HomeMy WebLinkAboutAgenda - 06-11-2013 - 2SUBJECT:
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 11, 2013
and Benefits Presentation
DEPARTMENT: Human Resources
ATTACHMENT(S):
A. Pay and Benefits for Employees and
Retirees
B. Health Insurance Health Insurance
Update
1
Action Agenda
Item No. 2
PUBLIC HEARING: (Y /N) No
INFORMATION CONTACT:
Nicole Clark, Human Resources
Director, (919) 245 -2552
Diane Shepherd, Benefits Manager
(919) 245 -2558
PURPOSE: To receive information and provide feedback to staff on employee pay and
benefits for FY 2013 -14.
BACKGROUND: Staff has provided information relating to FY 2013 -14 employee pay and
benefits in Attachments and in Appendix A of the Manager's Recommended Budget. The
information provided includes background information on employee pay and benefits over
recent years and information on specific pay and benefits plan elements. Key components of
the recommended employee pay and benefits plan include:
Recommendation
Appendix A Pages
A Cost of Living Adjustment (COLA) of 2% for all permanent
285
employees hired on or before June 30, 2013
Increase the salary range maximums by 2.5% to allow those
285
employees at or exceeding the range to receive the 2.0% COLA
An Employee Performance Award in the amount of $500 (Proficient
285
Performance) or $1,000 (Exceptional Performance) effective with
WPPR review dates from July 1, 2013 through June 30, 2014
Continue the $27.50 per pay period County contribution to non -law
299
enforcement employee's supplemental retirement accounts and
implement a County match of up to $46.15 per pay period of each
employee's salary; and continue the mandated Law Enforcement
Officer contribution of 5.0% of salary
Fund up to an 8.0% health insurance increase over current premiums
306
effective January 1, 2014
Maintain the living wage at $10.97 per hour
311
Extend the six -month hiring delay
314
Extend the voluntary furlough program
326
FINANCIAL IMPACT: Appendix A of the Manager's Recommended Budget includes
information about the estimated costs of various pay and benefits options.
RECOMMENDATION(S): The Manager recommends that the Board discuss employee pay
and benefits for FY 2013 -14 and provide direction to staff.
Attachment A
Pay and ifor
Employees and Retirees
OCC Budge- - c � ion
201
M
Work Session Purpose
To consider and provide direction on pay
and benefits for employees and retirees for
FY 2013 -14
Key Pay and Benefits Plan
Recommendations
• A COLA of 2% for permanent employees
• An Employee Performance Award of $500 or $1,000
• Funding for a health insurance increase of up to 8%
• Maintain the living wage at $10.97 per hour
• Extend the six -month hiring freeze and the voluntary furlough
program
Continue the $27.50 per pay period County contribution to
non -law enforcement employees' supplemental retirement
accounts and the mandated Law Enforcement Officer 401(k)
contribution of 5% of salary and implement a County match of
up to $46.15 per pay period of each employees' salary
Address increased costs for retiree health benefits
Past Actions: FY 2 0 12 - 13 Pay
and Benefits Plan
• A COLA of 2.0% for permanent employees
• An Employee Performance Award of $500 or $1,000
• Funding for a health insurance increase of up to 23.0%
• Increasing the living wage to $10.97 per hour
• Implementing recommendations of the FY 2011 -12 internal
Classification and Pay Study
