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Home My WebLink AboutAgenda - 03-17-2015 - 7a1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 17, 2015 Action Agenda Item No. 7 -a SUBJECT: Updates and Recommendations for Emplovee Benefits Effective July 1, 2015 DEPARTMENT: Human Resources ATTACHMENT(S): 1. Benefits Highlights I•Si:Cxlfii� l 019 aiitl1:�- �. PUBLIC HEARING: (Y /N) No INFORMATION CONTACT: Brenda Bartholomew, Human Resources Director, (919) 245 -2552 Diane Shepherd, Benefits Manager, (919) 245 -2558 PURPOSE: To receive information and consider the Manager's recommendations regarding employee health insurance and other benefits effective July 1, 2015 through June 30, 2016. BACKGROUND: The County provides employees with comprehensive benefits including health, dental, life insurance and access to an Employee Assistance Program. The County has been self- funded since January 1, 2014 for medical and pharmacy plans and continues to be self- insured for the dental plan. The County pays an administrative fee and all claims incurred by members enrolled in the United Healthcare and Delta Dental programs. The United Healthcare administrative fee of $143.53 per member per month includes stop -loss coverage of $100,000 per person. Further, the County is currently transitioning from a twelve -month calendar plan year to a twelve -month fiscal plan year, July 1 through June 30. Therefore, a one time, six -month plan year was implemented effective January 1, 2015 through June 30, 2015. A twelve -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 recommended, and the Board of Commissioners approved, the selection of Arthur J. Gallagher & Co. (AJG) as the Broker of Record at the March 3, 2015 regular meeting. Overall, enrollment numbers for the six -month benefit period which were effective January 1, 2015 have remained consistent, with a slight decrease in the High Deductible Health Plan membership compared to FY 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 1 shows benefits enrollments as of February 16, 2015. P� 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. The County will continue to partner with representatives of the UNC Wellness @ Work program to offer health screenings to all employees. In the fall of 2014, the Health and Human Resources Departments coordinated flu clinics for employees and Human Resources held two Breast Cancer Awareness Days for mammograms at UNC Radiology in Hillsborough. Staff will be working closely with AJG 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 effective July 1, 2015 through June 30, 2016. AJG 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, AJG is recommending that the premium equivalent remain the same, with no increase for medical and pharmacy costs. To date, no benefit changes are anticipated for FY2015/16 coverage. Health benefits, co -pays, co- insurance and deductibles are expected to remain the same. AJG will continue to work with Staff is analyzing all data relative to benefits and will bring forward any recommendations, if necessary, to the Manager and the BOCC for consideration and approval. Staff and the County Manager discussed with AJG ways to mitigate additional deductible expenses for some employees because of the plan year change from calendar to fiscal. It is estimated that approximately 18 percent of employees and retirees may have met or will meet some or all of their deductible in the short plan year, and will then incur a second deductible in FY 2015/16. AJG has projected a cost of $100,000 to mitigate the impact of deductibles paid by employees because of the plan change from a calendar year to a fiscal year. These costs represent making employees whole by giving credit to those who will have paid two deductibles within the 18 -month period (January 1, 2015 through June 30, 2016). 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% for Plan Year 2015/16 to sustain an adequate reserve for future claims. This is an increase of $70,000. Attachment 2 reflects the increases. FINANCIAL IMPACT: There is no increase for medical and pharmacy costs. However the cost of mitigating the impact of employees paying double deductibles is $100,000. The financial impact of a 15% rate increase for dental insurance is $70,000. 3 RECOMMENDATION(S): The Manager recommends that the Board approve the County Manager's recommendation of no increase for medical and pharmacy costs, $100,000 increase for mitigating the impact of employees paying double deductibles and a $70,000 increase for dental insurance. C! ATTACHMENT 1 Benefits Highlights Health Insurance Enrollment (at start of each Plan Year) Enrollments as of February 23, 2015 New employees enroll in plans effective with the 1 S of the month after hire, and terminating employees' coverage ends on the last day of the month employed (unless a retiree under age 65). Benefit 2011 2012 2013 2014 2015 Traditional Plan n/a 610 605 624 646 High Deductible Plan n/a 187 197 198 182 Total Health Plan Participation n/a 797 802 822 828 Health Savings Account (employee contribution) n/a 81 89 73 (37 %) 64 (33 %) Waived Health Insurance 20 22 21 29 31 Enrollments as of February 23, 2015 New employees enroll in plans effective with the 1 S of the month after hire, and terminating employees' coverage ends on the last day of the month employed (unless a retiree under age 65). Benefit Enrollments 2012 Active Employees Retirees Traditional Health Plan 647 156 High Deductible Health Plan 177 5 Delta Dental 838 Medical Flexible Spending Account 134 Dependent Care Spending Account 13 Community Eye Care 477 Accident Insurance 204 Critical Illness 179 Short -term Disability 231 Whole Life 113 Wellness Events /Activities September 2014 through February 2015 Annual Employee Flu Shot Clinic Participants 2010 2011 2012 2013 2014 204 169 225 207 196 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. WaIk4Life —One Step at a Time Fitness Challenge 2. Financial Health classes 3. Maintain, Don't Gain Holiday Challenge 4. National Nutrition Month Challenge /Activities 178 participants 12 participants 26 participants 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 0 ATTACHMENT 2 HEALTH INSURANCE RATES UnitedHealthCare Health Insurance Premiums FY 2015 -16 HDP High Deductible Plan /Health Savings Account* Total Cost County Pays Employee Pays POs (Point of Service) Traditional Plan Individual $ 364.51 $ 364.51 $0.00 Ind /Child(ren) $ 572.69 $ 457.74 $114.95 Ind /Spouse $ 737.40 $ 532.81 $204.60 Family $ 1,036.57 $ 669.16 $367.42 HDP High Deductible Plan /Health Savings Account* Individual $ 362.76 $ 362.76 $0.00 Ind /Child ren $ 533.65 $ 457.74 $75.91 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 2014/15 FY 2015/16 Increase Difference Coverage County Pays Employee Pays County Pays Employee 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