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HomeMy WebLinkAboutAgenda - 05-13-2014 - 21 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 13, 2014 Action Agenda Item No. 2 SUBJECT: Employee Benefits Updates, Preliminary Renewal Estimates Regarding Calendar Year 2015 Health Insurance, and Anticipated Health Care Reform Components DEPARTMENT: Human Resources PUBLIC HEARING: (Y /N) No ATTACHMENT(S): A. Plan Year Highlights B. Healthcare Reform and Health Insurance for Temporary Employees C. Mark III Health Insurance Update INFORMATION CONTACT: Cheryl Young, Assistant County Manager, 919 - 245 -2307 Diane Shepherd, Benefits Manager, 919- 245 -2558 PURPOSE: To provide an update on health insurance initiatives, preliminary health insurance cost estimates for calendar year 2015, and the impact of Health Care Reform. BACKGROUND: Effective January 1, 2014, the County changed the employee health insurance funding from premium -based (fully- insured) to self- insured. The County pays United Healthcare an administrative fee, including stop -loss coverage, and pays the claims costs. The County does not pay a per member premium. The County will save approximately $667,000 for the 2014 Plan Year, because some fees related to health care reform are not imposed on self- insured plans. Based on early claims data, consultant Mark III has projected up to a 14.35% increase in premiums for a renewal of the same benefits beginning January 1, 2015. The projected general fund budgetary increase for FY 2014 -15 is $423,446 (January through June 2015). Overall 2014 enrollment numbers remained consistent, with a slight increase in the High Deductible Health Plan compared to 2013. The number of employees waiving coverage, generally due to spousal coverage, has increased. The chart below shows current enrollments: Health Plan Active Employees Retirees # Enrolled % Enrolled # Enrolled % Enrolled Traditional Point of Service (POS) 630 72.5% 145 97.3% High Deductible Health Plan (HDHP) 201 23.1% 4 2.7% Employees Waiving Health Coverage 38 4.4% 0 Total (includes Commissioners) 869 149 Employees continue to appreciate the option to enroll in and pay for products (short term disability, whole life insurance, critical illness and accident insurance) through payroll deduction. In June 2014 Orange County will partner with UNC Wellness @ Work program to offer health screenings to all employees. In Fall 2014 flu clinics will be arranged and the County will host the second Orange County Breast Cancer Awareness Day (for mammograms) at UNC Radiology. No changes to the 2015 health insurance plans are expected. Based on current trends, staff is projecting up to a14.35% increase in health care costs. Dental Insurance The County will continue coverage with Delta Dental. Beginning with January 2015 coverage, employees with dependent coverage are expected to see an increase in their deductions for the first time since 2007. The amount will be determined in September as part of the insurance renewal. Healthcare Reform In FY 2013 -14, the County complied with all notification requirements of the Affordable Care Act (ACA). Attachment B includes information about the potential impact on 2015 health insurance. FINANCIAL IMPACT: The projected budget impact for FY 2014 -15 is $423,446. RECOMMENDATION(S): The Manager recommends that the Board discuss employee insurance benefits for calendar year 2015. Attachment A 2014 Plan Year Highlights Health Insurance Enrollment (at start of each Plan Year) New employees enroll in plans effective with the 1St of the month after hire, and terminating employees end coverage on the last day of the month employed. Enrollments as of May 2014 Benefit 2011 2012 2013 2014 Traditional Plan n/a 610 605 624 High Deductible Plan n/a 187 