• Extending the six -month hiring freeze and the voluntary
furlough program
• Continuing the $27.50 per pay period County contribution to
non -law enforcement employees' supplemental retirement
accounts and the mandated Law Enforcement Officer 401(k)
contribution of 5.0% of salary
• Addressing increased costs for retiree health benefits
Position , Pay
Plans
9 The Manager recommends:
• A Cost of Living Increase (COLA) of 2.0% for all permanent
employees hired on or before June 30, 2013, effective July 1,
2013
• An increase to the salary range maximums by 2.5% to allow those
employees at or exceeding the range to receive the 2.0% COLA
An employee performance award of $500 for proficient
performance and $1,000 for exceptional performance, effective
with permanent employees' annual performance review dates
from July 1, 2013 to June 30, 2014
• Individual positions and classifications are reviewed as needed
• County salary schedule is competitive with the market
• Salary compression is a concern
County
Retirement Benefits
9 The Manager recommends:
• Continuing the 5.0% contribution employer contribution to the
Local Government Employees' Retirement System 401(k) program
for sworn law enforcement officers
• Maintaining the $27.50 per pay period County minimum
contribution and matching employees' contributions up to an
additional $46.15 per pay period for non -sworn law enforcement
employees
Fifty -four of the 100 counties contribute to the NC
Supplemental Retirement Plans through Prudential
McDowell and Orange contribute a flat dollar amount
Average contribution is 3.6%
• Chapel Hill 5.0 %, Carrboro 3.0 %, Durham 4.5 %, Mebane 5.0%
• Alamance 2.0 %, Chatham 4.5 %, Durham 5.0 %, Wake 5.0%
u
Employee and Retiree Health
Insurance
• Potential 8.0% premium increase, based on early claims da
effective January 1, 2014 with the same level of coverage
• RFP responses are not firm due to limited plan year
performance data
Fully insured and self- funded responses provided
Actual plan designs, premium structure and total cost will k
presented at the September 5, 2013 Regular Meeting with
decision needed by the Commisioners
Decision is needed on September 5 in order to comply with
federal notification requirements
10
Orange County Living Wage
• Recommend maintaining the Living Wage of $10.97 an hour
Most recent calculation would result in a decrease to $10.89
• Calculation based on the region including Orange, Durham,
Alamance, and Wake Counties
11
Six-Month Hiring .
• Recommend extending the six -month hiring delay that was
implemented in FY 2010 -11.
• Total savings from the hiring freeze is projected to be more
than $2.0 million.
12
Voluntary Fur
• Recommend extending the voluntary furlough program that
was initially implemented in FY 2009 -10.
• Anticipate cost savings of $50,000 in FY 2013 -14.
Fewer participants with longer furlough periods
13
9111 oil
The County Manager recommends restricting 50.0% of the FY
2012 -13 fund balance for the long -term liability of funding
retiree health benefits
As retiree health care costs increase due to the increase in
retirees and the increase in health care costs, the County must
plan for its future liability
14
I
Focus is on retaining a talented workforce that is committed
to serving the residents of Orange County.
Employees are very concerned about pay and health
insurance.
Preserving employee pay and benefits continues to be a
priority.
