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HomeMy WebLinkAboutAgenda - 03-19-2019 6-c - Recommendations for Employee Health Insurance and Other Benefits 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 19, 2019 Action Agenda Item No. 6-c SUBJECT: Recommendations for Employee Health Insurance and Other Benefits DEPARTMENT: Human Resources ATTACHMENT(S): INFORMATION CONTACT: 1. Breakdown of County and Brenda Bartholomew, Human Resources Employee Contribution for Health Director, (919) 245-2552 and Dental Coverage PURPOSE: To approve the Manager's recommendations regarding employee health and dental insurance and other employee benefits effective July 1, 2019 through June 30, 2020. The Manager is recommending no increase in appropriations for the FY2019/2020 Health and Dental budget and is also recommending that the County continue to participate as a member of the North Carolina Health Insurance Pool (NCHIP). 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 also 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 County Manager's recommendation 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 also provided $25,000 for wellness programs. 2 In 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 Benefit Manager (PBM). This resulted in an expenditure reduction of $141,000 annually for FY2017/2018. The FY2017/2018 total County budget for health insurance for employees and pre-65 retirees was approximately $11.6 million dollars. For FY2018/2019, the Board of County Commissioners approved the County's participation in the North Carolina Health Insurance Pool (NCHIP), which included Blue Cross Blue Shield as the health care provider, and approved increasing Health Insurance funding (County share) by $750,000 and the Dental Insurance funding (County share) by $125,521. The County maintained current premium equivalent rates for health insurance and dental coverage for employees and pre-65 retirees. The total FY2018/2019 budget was 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 was projected at $11.9 million; representing a 5.9 percent increase. Health Insurance The total FY2019/2020 budget is projected to be approximately $13.3 million (including health savings account contributions) based on current enrollments for 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 no increase to the FY2019/2020 budget. Through December 2018, Orange County is in a very good position from a reserve perspective with NCHIP. Reserve levels are recommended at 1.25 times total monthly claims; $6.4 million has been funded by Orange County through December 2018; $819,000 has been paid in fixed costs; and $3.9 million paid in claims which results in a $1.7 million reserve. This is well over the recommended reserve level. Comparatively, $21.4 million has been funded by all participants of NCHIP through December 2018. A total of $16.9 million has been paid for claims resulting in a $4.5 million reserve. Of these reserves, $1.7 million is tied to Orange County. The following represents total health care appropriations over the last five years (County and Employee shares): 2015-16 2016-17 2017-18 2018-19 2019-20 Health Insurance $11,082,953 $11,784,305 $12,585,606 $13,333,299 $13,333,299 Budget Health Budget% 6.33% 6.80% 5.94% 0.00% Increase It is recommended that the premium equivalent for the high-deductible plan be decreased by $118 per month for each plan tier. The $118 per month represents 1/12th of the Health Savings Account County funding of $1,416 annually. A total of $363,912 is funded for Health Savings Accounts for FY2018/2019 and is 100% paid by the County. These funds are currently not paid to NCHIP and therefore not necessary to include as part of the high-deductible premium equivalent. The Health Savings Account funding is budgeted separately in the Health Insurance 70 Fund. 3 Attachment 