197 198 Total Health Plan Participation n/a 797 802 820 Health Savings Account (employee contribution) n/a 81 89 73 Waived Health Insurance 20 22 21 29 New employees enroll in plans effective with the 1St of the month after hire, and terminating employees end coverage on the last day of the month employed. Enrollments as of May 2014 Benefit Enrollments Traditional Health Plan 630 High Deductible Health Plan 201 Medical Flexible Spending Account 142 Dependent Care Spending Account 16 Accident Insurance 199 Critical Illness 183 Disability 226 Whole Life 105 Community Eye Care 463 M Attachment A Wellness Events /Activities Annual Employee Flu Shot Clinic Participants 2010 2011 2012 2013 204 169 225 207 Orange County Sportsplex Sportsplex Membership remains consistent with the past few years. Approximately 250 employees are members, receiving a sizable discount on membership. Employee Wellness Challenges 1. In -Tune Stress Management Summer Challenge: 103 employees signed up for this challenge which focused on coping with stress. 2. National Nutrition Month Challenge: 19 participants 3. Maintain, Don't Gain Holiday Challenge: 20 participants Additional Sponsored Health Screenings Hepatitis C Screenings 16 Orange County Breast Cancer Awareness 38 Day Mammograms Biometric Screenings (blood pressure, To be held June 2014 cholesterol, & glucose) Health Care Reform and Health Insurance for Temporary Employees Background 5 Attachment B The Affordable Care Act (ACA) "Employer Mandate" to offer coverage to full -time employees becomes effective January 1, 2015. This requirement has the potential for increased financial liability for Orange County because employers are required to provide health insurance for all full -time employees or face penalties. A full -time employee is defined as one working an average of 30 hours a week. This requirement is often referred to as the "Play or Pay" component of health care reform, and applies to all full -time County employees, regardless of temporary or permanent status. The County will be responsible for providing health insurance benefits to any employee who works an average of 30 hours or more a week during a 12 month period. Temporary employees who work an average of 30 hours or more must be offered health insurance coverage under the ACA beginning January 1, 2015. Departments have been monitoring employee hours to limit the use of temporary employees over the past year. There are currently four employees who have worked an average of more than 30 hours /week in the past twelve months. The County will be required to offer health insurance to all full -time employees, including dependent coverage, as defined by the ACA OR pay a monthly penalty. Departments will be charged if temporary employees become eligible for health insurance. Financial Impact Individual costs for the County for each temporary employee that must be covered range from a minimum of $814 to a maximum of $1,498 per month based on 2015 projections. Penalties for failing to provide health insurance to any qualifying employee would be approximately $138,300 a month. Health Care Reform and Health Insurance for Temporary Employees Background 5 Attachment B The Affordable Care Act (ACA) "Employer Mandate" to offer coverage to full -time employees becomes effective January 1, 2015. This requirement has the potential for increased financial liability for Orange County because employers are required to provide health insurance for all full -time employees or face penalties. A full -time employee is defined as one working an average of 30 hours a week. This requirement is often referred to as the "Play or Pay" component of health care reform, and applies to all full -time County employees, regardless of temporary or permanent status. The