percentage general government. Is that short somewhere in the report?

It's in the appendix. Yeah.

Thank you.

If you look at page 20:

20

no, 18. Page 18.

Oh, yeah.

That's. For a survey one result. Yes, survey one. So, the breakdown. Well, that is. Yeah. Is survey for survey one. There's survey one and survey two. So. Yeah.

18. Yeah. Eighteen, nineteen, and 20. Right. So, for example, what you were just asking about the department, if you can hear me. On slide 20, you can see for the Department General Services, there were 151 in that group and they were 1% of Metro's total population. 71 of them responded. So, 2% of that group responded. So, you can see the percentage throughout the departments. If a department was too small, we aggregated departments together.

Yeah, she's on page 20. Okay, just a few other highlights of survey one and then we'll get into survey two. The ability to retire shifted from being the number one concern in 2019 to the number two concern in 2025 in aggregate and it was the top most concern for about 20% of the respondents. The physical fitness and healthy living was previously ranked number six and risen to number three here. And it was driven by barriers such as limited time, demanding schedules, and sedentary roles.

And then in terms of some additional research questions, most of the respondents feel favorably about Metro's benefits and indicate that they do meet their needs and two thirds of the respondents clearly understand the benefits offered at Metro. So, there is an opportunity to increase awareness around retirement benefits and even a pension estimator tool. About half the respondents feel the compensation statement helps them understand their pay and value their benefits. There's lots of good details and information on the on the comp statement. And then lastly, while two thirds of the respondents feel they have enough flexibility to deal with personal situations and have sufficient time to complete work tasks, They have they struggle with managing everyday pressures.

And that's 30% of the respondents that were indicated that that was the case. That that plays into to some of the the other attributes as well. So those are the top five for survey one. If you turn to the next page seven, you'll see where all of the other attributes, how they ranked and stacked up. So after those first five, the next one was medical illness or disease, mental health, flexibility with work and on down the line.

Okay, that summarizes survey one and then the next survey that was conducted in October, Kelly will go over that one. So

survey two was what we call a gap survey. And the purpose of it was to understand the value or the importance that the employees placed on the benefits or the benefit programs and then the effectiveness of the program. So this tested 15 attributes and they are listed on the left hand side of the page and those were all truly, you know, the metro benefits. So, asking about basic life insurance, career growth, dental, disability, all the way down divisions, just alphabetical. Twenty percent of metro employees completed this survey.

And again, it was also done with the conjoint where they were asked to rank which one of these on that page was most important versus least important. And it just kept going through until it had them all compared against each other. If you flip over to the next page, the results of this survey had three of the programs that were listed as having the largest program gaps. So those that were the most important, but they were least with. And number one was the pension plan, which is consistent with the last survey that Angela mentioned that we did five years ago.

The pension plan had the largest gap. So it was the most important but the one that folks are least satisfied with. Number two is medical benefits. And number three was the retiree life insurance. Medical benefits, it was affordability and coverage remain the top concerns.

Many employees said something about the high cost of the medical insurance. And we also ask their willingness to pay higher premiums to have some additional benefits added. It was infertility coverage and GLP-1s. And there was limited willingness about adding that. Now, would break down, as we can see in the appendix, you could see different demographics.

So maybe certain ages or certain genders. But overall, most said that affordability was and they were limited. They were not willing to pay too much more just because they felt like the plans were already expensive. And then there are other two on here that were kind of shaded out because those are not really within the purview of Metro's benefits for the study and formula committee can do anything with the longevity pay and the career growth. And then so on the retiree life, you may remember the last time I was here and giving you an overview of Metro's benefits.

The retiree life insurance is a $10,000 benefit. And so there was a number that said that's really too low and doesn't provide enough insurance for the family that's remaining. So they noted that that was low. If you turn to the next page, so of the 15 attributes tested, attributes. So this is showing what they said was most important to them, medical pension, vacation, Metro Max is $4.57 and the paid family leave.

Those were the top five. Over to the right, medical benefits, it has 18.3%. Those percentages indicate the magnitude of importance. So for example, the degree to which the medical benefits are more important than the pension plan, vacation, etcetera. So these are the most important.

