West Virginia Retiree Health Benefit Trust Fund and PEIA Finance Board Meeting Thursday June, 27, 2019, 1:00 p.m. Canaan Valley Room 1041, DEP Building, 601 57th Street, SE Charleston, WV 25304 1 Agenda • Roll Call • Call to Order • Approval of Minutes • Plan Year 2019 Financial Update • Financial Statements Year-to-Date • Public Comments • Old Business • New Business • Next Meeting - September 19, 2019 2 Roll Call Chairman Members: ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ Allan McVey-Chairman Lee Diznoff Jason Myers Amanda Meadows Jared Robertson William “Bill” Milam Michael T. Smith Geoff Christian 3 Approval of Minutes March 21, 2019 Chairman Financial Plan Updates Chris Borcik, Continuing Care Actuaries PEIA/RHBT Finance Board Meeting 5 West Virginia Public Employee Insurance Agency Revenue Premiums Investment Income Other Fiscal Year 2019 (millions ) Fiscal Year 2020 (millions ) Jun-19 Jun-19 Financial Plan Update Change Financial Plan Update Change $ 744.4 $ (1.5) 36.9 744.4 8.9 37.1 $ (0.0) $ 10.4 0.2 741.4 10.9 15.9 $ 741.3 11.4 37.1 $ (0.0) 0.5 21.2 $ 779.8 $ 790.4 $ 10.6 $ 768.2 $ 789.8 $ 21.7 $ 405.2 137.1 46.4 16.7 152.2 0.3 2.5 $ 401.7 138.8 46.6 17.0 152.4 0.3 1.7 $ (3.6) $ 1.7 0.2 0.3 0.2 (0.9) 440.0 154.9 49.1 20.7 140.0 3.0 $ 435.5 156.5 49.4 21.4 140.0 3.0 $ (4.5) 1.6 0.3 0.7 0.0 Total $ 760.4 $ 758.5 $ (1.9) $ 807.8 $ 805.9 $ (1.9) Fiscal Year Results Ending Fund Balance Required Reserve Surplus/(Shortfall) $ $ $ $ 19.4 214.0 117.2 96.8 $ $ $ $ 31.9 226.4 116.1 110.3 $ $ $ $ 12.5 12.5 (1.0) 13.5 (39.6) 174.3 126.1 48.3 $ $ $ $ (16.0) 210.4 124.4 86.0 $ $ $ $ 23.6 36.1 (1.7) 37.8 Total Expenses Medical Claims Drug Claims Capitations Administration & Wellness WV RHBT Pay Go Premiums ACA Expenses Other Expenses $ $ $ $ *The annual Medical Trend through May was 6.7%, while the plan assumption was 7.5% *The annual Gross Drug Trend through May was 15.2%, while the plan assumption was 11.5% PEIA/RHBT Finance Board Meeting 6 West Virginia Retiree Health Benefit Trust Revenue Premiums Fiscal Year 2019 (millions) Fiscal Year 2020 (millions) Jun-19 Jun-19 Financial Plan $ Annual Required Contributions 241.2 Update $ 0.0 241.3 Change $ - 0.2 Financial Plan $ (0.0) 231.1 Update $ - 227.4 Change $ - (3.6) - Life Insurance 23.7 23.8 0.1 24.9 25.0 0.1 Investment Income Transfer from Premium Stabilization Reserve General Revenue Transfer (5.8) 35.0 41.3 35.0 47.1 - 61.3 35.0 64.4 35.0 3.1 - Total $ 294.0 $ 341.4 $ 47.4 $ 352.3 $ 351.9 $ (0.4) $ 63.9 27.0 124.7 4.7 23.7 1.8 0.0 0.2 $ 58.7 27.8 124.7 4.4 23.8 1.9 0.0 0.1 $ (5.2) $ 0.9 (0.0) (0.3) 0.0 0.1 (0.1) 68.5 30.2 114.0 5.3 24.9 1.9 0.3 $ 60.5 29.2 114.2 5.0 24.9 2.0 0.2 $ (8.0) (1.0) 0.2 (0.3) 0.0 0.1 (0.0) Total $ 246.0 $ 241.4 $ (4.6) $ 245.1 $ 236.2 $ (8.9) Fiscal Year Results Ending Fund Balance $ $ 48.0 973.0 $ 100.0 $ 1,025.0 $ $ 52.0 52.0 107.2 1,080.3 $ $ 115.7 1,140.7 $ $ 8.5 60.5 Expenses Medical Claims Drug Claims Capitations Administration Life Insurance Retiree Assistance Program ACA Expenses Other Expenses $ $ *The annual Non-Med Medical Trend through May was 4.9%, while the plan assumption was 7.5% *The annual Non-Med Gross Drug Trend through May was 18.8%, while the plan assumption was 11.5% PEIA/RHBT Finance Board Meeting 7 Financial Statements Year-to-Date Financial Statements By: Jason Haught, CFO, PEIA West Virginia Public Employees Insurance Agency Statement of Net Position Tuesday, Apn?l El], 2515 [Dollars in Thousands} [Unaudited?For Internal Use lCinly} Assets Current assets: Cash and cash equivalents Equity position in internal investment pool Premiums receivable: Other, less allowance for doubtful