1 demonstrates further the breakdown of the County and employee contribution relationship for health insurance based on current enrollment without health savings account equivalents. Monthly/Semi-Monthly rates are listed as follows: Current PPO Plan Premium Equivalent Monthly County Monthly Employee Semi Monthly County Semi Monthly Employee FY2019/2020 Cost Share Cost Share Cost Share 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 $734.84 $779.44 $367.42 Current HDP Plan Premium Equivalent Monthly County Monthly Employee Semi Monthly County Semi Monthly Employee FY2019/2020 Cost Share Cost Share Cost Share Cost Share Employee Only $680.51 $680.51 $0.00 $340.26 $0.00 Employee+Child(ren) $1,065.16 $916.04 $149.12 $458.02 $74.56 Employee+Spouse $1,369.49 $1,109.29 $260.20 $554.64 $130.10 Employee+Family $1,922.26 $1,441.70 $480.57 $720.85 $240.28 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. Vision premiums are paid 100 percent by employees and to date no increase has been proposed by Community Eye Care. There is no recommended increase to the FY2019/2020 Dental budget and the funding is proposed as follows: Projected 2019-20 Dental Costs $594,604 Proposed EE Contributions $227,532 Proposed OC Cost $367,073 Monthly rates for dental coverage are listed below: Monthly Premium Monthly Orange Monthly Employee Semi Monthly W I Premium Tier Equivalent County Cost Share Cost Share Employee Cost Share Employee only $30.49 $30.49 $0.00 $0.00 Employee children $82.32 $34.58 $47.74 $23.87 Employee spouse $73.17 $33.85 $39.32 $19.66 Family $106.71 $36.51 $70.20 $35.10 FINANCIAL IMPACT: No financial impact, there are no additional appropriations for Health or Dental Insurance for FY2019/2020. SOCIAL JUSTICE IMPACT: The following two Orange County Social Justice Goals are applicable to this item: 4 • 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 no increase to the Health Insurance 70 Fund for FY2019/2020, maintaining the County's current level of health, dental, and other employee benefits, and approve the County's continued participation as a member in the North Carolina Health Insurance Pool (NCHIP). 5 ATTACHMENT 1- Breakdown of County and Employee Contribution for Health Insurance Premium Equivalents Premium Premium BUDGET Equivalent Equivalent TOTAL COST EMPLOYEE EMPLOYER TOTAL COST EMPLOYEE EMPLOYER CHANGE Current PPO Plan FY2018/2019 FY2019/2020 Enrollment FY2018/2019 CONTRIBUTION CONTRIBUTION FY2019/2020 CONTRIBUTION CONTRIBUTION FY2018/2019 Employee Only $806.59 $806.59 570 $5,517,076 $0 $5,517,076 $5,517,076 $0 $5,517,076 $0 Employee+Child(ren) $1,267.24 $1,267.24 164 $2,493,928 $411,821 $2,082,107 $2,493,928 $411,821 $2,082,107 $0 Employee+Spouse $1,631.71 $1,631.71 48 $939,865 $279,456 $660,409 $939,865 $279,456 $660,409 $0 Employee+Family $2,293.71 $2,293.71 40 $1,100,981 $362,176 $738,805 $1,100,981 $362,176 $738,805 $0 822 $10,051,850 $1,053,453 $12,780,611 $10,051,850 $1,053,453 $8,998,397 $0 Premium Premium BUDGET Equivalent Equivalent TOTAL COST EMPLOYEE EMPLOYER TOTAL COST EMPLOYEE EMPLOYER CHANGE Current HDP Plan FY2018/2019 FY2019/2020 Enrollment FY2018/2019 CONTRIBUTION CONTRIBUTION FY2019/2020 CONTRIBUTION CONTRIBUTION FY2018/2019 Employee Only $798.51 $680.51 133 $1,274,422 $0 $1,274,422 $1,086,094 $0 $1,086,094 (188,328.00) Employee+Child(ren) $1,183.16 $1,065.16 55 $780,886 $91,936 $688,950 $703,006 $91,936 $611,070 (77,880.00) Employee+Spouse $1,487.49 $1,369.49 25 $446,247 $64,026 $382,221 $410,847 $64,026 $346,821 (35,400.00) Employee4amily $2,040.26 $1,922.26 29 $710,010 $196,437 $513,574 $668,946 $196,437 $472,510 (41,064.00) 242 $3,211,565 $352,399 $2,859,166 $2,868,893 $352,399 $2,516,494 (342,672.00) 1064 $13,263,415 $1,405,851 $15,639,777 $12,920,743 $1,405,851 $11,514,891 (342,672.00) *Decrease in funds represents funding separately for Health Savings Account.