And if you turn to the next page, you can see we took remember I said this is measuring the satisfaction between what's most important, but their satisfaction. Ones that are shaded kind of the pink medical benefits, pension plan, retiree medical, those are the top three, as I said. But those are showing so the green bar shows the importance. The blue bar represents their satisfaction. So the medical benefits, there is that gap where they're not satisfied for one of the benefits that's most important to them.

That kind of makes sense. And so for example, if you look at down at the bottom, say basic life AD and D, they're more satisfied with that than it's really important to them. So it's what the when the blue bar is longer than the green bar. Any any questions? Thank

you. My question is, the survey doesn't include any retirees or all these active employees that were It being

was just Ashtiv benefit eligible employees.

Okay. Yeah.

And for survey two, the breakdown by age, tenure, and other factors including department are on pages 24, 25, and 26. In the appendix.

So there is a lot of information in the appendix. I mean, there's probably more pages in the appendix than there are, but so we could go through some of it now, but it's there for you to see, but it's broken out. If you just turned it, page, was that 15? 13. 13. Those are tiny print. That's a very tiny print. We've got age, tenure, salary, department, and we do this for both surveys. And then let's see. On 14, there were I think Angela mentioned we did ask a few other additional questions in the survey.

So, if you look at page 14, we had said what degree are you happy with out our metro's benefits and important reason why you stay at Metro? And 86% said yes, and as their tenure increased, the agreement with that higher. Is there interest to walk through some of these pages or

I personally, I mean, get it. I see the supplemental information. I don't know if anybody else has any further questions about that. I'm sure we're going to come back to rely on some of this information as we start going through the specifics to to validate or to further explain.

Just one one question on page 14 you have bars for 2025 and 2019 results. But there's only one bar for 2019. Does that mean these other questions were not asked in 2019? Correct. Developed the survey more.

Yes. True.

Thank you.

Thank you.

Okay. We received a letter from the mayor's office, wasn't it?

Yes, the director of finance and the chief of operations and performance. If they would like to come forward to present any information on this letter the committee received prior to this meeting. If you guys could sit down, introduce yourself and then everyone has a copy of the memo that you've provided us

Hello, good morning. My name is Janine Reed. I'm director of finance and thank you so much for serving on this committee. It's a really important committee and we're happy to be with you today. Kristen, you wanna introduce yourself?

Hi, I'm Kristen Wilson. I'm the mayor's chief of operations and performance.

All right, so I'll kick us off if I can. So as finance director, one of the main, I have a lot of duties, but one of the main duties is the annual budget that we work on in conjunction with the mayor's office. We filed that budget on Friday. It's about a $3,800,000,000 budget just across the six tax funds. Key considerations for us as we start planning the budget are revenue projections.

We rely as you know heavily on property tax which accounts for a little more than 57% of the budget, sales tax which accounts for a little more than 19% and then kind of all other revenue sources. This year in particular was a pretty tight budget because our revenues are just not really quite growing at the rate that they used to kind of post COVID. And so we've seen our revenues return to a more normalized state. So one of the things that we're always concerned about is of course fiscal responsibility. Responsibility.

We We wanna wanna make sure that our budget is structurally balanced every year. But we also wanna make sure that we are leaning into obviously the mayor's priorities as well as things that significantly impact the employees. So things that come to mind that are in the budget are pension and we'll talk a little bit about that, it's in memo. The medical benefit cost for example, this year we had significant increases to our premiums that will go into effect at oneonetwenty seven calendar year. It was about a 16.8% increase on the premium side.

And when that happens, it not only impacts the employees but it also impacts the employer which is Metro because as you know, we are a self funded plan. So that cost alone this year was somewhere around $19,000,000 in the budget. We also obviously care about the pension plan as well. Our pension plan for those of you who don't know and this is something really great. Our pension plan is for all intents and purposes fully funded.

So it's funded somewhere around 98 percent which is great news for our employees. Most pension plans within municipalities are not funded at 90 some odd percent. But there is an annual contribution rate that goes into the budget and so that we continue to wanna make sure that our investments are doing well because that keeps our funding for the pension kind of in line and in control as we prepare the budget. This year also we had some IOD expenses that are hitting the budget. They're somewhere around $13,800,000 Our IOD costs have continued to escalate and that's one of the items you'll note that's in the memo as well.

