ALC-Policy Making

Okay of the meeting will please come to order. Is now one thirty. I want to do that for a while good afternoon ladies and gentleman we are. In order thank you I will yield to my co chair a chairperson the involved four comments I'm just grateful to be here thank you senator all right and I have none we're going to move immediately to the agenda first of all allow me to recognize that wonderful staff for a wonderful staff is with us today we appreciate you and I always want to say that because we could not do this work without you so we want to acknowledge you all today thank you very much we have a an agenda that is both brief but full of vital information and so we would invite to the table representative last one shoe for the review of the actuarial consulting services contract between Osborn Carreiro and associates in the pure of Legislative Research Senator you want to join you senator Hammer. Thank you madam chair. Would you state your name for the record Les Warren representative district twenty five. Senator Kim Hammer district thirty three all right you're recognized thank you so much. Osborn Carreiro and associates has been serving as the actuary for the retirement committee for the last ten or eleven sessions I can't remember which this is my fifth year a third term on the retirement committee last to serving as chair in my opinion Jody and staff have done an outstanding job. The and I hope to continue working with him as long as I serve here every time I've had a question or needed to meet Jody is made himself available and is always provided the work in a very timely manner. I don't think you'll find a member of the retirement committee past or present who does not respect and appreciate what Jodie's farm brings to our committee. This request is to renew the contract for Osborn Carreiro and associates for another two years that would be from July first two thousand twenty one to June thirtieth two thousand twenty three. The only cost adjustment to the contract was his hourly rate which went from two hundred and ten dollars per hour to two hundred twenty dollars per hour which was a five percent con increase basically keeping up with inflation. He has a contract maximum of a hundred and seventy thousand there's only been one time OR one session where we ever ever came close to that amount. Of this last session this farm provided our committee forty three different cost reports on thirty eight different bills. Last time we put out for bid was two thousand fifteen and Osborn Carreiro was the clear choice and the only one that was in state the we haven't felt a need to bid out since then. I respectfully ask the committee to renew this contract. Thank you senator Hammer you have any comment. Benchers my first term as chair of the retirement Jody didn't always tell us what we want to hear what he told us what we need to hear to make good sound decisions and I think that we should recognize that as a valuable asset that he brings also the previous to that had bid on it back in fifteen when we reviewed it they were both out of state had travel expenses in it we've been spared that by work within state firm I think that bring some value to the fact that this is of an Arkansas firm that understands Arkansas politics in Arkansas needs thank you measure. Other questions from the committee. I'll use this is the proper time I don't see anybody in the queue. motion to approve their second. Is there discussion on the motion. Saying no will place the question all those in favor please say aye. Opposed no. Motion carries thank you so much you know thank you madam chairman committee and congratulations to Osborn Carreiro and associates we're delighted to have you working with this again is a member of the retirement committee I to want to say how much I have appreciated working with you I am a seat on the agenda is a review of employee health benefits consulting services contract between the Siegel group incorporated in the bureau legislative research for the benefit of the A. L. C. executive committee we have presenting Senators Terry Rice and representative Jeff Wardlaw. Gentleman we you identify yourself with the record ending you'll be recognized thank you madam chair state Senator Terry Rice. Representative Jeff Wardlaw you're recognized. Thank you chair Wardlaw myself or before you of the executive subcommittee authorized your legislative research to begin the procurement process for employment health benefit consulting services on March eleventh two thousand twenty one the request for proposals was released on March fifteenth at six proposals were submitted the executive subcommittee narrative vendors down to two we heard oral presentation from the consultants and it's may twelfth meeting and I will add that we had two excellent presentations the committee felt. The subcommittee voted to select the Segal group incorporated to provide services in the bureau work to finalize a contract that is before you today you have a copy of under contract so you will provide consulting services regarding a long term solution to the problem with the State and Public School Life and Health Insurance program single report to the executive subcommittee on a monthly basis in the subcommittee will submit a final report with recommendations and draft legislation for the pool Legislative Council at its October fifteenth meeting we did ask if there's any way you could finish just a little bit early would give us some extra time thanks they said they would work towards that it all possible in Mr Qian Vieira senior vice president for Segal is setting up with my right shoulder here is here to answer your entering a specific questions you may have regarding the services that will be provided under the contract. And madam chair at the proper time I will have a motion on the contract. Representative Wardlaw do you have any comments. I could not anything any better than my co chair expressed. Thank you so much that is so succinct I know you like it other questions for senator rice or representative Wardlaw our the company that is being recommended I mean Senator English you're recognized. I am I guess one of the questions just at as reading this in the newspaper knowing how far we are behind and in in the whole on health care benefits what is our real goal here for this effort. So as soon Senator back in September you you very well remember they came