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Home My WebLink AboutAgenda - 04-11-2013 - 2ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 11, 2013 Action Agenda Item No. 2 1 SUBJECT: Employee Benefits Updates, Preliminary Renewal Estimates Regarding Calendar Year 2014 Health Insurance, and Anticipated Health Care Reform Components DEPARTMENT: Human Resources PUBLIC HEARING: (Y /N) No ATTACHMENT(S): A. Plan Year Enrollment Highlights and United Healthcare Activity B. Proposed Timeline for Competitive Bid Process C. Powerpoint- Health Insurance Update INFORMATION CONTACT: Nicole Clark, Human Resources Director, 245 -2552 Diane Shepherd, Benefits Manager, 245- 2558 PURPOSE: To provide an update on health insurance initiatives, preliminary health insurance cost estimates for calendar year 2014, and the impact of Health Care Reform. BACKGROUND: The County is in the second year of a contract with UnitedHealtcare (UHC), which offers a traditional POS and high deductible plan. Although there was a considerable amount of dissatisfaction immediately following the transition to UHC, staff recommended that the County remain with UHC's fully insured plan for the 2013 plan year. While the overall enrollment numbers remained constant when comparing 2012 and 2013, there are 5 less enrollees in the Traditional Plan and 10 new enrollees in the High Deductible Plan. New enrollments in our optional benefits decreased, as 2013 is the third year for these offerings. We have partnered with UHC to offer monthly programs geared to increase employees' awareness of their health insurance benefits by hosting monthly programs. This was launched in December with a Town Hall style meeting. Since then, UHC has hosted monthly seminars on topics such as estimating health care costs and health and wellness online tools. For the second year, Orange County and UHC have partnered for health screenings, which occurred in February. Monthly activities are planned through the remainder of the 2013 Plan Year. Attachment A provides an enrollment summary and lists the activities sponsored by UHC. A competitive bid process will be conducted for the 2014 plan year and will include pricing for fully insured and self- funded plans. Based on current trends, staff is projecting an 8% increase in health care premiums. Due to the competitive process and the potential change in funding, recommendations for a vendor and funding will be provided at the June 11, 2013 Work Session with anticipated approval through the budget process at the June 18, 2013 Regular Meeting. Attachment B outlines the timeline for the RFP process and vendor selection. FINANCIAL IMPACT: More definitive costs will be provided at the June 11, 2013 Work Session. RECOMMENDATION(S): The Manager recommends that the Board: 1) discuss employee insurance benefits for calendar year 2014; and 2) provide direction to staff at the June 11, 2013 Work Session regarding the recommended policy coverage and benefits in preparation for approval through the budget process at the June 18, 2014 Regular Meeting. Attachment A Plan Year Enrollment Highlights and UnitedHealthcare Activity Open Enrollment Highlights Health Insurance Enrollment (at start of Plan Year) Annual Optional Benefits New Enrollment Benefit 2011 2012 2013 Traditional Plan n/a 610 605 High Deductible Plan n/a 187 197 Total Health Plan Participation n/a 797 802 Health Savings Account (employee contribution) n/a 81 89 Waived Health Insurance 20 22 21 Annual Optional Benefits New Enrollment Benefit 2011 2012 2013 Medical Flexible Spending Account 159 165 132 Dependent Care Spending Account 12 11 16 Community Eye Care n/a 369 42 Accident Insurance 54 114 36 Critical Illness 103 79 23 Disability 145 97 18 Whole Life 64 55 18 Attachment A Annual Employee Flu Shot Clinic Participants 2010 2011 2012 204 169 225 