The County's financial condition continues to improve.
15
Questions?
Attachment B
HEALTH INSURANCE
Li
HSA Plan
Date
Subscribers
Members
Premium
Medical
Pharmacy
Combined
Claims
Claims Per Sub
Per Month
Loss Ratio
January-12
195
375
$142,356.71
$12,037.78
$2
$15,884.91
$81.46
11.16%
February-12
196
373
$141,405.73
$21,599.49
$699
$26,113.07
$133.23
18.47%
March -12
191
362
$139,684.00
$30,321.00
$1,091.00
$35,144.00
$184.00
25.16%
April -12
191
364
$140,868.00
$43,011.00
$1,695.00
$48,459.00
$253.71
34.40%
May -12
192
364
$140,688.00
$35,127.00
$2,641.00
$41,521.00
$216.26
29.51%
June-12
196
371
$143,540.68
$24,769.27
$2,544.50
$31,138.78
$158.87
21.69%
July-12
205
380
$148,181.47
$25,229.21
$5,333.99
$34,481.00
$168.20
23.27%
August -12
207
385
$150,507.00
$127,044.00
$4,992.00
$136,005.00
$657.03
90.36%
September -12
206
385
$150,145.00
$54,506.00
$5,373.00
$63,848.00
$309.94
42.52%
October -12
208
384
$149,798.00
$25,270.00
$7,335.00
$36,564.00
$175.79
24.41%
November -12
j 217
j 397
j $154,425.00
$69,224.00
j $8,584.00
j $81,891.00
$377.38
53.03%
December -12
220
401
$155,851.00
$80,748.00
$11,558.00
$96,409.00
$438.22
61.86%
Total
2,424
4,541
$1,757,450.59
$548,886.74
$51,847.89
$647,458.76
$267.10
36.84%
PPO Plan
Date
Subscribers
Members
Premium
Medical
Pharmacy
Combined
Claims
Claims Per Sub
Per Month
Loss Ratio
January-12
755
1,258
$601,086.67
$503,372.10
$72,164.17
$588,423.77
$779.37
97.89%
February-12
750
1,254
$602,793.53
$443,530.37
$86,572.58
$543,031.69
$724.04
90.09%
March -12
746
1,246
$599,131.00
$424,785.00
$105,977.00
$543,629.00
$728.73
90.74%
April -12
745
1245
$593,015.00
$573,611.00
$102,468.00
$688,842.78
$924.62
116.16%
May -12
753
1,252
$596,579.00
$417,265.00
$112,812.00
$542,944.00
$721.04
91.01%
June-12
752
1246
$592,685.50
$335,871.46
$82,049.64
$430,705.50
$572.75
72.67%
July -12
790
1286
$615,389.38
$376,251.09
$115,307.99
$504,828.05
$639.02
82.03%
August -12
784
1,272
$610,263.00
$408,789.00
$107,816.00
$529,730.00
$675.68
86.80%
September -12
777
1,264
$604,558.00
$451,349.00
$100,731.00
$565,071.00
$727.25
93.47%
October -12
779
1,260
$603,476.00
$363,443.00
$109,365.00
$485,788.00
$623.60
80.50%
November -12
777
1,259
$604,066.00
$409,725.00
$119,655.00
$542,381.00
$698.05
89.79%
December -12
775
1,252
$601,173.00
$426,124.00
$103,265.00
$542,307.00
$699.75
90.21%
Total
9,183
15,094
$7,224,216.08
$5,134,116.02
$1,218,183.38
$6,507,681.79
$708.67
90.08%
Combined Plans
Date
Subscribers
Members
Premium
Medical
Pharmacy
Combined
Claims
Claims Per Sub
Per Month
Loss Ratio
January-12
950
1,633
$743,443.38
$515,409.87
$72,165.67
$604,308.68
$636.11
81.29%
February-12
946
1,627
$744,199.26
$465,129.86
$87,271.47
$569,144.77
$601.63
76.48%
March -12
937
1,608
$738,815.00
$455,106.00
$107,068.00
$578,773.00
$617.69
78.34%
April -12
936
1,609
$733,883.00
$616,622.00
$104,163.00
$737,301.78
$787.72
100.47%
May -12
945
1,616
$737,267.00
$452,392.00
$115,453.00
$567,845.00
$600.89
77.02%
June-12
948
1,617
$736,226.18
$360,640.73
$84,594.14
$445,234.87
$469.66
60.48%
July-12
995
1,666
$763,570.85
$401,480.30
$120,641.98
$522,122.29
$524.75
68.38%
August -12
991
1,657
$760,770.00
$535,833.00
$112,808.00
$648,641.00
$654.53
85.26%
September -12
983
1,649
$754,703.00
$505,855.00
$106,104.00
$611,959.00
$622.54
81.09%
October -12
987
1,644
$753,274.00
$388,713.00
$116,700.00
$505,413.00
$512.07
67.10%
November -12
994
1,656
$758,491.00
$478,949.00
