HomeMy WebLinkAboutAgenda - 10-03-2006-5fORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 3, 2006
Action Agenda
Item No. ~--
SUBJECT: Employee Dental Insurance for 2007
DEPARTMENT: Personnel PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Draft Monthly Dental Insurance Rates
INFORMATION CONTACT:
Tyrone Jackson, Personnel Director
(919) 245-2550
Michael Edmonds, Benefits Manager
(919) 245-2558
PURPOSE: To consider an increase in employee dental insurance rates effective January 1,
2007.
BACKGROUND: The County's employee dental insurance program is aself-insured plan.
Delta Dental is the plan administrator. As part of the annual plan evaluation process, the
Personnel Department, in conjunction with Delta Dental, evaluates plan costs and projected
plan revenue. After analysis of Orange County dental claims costs; and consulting ~{vith Delta
Dental regarding administrative costs, staff recommends a 10 percent increase in dental
insurance rates for the 2007 calendar year effective January 1, 2007.
The recommended rate increase represents about a $13,000 increase in County cost for 2006-
07 for the approximately 839 positions covered in the dental insurance group. Funds are
available within the approved dental insurance budget for fiscal year 2006-07; Over the past 10
years, the County has increased dental .rates in 2000, 2001, and 2006. The last increase prior
to that was in 1994.
2007 Dental Insurance Rates
The recommended 10 percent rate increase arises from several factors including increases in
dental insurance costs, updates to the table of allowances for dental procedures during the
2006 plan year to maintain benefits in line with market rates, increased u,se of the plan, and the
fact that plan reserves are no longer available to offset increases.
In the past, the County has been able to use plan reserves accumulated in earlier years to
offset cost increases. Those reserves now have been drawn down to the point a rate increase
is necessary. To maintain the self-insurance fund, it is necessary to implement the rate
increase .proposed.
County Contribution for Employee Dental Insurance
Attached are the draft monthly dental insurance rates for 2007. This shows the total cost,
County cost and employee cost for each coverage type. In the past the County has paid the full
cost of individual employee dental insurance coverage and has not made a contribution for
dependent coverage. The attached rates have been calculated in this same manner.
It should be noted that the Personnel Department has always been available to and welcomed
input and questions from County staff regarding the County's dental insurance plan, especially
in conjunction with the recent discussions regarding health insurance. The Department is not
currently aware of any substantial concerns with the dental plan.
FINANCIAL IMPACT: The estimated 2006-07 County cost of the increase is about $13,000
from all fund sources. The annual cost increase is about $22,000. The Budget Director
advises that the cost of the increase can be covered from funds available within the approved
dental insurance budget for 2006-07. The 2006-07 budget provided for up to a 20 percent
increase beginning December 1, 2006.
RECOMMENDATION(S): The Manager recommends that the Board approve the attached
dental insurance rates effective January 1, 2007, and authorize the Personnel Director to sign
the contract with Delta Dental for Plan administrative services.
Attachment
Draft Monthly Dental Insurance Rates'
For 2007
Coverage Type -Total Cost County Cost Employee Cost
Old New Old New Old New
Employee Only 22..09 24.30 22.09 24.30 0 0
Employee/Children 60.21 66.23 22.09 24.30 38.12 41.93
Employee/Spouse 54.06 59.47 22.09 24.30 31.97 35.17
Employee/Family 76.70 84.37 22.09 24.30 54.61 60.07