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Home My WebLink AboutAgenda - 6-c - Recommendations for Employee Health Insurance and Other BenefitsORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 6, 2018 Action Agenda Item No. 6 -c SUBJECT: Recommendations for EmDlovee Health Insurance and Other Benefits DEPARTMENT: Human Resources ATTACHMENT(S): 1) Breakdown of County and Employee Contribution for Health and Dental Coverage 1 INFORMATION CONTACT: Brenda Bartholomew, Human Resources Director, (919) 245 -2552 PURPOSE: To approve the Manager's recommendations regarding employee health and dental insurance and other employee benefits effective July 1, 2018 through June 30, 2019. The Manager is recommending no increase in premium equivalent for employees or participating pre -65 retirees for FY2018/2019. All other health benefits, co -pays, co- insurance and deductibles will remain the same. 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 Employee's Retirement System and a supplemental retirement plan. 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 the benefit programs, which include health, dental, vision, and other voluntary programs for employees and retirees. In FY2016/2017, the Board of County Commissioners approved the recommendation of the County Manager to continue with UnitedHealth Care (UHC) as the County's Third Party Administrator for health insurance programs and granted authority to the County Manager to renew the Third Party Administrator contract with UnitedHealth Care. UnitedHealth Care will also fund $25,000 for FY 2017/2018 for wellness programs. For FY2017/2018, the Board of County Commissioners approved "carving out" pharmacy coverage from UnitedHealth Care and contracted with Envision Rx as the County's Pharmacy OA, Benefit Manager (PBM). This resulted in an expenditure reduction of $141,000 for FY2017/2O18. The FY2O17/2018 total adopted budget was increased by $524,433 or 5.05 percent for the County's health insurance appropriation. The FY2017/2018 total County budget for health insurance for employees and pre -65 retirees is approximately $11.6 million dollars. Health Insurance The total FY2018/2O19 health insurance expenditure is projected to be approximately $13.3 million (including health savings account contributions) based on increases to current enrollment of 1,068 employees and pre -65 retirees. The County contribution is projected at $11.9 million assuming that no changes are made to the current employee contribution structure. This represents a 5.9 percent increase in the projected FY2018/2O19 budget; or approximately $750,000 (County share). The following represents total health care appropriations: Attachment 1 demonstrates further the breakdown of the County and employee contribution relationship for health insurance. Monthly /Semi - Monthly rates are listed below and assuming current enrollment of 1,068. Current PPO Plan Premium Equivalent FY2018/2019 Monthly County Cost Share Monthly County Cost Share Semi Monthly County Cost Share Semi Monthly Employee Cost Share Employee Only $806.59 $806.59 $0.00 $403.30 $0.00 Employee +Child(ren) $1,267.24 $1,037.34 $229.90 $518.67 $114.95 Employee +Spouse $1,631.71 $1,222.51 $409.20 $611.26 $204.60 Employee +Family $2,293.71 $1,558.87 1 $734.84 $779.44 $367.42 Current CDHP Plan Premium Equivalent FY2018/2019 Monthly County Cost Share Monthly County Cost Share Semi Monthly County Cost Share Semi Monthly Employee Cost Share Employee Only $798.51 $798.51 $0.00 $399.26 $0.00 Employee +Child(ren) $1,183.16 $1,031.34 $151.82 $515.67 $75.91 Employee +Spouse $1,487.49 $1,215.69 $271.80 $607.85 $135.90 Employee +Family $2,040.26 $1,550.52 $489.74 $775.26 $244.87 Dental and Vision Insurance Delta Dental is the County's Dental provider and Community Eye Care provides the County's vision plan. The County will continue to provide coverage with Delta Dental and Community Eye Care. In FY2O18/2O19 no increases in dental premiums for employees is recommended by the Manager. Vision premiums are paid 100 percent by employees and to date no increase has been proposed by Community Eye Care. K The current fiscal year budget for dental coverage is $305,856. Based on current enrollment, the County share for the FY2017/2018 