UnitedHealthcare Activities and Programs Date(s) Event 12/13/12 Town Hall Meeting 1/24/13 Health and Wellness Website Demonstration 2/12 - 2/14/13 Know Your Numbers Biometric Screenings 3/28/13 Health Care Cost Estimator 4/25/13 Demystifying Your Pharmacy Benefits 5/23/13 Fitting Fitness Into a Busy Day & Sportsplex Tour 6/27/13 Sun Protection and Skin Damage Health Assessment Participants 2012 2013 334 1 356 Attachment B Proposed Timeline for Competitive Bid Process 4/15/13 RFP solicitation is published 5/10/13 Response deadline 5/31/13 Evaluations complete 6/11/13 Recommendations presented during work session 6/18/13 Vendor and plan funding approved with the FY 13 -14 budget process* *With the possibility of a new vendor and funding source, approval is needed to ensure proper and timely implementation in preparation for Open Enrollment in October 2013. Attachment C HEALTH INSURANCE UPDATE 2013 Enrollment Highlights and 2012 Plan Performance /2014 Plan Year Preliminary Recommendations April 11, 2013 Work Session 7 2012 Summary Year one with United Healthcare Initial dissatisfaction with change in provider and plan structure 2013 Plan design recommendations addressed concerns Renewal cost less than projections Enrollment process successful, no significant complaints Health Insurance Enrollment Comparison -M I = I Traditional Plan High Deductible Plan Total Participation Employee Health Savings Account Waived Health Insurance 610 605 187 197 797 802 22 21 Optional Benefits New Enrollment Comparison I MW Medical Flexible Spending Account Dependent Flexible Spending Account Community Eye Care Accident Insurance Critical Illness Disability Whole Life 165 132 11 16 369 42 114 36 79 23 97 18 55 18 10 Benefits Activities and Programs ERC Meeting updates Town Hall Meeting (December) Health and Wellness website demonstration (January) Know Your Numbers (February) Health Care Cost Estimator (March) Health Insurance R'P Timeline April 15th May 10th May 31St June 11th RFP solicitation published Response deadline Evaluations complete Recommendations presented during the Work Session 11 June 18th Vendor and plan funding approved with the FY 13 -14 budget process* *With the possibility of a new vendor and funding source, approval is needed to ensure timely implementation in preparation for Open Enrollment in October 2013. 12 J�LF. MEDICAL PLAN UPDATE 2012 Plan Performance /2014 Renewal Expectation Mark III Dy" Iff NVENOM N� 0 13 ■ HSA Plan Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Claims Claims Per Sub Per Month Loss Ratio January -12 195 375 $142,356.71 $12,037.78 $2 $3,845.63 $15,884.91 $81.46 11.16% February-12 196 373 $141,405.73 $21,599.49 $699 $3,814.70 $26,113.07 $133.23 18.47% March -12 191 362 $139,684.00 $30,321.00 $1,091.00 $3,732.00 $35,144.00 $184.00 25.16% April -12 191 364 $140,868.00 $43,011.00 $1,695.00 $3,753.00 $48,459.00 $253.71 34.40% May -12 192 364 $140,688.00 $35,127.00 $2,641.00 $3,753.00 $41,521.00 $216.26 29.51% June-12 196 371 $143,540.68 $24,769.27 $2,544.50 $3,825 $31,138.78 $158.87 21.69% July-12 205 380 $148,181.47 $25,229.21 $5,333.99 $3,918 $34,481.00 $168.20 23.27% August -12 207 385 $150,507.00 $127,044.00 $4,992.00 $3,969.00 $136,005.00 $657.03 90.36% September -12 206 385 $150,145.00 $54,506.00 $5,373.00 $3,969.00 $63,848.00 $309.94 42.52% October -12 208 384 $149,798.00 $25,270.00 $7,335.00 $3,959.00 $36,564.00 $175.79 24.41% November -12 217 397 $154,425.00 $69,224.00 $8,584.00 $4,083.00 $81,891.00 $377.38 53.03% December -12 220 401 $155,851.00 $80,748.00 $11,558.00 $4,103.00 $96,409.00 $438.22 61.86% Total 2,424 4,541 $1,757,450.59 $548,886.74 $51,847.89 $46,724.14 $647,458.76 $267.10 36.84% PPO Plan Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Claims Claims Per Sub Per Month Loss Ratio January -12 755 1,258 $601,086.67 $503,372.10 $72,164.17 $12,887.50 $588,423.77 $779.37 97.89% February -12 750 1,254 $602,793.53 $443,530.37 $86,572.58 $12,928.74 $543,031.69 $724.04 90.09% March -12 746 1,246 $599,131.00 $424,785.00 $105,977.00 $12,867.00 $543,629.00 $728.73 90.74% April -12 745 1245 $593,015.00 $573,611.00 $102,468.00 $12,763.78 $688,842.78 $924.62 116.16% May -12 753 1,252 $596,579.00 $417,265.00 $112,812.00 $12,867.00 $542,944.00 $721.04 91.01% June -12 752 1246 $592,685.50 $335,871.46 $82,049.64 $12,784.40 $430,705.50 $572.75 72.67% July -12 790 1286 $615,389.38 $376,251.09 $115,307.99 $13,268.97 $504,828.05 $639.02 82.03% August -12 784 1,272 $610,263.00 $408,789.00 $107,816.00 $13,125.00 $529,730.00 $675.68 86.80% September -12 777 1,264 $604,558.00 $451,349.00 $100,731.00 $12,991.00 $565,071.00 $727.25 93.47% October -12 779 1,260 $603,476.00 $363,443.00 $109,365.00 $12,980.00 $485,788.00 $623.60 80.50% November -12 777 1,259 $604,066.00 $409,725.00 $119,655.00 $13,001.00 $542,381.00 $698.05 89.79% December -12 775 1,252 $601,173.00 $426,124.00 $103,265.00 $12,918.00 $542,307.00 $699.75 90.21% Total 9,183 15,094 $7,224,216.08 $5,134,116.02 $1,218,183.38 $155,382.39 $6,507,681.79 $708.67 90.08% Combined Plans Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Claims Claims Per Sub Per Month Loss Ratio January -12 950 1,633 $743,443.38 $515,409.87 $72,165.67 $16,733.13 $604,308.68 $636.11 81.29% February -12 946 1,627 $744,199.26 $465,129.86 $87,271.47 $16,743.44 $569,144.77 $601.63 76.48% March -12 937 1,608 $738,815.00 $455,106.00 $107,068.00 $16,599.00 $578,773.00 $617.69 78.34% April -12 936 1,609 $733,883.00 $616,622.00 $104,163.00 $16,516.78 $737,301.78 $787.72 100.47% May -12 945 1,616 $737,267.00 $452,392.00 $115,453.00 $16,620.00 $567,845.00 $600.89 77.02% June -12 948 1,617 $736,226.18 $360,640.73 $84,594.14 $16,609.41 $445,234.87 $469.66 60.48% July -12 995 1,666 $763,570.85 $401,480.30 $120,641.98 $17,186.77 $522,122.29 $524.75 68.38% August -12 991 1,657 $760,770.00 $535,833.00 $112,808.00 $17,094.00 $648,641.00 $654.53 85.26% September -12 983 1,649 $754,703.00 $505,855.00 $106,104.00 $16,960.00 $611,959.00 $622.54 81.09% October -12 987 1,644 $753,274.00 $388,713.00 $116,700.00 $16,939.00 $505,413.00 $512.07 67.10% November -12 994 1,656 $758,491.00 $478,949.00 $128,239.00 $17,084.00 $607,188.00 $610.85 80.05% December -12 995 1,653 $757,024.00 $506,872.00 $114,823.00 $17,021.00 $621,695.00 $624.82 82.12% Total 11,607 19,635 $8,981,666.67 $5,683,002.76 $1,270,031.27 $202,106.53 $7,019,626.38 $604.78 78.16% Trend 69.44% 14 r Current Plans United Healthcare Option 1 2013 Fully Insured Renewal United Healthcare - Both Plans $4 Copay for Generic - POS Office Surgery Subject to Copay - POS In- Network Simple Labs at 100% - POS POS: S5E -P -M5 2012 HSA: C3Z -PM 2012 POS: S5E -P -M5 2013 HSA: C3Z -PM 2013 In- Network In- Network In- Network In- Network Primary Care Physician Visits $20 80% after Ded. $20 80% after Ded. Specialist Physician Visits $40 80% after Ded. $40 80% after Ded. Preventive Care 100% 100% 100% 100% Deductible $500 $1,500 $500 $1,500 Deductible - Family Maximum $1,500 $3,000 $1,500 $3,000 Coinsurance Limit $1,000 $2,000 $1,000 $2,000 Coinsurance Limit - Family Max $3,000 $2,000 $3,000 $2,000 In- patient Hospital Services 80% after Ded. 80% after Ded. 80% after Ded. 80% after Ded. Out - patient Hospital Services 80% after Ded. 80% after Ded. 80% after Ded. 80% after Ded. Emergency Room $150 80% after Ded. $150 80% after Ded. Pharmacy $8/$25/$45 80% after Ded. $4/$25/$45 80% after Ded. Lifetime Maximum Unlimited Unlimited Unlimited Unlimited Rates Subs Monthly Premium Subs Monthly Premium Monthly Premium Monthly Premium Employee Only 464 $578.59 $268,465.76 104 $475.49 $49,450.96 $631.18 $292,867.52 $510.15 $53,055.60 Employee and Spouse 72 $1,220.83 $87,899.76 18 $1,003.28 $18,059.04 $1,331.80 $95,889.60 $1,076.41 $19,375.38 Employee and Children 163 $937.32 $152,783.16 45 $770.29 $34,663.05 $1,022.52 $166,670.76 $826.44 $37,189.80 Employee and Family 49 $1,735.77 $85,052.73 29 $1,426.47 $41,367.63 $1,893.54 $92,783.46 $1,530.45 $44,383.05 Monthly Cost 748 $594,201.41 196 $143,540.68 $648,211.34 $154,003.83 HSA Contribution $1,237.20 $242,491.20 HSA Contribution $1,237.20 $242,491.20 Annual $7,130,416.92 $1,964,979.36 $7,778,536.08 $2,090,537.16 Total $9,095,396.28 109.09% $9,869,073.24 106.39% Increase over current 108.51% r ■ Current Plans Monthly Costs Calendar Year Costs Type of Plan Tier # of Participants County Contribution Employee Contribution Annual County Cost Employee Contribution POS (Point of Service) Individual 464 $579 $0.00 $3,221,589 $0 Ind /Children 163 $731.89 $205.43 $1,431,569.02 $401,828.90 Ind /Spouse 72 $853.04 $367.79 $737,027.25 $317,769.87 Family 49 $1,073.10 $662.67 $630,982.56 $389,650.20 Total 748 $6,021,167.95 $1,109,248.97 High Deductible Plan Individual 104 $578.59 $0.00 $722,080.32 $0.00 Ind /Children 45 $731.89 $141.50 $395,218.44 $76,412.16 Ind /Spouse 18 $853.04 $253.34 $184,256.81 $54,721.27 Family 29 $1,073.10 $456.47 $373,438.66 $158,851.70 Total 196 $1,674,994.23 $289,985.13 Renewal Totals $7,696,162 $1,399,234 Type of Plan Tier # of Participants County Contribution Employee Contribution Annual County Cost Employee Contribution United Health Care Option 1 with Enhance- ments POS (Point of Service) Individual 464 $631 $0 $3,514,410 $0 Ind /Children 163 $778 $245 $1,521,222 $478,827 Ind /Spouse 72 $908 $424 $784,257 $366,418 Family 49 $1,144 $750 $672,558 $440,844 Total 748 $6,492,447 $1,286,089 High Deductible Plan Individual 104 $613 $0 $765,336 $0 Ind /Children 45 $778 $152 $419,969 $81,982 Ind /Spouse 18 $908 $272 $196,064 $58,710 Family 29 $1,144 $490 $398,044 $170,431 Total 196 $1,779,414 $311,123 Option 1 Totals $8,271,861 $1,597,212 all 2013 Renewal Estimate Orange County Government Subscribers Premium Total Claims Loss Ratio Stop -Loss Credit Net Claims January-12 950 $743,443.38 $604,308.68 81.29% $0.00 $604,308.68 February -12 946 $744,199.26 $569,144.77 76.48% $0.00 $569,144.77 March -12 937 $738,815.00 $578,773.00 78.34% $0.00 $578,773.00 April -12 936 $733,883.00 $737,301.78 100.47% $0.00 $737,301.78 May -12 945 $737,267.00 $567,845.00 77.02% $0.00 $567,845.00 June -12 948 $736,226.18 $445,234.87 60.48% $0.00 $445,234.87 July -12 995 $763,570.85 $522,122.29 68.38% $0.00 $522,122.29 August -12 991 $760,770.00 $648,641.00 85.26% $0.00 $648,641.00 September -12 983 $754,703.00 $611,959.00 81.09% $0.00 $611,959.00 October -12 987 $753,274.00 $505,413.00 67.10% $0.00 $505,413.00 November -12 994 $758,491.00 $607,188.00 80.05% $0.00 $607,188.00 December -12 995 $757,024.00 $621,695.00 82.12% $0.00 $621,695.00 Total 11,607 $8,981,666.67 $7,019,626.38 78.16% $0.00 $6,397,931.38 Fully Insured Calculation Current PPO Plan Design 2014 Renewal Premium - 1/13 - 12/13 $9,729,197 Claims $6,397,931 Claims - With Benefit Change $6,397,931 Trend 2014- 8 % -24 Months 116.00% Trended 2014 Claims $7,421,600 PPACA - Fee for Comparative Effectiveness Research Agency $1,649.00 PPACA - Transitional Reinsurance Fee - 2014- 2016 $103,887.00 PPACA - Health Insurance Industry Fee $243,229.93 2014 Expected Cost $7,770,366 Premium - 1/13 - 12/13 $9,729,197 Loss Ratio 79.87% Target Loss Ratio 85.00% Rate Action 93.96% Self- funded Calculation Current PPO Plan Design 2014 Renewal Claims - Without Benefit Change $6,397,931 Trend 2014- 8 % -25 Months 116.67% Trended 2014 Claims $7,464,467 Administration $1,448,321 PPACA - Fee for Comparative Effectiveness Research Agency $1,649.00 PPACA - Transitional Reinsurance Fee - 2014 - 2016 $103,887.00 Total Cost $9,018,324 Current Contribution $9,729,197 Percentage Change over 2014 92.69% 11 Mark /// gazpoop _� ff�Log"ii3 17