accounts Due From Accounts receivable: Provider refunds, less allowance for doubtful accounts Prescription rebates Other Total current assets Noncurrent assets: Equity position in internal investment pools Equity position in internal investment pool restricted Itiapital assets, net of accumulated depreciation Total noncurrent assets Total assets Deferred of Resources Related to Pensions 5 DPEB Liabilities Current liabilities: Current claims payable Accounts payable Uneamed revenue Other accrued liabilities Total current liabilities Noncurrent liabililjes: Dtner Liabilities Gther accrued liabilities: Premium stabilization fund Total liabilities Deferred In?ows of Resources Related to Pensions B. DPEB Net position Invested in capital assets Actuarially Required Reserve PEIA PER, Unrestricted Total net position A IA. CURRENT PRIDR TR 5- 1* 313,521 311,553 31,553 1435 12,554 34,545 [22,5551 {55351 ?,215 5,5?4 12,4551 {25351 4,5?3 5,512 14,5351 {55351 4?2 1,553 1:1 .1511 {?1351 15,255 14,555 4,555 3135 23,534 3,555 15,535 53535 51,253 55,433 15.2 351 [5351 23?,555 155,2?5 3?,55? 1535 11,344 15,4 331 {32351 145 25? 1:551 {25351 245,5?5 215,253 32,315 1535 325,?51 352,555 2?,555 535 552 5?5 1:131 54,155 52,425 1,?45 335 5,325 [11,4111 {54351 4,255 4,454 2?5 535 15,245 2,554 3235 2,325 1,555 324 1535 ??,525 54,353 15,5551 [3351 1,151 1,5?3 [5221 {42351 5,35? 14,533 15,4?11 {3?351 55,335 151,155 [12,5511 [13351 44 533 1,21135 145 25? 1:591 {29?53 115,443 115,?55 553 [5351 124,534 55,251 35,5?3 535 241,425 252,525 35,35? 25 35 West Virginia Public Employees Insurance Agency Statement of Changes in Plan Net Position For the Ten Months Ending Tuesday. April 30. 2013 [Dollars in Thousands] (Unaudited-For Internal Use Only] BUDGET VARIANCE PRIOR VR VARIANCE ACTUAL BUDGET PRIOR VR 3 323 3- ?2r: OPERATING REVEMLI Premium Revenue $302,143 $313,230 $312,220 Health Insurance - State Gov. Employers [31 1.332] [$5,022] 102,231 105,310 105,303 Health Insurance - State Gov. - Employees [3.323] [3,525] 32,302 31,302 33,423 Health Insurance - Local Gov. - All 1,500 2% [322] 3,321 3,233 4,233 Administrative Fees, Net of Refunds 152 4% [312] 1,132 1,353 2,012 Other Premium Revenue [324] [330] 432.223 511.312 502.200 Total Operating Revenue [10.421] REVENUE 1,133 1,023 1,112 er Insurance 54 5% 13 1% 25,333 25,333 3,333 Direct Transfer 0 0% 12,500 210% 3,333 3,322 2,322 Interest and Investment Income 5,223 142% 1,021 13% 123,321 123,333 124,113 WV Go Premiums [1.332] 2,353 2% 132.335 153.312 141 .440 Total Mon?Ope rating Revenue 3,313 2% 21.335 15% 330.114 320.534 343.140 TOTAL REVENUE [10,420] 10.324 2% EKPEN SES 313,403 325,030 312,141 Claims Expense - Medical 5.324 2% [2,235] 112,523 151,532 103,331 Claims Expense - 33.003 23% [3,312] 33,335 33,135 33,013 Payments to Managed Care Org. [200] [2,313] 3,223 3,532 3,303 Administrative Service Fees [134] [420] 301 321 333 Wellness and Disease Management 520 35% 33 23% 4,032 4,030 3,331 Other Operating Expenses 3 0% [153] 1,022 303 1,032 Life Insurance Expense [113] 10 1% 232 232 233 AOA lOomparative Effectiveness Fee 0 0% 2 1% 123,321 123,333 124,113 WV Go Premiums 1.332 1% [2,353] 313.243 353.233 533.153 TOTAL EXPENSES 45.335 2% [12.035] 43.321 11.233 52.332 Surplus [Deficit] 35,135 233% [3.111] 134,554 134,554 143,043 Total Net Position, Beginning of Period 0 0% 45,503 31% 113,443 115,230 End of Period Net Position, [?uctuariallyr Required Reserve 0 0% 333 0% 124,332 33,233 End of Period Net Position. PEIA PSR 0 0% 33,214 0% 5241.425 $203230 $2 02.023 Total Net Position. End of Period $35,135 12% 333.332 20% 522322013 2:30 PM 10 AS SETS ISash - Dpeiating Fund