We cannot dip into fund balance in our IOD funds. So we did make a significant contribution into the IOD funds as well this year.

Yes. Could you explain what IOD is or just at least give us a

Sure. It's injury on duty. And so for those of you who are in the private workforce, it's kind of the equivalent of workers' comp. So for employees who are injured on duty, there is a lot of benefits around IOD. And I will leave that to our HR professionals to explain all of that in detail about IOD.

But it is something every year that as the finance team we monitor because again, we look balances across all of our funds. But in particular, we wanna make sure IOD has fund balance enough to continue to pay out the benefits. We look at medical benefits and those funds as well as well as a slew of other funds like property tax insurance insurance and those types of things. But in terms of your regards, kind of pension, medical benefits and IOD are generally top of mind for us in the finance world. And so before I get into the memo, I do wanna turn it over to Kristen to walk through some things.

You mentioned the pension fund being well funded and I applaud the benefit board for that and Metro Finance but is there a dedicated budget amount that goes into the ILD fund as well or not?

So generally we do have we do make two contributions into the ILD plan. This year we had to increase those contributions by 13.8 to really honestly reestablish the fund balance. What happened over the past year is that the claims for IOD were exceeding the amounts that were being put in or were budgeted for the IOD. And so this year in the budget for '27, we did put some one time cost into the IOD funds because again, we wanna make sure that those funds remain positive as we continue into FY '27.

Okay, but my question really was the mayor, has to say his

or her

budget and they are gonna have to like you all had, like the mayor had to do this year had to put additional funds in. But is there a line item budget that just normally, let's say you're not, you don't have a spike in holiday, do you have a normal bottom dollar amount that you normally fund the ILD program with?

Yes, sir.

Sir. Was my question. Do mind getting me that dollar amount?

I don't have that in front of me, but I can tell you we increased it this year by 13.8, which was unusual, and so I'd have to go look at the baseline budget. I got so many numbers in my head, Gary, from that budget. I cannot recall that one at this particular time, but happy to get that for you. It's in the ordinance, but we

I can can't handle names.

Yes, we'll be glad to get you that. Alright, Kristen.

So, hello. I'm again, I'm Kristen Wilson from the mayor's office, chief of operations performance. In my role, I work with departments on their operational policies and the implementation of them, the mayor's executive orders and the implementation of them. And then we also support the implementation of policies issued through the Employee Benefits Board, the Civil Service Commission, and obviously local and state and federal laws. Along with the financial stability that Janine referenced, Mayor Freddie O'Connell, his priorities consist of common sense approaches to governing that prioritize quality schools, reliable services, and safe neighborhoods for Nashvillians.

Local government remains the most direct and impactful form of service to residents and Metropolitan Nashville and Davidson County are committed to delivering that service with stability and with purpose. We're responding to the need for reliable government that delivers for its residents. Currently with a focus on balancing core service delivery with affordability for our residents and our employees. Of particular emphasis has been addressing transportation costs through the Choose How You Move referendum and housing costs, where we are one part of a collective effort in our community through our unified housing plan, all of which underpins commitments made by Mayor Freddy O'Connell on how we move, work, and grow as a city. This important work is executed through our departments and elected offices.

We have a very diverse operational portfolio, and this will be important for you all to keep in mind as you do your work. From 20 fourseven public safety agencies and around the clock infrastructure services from departments like our water and transportation agencies to internal administrative operations that work on a more regular traditional forty hour per week. Employment needs vary from part time and seasonal work, such as meaningfully makes up our parks department employment for the summer, to traditional and untraditional full time models, wherein shifts can range from our standard eight hours a day, five days a week, to multiple days on and off such as our fire EMS department four days on, four days off. Departmental operations can have unique needs as a result of these differences. These needs are shouldered by more than 10,000 metro employees.

