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HomeMy WebLinkAboutAgenda - 03-24-20; 8-b - Recommendations for Employee Health Insurance and Other Benefits 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 24, 2020 Action Agenda Item No. 8-b SUBJECT: Recommendations for Employee Health Insurance and Other Benefits DEPARTMENT: Human Resources ATTACHMENT(S): 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, 2020 through June 30, 2021, with no increase in appropriations for the FY2020/2021 Health Budget and an increase of funding for the Dental Budget of $92,236. Further, the Manager is recommending that the County continues 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. In FY2018/2019, the Board of County Commissions approved the County's participation in the North Carolina Health Insurance Pool and approved increasing Health Insurance funding (County share) $750,000 and the Dental Insurance funding (County share) $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 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 to the FY2018/2019 budget. In FY2019/2020, the Board of County Commissions approved the County's continued participation in the North Carolina Health Insurance Pool with no increase to the Health Insurance (70 Fund). The County maintained current premium equivalent rates for health 2 insurance and dental coverage for employees and pre-65 retirees. The total FY2019/2020 appropriation is $13.3 million (including health savings account contributions). Health Insurance For the FY2020/2021 plan year, no increase to the Health Insurance (70 Fund) is recommended. As such, a budget of $13 million (including health savings account contributions) based on current enrollments employees and pre-65 retirees. The County contribution is projected at $11 million. Through February 2020, Orange County is in a very good position from a reserve perspective with NCHIP. Average monthly enrollment is 1,063 employees (1,758 total members). Actual spending through February 2020 is $8,028,107 which is comprised of $6,944,910 for total net claims paid and $1,083,197 for total fixed costs. Total reserve balance YTD has increased by $693K and over two years is currently $3,400,230. This is well over the recommended reserve level due to extremely favorable claim experience the last 20 months and ability to share large claim risk with NCHIP partners. The following shows the total reserve balance by plan year: Year . Total (through Feb i Average Monthly Employees 1,053 1,063 Total Funding $12,969,352 $8,721,375 $21,690,726 Fixed Costs* $1,692,821 $1,083,197 $2,776,018 Reallocated Total Claims $8,569,569 $6,944,910 $15,514,479 Total Cost $10,262,390 $8,028,107 $18,290,497 Net Variance (RESERVE) $2,706,962 $693,268 $3,400,230 ('Includes Administration,Stop Loss, Consulting, Legal,Accounting,D&O,Care Management Fees,SOA True Up and Benefits Administration) The following represents total health care appropriations over the last five years: 2016-17 2017-18 2018-19 2019-20 2020-21 Health Insurance $11,784,305 $12,585,606 $13,333,299 $13,333,299 $13,333,299 Budget Health Budget% 6.33% 6.80% 5.94% 0.00% 0.00/o° Increase 3 The following demonstrates the breakdown of the County and employee contribution relationship for health insurance based on current enrollment without health savings account equivalents. NCHIP RATES ORANGE COUNTY July 1,2020-June 30,2021 Premium Monthly TOTAL COST EMPLOYEE EMPLOYER Current PPO Plan Equivalent Enrollment cost FY2020/2021 CONTRIBUTION CONTRIBUTION FY2020/2021 Employee Only $806.59 572 $461,369 $5,536,434 $0 $5,536,434 Employee+Child(ren) $1,267.24 183 $231,905 $2,782,859 $411,821 $2,371,038 Employee+Spouse $1,631.71 50 $81,586 $979,026 $279,456 $699,570 Employee+Family $2,293.71 34 $77,986 $935,834 $362,176 $573,657 839 $852,846 $10,234,152 $1,053,453 $9,180,700 Premium Monthly TOTAL COST EMPLOYEE EMPLOYER Current CDHP Plan Equivalent Enrollment cost FY2018/2019 CONTRIBUTION CONTRIBUTION FY2020/2021 Employee Only $680.52 126 $85,744 $1,028,931 $0 $1,028,931 Employee+Child(ren) $1,065.16 53 $56,453 $677,442 $91,936 $585,506 Employee+Spouse $1,369.50 21 $28,759 $345,111 $64,026 $281,085 Employee+Family $1,922.26 32 $61,512 $738,148 $196,437 $541,711 232 $232,469 $2,789,632 $352,399 $2,437,234 1071 $1,085,315 $13,0239785 $194059851 $11,617,933 The Monthly/Semi-Monthly rates are listed as follows: Current PPO Plan Premium Equivalent Monthly Monthly Semi Monthly Semi Monthly FY2020/2021 County Cost Employee Cost County Cost Share Employee Cost Share Share 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 Monthly Semi Monthly Semi Monthly FY2020/2021 County Cost Employee Cost County Cost Share Employee Cost Share Share Share Employee Only $680.52 $680.51 $0.00 $340.26 $0.00 Employee+Child(ren) $1,065.16 $916.04 $149.12 $458.02 $74.56 Employee+Spouse $1,369.50 $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 five percent increase to the FY2020/2021 Dental budget. While there is not increase of administrative cost, increasing the County contribution of premium equivalents is recommended 4 to cover expected claims for FY2020/2021. Orange County has experienced an increase in claims this fiscal year, and is projected to finish ten percent over budget year end ($577K Budget v $636K Year-End Estimate). 