HomeMy WebLinkAboutAgenda - 03-21-2023; 6-b - Recommendations for Employee Health Insurance and Other Benefits 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 21, 2023
Action Agenda
Item No. 6-b
SUBJECT: Recommendations for Employee Health Insurance and Other Benefits
DEPARTMENT: Human Resources
ATTACHMENT(S): INFORMATION CONTACT:
Attachment 1: Projected Health and Dental Brenda Bartholomew, Human Resources
Insurance Rates for FY Director, (919) 245-2552
2023-24
PURPOSE: To approve the Manager's recommendations regarding employee health and dental
insurance effective July 1, 2023 through June 30, 2024.
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
The Board of County Commissioners approved Orange County's participation in the North
Carolina Health Insurance Pool in FY 2018-19. From that time until FY 2022-23, neither health
nor dental insurance costs increased due to stable claims experience. In FY 2022-23, the health
insurance plan experienced an increase in the overall number of claims and higher costs per claim
incurred than prior years, which resulted in a drawdown of reserves. As a result, the Board
approved an increase of 5% to the health insurance plan for both active employees and pre-65
retirees. That increase was fully paid by the County and not passed on to employees.
Funding for the health plan is based on estimated premium equivalents rates that are necessary
to pay for incurred claims, administrative and reinsurance costs, and the expected liability of
claims incurred but not reported (IBNR). The plan also carries a reserve balance which ensures
the County's ability to pay claims. The reserve policy ranges between 1.5 and 3.0 over IBNR to
ensure the ability to pay for future claims based on current claims experience which currently are
higher than expected. The County's current reserve ratio is 1.1 through January 2023. In FY
2023-24 and beyond, that reserve amount is recommended to be two (2)times the expected IBNR
liability.
Although the plan is projected to have a positive year-end balance of$833,090, additional funding
is necessary to cover projected total plan costs for FY 2023-24 and to continue to build reserve
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levels for future sustainability of 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 contributions continue at current rates. As such, a 5.5% increase for
funding the County contribution is proposed. This represents a total budget increase of$659,108.
FY 2023-24 Health Insurance Rate Renewal
Year Rates Monthly Cost Annual Cost Employee Employer
Contribution Contribution
2022 Current Rates $1,098,486 $13,181,834 $1,296,475 $11,885,359
2023 Current Rates with Employer $1,153,412 $13,840,942 $1,296,475 $12,544,467
Increase Only (Renewal)
Net Increase $54,926 $659,108 $0 $659,108
Dental Insurance
Delta Dental is the County's current 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 FY 2021-22 Dental Fund. The total
Dental budget is currently $639,000, and no increase is recommended for FY 2023-24.
Behavioral Health Services
A new behavioral health benefit is also being recommended for FY 2023-24. Based on clinical
assessments, this program provides access to mental wellness resources, guided assessment
and recommendations, an immediate gateway to personalized support, and access to a therapist
within three days. The services is available 24 hours a day, 7 days a week.
Training, communication and knowledge-building materials are also available and designed to
engage all employees in an effort to maintain a supportive work environment that combats the
stigma around mental health. The total cost of this program is $89,000.
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.
FINANCIAL IMPACT: The FY 2023-24 Health and Dental Fund budget request is anticipated to
increase by $659,108. The recommendation for implementing UNUM Behavioral Health for all
employees is $89,000.
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RECOMMENDATION(S): The Manager recommends that the Board:
• approve an increase of 5% to the Health Insurance Premium Equivalents for both active
and pre-65 retirees and the amount of the increase to be fully paid by the County;
• approve an increase of Health Insurance funding of $659,108;
• approve the County's continued participation as a member in the North Carolina Health
Insurance Pool (NCHIP); and
• approve the County implementing UNUM Behavioral Health as a benefit to all employees
at a cost of $89,000.
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Attachment 1: FY 2023-24 Projected Health and Dental Insurance Rates
Table 1: Comparison of Health Insurance Funding from FY 2022-23 to FY 2023-24
2022 2023
Premium Premium
Current PPO Plan Enrollment Equivalent TOTAL COST EMPLOYEE EMPLOYER Equivalent TOTAL COST EMPLOYEE EMPLOYER
Employee Only 594 $846.92 $6,036,846 $0 $6,036,846 $889.27 $6,338,717 $0 $6,338,717
Employee+Spouse 53 $1,713.30 $1,089,659 $260,251 $829,408 $1,798.96 $1,144,139 $260,251 $883,887
Employee+Child(ren) 174 $1,330.60 $2,778,293 $480,031 $2,298,262 $1,397.13 $2,917,207 $480,031 $2,437,176
Employee-Family 34 $2,408.40 $982,627 $299,815 $682,812 $2,528.82 $1,031,759 $299,815 $731,944
$10,887,425 $1,040,097 $9,847,327 $11,431,821 $1,040,097 $10,391,724
Current HDHP Plan Enrollment Premium TOTAL COST EMPLOYEE EMPLOYER Premium TOTAL COST EMPLOYEE EMPLOYER
Equivalent Equivalent
Employee Only 117 $714.54 $1,003,214 $0 $1,003,214 $750.26 $1,053,365 $0 $1,053,365
Employee+Spouse 15 $1,437.96 $258,833 $48,924 $209,909 $1,509.86 $271,775 $48,924 $222,851
Employee+Child(ren) 30 $1,118.42 $402,631 $54,655 $347,976 $1,174.34 $422,762 $54,655 $368,107
Employee+Family 26 $2,018.37 $629,731 $152,799 $476,933 $2,119.29 $661,218 $152,799 $508,420
$2,294,410 $256,378 $2,038,032 $2,409,121 $256,378 $2,152,743
COMBINED PLANS $13,181,834 $1,296,475 $11,885,359 $13,840,942 $1,296,475 $12,544,467
INCREASE $659,108
Table 2: FY 2023-24 Employee and Employer Health Insurance Rates
Employee Semi-Monthly Rates (PPO PLAN)
EMPLOYEE SEMI-MONTHLY PAYROLL
COVERAGE LEVEL DEDUCTION COUNTY SEMI-MONTHLY CONTRIBUTION
Employee Only $0.00 $444.64
Employee+Child(ren) $114.95 $583.62
Employee+Spouse $204.60 $694.88
Employee+Family $367.42 $896.99
Employee Semi-Monthly Rates (HDHP PLAN)
EMPLOYEE SEMI-MONTHLY PAYROLL COUNTY SEMI-MONTHLY CONTRIBUTION
COVERAGE LEVEL
DEDUCTION (INCLUDES HSA FUNDING)
Employee Only $0.00 $493.13
Employee+Child(ren) $75.91 $629.26
Employee+Spouse $135.90 $737.03
Employee+Family $244.87 $932.78
Table 3: FY 2023-24 Employee and Employer Dental Insurance Contributions
Premium Tier Monthly Premium Equivalent Monthly Orange County Monthly Employee Cost Semi Monthly Employee
Cost Share Share 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