It's our responsibility to ensure we have the employees that we need to deliver and support our services and competitive compensation and benefits are key to our ability to attract and retain our most important assets, which are our people. Mayor O'Connell just proposed last week important compensation increases for our employees, as approved by the Civil Service Commission, following multiple years of meaningful increases. Over the past four years alone, so fiscal year twenty twenty three to fiscal year twenty twenty six, this does include the most recent proposed increase. Metro experienced higher than usual pay adjustments due to market influences and a new competitive strategy. Total market increase for across the board and merit increased increases averaged about 7% a year with average total pay growth over 30% since fiscal year twenty twenty three.

As we see record responses to our job board postings now, we'd now turn to ensuring our benefits are competitive, fair, and responsible, and we're grateful to your service at this end. So moving over towards the memo itself, I wanted to make sure we took a moment to just go through the guiding principles that are outlined about three paragraphs down in it. These hopefully will be a resource for you as you all go through your study work and then formulate your recommendations to reference them if you have any questions or thoughts about any trade offs or keynotes along the way. And obviously Janine and I will always be available if you need for any further data or discussion. First off, we believe that ensuring the overall longevity and sustainability of our benefits, current and post retirement, are critical to our ability to attract and retain employees.

We believe that investing in our employees and retirees generates returns, but also must be balanced by the cost of financial capacity for us to do so. We desire a healthy workforce and retiree population that's encouraged to be proactive and educated about their medical and financial and wellness. We want to provide participants with certainty that they will have access to competitive coverage for medical insurance benefits, life insurance benefits, and disability benefits. Our pension and benefit plans should be competitive with our peers and well understood by potential and current employees and retirees. And lastly, it is important that Metro, our employees, and our retirees share in the cost of these benefits so that all are aligned and engaged in the promotion of health, wellness, and management of costs.

With that said, I'm gonna turn it back to Janine so she can also review a little further some of the specific requests we've asked

you all to look into. Yes, as Kristen mentioned, first of all, we do appreciate your service. We recognize that this is a really important committee and certainly will take time as you work through a lot of these items. So thank you so much for doing that. As part of your study, we do ask that you include current and best practices of similar peer cities and governments, both state and local in your review and engage input and suggestions from our employees and labor representatives.

As we walk through our key highlights, I wanna start with the first one which is the pension. And I mentioned that the pension plan is fully funded and we are very excited about that. What we are asking for in regards to this particular item is to really take a look at in terms of peer cities, how other investment committees are structured. So our investment committee is a subset of the benefit board. So you have people who are appointed to the benefit board and then there is a small subset currently four people who serve on the investment committee.

But one thing we would ask you to look at when you're looking at peer cities is the makeup of that board. For example, do we have great representation on our investment committee that could benefit from investment experience? So maybe it's having someone else on the investment committee who doesn't necessarily have to serve on the benefit board. We currently only have four members. And so sometimes we struggle as an investment committee to make sure that we have a quorum or if there is a tie, having four members is sometimes awkward where if we could have maybe five or six.

So we would ask that you would look at that. We have a great investment committee. We have great investment policies. We are well represented by legal. Our treasury department certainly supports the investment committee.

We also do have consultants who also recommend and make recommendations on our investments and we feel like all of that process is actually working really well. But it's really looking at the makeup of the investment committee board itself. So that's the pension piece. Any questions or comments on that? So then as we move to medical care, we are seeking recommendations on strategies for optimizing our healthcare programs and reducing cost of employees and retirees where possible.

And in particular, we would love for the committee to examine and make recommendations regarding a lower cost employee health plan option. We have as we mentioned over 10,000 employees in our benefit plan. And so making sure that we have the right mix of plans for our population. One thing that we always look at when we're on the benefit board and we're looking at what those premium costs are gonna be every year is we try and look at the cost in relationship to kind of the average pay or living wage. And so just taking an analysis of looking at that and seeing if there are some other options would be great.

We would appreciate that. Examining the makeup of the plan itself, I call it plan design is what I call that. So looking at out of pocket maximums, deductibles and co pays of primary plans and looking at that across peers as well. Ensuring that our retiree health plan options, the recent migration of those health plan options for retirees has resulted in plans that maximize the federal provision of healthcare to those who are 65 and older. We would appreciate that as well.

Review if there could be optional incentives created for spending healthcare dollars as effectively as possible. In particular, looking at our pharmaceutical benefits. So the use of generic drugs, brand drugs, specialty, those types of tiering in the pharmacy area would be something else we would ask the study and formulating committee to focus on. We would also look at the use of wellness incentives. As you know, I mentioned earlier, we are self insured.

