HomeMy WebLinkAboutAgenda 03-15-22; 6-b - Recommendations for Employee Health Insurance and Dental Insurance 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 15, 2022
Action Agenda
Item No. 6-b
SUBJECT: Recommendations for Employee Health Insurance and Dental Insurance
DEPARTMENT: Human Resources
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1: Projected Health and Brenda Bartholomew, Human Resources
Dental Insurance Rates Director, (919) 245-2552
for FY 2022-23
PURPOSE: To approve the Manager's recommendations regarding employee health and dental
insurance effective July 1, 2022 through June 30, 2023.
BACKGROUND: The County provides employees with a comprehensive benefits plan that
includes participation in robust health and dental insurance plans for employees and their families.
Each year, the Board of Commissioners is asked to review and approve health and dental
insurance rates in advance of the annual budget so that open enrollment can be completed prior
to the beginning of the plan year which starts on July 1.
Health Insurance
Since the Board of County Commissioners approved Orange County's participation in the North
Carolina Health Insurance Pool in FY 2018-19, the County has maintained the same monthly
premium equivalent rates for health insurance and dental coverage for employees and pre-65
retirees based on stable claims experience.
Funding for the health plan is based on estimated premium equivalents rates that are necessary
to pay for incurred claims, administrative costs and expected liability of claims incurred but not yet
reported (IBNR). The plan also carries a reserve balance which ensures the County's ability to
pay claims. A reserve policy or the fund ratio target should range between 1.5 and 3.0 over IBNR
to ensure the ability to pay for future claims based on current claims experience which currently
have been higher than expected. The current fund ratio is 1.9 through January 2022. In FY2022-
23, that reserve amount is recommended to be 2 to 2.5X of expected IBNR liability.
In the current fiscal year, the Health Insurance plan experienced an increase in the overall number
of claims, higher costs per claim, and two very high cost claims. Although the plan is projected to
have a positive year-end balance of $1,380,254, additional funding is necessary to cover
projected total plan costs for FY 2022-23 and to build reserve levels for future sustainability of
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rates. The actuarial analysis conducted by the North Carolina Health Insurance Pool is
recommending an increase of five percent (5%).
The Manager recommends that the County assumes 100% of the recommended 5% increase
and that the employee contribution continues at current rates. This represents a total budget
increase of $626,813.
FY 2020-21 through FY 2021-22 Health Insurance Rates
Monthly Employee Employer
Year Rates Cost Annual Cost Contribution Contribution
2021 Current Rates $1,048,610 $12,583,316 $1,637,930 $10,945,390
2022 Renewal Rates $1,100,844 $13,210,129 $1,719,517 $11,490,611
Current Rates with Employer
2022 Increase Only(Renewal) $1,100,844 $13,210,129 $1,637,930 $11,572,198
Net Increase $52,234 $626,813
Dental Insurance
Delta Dental is the County's Dental provider and the County will continue to provide coverage with
Delta Dental. The Board of County Commissioners approved an increase of funding totaling
$92,236 (County contribution of$73,286)for the FY2021-22 Dental Fund. The total Dental budget
is currently $639,000 and no increase is recommended for FY2022-23.
FINANCIAL IMPACT: The FY 2022-23 Health and Dental Fund budget request is anticipated to
increase by $626,813.
SOCIAL JUSTICE IMPACT: The following two Orange County Social Justice Goals are
applicable to this 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.
ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal
impact associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board:
1) approve an increase of 5% to the Health Insurance Premium Equivalents for both active
and pre-65 retirees with the amount of the increase to be fully paid by the County;
2) approve moving forward with Dental Insurance as outlined above (no changes); and
3) approve the County continuing to participate as a member in the North Carolina Health
Insurance Pool (NCHIP).
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Attachment 1: FY 2022-23 Projected Health and Dental Insurance Rates
Table 1: FY 2020-21 through FY 2021-22 Health Insurance Rates
Monthly Cost Total Cost Employee Employer
Contribution Contribution
2021 current rates $1,048,610 $12,583,316 $1,637,930 $10,945,385
2022 renewal rates $1,100,844 $13,210,129 $1,719,517 $11,490,610
2022 current rates with employer $1,100,844 $13,210,129 $1,637,930 $11,572,199
increase only(renewal)
Table 2:Comparison of Health Insurance Rates from FY 2021-22 to FY 2022-23
DesignsNCIITP-Cut rent Plan
Monthly Monthly Montwv MointtdvCurrent Rates NCHW Rates
PPO PLAN
EE Oils 564 580659 S454,917 S846.77 3477,577
EE+ Spouse 54 S1,631.71 S68,112 S1,712.99 592,501
EE+Child 0 50.00 50 S0.00 SO
EE+Chi1dren 189 $1,267.24 5239,50E $1,330.36 $251,439
EE+Family 33 S2,293.71 $75,692 $2,407.97 $79,463
HDHP PLAN
EE On1y- 107 S680.51 $72,615 $714.41 576,442
EE+ Spouse 12 S1,369.49 S16,434 $1,437.71 S17,252
EE+Child 0 S0.00 S0 $0.00 50
EE+Clulclien 39 $1,065.16 541,541 $1,118.222 543,611
EE+Fami1y 31 $1,922_26 S59,590 52,018.01 562,558
Total PPO
$1,048,610
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Table 3: FY 2021-22 Employee and Employer Health Insurance Contributions
Monthly Monthly
Monthly Monthly Semi Monthly Semi Monthly
Premium Premium 2022 Total
Current PPO Plan Employee Cost Employer Employee Cost Employer Cost
Equivalent for Equivalent for Annual Cost
Share Cost Share Share Share
Employee Employer
Employee Only $806.59 $846.77 $10,161 $0.00 $846.77 $0.00 $423.39
Employee Spouse $1,631.71 $1,712.99 $20,556 $229.90 $1,483.09 $114.95 $741.55
Employee Children $1,267.24 $1,330.36 $15,964 $409.20 $921.16 $204.60 $460.58
Employee Family $2,293.71 $2,407.97 $28,896 $734.84 $1,673.13 $367.42 $836.57
Premium Premium 2022 Total Monthly Monthly Semi Monthly Semi Monthly
Current HDP Plan Equivalent for Equivalent for Annual Cost Employee Cost Employer Employee Cost Employer Cost
Employee Employer Share Cost Share Share Share
Employee Only $680.52 $714.41 $8,573 $0.00 $714.41 $0.00 $357.21
Employee Spouse $1,369.50 $1,437.71 $17,253 $149.12 $1,288.59 $74.56 $644.30
Employee Children $1,065.16 $1,118.22 $13,419 $260.20 $858.02 $130.10 $429.01
Employee Family $1,922.26 $2,018.01 $24,216 $480.57 $1,537.44 $240.28 $768.72
Table 4: FY 2021-22 Employee and Employer Dental Insurance Contributions
Monthly Premium Monthly Employer Monthly Employee Semi Monthly
Premium Tier Equivalent 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