ABOUT LACERA

INSURANCE, BENEFITS & LEGISLATIVE COMMITTEE MINUTES 3-5-09

PRESENT

• William de la Garza, Chair
• Simon S. Russin, Vice Chair
• Edward L. Blecksmith
• Ed C. Morris
• James P. Harris, Alternate

MEMBERS AT LARGE

• Sadonya Antebi
• Yves Chery
• Si Frumkin
• Les Robbins

STAFF, ADVISORS, PARTICIPANTS

• Lita Payne
• Cynthia Lau
• Mercer Human Resource Consulting
• Laurie Silva

The meeting was called to order by Chairman de la Garza at 10:00 a.m.

1. APPOINTMENT OF VOTING MEMBER(S) IN THE EVENT ONE OR MORE REGULAR COMMITTEE MEMBERS ARE ABSENT

   All regular members of the Committee were present.

2. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF FEBRUARY 12, 2009

   With the approval of the Committee, Mr. de la Garza instructed staff to add the following to the minutes, Section IV-D:

   “Committee members expressed concern regarding audit items, such as financial accuracy, that were below both LACERA's performance standard and generally acceptable industry standards.”

   Also, Kathy Slothour's name was added to Section IV-C and IV-D as the Mercer staff member who conducted the audits of Anthem Blue Cross and CIGNA.

   A motion was made by Mr. Morris, seconded by Mr. Blecksmith, to approve the minutes of the regular meeting of February 12, 2009, as amended. The motion passed unanimously.

3. ACTION ITEMS
   1. Recommend the Board of Retirement adopt a “Watch” position on AB 155, which would require municipalities to seek approval from a Local Agency Bankruptcy Committee before filing for bankruptcy.

      A motion was made by Mr. Morris, seconded by Mr. Russin, to watch AB 155. The motion passed unanimously

4. FOR INFORMATION
   1. Prescription Drug Benefits – Days Supply Limit

   It is general industry practice to limit retail pharmacy prescription fills to a 30-day supply. This was the result of the addition of mail order programs and the use of Rx cards with co-pay structures for both retail and mail order, and is in practice by all HMOs except Kaiser. This practice was applied to the Anthem Blue Cross Plans I, II and III, although it was never officially documented or communicated.

   Although an industry practice, it is not strictly prohibited to receive more than a 30-day supply under LACERA's Anthem Blue Cross contract if the prescribing doctor writes the prescription for a specified number of days supply. However, certain drug classes, including some specialty drugs and controlled substances, are not filled with more than a 30-day supply regardless of how the prescription is written.

   2. Staff Activities Report for February, 2009

   The staff activities report was discussed

   3. Federal Legislation
   • Weekly Highlights – February 23, 2009
   • Weekly Highlights – February 17, 2009
   • Weekly Highlights – February 9, 2009
   • Weekly Highlights – February 2, 2009
   President Obama is really focusing on health care, and a lot of money is moving around. There are new COBRA rules in the stimulus package, which will not affect LACERA. Also, tougher executive pay curbs for firms in TARP (Troubled Asset Relief Program), and legislation reforming CHIP (Children's Health Insurance Program). More funding through CHIP and through the stimulus program for Medicaid will help hospital and physicians with their uninsured population, which will probably shore up some of LACERA's provider community.

   With the latest health care reform, the overall increase for the Medicare Advantage plans is going to be set at 0.5%, a little lower than in the past. The final numbers won't be out until April. This will not affect LACERA in the 2009-2010 plan year, as rates are pretty well set. However, the 2010-2011 plan year could show a spike up in the Medicare Advantage plans.

   There are changes being made at the Federal level every day, and Mercer will keep the Board and LACERA staff informed as information becomes available.

   4. California Retirement Legislation
   • Pending Legislation — Workers' Compensation Bills
     • AB 361: PERS – Treatment Authorization
     • SB 186 : PERS – Predesignation of Physician
     • SB145: PERS – Immutable Characteristic of Employee/Discrimination

   AB 361 – This bill would not allow insurance carriers and employers to retroactively deny coverage, once authorization has been granted to a provider.

   SB 186 – This bill would repeal end date of December 31, 2009, and allow employees to continue to predesignate a physician for workers' compensation injuries if they chose to do so.

   SB 145 – This bill would provide that no workers' compensation claim shall be denied solely because the motivation behind what caused the employee's injury, or injury resulting in death, was related to an immutable characteristic of the employee. It would also prohibit race, religious creed, color, national origin, age, gender, marital status, sex, sexual orientation, or genetic predisposition from being considered a cause or other factor of disability considered in any determination. This is a redo of SB 1115, which the Governor vetoed last year, as he felt that the intent of the bill was not necessary and could inadvertently create new ambiguities in the law and result in increased litigation.

5. MISCELLANEOUS
6. PUBLIC COMMENT
7. GOOD OF THE ORDER

   (For discussion purposes only)

8. ADJOURNMENT

The Board of Retirement has adopted a policy permitting any member of the Board to attend a standing committee meeting open to the public. In the event five or more members of the Board of Retirement (including members appointed to the Committee) are in attendance, the meeting shall constitute a joint meeting of the Committee and the Board of Retirement. Members of the Board of Retirement who are not members of the Committee may attend and participate in a meeting of a Board Committee but may not vote on any matter discussed at the meeting. The only action the Committee may take at the meeting is approval of a recommendation to take further action at a subsequent meeting of the Board.

Documents distributed to members of the Committee less than 72 hours prior to the meeting will be available for public inspection at LACERA at the time they are distributed to a majority of the Committee, provided the documents are subject to public disclosure and relate to an open session of the Committee. Such documents may be viewed Monday through Friday during normal 9:00 a.m. to 5:00 p.m. business hours. LACERA is located at 300 N. Lake Avenue, Suite 820, Pasadena, California.

Persons requiring an alternative format of this agenda pursuant to Section 202 of the Americans with Disabilities Act of 1990 may request one by calling Cynthia Guider at (626)-564-6000, from 8:30 a.m. to 5:00 p.m. Monday through Friday, but no later than 48 hours prior to the time the meeting is to commence. Assistive Listening Devices are available upon request. American Sign Language (ASL) Interpreters are available with at least three (3) business days notice before the meeting date.

3/5/09