HomeMy WebLinkAboutAgenda - 10-03-2005-5hORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 3, 2005
Action Agend
Item No. _
SUBJECT: Employee Dental Insurance for 2006
DEPARTMENT: Personnel PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Draft Monthly Dental Insurance Rates
INFORMATION CONTACT:
Elaine Holmes, 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, 2006.
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 casts and projected
plan revenue. After analysis of Orange County dental claims costs, and consulting with Delta
Dental regarding administrative costs, staff recommends a 14 percent increase in dental
insurance rates for the 2006 calendar year effective January 1, 2006. This includes an 11
percent increase in the Delta Dental Plan administrative fee from $1.82 per employee per
month to $2.02.
The recommended rate increase represents about a $16,000 increase in County cast for 2005-
06 for the approximately 830 positions covered in the dental insurance group. Funds are
available within the approved dental insurance budget for fiscal year 2005-06. Over the past 10
years the County has increased dental rates in 2000, and 2001. The last increase prior to that
was in 1994.
2006 Dental Insurance Rates
The recommended 14 percent rate increase arises from several factors including increases in
dental insurance costs, updates to the table of allowances for dental procedures during the
2005 plan year to maintain benefits in line with market rates, increased use 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.
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County Contribution for Employee Dental Insurance
Attached are the draft monthly dental insurance rates for 2006, 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.
FINANCIAL IMPACT: The estimated 2005-06 County cast of the increase is about $16,000
from all fund sources. The annual cost increase is about $27,000. The Budget Director
advises that the cost of the increase can be covered from funds available within the approved
dental insurance budget for 2005-06. The 2005-06 budget provided for up to a 14 percent
increase beginning December 1, 2005,
RECOMMENDATION(S): The Manager recommends that the Board approve the attached
dental insurance rates effective January 1, 2006, and authorize the Personnel Director to sign
the contract with Delta Dental for Plan administrative services.
Attachment
Draft Monthly Dental Insurance Rates
For 2006
Coverage Type Total Cost County Cost Employee Cost
Old New Old New Old New
Employee Only 19.38 22.09 19,38 22.09 0 0
Employee/Children 52.82 60.21 19.38 22.09 33,44 38,12
Employee/Spouse 47.42 54,06 19,38 22.09 28.04 31,97
Employee/Family 67.28 76.70 19.38 22.09 47.90 54.61