And so I tell everybody we're all one when it comes to our medical plans. Because if we're all healthier, well that makes the plan better in terms of dollars. And so is there some opportunity there in terms of wellness initiatives to make sure that we're all kind of rowing in the same boat? And then really evaluating health insurance plan options for Metro Nashville Public Schools for the certificated employees. So on Metro Nashville Public Schools, they have a lot of regular, I call them staff who are part of the Metro plan.

But certificated teachers are not included in the Metro plan. They have their own separate plan. So evaluating that certificated employee population to identify other opportunities or options, whether it's coming into the Metro plan, looking at the state plan, I think there's some options there for those certificated employees or leaving it alone type of option as well. So that's really that on medical costs. Do you have anything else to add?

Okay, on insurance benefits and this really came out of some of the survey result, are we providing enough insurance, life insurance, supplemental insurance to our employees and retirees as injury on duty. So really reviewing our workplace injury claims and injury on duty processes and practices just to make sure that we are optimizing needs for our employees as well as our cost. Anything else to add? Yeah, go ahead.

And with that, there's our requests in the memo. Again, we stand by to be helpful as we can be in producing any data or any further information you may need along the way.

I have a question, if that's And this is probably getting too into details. But I went back and read the last report from 2021 when we took retiree health benefits and moved them over to the Medicare Advantage Plan. And one of the reasons that the study and formulating committee gave at that time was a reduction in annual cost or a reduction in OPEB liability, and I was wondering if that has come to fruition, if we've seen it play out over the last four or five years, and then also whether our ratings agencies have actually cited that in our ratings reports.

That's a great question, Margaret, and thanks for asking that. And yes, we have seen that come to fruition. Our OPEB liability actually in the year that it was adopted, the change was adopted from study and formulating committee. We saw a reduction and I'm going, it was a billion, somewhere in the billion dollars, couple billion. I'm happy to get you the exact number of that reduction that hit our liability but it was a significant reduction. And yes, that has certainly played well in terms of our rating agencies. Our rating is AA plus. We are really proud of that rating. It was actually just reaffirmed in February when we did recent general obligation bond issue. And one of the things that they're always looking at are our liabilities.

And one of the things that we get really scored high on is our pension, as I mentioned, our pension funding. So that's always something that is really scored high. Our OPEB liability even after that significant change in savings to our liability, it is still something that is flagged for us during the rating agencies because our OPEB liability is unfunded. Now that is typical in municipalities, it is typical in private industries. So I don't want anyone to say what?

It typical and normal in the ordinary course of business for your OPEB liability to be unfunded. We pay as you go, if that makes sense for OPEB. And we did see drops in terms of the expenditures on that side too. So yes, Margaret, thank you for that.

And just to add from the operational side, that was incredibly valuable to all of us. So the stronger bond rating means that our cost for debt decreases. And so we're able to do more with the limited dollars that we have as a government. So operationally, there was great benefit ultimately for us from that. In saving metro money, not just in the annual operating budget and the decrease in the OPEB cost itself, but also just for us to be able to invest more in our infrastructure and do more things to make our dollars go farther.

Yeah, that's a great flag, Kristen. Thank you for bringing that up. We just actually, as part of our, we normally do kind of a refunding of commercial paper, but this year we actually also did a refunding and tender of some previously outstanding bonds. It was the first geo tender actually done in the state of Tennessee and we saved Metro a little over $18,000,000 when we did that refund in tender and it was because of our bond ratings and that was on a go forward forward basis. So some good news there.

That's lots of great information. I agree with it 100%. Looking at the cost versus the benefit, I mean there are certainly changes I think we can make and recommend as we start evaluating those benefits and how they're structured and saving money doesn't necessarily mean benefit cuts and improving benefits doesn't necessarily mean but we've got to look at both sides of the equation. My recommendation is that or my take is that we probably want to tackle the health, the medical side of the equation first, probably from a budgeting standpoint that's going to help you up front and I think there's a lot of different components of it to look at. And secondly, one thing and to follow-up on a good point that you make, Mr.

