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HomeMy WebLinkAboutAgenda - 05-01-2012 - 7bORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 1, 2012 Action Agenda Item No. ~~ SUBJECT: Health Insurance Benefits for Employees of the Orange County Alcoholic Beverage Control Board DEPARTMENT: Human Resources PUBLIC HEARING: (Y/N) No ATTACHMENT(S): 1. Request from Alcoholic Beverage Control Board to Join Orange County Health Insurance INFORMATION CONTACT: Sharon Goode Laisure, Interim Human Resources Director, 919-245-2552 Diane Shepherd, Benefits Manager, 919-245-2558 PURPOSE: To seek BOCC approval regarding the addition of a subgroup, Orange County Alcoholic Beverage Control (ABC) Board employees and retirees, to the Orange County health insurance plan with UnitedHealthcare. BACKGROUND: In September 2002, the ABC Board and Orange County discussed the possibility and costs associated with adding ABC employees to the County's health insurance. At that time, the addition of ABC employees would have resulted in an increase of between 3.5% and 6.9% in Orange County's health care premiums. No action was taken at that time to include ABC employees in the County's health plan. In June 2005, the ABC Board had a 19% increase in group health insurance and again requested that Orange County explore the option of ABC employees "piggybacking" on the County's health insurance for the following year's coverage. The ABC Board opted to renew its own group health insurance after extensive research into the feasibility of joining the County's health plan. In February 2012, the Human Resources Department received a verbal request to research the possibility of adding thirty ABC employees and six retirees (all under age 65) to .the County's health plan effective July 1, 2012. A written request (Attachment 1) followed. UnitedHealthcare, Orange County's current health insurance provider, has confirmed that adding these thirty-six individuals and dependents would have no impact on the County's current premiums. While current premiums will not be affected, the addition of the ABC Board employees may increase the County's exposure to increased utilization and increase in claim costs. The average age of ABC Board employees (47.2 years) is greater than the average of 2 Orange County employees (45.7 years). With an older population of insured members, there is a greater likelihood of individuals incurring claims more frequently and at higher amounts because health care costs increase with age. These finro factors could result in an increase in premiums for all County employees and the other subgroup, Community Home Trust. If the County becomes self-insured, the ABC Board (and any other subgroup) will be accountable for their own claims. This will minimize the impact of non-County employees on the County's health insurance. Based on current analysis, the County would reserve the right to terminate the subgroup relationship with one year's notice to allow the ABC Board the time to identify other coverage. FtNANCIAL IMPACT: Because the Orange County ABC Board will be paying its own premiums, there is no financial impact on the cost of health insurance premiums for the current fiscal year. If claims paid on behalf of the ABC Board staff exceed the ratio of claims to premiums paid by Orange County members, the cost of premiums for all members will be negatively impacted and premiums could increase effective in the future. Likewise, if the ratio of claims to premiums paid is lower for the ABC members, the cost of all premiums could be positively affected. RECOMMENDATION(S): The Manager recommends that the Board approve the ABC Board's request to be added to the County's health insurance plan as a subgroup effective July 1, 2012. If the Board approves the request, the Manager further recommends that the Board direct the County Attorney to develop a finro-year Memorandum of Understanding befinreen the finro parties to be signed by the appropriate representatives of the ABC Board and the County. Such Memorandum should require the subgroup to pay for its own claims when the County's health coverage funding changes from fully-insured to self-insured. The Manager also recommends that the County reserve the right, with appropriate notification to the ABC Board, to terminate the option if analysis provides evidence that the subgroup's medical experience adversely impacts the County's overall cost of coverage. Should approval be granted, the ABC Board reserves the right to consider another option if during the interim period, the ABC Board identifies another option that is a better fit for its employees. COUNTY OF ORANGE ALCOHOLIC BEVERAGE CONTROL BOARD 122 HIGHWAY 70 EAST HILLSBOROUGH, NORTH CAROLINA 27278 919 - 732 -3432 ocabcAmindspring.com BoardMembera KEITH COOK, Chair JOHN LINK, Vice Chair TONY DUBOIS, General Manager April 17, 2012 Earl McKee Orange County Commissioner 5200 Kiger Road Rougemont, NC 27572 WILLIAM CROWTHER ROSA TILLEY LISA STUCKEY APR 13 2012 �S The Orange County ABC Board is in the process of reviewing health care coverage for the next fiscal year. The Board's employees were covered by the County Commissioner's plan and that coverage was eliminated on June 30, 2011. A Blue Cross Blue Shield plan was subsequently obtained to cover the ABC Board's employees until June 30, 2012. We would like to request that the BOCC consider allowing the ABC Board's employees to be covered by the current plan that covers the Orange County employees. We are currently investigating all of our options and would like to know if that is one we are able to consider. Please let me know if you need any further information regarding this request. Sincerely, 1 eft Cook Orange County ABC Board Chairman cc. Frank Clifton