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HomeMy WebLinkAboutPolicy for County Contribution for Commissioners' Benefits 1 Orange County Board of Commissioners Action Agenda Item Abstract Meeting Date: November 3, 1999 Action Agenda Item No. $-1 Subject: Benefits for County Commissioners Department: Personnel Public Hearing: Yes No X Budget Amendment Needed: Yes No X Attachment(s): Information Contact: Elaine Holmes, Personnel Director Draft Policy— County Contribution Extension 2550 For Commissioners' Benefits Telephone Number: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 Purpose: To consider adopting a policy effective July 1, 2000 providing for the County to make the same contribution for benefits for which County Commissioners are eligible that it makes for permanent County employees receiving those same benefits. Background: Under State law, the Board of Commissioners fixes the compensation of its members. It may do so annually by inclusion of the amount of compensation in the annual Budget Ordinance and by adoption of the Ordinance. The purpose of the attached draft policy is to direct how the Budget Ordinance is to be prepared each year. Specifically, the draft policy would change Commissioners' compensation to add the same County contribution amount for health insurance, dental insurance, life insurance and supplemental retirement that is provided for permanent County employees, provided the Commissioners are eligible for this coverage under the insurance contracts and other contracts affecting these benefits. Outlined below for each involved benefit is the present policy and the impact of the draft policy change. 1. Health Insurance Presently Commissioners may participate in Orange County's health insurance (Healthsource Plan only) by paying the full cost of coverage (both the employee cost and the County contribution amount). Under the draft policy, the County would provide the same contribution for Commissioners' health insurance that it provides for permanent employees. The North Carolina Association of County Commissioners' health insurance trust advises that Commissioners would become eligible to participate in the Blue Cross plans (Preferred Provider Plan or Personal Care Plan) if the County makes such a contribution. This 2 r would be effective with the initiation of the contribution (July 1, 2000), if adopted. If the Board elects to pursue the draft policy and contingent on adoption of the County contribution through the Budget Ordinance, a County Commissioner could: ❑ Enroll in the Healthsource plan during the current open enrollment (through November 15, 1999), pay the full cost of coverage (County and employee share) through June 30, 1999 and then begin receiving the County contribution for health insurance coverage effective July 1, 2000, or ❑ Enroll in a health insurance plan effective July 1, 2000 with the initiation of the County contribution for health insurance coverage. 2. Dental Insurance Presently Commissioners may participate in Orange County's dental insurance by paying the full cost of coverage (both the employee cost and the County contribution amount). Under the draft policy, the County would provide the same contribution for Commissioners dental insurance that it provides for permanent employees. If the Board elects to pursue the draft policy and contingent on adoption of the County contribution through the Budget Ordinance, a County Commissioner could: ❑ Enroll in the dental plan during the current open enrollment (through November 15, 1999), pay the full cost of coverage (County and employee share) through June 30, 1999 and then begin receiving the County contribution for dental insurance coverage effective July 1, 2000, or ❑ Enroll in the dental plan effective July 1, 2000 with the initiation of the County contribution for dental insurance coverage. 3. Life Insurance Presently Commissioners may participate in Orange County's life insurance by paying the full cost of coverage (both the employee cost and the County contribution amount). If the Commissioner did not enroll in the life insurance when first elected as a Commissioner and the Commissioner then decides to enroll later, the insurance company requires satisfactory evidence of insurability before enrollment may occur. Under the draft policy the County would provide the same contribution for Commissioners' life insurance that it provides for permanent employees. The life insurance coverage amount would be one times the Commissioners annual salary for service as a Commissioner. The Commissioners could enroll at the time of initiation of a County contribution without providing evidence of insurability. 4. Local Government Employees' Retirement System The Retirement System advises that County Commissioners are not eligible to participate in the Retirement System under State law. 3 5. Supplemental Retirement Presently Commissioners may join and make a voluntary supplemental retirement contribution to the Deferred Compensation (457) plan as may County employees. The County makes no contribution for employees to the Deferred Compensation 457 plan. The County makes a $15 per pay period($390 annually) supplemental retirement contribution for each permanent, non-law enforcement employee to the State 401(k) Plan. The State 401(k) plan advises that that Commissioners are not eligible to participate in that plan and that it is necessary to be a member of the Local Government Employees' Retirement System in order to participate. Under the draft policy, the County would make the same supplemental retirement contribution to the 457 plan for each County Commissioner that it makes to the 401(k) plan for each permanent employee, since Commissioners may not participate in the 401(k) plan. Because employer contributions to a 457 plan require a matching social security contribution for that benefit [unlike the 401(k) plan employer contribution], the estimated cost shown under Financial Impact includes the matching social security. 6. Flexible Spending Accounts and Supplemental Insurance Presently Commissioners may participate in Flexible Spending Accounts (Medical or Dependent Care) and Supplemental Insurance (Life, Accident, Disability) by making a voluntary contribution on the same basis as County employees. The draft policy makes no change in this handling. Financial Impact: The estimated annual cost for the County contribution for health, dental and life insurance and a supplemental retirement contribution for County Commissioners is show below. The estimate is based on health and dental rates effective January 1, 2000 and assumes all Commissioners participate in a plan. Benefit Coverage Annual County Cost Total Annual Cost Per Commissioner Health $2,399 to $4,319* $11,995 to $21,595* Dental $166 $830 Life $35 to $45 $190 Supplemental Retirement(457) $420 $2,100 Total $3,020 to $4,950 $15,115 to $24,715 * Depending on coverage type selected (individual, individual/children, individual/spouse, individual/family). Recommendation: The Manager recommends the Board approve the attached policy effective July 1, 2000. r ` 4 Attachment Policy for Insertion into the Policy Manual Meeting Date: November 3, 1999 Policy Number: 483 Effective Date: July 1, 2000 Revisions: Policy: County Contribution for Commissioners' Benefits 1. The Board of County Commissioners authorizes that the compensation of the County Commissioners will include the County contribution for health insurance, dental insurance, and life insurance that is provided for permanent County employees, provided the Commissioners are eligible for this coverage under the insurance contracts and other contracts affecting these benefits. 2. The Board of County Commissioners further authorizes that the compensation of the County Commissioners will include a County contribution for each Commissioner to the Deferred Compensation (457) Supplemental Retirement Plan that is the same as the County contribution for non-law enforcement County employees to the State 401(k) Plana 3. The Board of County Commissioners directs the County Manager to incorporate in the Budget Ordinance each fiscal year a County contribution amount for each Commissioner's health, dental and life insurance equivalent to the County contribution amount for permanent County employees. 4. The Board of County Commissioners further directs the County Manager to incorporate in the Budget Ordinance each fiscal year a County supplemental retirement contribution for each Commissioner that is the same as the County contribution for non-law enforcement County employees to the State 401(k) Plan. 5. The Board of County Commissioners adopts the County contribution for Commissioners' health, dental and life insurance and supplemental retirement for the fiscal year through the adoption of the Budget Ordinance for that year. H:\e\comins1.doc October 27, 1999