County will be responsible for providing health insurance benefits to any employee who works an average of 30 hours or more a week during a 12 month period. Temporary employees who work an average of 30 hours or more must be offered health insurance coverage under the ACA beginning January 1, 2015. Departments have been monitoring employee hours to limit the use of temporary employees over the past year. There are currently four employees who have worked an average of more than 30 hours /week in the past twelve months. The County will be required to offer health insurance to all full -time employees, including dependent coverage, as defined by the ACA OR pay a monthly penalty. Departments will be charged if temporary employees become eligible for health insurance. Financial Impact Individual costs for the County for each temporary employee that must be covered range from a minimum of $814 to a maximum of $1,498 per month based on 2015 projections. Penalties for failing to provide health insurance to any qualifying employee would be approximately $138,300 a month. `.Q(# eaxa ;; , +�I i 6. Attachment C MEDICAL PLAN UPDATE 2015 Projection May 13, 2014 i HSA Plan Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Medical Claims Claims Per Sub Per Month Loss Ratio January -13 212 390 $162,620.27 $50,871.77 $2,083.01 $4,361.12 $57,315.90 $270.36 35.25% February -13 209 391 $161,350.00 $37,112.00 $2,042.00 $4,384.00 $43,538.00 $208.32 26.98% March -13 210 392 $161,860.15 $136,181.99 $2,065.05 $4,394.84 $142,641.89 $679.25 88.13% April -13 206 383 $158,880.89 $57,726.66 $5,333.90 $4,316.16 $67,376.72 $327.07 42.41% May -13 207 386 $159,957.00 $74,496.00 $7,300.00 $4,350.00 $86,146.00 $416.16 53.86% June-13 206 384 $160,013.41 $24,155.00 $10,519.03 $4,327.40 $39,001.43 $189.33 24.37% July-13 209 387 $162,110.12 $177,976.62 $9,258.79 $4,361.12 $191,596.53 $916.73 118.19% August -13 207 383 $160,207.27 $44,748.25 $8,418.69 $4,316.16 $57,483.10 $277.70 35.88% September -13 207 382 $160,911.28 $25,177.42 $8,300.03 $4,304.92 $37,782.37 $182.52 23.48% October -13 211 385 $162,635.59 $51,424.32 $11,943.56 $4,327.40 $67,695.29 $320.83 41.62% November -13 212 383 $161,559.18 $71,041.87 $16,723.54 $4,304.92 $92,070.33 $434.29 56.99% December -13 212 382 $161,243.00 $83,601.00 $17,403.00 $4,294.00 $105,298.00 $496.69 65.30% Total 2,508 4,628 1 $1,933,348.16 1 $834512.91 1 8101,390.60 552,042.04 1 $987,945.56 $393.92 51.10% PPO Plan Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Medical Claims Claims Per Sub Per Month Loss Ratio January -13 793 1270 $658,202.86 $413,768.21 $128,819.17 $14,151.16 $556,738.54 $702.07 84.58% February -13 785 1254 $656,871.00 $526,142.00 $101,875.00 $14,117.00 $642,134.00 $818.01 97.76% March -13 781 1252 $654,106.50 $490,533.16 $117,996.66 $14,072.48 $622,602.31 $797.19 95.18% April -13 782 1251 $655,198.46 $425,139.55 $113,863.00 $14,094.96 $553,097.50 $707.29 84.42% May -13 787 1247 $653,715.00 $477,339.00 $109,433.00 $14,039.00 $600,811.00 $763.42 91.91% June -13 790 1251 $656,713.28 $270,417.84 $103,850.88 $14,094.96 $388,363.68 $491.60 59.14% July-13 August -13 795 805 1254 1274 $656,662.74 $661,074.72 $404,477.45 $441,628.08 $119,256.79 $114,516.61 $14,106.20 $14,241.08 $537,840.44 $570,385.77 $676.53 $708.55 81.91% 86.28% September -13 799 1261 $657,918.82 $348,069.93 $112,611.29 $14,184.88 $474,866.10 $594.33 72.18% October -13 802 1265 $659,433.64 $457,286.77 $116,096.62 $14,196.12 $587,579.51 $732.64 1 89.10% November -13 804 1260 $657,476.94 $746,131.28 $112,374.53 $14,106.20 $872,612.01 $1,085.34 132.72% December -13 803 1259 $658,739.00 $411,300.00 $119,551.00 $14,129.00 $544,980.00 $678.68 82.73% Total 9,526 1 15,098 $7,886,112.96 $5,412,233.28 $1,370,244.55 $169,533.04 $6,952,010.87 $729.79 88.16% Combined Plans Date Subs Mbrs Premium Medical Pharmacy Capitation Combined Medical Claims Claims Per Sub 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% February -13 March -13 994 991 1,645 1,644 $818,221.00 $815,966.65 $563,254.00 $626,715.16 $103,917.00 $120,061.72 $18,501.00 $18,467.32 $685,672.00 $765,244.19 $689.81 $772.19 83.80% 93.78% April -13 May -13 June -13 988 994 996 1,634 1,633 1,635 $814,079.35 $813,672.00 $816,726.69 $482,866.21 $551,835.00 $294,572.85 $119,196.90 $116,733.00 $114,369.91 $18,411,12 $18,389.00 $18,422.36 $620,474.22 $668,568.00 $408,942.76 $628.01 $672.60 $410.59 76.22% 82.17% 50.07% my -13 August -13 September -13 October -13 November -13 December -13 1,004 1,012 1,006 1,013 1,016 1,015 1,641 1,657 1,643 1,650 1,643 1,641 $818,772.86 $821,281.99 $818,830.10 $822,069.23 $819,036.12 $819,982.00 $582,454.08 $486,376.33 $373,247.35 $508,711.09 $817,173.15 $494,901.00 $128,515.58 $122,935.30 $120,911.32 $128,040.19 $129,098.07 $136,954.0 $18,467.32 $18,557.24 $18,489.80 $18,523.52 $18,411.12 $18,423.00 $710,969.65 $609,311.64 $494,158.67 $636,751.28 $946,271.22 $631,855.00 $708.14 $602.09 $491.21 $628.58 $931.37 $622.52 86.83% 74.19% 60.35% 77.46% 115.530 77.06% otal 12,034 19,726 $9,819,461.12 $6,246,746.19 $1,471,635.16 $221,575.08 $7,792,273.07 $647.52 79.36% $122.29 113.89% k, 2014 Self -funde d Quotes Current HSA In-Network Deduct/20% Deduct /20% 100% $1,500 7 UHC Insured 2013 Renewal: LIHC 2014 Self-fun ed , Self -fun ed Current POS Current POS Current t Current HSA ECarEeP�Ehysician In-Network In-Network In-Network Primary Physician Visits $20 $20 Deduct/20% Specialist P 'Ir Specialist Physician Visits $40 $40 Deduct/20% Preventive Care 100% 100% 100% D Deductible $500 $500 _$1,500 $1,500 $4,500 $1,500 $3,000 $3,500 $5,000 Deductible - Family Maximum $1,500 $3,000 Out of Pocket Limit (includes deductible) $1,500 $3,500 Out of Pocket Limit - Family Max $4,500 $5,000 Deduct/20% Radiology Deduct/20% Deduct/20% Office Copay Deduct/20% Deduct/20% Minor Surgery in Office Office Copay Deduct/20% Deduct/20% Hospital Services Deduct/20% Deduct/20% $50 $150 $4/$25/$45 Not covered Deduct/20% Deduct/20% Deduct/20% Deduct/20% Not covered Urgent Care $50 Deduct/20% Emergency Room $150 Deduct/20% Pharmacy $4/$25/$45 Deduct/20% Vision Hardware Not covered Not covered HSA $1,237.20 Unlimited $1,237.20 Unlimited Lifetime Maximum Unlimited Unlimited Difference 0% k, I 2014 Plan Rates Monthly - PPO County County Employee County and Ee County and Ee Sub Monthly Monthly Monthly Employee Monthly Monthly Count Contribution Premium Contribution Premium Contribution Premium Employee Only 528 $631.18 $333,263.04 $0.00 $0.00 $631.18 $333,263.04 Employee and Spouse Employee and Children Employee and Family Total 60 157 31 776 $922.61 $792.62 $1,151.55 $55,356.60 $124,441.34 $35,698.05 $548,759.03 $409.19 $229.90 $741.99 $24,551.40 $36,094.30 $23,001.69 $83,647.39 $1,331.80 $1,022.52 $1,893.54 $79,908.00 $160,535.64 $58,699.74 $632,406.42 $107.79 Annual Total $6,585,108.36 $1,003,768.68 $7,588,877.04 Cost /Sub /Mth $814.96 Monthly- HSA Sub Count County Monthly Contribution County Monthly Premium Employee Monthly Contribution Employee Premium County and Ee Monthly Contribution County and Ee Monthly Premium Employee Only Employee and Spouse Employee and Children Employee and Family Total 109 16 48 31 204 $628.15 $922.61 $792.62 $1,158.71 $68,468.35 $14,761.76 $38,045.76 $35,920.01 $157,195.88 $0.00 $271.80 $151.82 $489.74 $0.00 $4,348.80 $7,287.36 $15,181.94 $26,818.10 $628.15 $1,194.41 $944.44 $1,648.45 $68,468.35 $19,110.56 $45,333.12 $51,101.95 $184,013.98 $131.46 $1,886,350.56 $321,817.20 $2,208,167.76 Cost /Sub /Mth $902.03 Combined Plans Sub Count County Monthly Contribution County Monthly