HomeMy WebLinkAboutAgenda - 10-03-2000-8gORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 3, 2000
Action Agenda
Item No. J
SUBJECT: _Employee Health Insurance for 2001 --T __
DEPARTMENT: Personnel PUBLIC HEARING: (Y/N) No
ATTACHMENT(S);
Draft 2001 Monthly Health Insurance
Rates
INFORMATION CONTACT:
Elaine Holmes, Personnel Director,
Extension 2550
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968501
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
(formerly Healthsource) effective January 1, 2001.
BACKGROUND: In summary, the County has received renewal rate quotations for employee
health insurance effective January 1, 2001. The renewal rates quoted are within the amounts
budgeted for health insurance for 2001. Additional information is provided below:
Current Health Plans
Currently Orange County offers three health insurance plans: Blue Cross Preferred Provider
Plan, Blue Cross Personal Care Plan and CIGNA (formerly Healthsource). Both Blue Cross
plans are offered through the North Carolina Association of County Commissioners' (NCACC)
Health Insurance Trust; The County entered into the Interlocal Agreement with the NCACC
Trust effective January 1, 1996. The Blue Cross Preferred Provider Plan is a type of traditional
health insurance plan. The Blue Cross Personal Care Plan and CIGNA are health maintenance
organizations (HMOs).
2001 Health Insurance Rates
The NCACC Health Insurance Trust and CIGNA renewal rate quotations effective January 1,
2001 for the current health plans as follows:
Health Plan Rate Increase Employees Enrolled
Blue Cross Personal Care Plan 15.8% 414
Blue Cross Preferred Provider Plan 15.$% 52
CIGNA 10.5% 160
The NCACC Trust advises the 15.8 percent rate increase results from the increasing trend in
health insurance costs generally and the County's awn claims experience. This compares to
increases in past years as follows:
Year NCACC Trust CIGNA
2000 4.5% 5%-14.8%*
1999 10% (PCP)
24% (PPO) 13%
1998 0.3% 2%-3%*
1997 5.8% -6.0%
1996 -15.5% 2.4%
*Depending on coverage type.
County Contribution for Employee Health Insurance
Attached are the draft monthly health insurance rates for 2001. This shows the Total Cost,
County Cost and Employee Cost for each coverage type. In the past the County has
established its contribution for employee health insurance as the:
• Full cost for the individual employee coverage
• 40 percent of the cost of dependent coverage based on the Blue Cross Personal Care plan
rate. The County then has applied the dollar amount of the dependent contribution
calculated on the Blue Cross person Care Plan rate to the Blue Cross Preferred Provider
and CIGNA plan rates.
The attached rates have been calculated in this same manner.
Budget for Health Insurance
The cost of the proposed County contribution far individual coverage and dependent coverage
is within the amount budgeted for health insurance for 2000-01. The Gounty budget for fiscal
year 2000-01 provides funding for up to a 20 percent health insurance increase effective
January 1, 2001. In dollars, this is about $2fi0,000 for the fiscal year. The estimated cost of the
actual renewal rates fog the fiscal year is about $190,000 or about $70,000 less than projected.
Sole Provider Option
The County also requested that the NCACC Trust provide a "sole provide' 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, 2001 and offering only the Blue
Crass plans. Far the sole provider option, the NCACC Trust quoted rates that represent about
a 12.3 percent increase over the current rates as compared to the 15.8 percent increase if the
County retains the CIGNA plan as well as the Trust. It is estimated this would yield a savings of
about $40,000 in fiscal year 2000-01 over the renewal rate quoted and about $70,000 on an
annual basis.
Over the past years employee participation in the CIGNA plan had declined. As of last year
CIGNA participation was at 22 percent of health plan participants. However, in the past year
many of the Solid Waste employees transferring from the Town of Chapel Hill selected CIGNA
and many new hires also have selected CIGNA. As a result, CIGNA participation has increased
to 25 percent of health plan participants. Based on this, it is recommended that the County
continue to offer the CIGNA plan. Further, it would appear based on this year's health
insurance renewal discussions that the element of competition created by the offering two
health plans has been to the County's advantage.
FINANCIAL IMPACT: As explained in the budget section above, funds for the health insurance
renewal are available in the approved budget for 2000-01.
RECOMMENDATION(S): The Manager recommends that the Board:
• Approve renewal of the County health insurance plans and authorize the Chair to sign the
implementing Interlocal Agreement with the NCACC Health Insurance Trust, subject to the
review of staff and the County Attorney.
^ Approve the attached health insurance rates effective January 1, 2001.
4
Attachment
2001 Monthly Health Insurance Rates
Blue Cross Personal Care Plan (HMO)
Total Cost Paid by the
Coun Paid by the
Em to ee
Old New .Old New Old New
Employee Only $199.94 $231.53 $199.94 $231.53 $0.00 $0.00
Employee/Child(ren) 385.90 446.86 274.32 317.66 $111.58 $129.20
Employee/Spouse 421.$8 488.31 288.72 334.24 $133.16 $154.07
Employee/Family 599.82 694.59 359.88 416.75 $239.94 $277.84
Blue Cross Preferred Provider Plan
Total Cost Paid by the
Coun Paid •by the
Em to ee
Old New Old New Old New
Employee Only $224.10 $259.50 $224.10 $259.50 $0.00 $0.00
Employee/Child(ren) 432.48 500.81 274.32 317.66 $158.16 $183.1 S
Employee/Spouse 472.80 547.51 288.72 334.24 $184.08 $213.27
Employee/Family 672.26 778.47 359.88 416.75 $312.38 $361.72
CIGNA Healthcare (HMO}
~: Total Cost Paid by the
Coun Paid by the
Em to ee
Old New Old New Old New
Employee Only $209.00 $231.00 $209.00 $231.00 $0.00 $0.00
Employee/Child(ren) 403.00 446.00 274.32 317.66 $128.68 $128.34
Employee/Spouse 441.00 487.00 288.72 334.24 $152.28 $152.76
Employee/Family 627.00 683.00 359.88 416.75 $267.12 $266.25
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