HomeMy WebLinkAboutAgenda - 09-16-2003-9aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 16, 2003
Action Agenda
Item No. ~ - a
SUBJECT: Employee Health Insurance Renewal for 2004
DEPARTMENT: Personnel
PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
1 -Draft 2004 Monthly Health Insurance
Rates
2 -Health Insurance Renewal Options
and Costs
INFORMATION CONTACT:
Elaine Holmes, Personnel Director
Extension 2550
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider renewal of employee health insurance plans through the North
Carolina Association of County Commissioners (NCACC) Health Insurance Trust and CIGNA
effective January 1, 2004.
BACKGROUND: In summary, the County has received renewal rate quotations for employee
health insurance effective January 1, 2004. The renewal rates quoted are well within the
amount budgeted for health insurance for 2004. Additional information is provided below.
Current Health Plans
Currently Orange County offers three health insurance plans:
• Blue Cross Blue Care Plan
• Blue Cross Blue Options Plan
• CIGNA Healthcare
Both Blue Cross plans are contracted through the NCACC Health Insurance Trust. The Blue
Cross Blue Care Plan and CIGNA are health maintenance organizations (HMOs). The Blue
Cross Blue Options Plan is a type of traditional health insurance plan called a Preferred
Provider Plan. The chart below shows the number of employees enrolled in each plan.
Health Plan Employees Enrolled
Blue Cross Blue Care Plan 519
Blue Cross Blue Options Plan 36
Cigna 130
2004 Rates
The NCACC Health Insurance Trust and CIGNA have provided renewal rate quotations
effective January 1, 2004 for the current health plans as follows:
Plan Rate Increase
Blue Cross Blue Care Plan 13.80%
Blue Cross Blue Options Plan 13.80%
CIGNA 17.21
Benefits Changes
The NCACC Trust renewal provides for minor changes to the Blue Cross Blue Care and Blue
Options Plans.
• The Blue Cross Blue Care Plan includes one adjustment to the benefits offered during 2003.
With the 2004 renewal, the Emergency Room co-payment increases from $100 to $150.
• For the Blue Cross Blue Options Plan the Emergency Room co-payment also increases
from $100 to $150. In addition, inpatient and outpatient hospital diagnostic services (such
as X-rays, CT scans, and MRIs) are changed from full coverage to 90% coverage after
meeting the standard $250 deductible.
The CIGNA plan renewal also includes two minor benefit changes. One provides fora 60 visit
limit on home health visits as compared to the previous no limit on such visits and the other
provides a $5 discount on mail order prescriptions.
County Contribution for Employee Health Insurance
For the 2003 benefit plan year, the County established its contribution for employee health
insurance as the:
• Full cost for individual employee coverage and
• 52 percent of the cost of dependent coverage based on the Blue Cross Blue Care Plan rate.
The County then applied the dollar amount of the dependent contribution calculated based
on the Blue Cross Blue Care rate to the Blue Cross Blue Options and CIGNA plans. The
County had increased the subsidy from 40 percent to 52 percent with the January 1, 2003
renewal to offset the impact on employees of the 25 percent health insurance cost increase
in 2003.
The Attachment 1 draft monthly health insurance plan rates are based on renewal of the current
plans with continuation of the current 52 percent dependent subsidy based on the Blue Care
Plan. Continuation of the subsidy at this level maintains a key "family friendly" policy offered by
the County. This is a family friendly policy in that it makes health insurance coverage for
dependents, whether spouse, children or both, more affordable and thus accessible. It
particularly benefits lower salaried employees for whom dependent health insurance coverage
is a significant cost.
Budget for fiscal year 2003-04
The County budget for fiscal year 2003-04 provides funding for up to a 20 percent health
insurance increase effective January 1, 2004. In dollars, this is about $376,000 budgeted for
the projected increase.
Based on the quoted renewal rates for 2004, the cost of the County contribution for
individual coverage and dependent coverage are within the amount budgeted for health
insurance for 2003-04. The estimated budget savings yielded by the actual renewal rates
quoted over the amount budgeted in fiscal year 2003-04 are about $110,000.