in Cutten pharmaceutical benefits for the retirees council stop that and we had him come every month thereafter in explaining. All their finances and where we were headed and we started the discussions going into the session hoping we can have a solution during the twenty twenty one session. We never were able to get the Department are there actuaries to give us any insight into a solution so about mid February senator rice and I got together and we decided we would put out a contract and hopefully hire consultant they could bring us some solutions that would they could be long term if you remember back in twenty thirteen when we had the special session we made a lot of hard decisions we got a lot of folks off a spouse's bus drivers different things and in both systems and we were able to build a a fairly substantial surpluses about a hundred eighteen million dollars in the year twenty seventeen we saw all those system boards come back together in a relaxed a lot of those requirements they went back to be a trick surgeries we had legislation passed in that time that allowed bus drivers back on the system we had different things it took place we started C. and enters a curve I don't have the graph handy to show you but there's a curved it shows everything I'm saying that curve went back up costs went back up we started seeing those surplus funds depleted and they were depleted to the point of about fifty million dollars going into this session for this fiscal year now we were able to put twenty million next year in education and that was enough to bring them to zero they were able to make a few changes in the fifty dollars we added on the state This state of contributions side that brought us from four hundred four fifty for fill that gap for this fiscal year so we're able to get both systems to zero for Jan June thirtieth but the problem is when you look at next year we're at sixty seven million dollars short on the teacher's side we're about five to seven million dollars short on the state employee's side so looking at that and see in that common. We we got in front of it and hired this consultant allows us to get in front of it we've met with the governor's office we've done all the things we have to do to know that we can get legislation enacted in time so we need to get this report in by by October so that by the fiscal session are there before we can have a special session or address it during the physical and get some of these things addressed whether we're going to put more money in the system. I can't answer that for you I mean I we're leaning on our consultants to tell us what we need to do whether we need to raise the deductibles when we need to raise premiums I think it's going to be a combination fix of but that's why we hired Siegel to come in and tell us all those things in their presentation was was also on the the center on our car on presentation was was also just as good these guys have no ties to any healthcare services in Arkansas which we thought was a plus is the executive committee and that was one of the biggest reasons that we came out and I believe it was a unanimous vote by the executive committee to to go with this this vendor but we had six great proposals and to really really good ones and they had a did a really good job present us other day and kind of walking through everything I just walked you through that got us to this point and then we've got a due process back out of this whole. So we're thinking October we're going to have some some kind of report that's pretty short notice it is of that was it that was the kind of the time on we had to work with to get ready for the fiscal session so that was that was what we set forth and both of these companies said they can hit that time line so we're hoping they'll give us some sort of draft report in September I think was the of consensus on the committee it was about thirty days prior to the October meeting and that gives us time to kind of work do it before we finally approve it in A. L. C. in December I mean October thank you. Representative will you're recognized. I want to commend both of you because we've discussed this at length the. About about the benefits and to the Committee in the personnel committee the home page of ten of the or if the yes Is implore your of contributions strategy could can you share it will they will include or we're going to or going to look at the budgeting process relative to the tying it to the four hundred fifty dollars or we're going to set up a pool of money which in within a each agency I mean I know that strategy but I think all that's going to be looked at one of the problems we've had and and you guys have been around me all session you've heard me use the word parity between the systems when you look at the school system and you look at the state employee system there is a lot of difference in the rate of funds that we contribute to each member when you look at a state employees and to represent loons point we contribute on a budget a position which is not always an actual body and I know you've got a study going on a personnel right now and pass it to session is going to look at those open positions and how we maneuver that and we're absolutely going to change the way we fund DVD because that's going to affect EBT funding when you start doing away with these pool strategies are pool positions or whatever you want to call those open positions but when you look at the teachers side they only contribute to a contributing member so if you had thirty teachers in room only ten or more on the insurance only ten number get nine hundred sixty six dollar minimum to the to the EBT system so we've got to figure out a way to bring those systems close to the same on contributed area of so I think there's gonna be a lot of that conversation going over known over the next few months to how that is addressed one question I asked the department of ed just this week was. Take their pool of money they have a pool of money like your references and then divide that out amongst the contributing members and what's that come to. I think you're gonna find that's a lot more than the five hundred fifty that is eligible to be used on the state employee's side now of they're not using five hundred fifty by the way we just passed a law this session it given the right to go to five fifty I think they're actually using for fifty at the moment so I