W?v' Eieard 5f Treasurg,r Investments W?v' Investment Management Bsard Tetal Investments Due PEIA PREMIUM ACCOUNTS RECEIVABLE Premium Accounts Receivable Less: Allswance Dsubtful Accsunts Net Piemium Accsunts Receivable Premium AIR Annual Required Less: Allswanse fer Dsubtful Acsbunts Net Premium AIR ARC Cl'tl'iEI' Receivables TDTAL AS ETS DEFERRED DF Deferred 5f Resources Related to Pensisn Deferred 5f Ressurces Related t5 TDTAL DEFERRED DUTFLUWS DF RESOURCES LIA BI LITI ES Claims pavable Ascsunts pavable Accrued Liabilities TDTAL LIABILITIES DEFERRED DF Deferred sf Ressurces Related t5 Pensisn Deferred sf Ressurces Related t5 DPEEI TDTAL DEFERRED INFLUWS DF RESUURCES Net Pbsitisn- PSR Net Pbsitisn- Restricted NET RESTRICTED FUR POST BENEFITS West Virginia Retiree Health Benefit Trust Fund STATEMENT OF PLAN NET PDSITIDN Tuesdav, April 21119 In Theusands VARIANCE CURRENT 212 1221512 22 35 $12,525 $5,133 $5,533 5235 34,352 55,244 24,553 4535 553,255 352,515 35,243 1535 1,553,551 553,255 115,351 1235 [4,525} [5,511} 4,535 [5535} 2,523 2,254 [121} 335 [453} [154} [354} 35535 2,155 2,555 [535} [2535} 2,215,431 2,215,431} [15535} - 2,215,431} 2,215,431 [15535} - 535 [153} [1,245} 1,552 [5135} 1,522,554 555,432 122,232 1335 255 335 [25} [2135} 34 34 15535 353 335 [35} [1135]: 3,125 3,555 [535} [535} 25 43 [22} [4 535} 12,353 15,553 [3,235} [2535} 25,554 24,235 [3,332} [1535} 235 25 214 35535 22 22 15535 315 25 251 1,15435 33,152 33,152 15535 1,513,555 535,555 32,535 535 51,555,552 $535,555 5125,232 1435 11 lWest 1Inll'irginia Retiree Health Benefit Trust Fund STATEHENT CIF CHANGES IN PLAN NET PDSITIDN F3r the Ten Henths Ending Tuesday, April 39, 2919 In Tlleusancls BUDGET PRIDR ACTUAL BUDGET PRICIR ?3'3 ?3'3 ADDITICINS Premiums: $2,594 $2,493 $2,5?1 Health premiums - N33 Par $11 9% {315?} 13,919 13,213 14,533 Health Premiums - RLC Health, Ufe {293} {1,553} 133,331 133,333 134,113 Paar I33 Premiums (1,333} {133} 3,333 333 25,999 25,999 25,999 State apprepr?iatien 9% 9% 4,15? 4,15? 4,15? State Premium - 9% - 9% 131,552 133,219 139,424 T3tal Emplp'fer Premiums {1,553} 1,223 Dtller Additiens: 1,299 1,999 1,999 Retiree Drug Suhsiti?.?I 299 21% 299 21% 41,395 43,992 53,553 Investment Inceme {5,333} {25,243} 314,133 333,333 333,333 TDTAL ADDITICINS {3,133} {433] (34,311} {1333} DEDUCTIDNS 195,349 125,251 115,9?2 Payments t3 Managed Care Drg. 19,411 15% 19,232 9% 19,?92 29,322 19,34? Life Insurance Expense 539 3% {445} 43,333 5 1,333 43,333 Medical Claims Expense 3,333 1333 1,333 433 23,5?9 24,534 23,351 Pharmacy Claims Expense 354 4% {399} 2? 2? 2? Campalative Effectiveness Research Fee - 9% - 9% 1,212 1,135 1,155 administrative Service Fees {External} {45} {55,323} {53,223} {55,353} Member Health premiums {2,495} 4% {43} 9% {19,342} {29,532} {19,331} Member We Insurance Premiums 4% 511 2,455 2,443 2,11? Other Dpeiating Expenses {12} {333} 123,534 145,332 131,923 TDTAL DEDUCTICINS 25,243 13033 11,344 9% 93,532 35,439 193,949 NET PCISITIDN INCREASE 13,112 24033 {13,453} {1333} Net Ppsiti3n Restricted f3r Pest Emplp'fment BenefiE 953,115 953,115 323,911 Beginning 3f Peried T3ta Net Pesitien - 9% 139,294 1,913,599 1,999,433 939,959 End [If Periecl Net Pesitien - Restricted 13,112 2% 33,539 9% 33,193 33,193 End at Perieci Net Pesiticln 9% 33,193 199% $1,955,593 $1,933,535 End 3f Peried Tetal Net Pesitipll $13, 112 233 $125,333 1433 12 Public Comment Chairman 13 Old Business New Business 15 Schedule Next Meeting Chairman September 19, 2019 16 Adjourn Chairman 17 If you want to request a copy of today’s meeting materials, please contact: Tammy Scarberry (304) 558-7850, Extension 52618 Tammy.R.Scarberry@wv.gov 18