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ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date:
March 5, 2015
Action Agenda
Item No.1
SUBJECT:
Updatesand Recommendationsfor Employee Benefits Effective July 1, 2015
DEPARTMENT:Human ResourcesPUBLIC HEARING: (Y/N)No
ATTACHMENT(S):INFORMATION CONTACT:
A.BenefitsHighlights
Brenda Bartholomew, Human Resources
Director, (919)245-2552
B.Review of Health and Dental Rates
Diane Shepherd, Benefits Manager,
(919)245-2558
PURPOSE:
To receiveinformation on the Manager’s recommendations regardingemployee
benefit programs effective July 1, 2015through June 30, 2016.
BACKGROUND:
The County has been self-funded since January 1, 2014 for medical,
pharmacyand dental claims. The County pays for all claims incurred by members enrolled in
the UnitedHealthCare and Delta Dental programs. In addition, the County paysadministrative
fees which includestop-loss coverageto UnitedHealthCare. The administrative fee is $107.03
permember per month includingthe stop loss coverage of $100,000 per person.
Further, the County iscurrentlytransitioning from a twelve-month calendar plan year to a
twelve-month fiscal planyear, July 1 through June 30. Therefore, a one time, six-month plan
year was put in place effective January 1, 2015 through June 30,2015. Atwelve-month plan
year will begin July 1, 2015 and end June 30, 2016 to align with the County’s fiscal year.
In February 2015, the Health Insurance Advisory Committee, under the direction of County
Purchasing Agent David Cannell, participated in the Request for Proposal (RFP) process for the
selection of a Broker of Record for the administration of benefit programs which include but are
not necessarily limited to health, dental, vision, and other voluntary programs for employees and
retirees. The Manager made recommendation to the BOCC as per Action Agenda Item No. 7-a
of the March 3, 2015 meeting toselect Arthur J. Gallagher & Co. as the Broker of Record.
Overall, enrollment numbers for the six-month benefit periodwhich wereeffective January 1,
2015 haveremained consistent, with aslight decreasein the High Deductible Health Plan
membership compared toFY 2014/15. The number of employees waiving health insurance
coverage has increased primarily due to employees obtaining coverage elsewhere, usually a
spouse’s benefit plan. Attachment A shows benefitsenrollments as of February 16, 2015.
The County continues to administer voluntary benefit programs including vision coverage, short
term disability, whole life insurance, critical illness and accident insurance available through the
benefit of a payroll deduction. At this time, there are no plans to change the voluntary benefit
programs.
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The County willcontinue to partner with representatives of the UNC Wellness @ Work program
to offer health screenings to all employees.In the fall of2014, the Health and Human
Resources Departments coordinated flu clinicsfor employeesand Human Resources held two
Breast Cancer Awareness Days(for mammograms) at UNC Radiologyin Hillsborough. Staff
will be working closely with Arthur J. Gallagher & Co. to conduct a feasibility study related to
wellness and an employee clinic.
Health Insurance
Open Enrollment for benefits will be held in April 2015 for coverage effectiveJuly 1, 2015
through June 30, 2016.Arthur J. Gallagher & Co. worked with United HealthCare to obtain
utilization data for medical and pharmacy cost projections for the FY2015/2016 budget. The
data incorporated 24 months of claims utilization including periods of January 2014 through
January 2015 (self-funded) and January 2013 through December 2013 (fully insured).After a
detailed review, Gallagher is recommending that the premium equivalent remain the same, with
no increase for medical and pharmacy costs.
To date, nobenefit changesare anticipated for FY2015/16 coverage. Health benefits, co-pays,
co-insurance and deductibles areexpected to remain the same. Arthur J. Gallagher & Co. will
continue to work with Staff in analyzing all data relative to benefits and bring forwardany
recommendations, if necessary, to the Manager and the BOCC for consideration and approval.
Staff and the County Manager discussed with Gallagher ways to mitigate the potential of
additional out-of-pocket expenses by some employees because of the plan year change from
calendar to fiscal. It is estimated that approximately 18percentof employees and retireesmay
have metor will meetsome or all of their deductible in the short plan year. Gallagher is in the
process of obtaining historical deductible informationfrom UnitedHealthCarefor a complete
analysisto determine what is best for Orange County employees and retirees. The projectionis
approximately a $100,000 impact to the FY2015/16 budgetto credit employees for deductibles
met during short plan year.