$128,239.00
$607,188.00
$610.85
80.05%
December -12
995
1,653
$757,024.00
$506,872.00
$114,823.00
$621,695.00
$624.82
82.12%
Total
11,607
19,635
$8,981,666.67
$5,683,002.76
$1,270,031.27
$7,019,626.38
$604.78
78.16%
I,
3
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%
3
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
E
Orange County Government
Subscribers
Premium
Total
Claims
Loss
Ratio
Net
Claims
February -12
945
$742,978.43
$501,190.30
67.46%
$501,190.30
March -12
936
$737,878.18
$505,078.91
68.45%
$505,078.91
April -12
935
$732,946.43
$633,298.56
86.40%
$633,298.56
May -12
944
$736,329.84
$511,843.90
69.51%
$511,843.90
June -12
947
$735,005.35
$430,666.60
58.59%
$430,666.60
July -12
995
$762,928.61
$499,640.83
65.49%
$499,640.83
August -12
990
$760,191.09
$586,067.78
77.09%
$586,067.78
September -12
984
$754,703.39
$597,897.17
79.22%
$597,897.17
October -12
987
$753,274.33
$554,237.84
73.58%
$554,237.84
November -12
994
$758,491.00
$561,559.75
74.04%
$561,559.75
December -12
994
$755,867.34
$609,873.76
80.69%
$609,873.76
January -13
1,005
$820,823.13
$614,054.44
74.81%
$614,054.44
Total
11,656
$9,051,417.12
$6,605,409.85
72.98%
$6,605,409.85
Fully Insured Calculation
C
J
Current PPO Plan Design
2014 Renewal
Premium - 1/13 - 12/13
$9,849,878
Claims
$6,605,410
Claims - With Benefit Change
$6,605,410
Trend 2014- 8 % -23 Months
115.30%
Trended 2014 Claims
$7,616,038
PPACA - Fee for Comparative Effectiveness Research Agency
$1,649.00
PPACA - Transitional Reinsurance Fee - 2014 - 2016
$103,887.00
PPACA - Health Insurance Industry Fee
$246,246.94
2014 Expected Cost
$7,967,820
Premium - 1/13 - 12/13
$9,849,878
Loss Ratio
80.89%
Target Loss Ratio
85.00%
Rate Action
95.17%
Self- funded Calculation
Current PPO Plan Design
2014 Renewal
Claims - Without Benefit Change
$6,605,410
Trend 2014 - 8 % -23 Months
115.30%
Trended 2014 Claims
$7,616,038
Administration
$1,454,436
PPACA - Fee for Comparative Effectiveness Research Agency
$1,649.00
PPACA - Transitional Reinsurance Fee - 2014 - 2016
$103,887.00
PPACA - Health Insurance Industry Fee
$0
Total Cost
$9,176,009
Current Contribution
$9,849,878
Percentage Change over 2014
93.16%
WIM Ka
HSA Plan
Date
Subscribers
Members
Premium
Medical
Pharmacy
Capitation
Combined
Medical Claims
Claims Per
Active /Retiree
Per Month
Loss Ratio
January -13
212
390
$162,620
$50,872
$2,083
$4,361
$57,315.90
$270.36
35.25%
Total
212
390
$162,620.27
$50,871.77
$2,083.01
$4,361.12
$57,315.90
$270.36
35.25%
PPO Plan
Date
Subscribers
Members
Premium
Medical
Pharmacy
Capitation
Combined
Medical Claims
Claims Per
Active /Retiree
Per Month
Loss Ratio
January -13
793
1,270
$658,203
$413,768
$128,819
$14,151
$556,738.54
$702.07
84.58%
Total
793
1,270
$658,202.86
$413,768.21
1 $128,819.17
$14,151.16
$556,738.54
$702.07
84.58%
Combined Plans
Date
Subscribers
Members
Premium
Medical
Pharmacy
Capitation
Combined
Medical Claims
Claims Per
Active /Retiree
Per Month
Loss Ratio
January -13
1,005
1,660
$820,823.13
$464,639.98
$130,902.18
$18,512.28
$614,054.44
$611.00
74.81%
Total
1,005
1,660
$820,823.13
$464,639.98
$130,902.18
$18,512.28
$614,054.44
$611.00
74.81%
on
7
Fully Insured
Fully Insured
Implementation
Provision
(Small Group)
(Large Group)
ASO
Individual
Date **
PRCORI — Fee for comparative effectiveness
research agency for fiscal year 2013, which
technically begins October 1, 2012
Required - health
Required - health plan
Required — employer