2019/2020 2019/2020 Year End Budget Estimate Total Costs $577,596 $636,931 EE Contributions $217,781 $236,732 OC Contributions $359,815 $400,200 The Manager recommends an increase of funding totaling $92,236 for the FY2020/2021; this is total cost for employee and county contributions to premium equivalents. This represents a total increase of 16 percent over last year's budget. FY 2020/2021 BUDGET 2019/2020 Recommended Budget Increase Budget 2020/2021 Budget Total Costs $577,596 $669,832 $92,236 EE Contributions $217,781 $236,732 $18,951 OC Contributions $359,815 $433,101 $73,286 Monthly rates for dental coverage are listed below: Monthly Premium Monthly Orange Monthly Employee Semi Monthly 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: There are no additional appropriations for Health Insurance for FY2020/2021. An increase of $92,236 is recommended to appropriately fund Dental Insurance coverage for FY2020/2021. • 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 an increase of $92,236 to the Health and Dental Insurance (70 Fund); $0 increase for health insurance and $92,236 for dental insurance for FY2020/2021; and recommends the County to continue to participate as a member in the North Carolina Health Insurance Pool (NCHIP). REVISED ABSTRACT ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 24, 2020 Action Agenda Item No. 6-a SUBJECT: Approval of Emergency Small Business Funding Program DEPARTMENT(S): County Manager ATTACHMENT: INFORMATION CONTACT: Bonnie Hammersley, (919) 245-2300 Travis Myren, (919) 245-2308 PURPOSE: To provide Emergency Small Business funding to Orange County small businesses experiencing revenue loss due to the coronavirus pandemic in the form of both grants and loans. This program will be funded using Article 46 Sales Tax revenue that was originally budgeted in the Small Business Loan Program. The current balance in the Article 46 Small Business Loan Program is approximately $300,000. BACKGROUND: The coronavirus pandemic has impacted the global stock markets and disrupted economic and business growth throughout the United States. The County is committed to supporting its local businesses and has established various grants and small business loan programs to facilitate economic development. Given the substantial financial impact on small businesses from this pandemic, a new Emergency Small Business Funding Program is intended to provide immediate financial assistance. The BOCC previously approved Article 46 Sales Tax funding for the Small Business Loan Program which will be used to fund the Emergency Small Business Funding Program. Eligible small businesses may apply and qualify for either a grant, loan or both. An evaluation committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board will make final determinations for both grants and loans. This group will be staffed by the County’s Chief Finance Officer and Director of Economic Development. Following BOCC approval, this group will develop a plan to begin issuing grants and loans between April through June 2020. County staff will provide status reports to the Board. Eligibility requirements: - Orange County based businesses - Minimum of one year of operations - For-Profit business status - Profit and Loss statement indicating profitability prior to coronavirus pandemic Emergency financing program: - Maximum grant of $5,000 per small business with no repayment required. - Maximum loan of $20,000 per small business, according to the following terms: REVISED ABSTRACT o Businesses will be required to provide tax returns. The maximum loan and grant combination available to a small business will be limited to three months of fixed operating expenses. o Loans will be repaid over a five (5) year term. No payments will be due during the first six months of loan origination. o No interest will be changed on loans. o Small business will agree to an auto-draft process for loan payments. FINANCIAL IMPACT: The Emergency Small Business Funding Program is funded using funds originally authorized in the Article 46 Sales Tax Fund for the Small Business Loan Program. Approximately $300,000 is available in this account. These funds will be used for the express purpose of making small business loans and grants to eligible businesses. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item. • 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. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board recognize that the Emergency Small Business Funding Program is necessary to preserve jobs and tax base during the coronavirus pandemic and is consistent with the State of Emergency declared by Orange County on March 13, 2020, and approve the creation of the Emergency Small Business Funding Program and marketing of this program on the County’s website, press release, and social media outlets to communicate available financial support to small businesses impacted by the coronavirus pandemic. The Manager further recommends that an Emergency Small Business Funding Program Committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board make final determinations between April through June for both grants and loans and that County staff provide status reports to the Board. REVISED ABSTRACT ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 24, 2020 Action Agenda Item No. 6-a SUBJECT: Approval of Emergency Small Business Funding Program DEPARTMENT(S): County Manager ATTACHMENT: INFORMATION CONTACT: Bonnie Hammersley, (919) 245-2300 Travis Myren, (919) 245-2308 PURPOSE: To provide Emergency Small Business funding to Orange County small businesses experiencing revenue loss due to the coronavirus pandemic in the form of both grants and loans. This program will be funded using Article 46 Sales Tax revenue that was originally budgeted in the Small Business Loan Program. The current balance in the Article 46 Small Business Loan Program is approximately $300,000. BACKGROUND: The coronavirus pandemic has impacted the global stock markets and disrupted economic and business growth throughout the United States. The County is committed to supporting its local businesses and has established various grants and small business loan programs to facilitate economic development. Given the substantial financial impact on small businesses from this pandemic, a new Emergency Small Business Funding Program is intended to provide immediate financial assistance. The BOCC previously approved Article 46 Sales Tax funding for the Small Business Loan Program which will be used to fund the Emergency Small Business Funding Program. Eligible small businesses may apply and qualify for either a grant, loan or both. An evaluation committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board will make final determinations for both grants and loans. This group will be staffed by the County’s Chief Finance Officer and Director of Economic Development. Following BOCC approval, this group will develop a plan to begin issuing grants and loans between April through June 2020. County staff will provide status reports to the Board. Eligibility requirements: - Orange County based businesses - Minimum of one year of operations - For-Profit business status - Profit and Loss statement indicating profitability prior to coronavirus pandemic Emergency financing program: - Maximum grant of $5,000 per small business with no repayment required. - Maximum loan of $20,000 per small business, according to the following terms: REVISED ABSTRACT o Businesses will be required to provide tax returns. The maximum loan and grant combination available to a small business will be limited to three months of fixed operating expenses. o Loans will be repaid over a five (5) year term. No payments will be due during the first six months of loan origination. o No interest will be changed on loans. o Small business will agree to an auto-draft process for loan payments. FINANCIAL IMPACT: The Emergency Small Business Funding Program is funded using funds originally authorized in the Article 46 Sales Tax Fund for the Small Business Loan Program. Approximately $300,000 is available in this account. These funds will be used for the express purpose of making small business loans and grants to eligible businesses. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item. • 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. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board recognize that the Emergency Small Business Funding Program is necessary to preserve jobs and tax base during the coronavirus pandemic and is consistent with the State of Emergency declared by Orange County on March 13, 2020, and approve the creation of the Emergency Small Business Funding Program and marketing of this program on the County’s website, press release, and social media outlets to communicate available financial support to small businesses impacted by the coronavirus pandemic. The Manager further recommends that an Emergency Small Business Funding Program Committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board make final determinations between April through June for both grants and loans and that County staff provide status reports to the Board.