Dental Insurance
The County will continue providing dental coverage with Delta Dental. The premium rate
charged for employees with dependent coverage has not increased since 2007, and the
County’s reserve fund has been able to sustain increases in claims and administrative fees.
The rate for dental coverage is expected to increase 15% forPlan Year 2015/16to sustain an
adequate reserve for future claims.Attachment Breflectsthe increases.
FINANCIAL IMPACT:
The financial impact of a 15% rate increase for dental insurance is
approximately $70,000.Further, the cost ofmitigating the impact of employees paying double
deductibles and other out of pocket expenses is approximately $100,000. If approved by the
Board, all costs will be part of the Manager’s Recommended FY 2015/16 budget.
RECOMMENDATION(S):
The Manager recommends that the Board discuss the
recommendation of the rate increases proposed by Arthur J. Gallagher & Co. for health and
dental coverage. Additionally, the Manager recommends that the Board discuss employee
insurancebenefits for FY 2015/16.
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ATTACHMENT A
Benefits Highlights
Health Insurance Enrollment (at start of each Plan Year)
20112012201320142015
Traditional Plann/a610605624646
High Deductible Plann/a187197198182
Total Health Plan Participationn/a797802822866
7364
Health Savings Account (employee contribution)n/a8189
(37%)(33%)
Waived Health Insurance2022212931
Enrollmentsas of February 23, 2015
st
New employees enroll in plans effective with the 1of the month after hire, and terminating employees’
coverage ends on the last day of the month employed (unless a retiree under age 65).
BenefitEnrollments
Active EmployeesRetirees
Traditional Health Plan647156
High Deductible Health Plan1775
Delta Dental838
Medical Flexible Spending Account134
Dependent Care Spending Account13
Community Eye Care477
Accident Insurance204
Critical Illness179
Short-term Disability231
Whole Life113
Wellness Events/Activities September 2014 through February 2015
Annual Employee Flu Shot Clinic Participants
20102011201220132014
204169225207196
Orange County Sportsplex
Sportsplex Membership remains consistent with the past few years. Approximately 240 employees are
members, receiving a sizable discount on membership.
Employee Wellness Activities
1.Walk4Life—One Step at a Time Fitness Challenge178 participants
2.Financial Health classes 12 participants
3.Maintain, Don’t Gain Holiday Challenge 26 participants
4.National Nutrition Month Challenge/Activities To be held March-April 2015
Additional Sponsored Health Screenings
Orange County Breast Cancer Awareness Day Mammograms
50 (30% increase over 2013)
Biometric Screenings (blood pressure, cholesterol, & glucose)
To be held as part of Open Enrollment in April/May
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ATTACHMENT B
HEALTH INSURANCE RATES
UnitedHealthCare Health Insurance Premiums FY 2015-16
Total Cost County PaysEmployee Pays
Individual$ 364.51 $ 364.51$0.00
POS (Point of
Ind/Child(ren)$ 572.69 $ 457.74$114.95
Service) Traditional
Plan
Ind/Spouse$ 737.40 $ 532.81$204.60
Family$ 1,036.57 $ 669.16$367.42
Individual$ 362.76 $ 362.76$0.00
HDP High Deductible
Ind/Child(ren)$ 533.65 $ 457.74$75.91
Plan/Health Savings
Account*
Ind/Spouse$ 668.71 $ 532.81$135.90
Family$ 914.03 $ 669.16$244.87
(Semi-monthly County contribution to Health Savings Account remains at $59 in FY 2015-16)
DENTAL INSURANCE RATES
The County’s Dental Plan, administered by Delta Dental of North Carolina, is self-insured and went into
effect January 1, 2007. The County pays the cost of employees’ dental claims and administrative fees,
and employees pay a premium equivalent through a payroll deduction for any dependent coverage.
Benefits are consistent with other employers, providing 100% preventive care and $1,200 annually in
benefits.
Semi Monthly FY 2014/15FY 2015/16 IncreaseDifference
CoverageCounty PaysEmployee PaysCounty PaysEmployee Pays Employee Pay
Employee$12.15 $0.00 $14.04 $0.00 $0.00
Employee/Child(ren)$12.15 $20.97 $14.04 $23.86 $2.89
Employee/Spouse$12.15 $17.59 $14.04 $19.65 $2.06
Family$12.15 $30.04 $14.04 $35.09 $5.05