Federal FY 2013
IRS Form 720 — Quarterly Federal Excise Tax Return
plan will take
will take
responsible for
(applies to plan years
care of it on
care of it on
determining amount and
ending 10/1/2012 and
$1 1St Year, $2 2nd Year until 2019
employers' behalf
employers' behalf
paying of fee ($1 then $2)
Required
later) * **
Employee notification of exchanges, premium
subsidies and free choice vouchers
Required
Required
Required
N/A
Deferred
State /Federal /Private Based Exchanges
January 1, 2014
North Carolina will not work with the federal government in setting up a health
insurance exchange. "There has been a lack of preparation within state
government during the past year to build necessary and reliable systems to
North Carolina
implement a state exchange," Gov. Pat McCrory said in a statement.
January 1, 2014
30% incentive cap for wellness programs
Required
Required
Required
N/A
January 1, 2014
Large groups required to auto - enroll employees
Required - dependent
Required - dependent
into health benefits (200+ employees)
N/A
on size of organization
on size of organization
N/A
January 1, 2014
Small group redefined as 1— 100 (state may defer
Required - dependent
until 2016)
Required
N/A
on size of organization
N/A
January 1, 2014
Ensure that annual cost - sharing for essential health
benefits doesn't exceed the maximum out -of-
pocket limits for a high - deductible health plan
(HDHP), as defined by Internal Revenue Code (these
limits are adjusted for inflation annually)
Required
N/A
N/A
Required
January 1, 2014
New fee on fully insured coverage
Required
Required
Not applicable
Required
January 1, 2014
90 -day limit on waiting periods for coverage
Required
Required
Required
Required
January 1, 2014
Coverage of routine patient costs for clinical trials of
life- threatening diseases*
Required
Required
Required
Required
January 1, 2014
Definition of Full Time Employees is 30 Hours of
more
Required
Required
Required
Required
January 1, 2014
Transitional Reinsurance Fee - 2014 - 2016
Required
Required
Required
Required
January 1, 2014
** Some dates may change based on additional guidance /requirements from HHS, these are intended to be general implementation timeframes.
* ** Best understanding subject to publication of regulations.
7
Comparative
Health Insurance
Effectiveness
Industry Fee
Reinsurance Assessment
Research Fee,
What is it? Annual fee on insured
Annual fee on all insured plans
Annual fee on insured and self -
and self- insured plans
beginning in 2014
insured plans, 2014 -2016
beginning on /after
10/2/11
Excludes Dental /Vision
Includes Dental /Vision
Excludes Dental /Vision
How much? Annual fee of $1, then
Estimated costs:
Estimated costs:
$2; indexed to med
inflation till 2019
2 t o 2m fo,e 2014
0 $63 PMPY in 2014
• First payable July 2013
- 3 to for 'titer, yea Ir'
$40 to $60 PMPY in 2015
$25 to $35 PMPY in 2016
IS tax - deductible
NOT tax - deductible
IS tax - deductible
Who pays? FI: Insurer pays, built into.
Insurer pays
0 FI: Full amount built into rates
rates
• Applies only to insured business,
for 1/1/14 +; partial load in 2013
• SF: Per regulations,
will be based upon each insurer's
. SF: Client is liable but Payor
employers must calculate
share of the taxable health
submits payment on their behalf
and pay own fee
insurance premium base (among all
Payor will assist
health insurers of U.S. health risks)
Mark III
EM 0-1 mll'', I , IF