Premium Employee Monthly Contribution Employee Premium County and Ee Monthly Contribution County and Ee Monthly Premium mployee Only Fmployee and Spouse Wmployee and Children I[zmployee and Family otal 637 76 205 62 980 $401,731.39 $70,118.36 $162,487.10 $71,618.06 $705,954.91 $0.00 $28,900.20 $43,381.66 $38,183.63 $110,465.49 $401,731.39 $99,018.56 $205,868.76 $109,801.69 $816,420.40 nnual Total $8,471,458.92 $1,325,585.88 $9,797,944.80 Cost /Sub /Mth $83tf 08 January -14 February -14 March -14 2014 Plan Experience AM Subs Medical Pharmacy Combined Medical Claims PPO Plan Claims Per Sub Per Month Total Administration 778 776 $141,278 $291,097 $68,600 $102,181 $209,878.21 $393,278.39 $269.77 $506.80 $104,360.92 $104,092.64 776 $625,686.00 $136,455.00 $762,141.00 $982.14 $104,092.64 2,330 $1,058,061.53 $307,236.07 $1,365,297.60 $585.96 $312,546.20 HSA Plan Subs Medical PharmacJ$74,814.30 Combined edical Claims Claims Per Sub Per Month Total Administration 201 $17,242 $265 $17,507.01 $87.10 $26,962.14 204 $73,041 $1,774 $543,924.09 $366.74 $27,364.56 198 $232,235.00 $1,114.0233,349.00 1 $382,426.28 $1,178.53 $26,559.72 603 $322,517.72 $3,152.59 1 $325,670.31 $540.08 $80,886.42 Combined $1,068,431.55 Subs Medical Pharmacy Combined Medical Claims Claims Per Sub Per Month Total Administration 979 $158,520.44 $68,864.78 $227,385.22 $232.26 $131,323.06 980 $364,137.81 $103,954.88 $468,092.69 $477.65 $131,457.20 974 $857,921.00 $137,569.00 $995,490.00 $1,022.06 $130,652.36 3 $1,380,579.25 $310,388.66 $1,690,967.91 $576.53 $393,432.62 Rx Per Sub $105.83 Change 89.04% Change 86.54% i Total Cost Stop -loss Credits Net Costs County Budgeted $314,239.13 $0.00 $314,239.13 $634,038.88 $497,371.03 $0.00 $497,371.03 $632,408.96 $866,233.64 $81,074.81 $785,158.83 $632,408.96 X1,677,843.80 $81,074.81 $1,596,768.99 $1,898,856.8( Total Cost Stop -loss Credits Net Costs County Budgeted $68,187.15 $0.00 $68,187.15 $181,308.03 $126,250.86 $0.00 $126,250.86 $184,014.12 $283,272.72 $0.00 $283,272.72 $178,601.94 $477,710.73 L $0.00 $477,710.73 $543,924.09 Total Cost Stop -loss Credits Net Costs County Budgeted $382,426.28 $0.00 $382,426.28 $815,346.91 $623,621.89 $0.00 $623,621.89 $816,423.08 1,149,506.361 $81,074.81 1 $1,068,431.55 $811,010.90 155,554.531 $81,074.81 $2,074,479.72 $2,442,780.89 31.41% 1 $368,301.17 9 - -- l 2015 Renewal Expectation Orange County Government Subscribers Total Claims Stop Loss Credits Net Claims HSA April -13 May -13 June -13 July -13 988 994 996 1,004 $620,474.22 $668,568.00 $408,942.76 $710,969.65 $0 $0 $0 $0 $620,474.22 $668,568.00 $408,942.76 $710,969.65 $21,238.60 $21,341.70 $21,238.60 $21,547.90 August -13 1,012 $609,311.64 $0 $609,311.64 $21,341.70 September -13 1,006 $494,158.67 $0 $494,158.67 $21,341.70 October -13 November -13 December -13 1,013 1,016 1,015 $636,751.28 $946,271.22 $631,855.00 $0 $0 $0 $636,751.28 $946,271.22 $631,855.00 $21,754.10 $21,857.20 $21,857.20 January -14 979 $614,054.44 $0 $614,054.44 $23,718.00 February -14 March -14 Total Self- funded Calculation 980 974 11,977 $685,672.00 $995,490.00 1 $8,022,518.871 $0 $811075 $81,074.81 $685,672.00 $914,415.19 $7,941,444.06 $24,072.00 $23,364.00 $264,672.70 Current PPO Plan Design 2014 Renewal Claims - Without Benefit Change $8,022,519 Trend 2014 - 8% 113.00% Trended 2014 Claims $9,065,446 Administration $479,080 Stop Loss Insurance $1,377,355 PPACA - Fee for Comparative Effectiveness Research Agency $3,188.00 PPACA - Transitional Reinsurance Fee - 2014 - 2016 $72,621.96 Copays Accumulate to Out of Pocket Maximum - 5% $453,272.32 HSA Cost - $1,416 $288,864.00 2015 Cost $11,739,828 Current Contribution $9,977,799 HSA Contribution Budget - $1,416 $288,864 Total Contribution for 2014 $10,266,663 Percentage Change over 2014 114.35% R - -- - - - 12.