Sole Provider Option
The County also requested the NCACC Trust provide a "sole provider" quote for the Blue Cross
Plans through the Trust. If the County enters into a sole provider contract, this would mean
discontinuing the current CIGNA plan effective January 1, 2004 and offering only the Blue
Cross Plans. Employees enrolled in CIGNA would have to change to either the Blue Cross
Blue Care Plan or the Blue Cross Blue Options Plan effective January 1, 2004.
For the sole provider option, the NCACC Trust quoted rates indicating a 3 percent cost
reduction in the renewal rates quoted for the Blue Cross Blue Care and Blue Options Plans. It
is estimated this would yield a savings of about $55,000 in 2003-04 over the regular renewal
quoted or about $94,000 on an annual basis.
The Manager's recommendation provides for continuation of the CIGNA plan for 2004. This is
based on the employee interest in maintaining choice in health insurance plans, the fact that
once the County eliminates CIGNA it will not be able to restore that or another plan under the
NCACC Trust's contract requirements and the fact that the three percent cost savings quoted
for this year is a relatively small given the size of the County's health insurance contract.
Next Steps
With the Board's approval of the heath insurance renewal and rates, staff will proceed to
develop the employee open enrollment packets, distribute these to employees in early October,
hold the open enrollment period from October 10 through November 7 with the Benefits and
Wellness Fair tentatively scheduled for Wednesday, October 22. The deadline for employees
to submit any change forms to Personnel will be Friday, November 7.. Payroll deductions at the
new rates will begin in the pay period beginning November 24 for coverage effective January 1,
2004.
FINANCIAL IMPACT: As noted, the County budget for 2003-04 provides funding for up to a 20
percent health insurance cost increase - or about $376,000. Attachment 2 shows the current
costs for health insurance and the projected costs for renewal of the current plans or renewal
with the Trust as the County's sole provider. Both options are within the amount budgeted.
• The 2003-04 cost increase for the renewal of the current plans is about $266,282. This is
about $110,000 less in cost than the amount budgeted.
• Renewal with the sole provider option is about a $211,373 cost increase for 2003-04. This
is about $165,000 less than the amount budgeted.
4
RECOMMENDATION(S): The Manager recommends that the Board:
• Approve renewal of employee health insurance plans with the NCACC Health Insurance
Trust and CIGNA.
• Adopt the attached health insurance rates for coverage effective January 1, 2004 including
continuing the dependent subsidy at 52 percent.
Attachment 1
Draft 2004 Monthly Health Insurance Rates
Blue Cross Blue Care Plan
Total Cost Paid by the County Paid by the Employee
Old New Old New Old New
Employee Only $312.44 $355.61 $312.44 $355.61 $0.00 $0.00
Employee/Child(ren) $603.00 $686.34 $463.53 $527.59 $139.47 $158.75
Employee/Spouse $658.94 $750.01 $492.62 $560.70 $166.32 $189.31
Employee/Family $937.30 $1,066.83 $637.37 $725.44 $299.93 $341.39
Blue Cross Blue Options Plan
Total Cost Paid by the County Paid by the Employee
Old New Old New Old New
Employee Only $350.18 $398.58 $350.18 $398.58 $0.00 $0.00
Employee/Child(ren) $675.80 $769.20 $463.53 $527.59 $212.27 $241.61
Employee/Spouse $738.82 $840.92 $492.62 $560.70 $246.20 $280.22
Employee/Family $1,050.48 $1,195.67 $637.37 $725.44 $413.11 $470.23
CIGNA Healthcare
Total Cost Paid by the County Paid by the Employee
Old New Old New Old New
Employee Only $296.40 $347.40 $296.40 $347.40 $0.00 $0.00
Employee/Child(ren) $572.27 $670.73 $463.53 $527.59 $108.74 $143.14
Employee/Spouse $624.86 $732.40 $492.62 $560.70 $132.24 $171.70
Employee/Family $876.34 $1,027.16 $637.37 $725.44 $238.97 $301.72
5
Note: Rates are based upon a dependent subsidy of 52 percent calculated on the Blue Care Plan with the same
dollar amount then applied to the Blue Options and CIGNA Plans.
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