Darby, is that the liability under the medical is not exactly the same as the liability under a pension, right? The retirement benefits, we make a promise, we make a promise for life and retiree and that going forward. Medical, it's not exactly considered change. You have the flexibility to make changes within that that affects the costs or the commitments going forward, correct?

Yes, that is correct.

So we're not quite under the same inflexibility there, if you will. Anybody?

I had one follow-up question. So we have the survey in front of us from current employees. Do we have a survey for retirees and their satisfaction levels or concerns with the switch from the way the plan used to be, the medical plan used to be for them, to the switch to Medicare Advantage?

I'm deferring to my HR team and Deloitte team because, Margaret, I'm I'm getting a note

from Shannon back there. Sorry, Director Hall.

I can somewhat answer that question. Most of them are not happy at all. There were a lot of kinks and bugs such as the same thing with the payroll thing. There's a lot of kinks and bugs. But I think on the insurance thing, there were some people that had a specific medical problem that they had to use Vanderbilt and they couldn't use it under the new system.

I'm not going to get into details, but some may be able to identify who it is. But it's some very serious issues that this individual could only be treated at Vanderbilt. And we had to really work through the through the problem to get that individual covered. And we finally got him covered. And there were other instances where but the one that pops in my mind is the one that I'm talking about with Vanderbilt that it was a real struggle to get him covered, but we finally did.

But it was it was, he was he was generally very concerned about his his about his life, about living and we did with the help of of HR, we did work through. But I would say that change was made, I assume, with the Employee Benefit Board approval. It's not something that HR did on their own, but it did go through the process and through the employee benefit board. My point is, mistakes are going to be made and we as a committee need to really look at all options when we start looking what could be the downside, what's the possibility of the downside, and do we recommend something sometimes even on a trial basis and see how it's going to work before it becomes a permanent implementation. But you may wanna follow-up with that individual.

I just wanna clarify what that situation was that mister Moore was talking about. So when we switched, this was a very unfortunate timing. But as you guys know in the insurance marketplace, at any given time, contractors including hospitals are going through contract negotiations on a periodic basis. Right? And they're not on the same basis.

I'm sure any plan that you've been in, you've heard about these negotiations, especially post COVID becoming a lot more engaged because cost increased quite a bit for hospital providers. So completely separate, but shortly after we implemented the Medicare Advantage Plan, the selected provider for the Medicare Advantage Plan was having unsuccessful negotiations with Vanderbilt. So that is the temporary topic. It was of grave concern, I would say for everyone involved. Certainly, I personally feel like it was one of the most stressful times for our retirees, especially as many of them have migrated here.

And to Mr. Moore's point, Vanderbilt sometimes provides a specialty of care that others in our market cannot. But those things happen periodically. Thankfully, the insurance carrier and Vanderbilt were able to successfully reach a conclusion. But it gave a lot of scare to a lot of people, honestly, that was on the plan, not just Metro.

But we're kind of caught in the middle. I mean, would say that about employers. I would say that about people in general, but this is a contract negotiation thing that happens periodically. Every one of the five major providers routinely go through contract negotiations, most of which are successful, but sometimes they get a little heated. Usually by the end of the day, even if there is a minor disruption, usually they can reach some terms that allow that.

But we have taken an additional step following that to add a second Medicare Advantage plan. So now, pensioners have their choice of Medicare Advantage plans so that if they want and all both of our plans have all the major providers. But if there are certain network challenges that present themselves, we would have the ability to adapt and pivot and allow a special enrollment if things were really unsuccessful. So we've taken some additional functional legal steps and are now supporting a second Medicare Advantage plan to give people true true choice on networks and allow a pivot point if we were in a really unsuccessful contract issue.

Thank you. Shannon, let's jump right into real quick a summary of the medical networks that you speak of and how that exact works. I mean, we're self funded plan, right? Means we set the eligibility. I mean, set the benefits and the networks. There's how many networks

we contract we actually contracts with we go through a competitive RFP process that is required by local code, our procurement code. So we competitively bid and we rent the networks from the administrator who in this case on the medical plans for employees is Cigna. On the Medicare Advantage plans, it's Humana and UHC.