budget is projected year end at $420,952; representing a budget shortfall of $115,096. The County's expenditure for the FY2018/2019 dental budget is projected at $431,377. The additional funding is partly driven because of an increase in the enrollment for dental coverage. By accounting for the increased enrollment and the current budgetary shortfall for FY2017/2018, an increase of $125,521 is projected for the FY2018/2019 budget. Attachment 1 demonstrates further the breakdown of the County and employee contribution relationship for dental insurance. Monthly rates for dental coverage are listed below: Current Dental plan Premium Equivalent FY2017/2018 Premium Equivalent FY2018/2019 Employee Only $29.76 $30.49 Employee +Child(ren) $80.31 $82.32 Employee +Spouse $71.39 $73.17 Employee +Family $104.11 $106.71 FINANCIAL IMPACT: The proposed FY2018/2019 Health Insurance appropriation increase is $750,000, and the proposed FY2018/2019 Dental Insurance appropriation increase is $125,521. • 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 approve the Manager's recommendations regarding employee health and dental insurance and other employee benefits effective July 1, 2018 through June 30, 2019, which will require a $750,000 funding increase funding for the FY2018/2019 Health Insurance appropriation, and a $125,521 funding increase the FY2018/2019 Dental Insurance appropriation; and maintaining current premium equivalent rates for health insurance and dental coverage for employees and pre -65 retirees. C! ATTACHMENT 1 -- Breakdown of County and Employee Contribution for Health Insurance and Dental Budgets Current PPO Plan Premium Equivalent FY2017/2018 Premium Equivalent FY2018/2019 Enrollment TOTAL COST FY2017/2018 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION TOTAL COST FY2018/2019 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION BUDGET INCREASE FY2018/2019 Employee Only $761.36 $806.59 583 $5,326,475 $0 $5,326,475 $5,642,904 $0 $5,642,904 $316,429 Employee +Child(ren) $1,196.18 $1,267.24 151 $2,167,478 $411,821 $1,755,657 $2,296,239 $411,821 $1,884,418 $128,761 Employee +Spouse $1,540.21 $1,631.71 56 $1,035,021 $279,456 $755,565 $1,096,509 $279,456 $817,053 $61,488 Employee 4amily $2,165.09 $2,293.71 41 $1,065,224 $362,176 $703,048 $1,128,505 $362,176 $766,329 $63,281 831 $9,594,198 $1,053,453 $8,540,745 $10,164,157 $1,053,453 $9,110,704 $569,959 Current CDHP Plan Premium Equivalent FY2017/2018 Premium Equivalent FY2018/2019 Enrollment TOTAL COST FY2017/2018 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION TOTAL COST FY2018/2019 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION BUDGET INCREASE FY2018/2019 Employee Only $753.73 $798.51 134 $1,211,998 $0 $1,211,998 $1,284,004 $0 $1,284,004 $72,006 Employee +Child(ren) $1,116.81 $1,183.16 49 $656,684 $91,936 $564,748 $695,698 $91,936 $603,762 $39,014 Employee +Spouse $1,404.08 $1,487.49 20 $336,979 $64,026 $272,953 $356,998 $64,026 $292,972 $20,018 Employee 4amily $1,925.85 $2,040.26 34 $785,747 $196,437 $589,310 $832,426 $196,437 $635,989 $46,679 237 $2,991,408 $352,399 $2,639,010 $3,169,126 $352,399 $2,816,727 $177,718 1068 $12,585,606 $1,405,851 $11,179,755 $13,333,283 $1,405,851 $11,927,431 $747,677 BUDGET INCREASE $747,677 % INCREASE 5.9% Current Dental plan Premium Equivalent FY2017/2018 Premium Equivalent FY2018/2019 Enrollment TOTAL COST FY2017/2018 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION TOTAL COST FY2018/2019 EMPLOYEE CONTRIBUTION EMPLOYER CONTRIBUTION BUDGET INCREASE FY2018/2019 Employee Only $29.76 $30.49 567 $202,487 $0 $202,487 $207,454 $0 $207,454 $4,967 Employee +Child(ren) $80.31 $82.32 123 $118,538 $48,079 $70,459 $121,504 $48,079 $72,222 $1,763 Employee +Spouse 1 $71.39 1 $73.17 1 103 1 $88,238 1 $39,637 1 $48,602 1 $90,438 1 $39,637 1 $49,813 1 $1,212 Employee +Family 1 $104.11 1 $106.71 1 118 1 $147,420 1 $48,015 1 $99,405 1 $151,101 1 $48,015 1 $101,888 1 $2,483 911 $556,682 $135,730 $420,952 $570,498 $135,730 $431,377 $10,425 FY2017/2018 BUDGET $305,856 BUDGET SHORTFALL $115,096 FY2017/2018 YEAR END PROJECTION $420,952 PROJECTED FY2018/2019 BUDGET $431,377 INCREASE TO FY2018/2019 BUDGET $125,521 BUDGET INCREASE $10,425 % INCREASE* 2.5% *calculated with adjusted year end projection