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HomeMy WebLinkAboutAgenda - 04-05-2016 - 7-c - Recommendations for Employee Health Insurance and Other Benefits 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 5, 2016 Action Agenda Item No. 7-c SUBJECT: Recommendations for Employee Health Insurance and Other Benefits DEPARTMENT: Human Resources ATTACHMENT(S): INFORMATION CONTACT: 1. Benefit Highlights Brenda Bartholomew, Human Resources 2. Current Premium Equivalent Cost Director, (919) 245-2552 Share for Medical, Dental and Vision Diane Shepherd, Benefits Manager, Benefits (919) 245-2558 PURPOSE: To approve the Manager's recommendations regarding employee health and dental insurance and other employee benefits effective July 1, 2016 through June 30, 2017. BACKGROUND: The County provides employees with a comprehensive benefits plan, including health, dental and life insurance, an employee assistance program, flexible compensation plan and paid leave for permanent employees. Additionally, the County contributes to the Local Governmental Employees' Retirement System and a supplemental retirement plan. Staff provided relevant information related to the recommendations of this abstract to the Board of County Commissioners at the March 29, 2016 Work Session Meeting. 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 transitioned from a twelve-month calendar plan year to a twelve-month fiscal plan year in 2015 aligning with the County's fiscal year. In February 2015, the Board of County Commissioners approved Gallagher Benefit Services (GBS) as Broker of Record for the administration of benefit programs, which include health, dental, vision, and other voluntary programs for employees and retirees. Since the County's insurance plan is self-funded, the County uses a third party administrator (TPA) to administer and manage claims. To take advantage of changing market dynamics and services, the County periodically solicits proposals from companies offering TPA services. On behalf of Orange County, Gallagher Benefit Services (GBS) conducted a competitive solicitation for service consideration in FY2016-2017. 2 Currently, UnitedHealth Care (UHC) is the Third Party Administrator (TPA) for the County's Medical Plan. GBS conducted a TPA Marketing Analysis. UHC, Meritain/Aetna, CIGNA and BCBSNC provided quotes to GBS for review and recommendation by the Manager. With careful consideration of all proposals, it is recommended to continue TPA services with UnitedHealth Care. The UHC renewal was negotiated from $41.50 per employee per month to $29.50 per employee per month with a guaranteed fee for 2 years and a 3 percent rate cap for July 1, 2018's renewal; this equates to approximately $150,000 savings. The difference between the top two competitors was $6,500 for annual fixed costs. The variable cost or the utilization/claims costs were essentially identical between the top two competitors. Wellness funding by the TPA was also considered and UHC was the most competitive. UHC will fund $25,000 each year for the next three years. The closest competitor was $12,500 respectively. Health Insurance Gallagher Benefit Services (GBS) estimates no change in the FY2016-2017 health care budget. In addition, no plan design changes are recommended. All covered benefits, co-pays, co- insurance and deductibles are expected to remain the same. Administrative fees and claims utilization are considered when setting premium equivalent rates. The administrative fee savings of $150,000 represents approximately 1.29 percent of the current FY budget ($11.6 million). The administrative fee reduction is projected to be absorbed within claims utilization; therefore the Manager is not recommending a change to the current year budget or premium equivalents for FY2016-2017. Almost all full time and part time benefited employees participate in the County's group health insurance plan. As of January 16, 2016, the plan covered 871 employees and 160 County retirees under the age of 65. Attachment 1 provides information on benefit enrollment for years 2011 through 2016 and an overview of voluntary enrollment and participation. Attachment 2 provides monthly premiums for medical programs as well as the cost share between employees and the County. Dental and Vision Insurance Delta Dental is the County's current dental provider and Community Eye Care provides the County's vision plan. As part of three year contract, the County will continue providing dental coverage through Delta Dental. The current budget for dental insurance coverage is approximately $320,000 annually. No increase in premium is recommended for FY 2016-2017. In fact, the County will improve the dental plan design by removing diagnostic and preventative services from the annual maximum of $1,200 of covered services to promote preventative oral health care. The monthly employee cost share of dental and vision premiums is also provided in Attachment 2. Other Employee Programs The County will continue to offer health screenings to all employees. In the fall of 2016, the Health and Human Resources Departments coordinated flu clinics for employees and Human 3 Resources held two Breast Cancer Awareness Days (for mammograms). See Attachment 1 for more detail on Employee Wellness Activities and Orange County Sportsplex enrollment. FINANCIAL IMPACT: There is a $150,000 savings in health insurance budget and no increase for dental costs compared to the FY2015/2016 budget. The administrative fee reduction is projected to be absorbed within claims utilization; therefore the Manager is not recommending a change to the current year budget or premium equivalents for FY2016-2017. SOCIAL JUSTICE IMPACT: The following two Orange County Social Justice Goals are applicable to this agenda item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends that the Board: 1. Approve the recommendation of contracting with UnitedHealth Care as the County's Third Party Administrator for the County's health insurance programs; 2. Grant authority to the Manager to renew the Third Party Administrator contract with UnitedHealth Care; 3. Grant authority to the Manager to contract with a Stop Loss Insurance Carrier as appropriate; 4. Maintain current premium equivalent rates for FY2016-2017 health coverage renewal; 5. Approve the recommended changes to the Dental program of removing diagnostic and preventative services from the annual maximum; and 6. Approve aligning all dental services to a fiscal year verses a calendar year. 4 ATTACHMENT 1 Benefits Participation New employees enroll in plans effective with the first of the month after hire, and terminating employees' coverage ends on the last day of the month employed (unless a retiree under age 65). Participation is shown as of March 2016. Health Coverage 2011 2012 2013 2014 2015 2016 Traditional Plan n/a 610 605 624 646 661 High Deductible Plan n/a 187 197 198 182 209 Total Health Plan Participation n/a 797 802 822 828 870 Health Savings Account(employee n/a 81 89 73 64 69 contribution) (37%) (33%) (33%) Waived Health Insurance 20 22 21 29 31 32 Participation in Voluntary Benefits as of March 2016 Benefit # of Participants As of March 2015 As of March 2016 Delta Dental 838 885 Medical Flexible Spending Account 134 177 Dependent Care Spending Account 13 16 Community Eye Care 477 538 Accident Insurance 204 431 Critical Illness 179 254 Disability 231 305 Whole Life (2015)/Universal Life (2016) 113 242 5 Wellness Events/Activities July 2015 through March 2016 Annual Employee Flu Shot Clinic Participants 2010 2011 2012 2013 2014 2015 204 169 225 207 196 218 Sponsored Health Screenings Orange County Breast Cancer Awareness Day Mammograms Promoted to employees in October, but numbers unavailable Biometric Screenings (blood pressure, cholesterol, &glucose) 98 held June 2015 Results of Health Screenings: Employees by Risk Category % of Total % of Total Risk Category 2014 2015 Low 48% 60% Moderate 36% 32% High 16% 8% Orange County Sportsplex Membership Sportsplex Membership remains consistent with the past few years. Approximately 245 employees are members, receiving a total 75% discount on membership. Employee Wellness Activities Maintain, Don't Gain Holiday Challenge 28 participants Fit in 15! 6 ATTACHMENT 2 Current Medical Monthly Premium Equivalent Cost Share Traditional Choice Plus Orange County Cost Employee MONTHLY Medical Plan Premium Share Cost Share Equivalent Employee Only $726 $726 $0 Employee/Child(ren) $1,160 $930 $230 Employee/Spouse $1,449 $1,040 $409 Family $2,028 $1,294 $734 Health Savings Account MONTHLY Choice Plus Plan (High Orange County Cost Employee Deductible Plan) Premium Share Cost Share Equivalent Employee Only $712 $712 $0 Employee/Child(ren) $1,070 $918 $152 Employee/Spouse $1,306 $1,034 $272 Family $1,784 $1,294 $490 Current Dental and Vision Monthly Premiums Cost Share Delta Dental Eye Care MONTHLY Employee Cost Share Employee Cost Share Employee Only $0 $9.74 Employee/Child(ren) Employee/Child $47.74 $18.54* (Vision) Employee/Spouse $39.30 $18.54* Family $70.18 $27.30 *coverage for employee plus 1 only, an employee with more than one child, pays a family rate.