Okay. So there's just really one network.

We rent

those networks for the active employees.

That's right. They administer our claims and we use their networks.

Okay. And when were those like how often are those put out for, you know, for for review and proposals and that kind of thing?

Yes, at least once every five years. So the sixty month is a traditional contract term. Every once in a while, if things have gotten disjointed on a contract term, the council can extend for a short period of time. But typically speaking, every every five years.

I just happen to know that, you know, with those networks and you alluded to it earlier about their contracts with the providers being up, a lot of those are seeing significant cost increases with the new contracts, right? I mean, maybe one of them. And so the timing of some of that can be good or unfortunate, right? Like I

would say they're always whenever they're not playing nicely together or they're not reaching mutually agreeable terms because everything is about balance, I think you're speaking a little bit about even the cost and benefit balance, for employees and retirees. Anytime that there is a contract dispute that is not going very well, I would say, is usually not my favorite.

What is the in network versus out of network under the active employee? What does that look like? So I

think it's I can speak kind of high level, but I think that was some of the information summary. Yes. The information we provided to you last meeting, I think, has all of that information. For active employees, in network, for an individual on the PPO plan, there is no deductible out of pocket maximum is $1,000 for a family plan, $2,000. The in net I mean, out of network, and I'll be honest with you, the networks are so broad. Most people do not go out of network. But off top of my head, is it

We had our meeting with Cigna about a week

and a half ago.

There was about 98% of the claims go through the in network because it's so broad. And here's the medical plan design.

So yeah, this was on slide eight of your presentation from last meeting. So for the PPO plan out of network and just so for the recording audience, she said 98% of our claims are in network. Again, the big five are gonna have huge networks. So there's lots of choice.

And there's some providers who just aren't in network like anesthesiology, right? Or you don't get a choice whether or not who put you to sleep for general anesthesia, right? Or if you're an emergency situation, you may or may not get a choice which hospital you go to or which provider you see.

And usually in those situations, they're going get the in network benefit even if they're out of network because there are provisions

that's exactly right,

which is great. But for the PPO, the out of network, the deductible is 200 for single, 600 for family, and then the out of network out of pocket maximums are 5,000 for single, 10,000 for family. On the HRA in network effectively for coverage after the HRA and high deductibles met, in network access for the HRA plan is 90%, out of network coverage is 70%, and that would be for medical and for pharmacy. That plan works a little bit differently. And that's typically up and down the board.

For most coverages, whether it's hospital, emergency, office visits, maternity, WellCare is covered at 100% if you're in that one.

And how are those claims paid? Is that through a third party administrator?

It's through the insurance carrier. So we pay Cigna or UnitedHealthcare or Humana. We have them administer our claims for us, use their medical policy

Review

Absolutely. So and then we also rent their networks. So the networks that they use

Right. Okay. That's what I was looking for is how how it's structured.

Mhmm.

If you don't mind, will you go back to those individuals that were Medicare eligible? And once this program, the new system took effect, the individuals were switched to we finally got it changed where we had two choices and we appreciate that happening. But the individual in the household, let's just say the retiree is Medicare eligible, but he's married to his wife who is not Medicare eligible and may even have underage children. How would that individual would be treated? Would they go under the the I'll just say Humana.

Would they go on to the Humana program and their spouse and and dependents go on to stay under their current insurance and would that individual pay be paying two premiums?

No. It would not work that way. So federal provisions that govern Medicare advantage plans require that everybody be Medicare eligible in order to participate. So for individuals who are Medicare eligible but someone in their household or vice versa. They're dependent as Medicare eligible but maybe the employer pensioners aren't quite there, right? So, you have to be all your dependents. You and your dependents have to be Medicare eligible before you come under the Medicare Advantage Plan under Metro's provisions. Otherwise, you're still allowed to participate in either the PPO plan or the HRA plan until such time that all dependents on your coverage are eligible for Medicare.

Okay, thank you.

Who is the PBM? Does it operate through Cigna as well?

Yes, all through Cigna.