think there's gonna be a lot of discussion about how we contribute funds to those two programs and and how we go forward with that if we don't have those open positions that we've had in the past. I would just add. Basically everything's on the table we we didn't want to go in with. With parameters in there that can be one thing I have a concern with the shared it was Senator English while ago is the retirees and and like happen with their at the last minute or pharmaceutical will will be cut off you know that that is a population that I I'm very sensitive to because if they work thirty four years whatever in there the least once you can afford a big change that needs to be considered and. Variance at least seventeen states that right. What. Twenty one states what they work is they saying. A lot of things in and work with and that's what we feel like they bring on board is from all the states they worked and be able to look at this with a fresh set of eyes and and hopefully give us some options and again changes not ever popular when it happens but we do we want it to be it's fairs can be what we've got to stabilize. Thank. I commend both of you for your efforts on this because it's important and like we've talked to a representative Wardlaw that this this is gonna come up and then did I understand one follow up this understand that the teacher the bill is sixty seven million. In the. Careers or in the deficit not not at the moment is projected the next FY of would be that big of a death up to. These changes take place where you'll see that number move hopefully to the of positive range and that's what we're going for a the yes it is exactly thank you very much thank you madam chairman. Thank you Mr Wootton Senator Hammer you're recognized thank you madam chair a couple questions if I made number one set through the majority of the presentations but I had leave a little bit early did it come in is it in the scope of practice for is it in the scope of this contract for them to evaluate scope of practice barriers between the various disciplines because we just passed quite a few scope of practice bills this session and will that be included in this portion in this work. I don't know that they look to that level but one of their. Subjects that they presented on last week was is they look at basically a managed care I don't use the word managed care is not about insurance here but they use nurse phone calls to the patience to to encourage medication compliance to encourage appointments so I think they'll use everything available and they'll look at the current laws the way they set one thing they testified to the committee and five say this wrong please come right up here is they pay attention to the changing climate of the legislature. They they change they pay attention to those laws change and they pay attention to leadership to changing or to the governing boards to that because we were talking about the BT board being wiped out now it's the Department of finance or board of finance so I think they'll look at all those aspects and they'll look to find the best care at the lowest affordable price for our employees across the state. Okay because. The what what we looked at the pharmaceutical issue. That was one thing but one of the barriers I think that we have to include in the discussion are the limitations that provide access to care in areas that traditionally add to the high cost of our health insurance so I'd just like to make sure there's a head nod from the gentleman the backer from you all to that scope of practice because I do know that legislation is supposed to come out of that out of this and that that needs to be considered in it or we're just going to play a monopoly money I'm afraid if we don't. And make sure can have one more follow up please one. Of course you may thank you madam chair. I'd like to offer this to you all and it may be appropriate that would go to Insurance and Commerce but in talking to Jody awhile ago and to representative Warren we are going to be doing tours again regarding retirement I'd like to put on the table for you all to discuss or consider that we might incorporate in our tour around the state somewhere around August that we also include this is an opportunity because of their suggestions are becoming a thing be better if we have those discussions by going around the state and getting feedback from the people are going to be affected by it over slow course time instead of us have to come in here one time every swallow a big pill at one time I'm just putting that out there for public consumption for y'all to consider thank you manager. Thank you senator we appreciated and Senator Rice being one of those retirees allow me to say that I have gotten so many calls. About their concerns around the increase and for the decrease in the contribution of this is a very very important issue that we have dealt with the legislature since I came in two thousand three. And hopefully this will get us to a place where we have some stability and we're not caught unaware again because as we've given teachers and support staff salary increases we don't want to have to take that away by a huge increase in the benefits are that they're going to have to pay for in order to maintain the system other other questions please to John. Seeing none was pleasure of the Committee. A motion by Senator English do pass as their second. Seconded by Senator Irvin discussion on the motion. Same number place the question all those in favor please say aye. Opposed no. Motion carries thank you gentleman so much. the last item on the agenda is consideration of committee fund allocations for fiscal year twenty twenty two we have that before us but the chairs of going to offer an amendment. That is good okay we don't have to do it have you had an opportunity to look at the proposed budget please keep in mind that this is not final if your committee runs out of money you can always come back to policy and ask for an increase. But the chairs are recommending this budget for the upcoming year. Are there any questions. Saying nine is there a motion. It's been moved by. By Senator English and seconded by representative Ladyman discussion on the motion. Sing number place the question all those in favor please say aye. Lows NO the motion carries thank you so much is there anything else for the good of the order. Seeing none you're dismissed thank you.