HomeMy WebLinkAboutAgenda - 06-24-2008-4iORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 24, 2008
Action Agenda ,
Item No. ~- - I
SUBJECT: Amendment to Article IV, Section 7.2.4 of the Orange County Personnel
Ordinance Eliminating the Dependent Health Care Subsidy for Retiring
Employees Hired After July 1, 2008
DEPARTMENT: Human Resources PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
INFORMATION CONTACT:
Michael McGinnis, Human Resource
Director (919) 245-2552
PURPOSE: To consider adopting an amendment to Article IV, Section 7.2.4 of the Orange
County Personnel Ordinance eliminating the dependent health care subsidy for retirees hired
after July 1, 2008.
BACKGROUND: The cost of providing health care insurance to employees and retirees
continues to increase. In the five year period 2002-2007, the cost for retiree health care
insurance has more than doubled from $326,102 to $841,110. The Human Resources
Department has been researching ways to lessen the financial impact of health care on the
organization without reducing benefits to current employees and retirees and without affecting
the organizations ability to hire and retain the best employees.
Currently, the County provides health insurance coverage for retirees with at least 10 years of
service. Retirees, under the age of 65, have the option of covering one or more dependents
under the County's. health care plan. The County subsidizes the cost of retiree dependent
health care by paying 52% of the dependent's monthly premium. Twenty-six retirees currently
have dependent health coverage. In calendar year 2008, the annual County cost to provide
dependent health coverage will be approximately $83,000.
Staff is recommending that the Board consider amending Article IV, Section 7.2.4 of the Orange
County Personnel Ordinance to eliminate the subsidy the County provides to retirees for
dependent heath care for those employees hired after July 1, 2008 who subsequently retire
from County Service. This would not affect current employees or retirees who are receiving the
dependent health care subsidy; this amendment would only apply to employees hired after July
1, 2008.
Article IV, Section 7.2.4 can be amended to add the following language:
Effective July 1, 2008, Orange County will not subsidize the cost of retiree dependent
health care for employees hired after July 1, 2008.
FINANCIAL IMPACT: This change will begin to provide savings when employees hired after
July 1, 2008 retire, potentially as early as July 1, 2018.
RECOMMENDATION(S): The Manager recommends that the Board approve amending the
Orange County Personnel Ordinance Article IV, Section 7.2.4, to add the language eliminating
the County subsidy for retiree dependent health care coverage for those employees hired after
July 1, 2008.