You may or may not know this off the top of your head, but approximately what's the cost of prescription benefits versus medical benefit? I mean, is there a

-We definitely have that breakdown. Ironically, I know you guys are on your journey here on the study and formulating. I would love to have a lot of that deep dive information, including that information delivered to you at a yes. I we've already flagged I mean, we anticipate that DelBoitte will be presenting you all kinds of deep dive information. As Kristen and Janine spoke about, we want you to see what other public sector peers are doing with regard to these plan design provisions, what our cost breakdowns look like between medical and pharmacy, all of that deep dive information.

I would like Deloitte to be able to present to you sooner versus later as you're contemplating what changes are being requested and then what others are doing or what would be a best practice in that field. So we will absolutely present all that information.

Yes, because I know that can be that can be significant.

Absolutely.

Just to chime in, I'm on the benefit board, Deloitte does have a lot of great information and they actually did present a lot of pure city and state information to the benefit board already on our health plans. And so I think that will be really beneficial to the study and formulating committee as you guys start your work. I sing Deloitte praises all the time because they do such a great job. But that is I mean and that's part of the request from us is for you to study that, look at that in comparison to our plans. Exactly.

And I think we've all seen PBM come in the news as of late, but they're always one step ahead of everybody. All peers that we couldn't meet enough time to stay, you know, and some of that is, you know, the research medication, some of that is, you know, you know, they they're want you to buy their most expensive drugs, right? That works.

Yeah.

Thank you for having us today.

I got another quick question. Sorry. You're not going to get off that easy. Real quick and and this maybe a question for Shannon but but have you all determined we keep using the term peer cities, peer cities? Have we determined who those cities are? And if so, can we get a list of those peer cities?

So, we typically have a peer city list that we use for the purposes of compensation. We would propose using a similar list but I would also encourage Deloitte. If there are other similar sized peers or cities that they have information on, I mean, the more the better. But yes, the peer city list that we use for compensation could be a base component on how we study that. That has been through a process where Mercer who is our compensation consultant has gone and look at a number of different metrics in establishing and recommending peers that have been adopted by the Civil Service Commission, which is another board that we support out the other arm of HR.

I do expect that that will play a pretty significant role in the data that they're able to collect. But if there are others that are not on that list, I think those would be helpful for the committee to see just to see. I think what's really important is let's see what others that are similar in our, I would say, very broad diverse scope of employment. I mean, working for a public sector, we have a place for everybody. Not everybody has the kind of diverse needs like a public safety sector in multiple different components, administrative, infrastructure. So, any of the other peers, I think we should also to the extent they think they're relevant. I think that should be supplied for your consideration.

So, we we can look at our own peer cities as well because I would assume finding a Nashville being as unique as it is being a county wide city is going be hard to find comparable cities to to Nashville. But we can certainly look at our own as well as reach out to the the you guys as well to find out what what you normally use. So, that answers my question. Thank you. Sure.

All right. Any other questions? Miss Farmer, you have any? All right. What are the next steps? Well, we got the we're going to have requests, right?

Yeah. Before we leave this meeting today, I'd like to note that our next meeting will be reserved for agenda requests. HR has received quite a few requests And if you have an item you would like the committee to consider studying, please contact me directly to be added to the agenda. If you've already reached out to me, I will be reaching out to you as well, to get that item on the agenda. That being said, I did receive some information from the local firefighters union that he wanted me to pass out to you guys today, and that will be something that will also be coming up at the next meeting.

And then we can kind of take a list of all of our items that we've been asked to study and you all can start breaking those down and seeing which ones you want to tackle first with the next meeting. I think anybody that wants to come present an item to request to be studied, please contact me and we can get that agenda on the agenda for you

and they would contact you by email

by email or by phone.

Yes. And your email is

christina christina.hickeyhickey@nashville.gov or you can contact me by phone

Great. Thank you. So if you want anybody listening if you want something on the agenda contact Miss Hickey if you haven't already. Thank you That's our agenda, right?

That's it.

We have

no late items. I don't know if there's any other questions at this point from any of the committee members but we'll be in contact with the next meeting and then subsequent meetings we'll get those on the calendar. But anybody that wants to present at the next meeting, please, please reach out and we will get your request heard.

Okay. Thank you. Is there a motion to adjourn?

So moved.

Motion to adjourn.

Second. Second.

Adjourn. Meeting is adjourned.

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