HomeMy WebLinkAboutAgenda - 10-14-2008 - 1ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 14, 2008
Action Agenda
Item No. ,~.
SUBJECT: 2009 Benefits Recommendation
DEPARTMENT: Human Resources PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
3. Health Insurance Participation
4. Health Insurance Plan Descriptions
1. Comparative Benefits Information
2. Dental Insurance Table of Allowances,
Projections
(Recommendation and Alternatives)
5. Health Insurance Costs
6. Advantages/Disadvantages of Health
Insurance (Recommended and Alternatives)
7. Benefits Costs from FY 04-05 to FY 07-08
INFORMATION CONTACT:
Michael McGinnis, HR Director, 245-2552
Diane Shepherd, Benefits Manager, 245-2558
PURPOSE: To approve the County Manager's 2009 employee dental insurance plan, flexible
compensation program, employee assistance program, and health insurance plan
recommendations.
BACKGROUND: The County provides employees with a comprehensive compensation plan.
This plan includes benefits that are provided at no cost to the employee or have a considerable
County contribution. These benefits enable employees to care for their health and financial
wellness. .Maintaining and improving these benefits when possible helps the County hire and
retain the best employees.
Annually staff reviews and revises the employee comprehensive benefit plans and makes a
recommendation to the BOCC. This recommendation is for renewal and changes to dental
insurance, flexible compensation, employee assistance program and health insurance that will
become effective January 1, 2009.
Discussions regarding benefits have been held with the Employee Relations Consortium (ERC),
the ERC Pay & Benefits Committee and department directors. Each group provided input to the
Human Resources Department related to compensation and benefits. An update of employee
benefits was provided and discussions were held with the Commissioners at the September 22,
2008 work session.
2
Staff reviewed the benefits survey conducted by The Archer Company and other local surveys
and confirmed that Orange County benefits are, for the most part, comparable to nearby
jurisdictions. This data shows Orange County health care provides some of the lowest
deductibles and co-pays for office visits with the lowest co-pays for prescriptions. Where the
data can be compared, Orange County dental benefits are comparable to other organizations.
Orange County provides the highest number of paid days off (holidays, personal and vacation
days) among surveyed groups. Employees must have more years of service to qualify for
longevity payments than most of the surveyed organizations, and the maximum tuition
reimbursement amount is below the average. 401(k) contributions are the lowest of all
organizations surveyed because most organizations contribute 5%, while we contribute $27.50
for non-Law Enforcement Officers each pay period. Attachment 1 presents a comparison of
benefits.
Dental Insurance
The County provides aself-insured dental plan with Delta Dental of North Carolina serving as
the third party administrator. Premiums earned in FY 07-08 were $443,500 and claims and fees
paid were $368,800. The dental plan's fund balance at the end of FY 07-08 was in excess of
$300,000. This year there is no increase in Delta Dental's administrative fee of $2.02 per
member per month.
All claims are paid based on a Table of Allowances (TOA) which Orange County establishes.
Although the County reimburses preventive services at 100% of the TOA, the current Table has
lagged behind standard rates of reimbursement, causing employees to pay an increasing
amount for services. This has reduced the value of the benefit and only.a third of employees
are taking advantage of the preventive and diagnostic care.
Staff reviewed the dental TOA and identified the most common preventive and diagnostic
services. As a result, staff recommends increasing the amount -paid for preventive and
diagnostic services from the current TOA to the Maximum Payable Amount (MPA) established
by Delta Dental. Attachment 2A provides a comparison of the current and proposed amounts.
Based on experience, this change in the amount paid for services will increase the County's
claims by approximately $48,000 annually and can be absorbed by the current premiums
earned over the next several years. Attachment 2B shows projections that assume there will be
growth due to increased staff size and more participants in the dental plan. Staff will continue to
regularly monitor the dental fund.
Staff reviewed other options besides increasing preventive and maintenance reimbursements,
such as also increasing restorative services by 25%. Increasing additional services would draw
down the dental fund more rapidly. An example projection is on Attachment 2 C.
Flexible Compensation Plan
The County provides a Section 125 Flexible Compensation Plan administered by Tucker
Administrators. This Plan provides tax sheltering of health and dental premiums and includes
two Flexible Spending Accounts (a medical spending account and dependent/child care
spending account). These accounts enable employees to save money and increase their take
home pay by eliminating income taxes and Social Security taxes on contributions they make to
the Spending Accounts. It also allows the County to reduce payroll taxes on employee
contributions. Employees achieve these reductions in taxes by setting aside a specific amount
3
of funds into a spending account used for health related and/or dependent care expenses,
resulting in a tax savings for both the employee and the County.
The maximum contribution employees may currently make to the Medical Spending Account is
$2,600 each benefit year. Federal regulations allow employees to contribute $3,000.
Maximizing the amount of potential contributions allows employees and the County to take full
advantage of all possible tax savings. The County's maximum allowable contribution to the
Dependent/Child Care Spending Account is already at the Federal maximum of $5,000 per year.
An enhancement to the 2009 Plan incorporates a debit card feature which enables employees
to pay for expenses at time of service with the funds from their accounts. This feature should
increase employee participation in the Flexible Compensation Plan.
Employee Assistance Program (EAP)
Magellan Behavioral Health provides the County's EAP for County employees and their
dependents. This benefit includes a number of services such as confidential assessment and
counseling services, 24/7 emergency services, and legal consultation. Several changes that
would greatly enhance the EAP can be made with an increase in cost of 7 cents per month per
employee which would bring the overall cost to $1.61 per employee per month.
The 2009 recommendation includes increasing the number of counseling sessions from three to
five, the removal of the LifeManagement Resource and Referral Service, and the addition of
financial consultation services to the legal consultation services. The LifeManagement
Resource and Referral Service provides members with referrals for dependent or senior care
which is duplicated by County departments. Increasing the number of counseling sessions will .
allow employees more treatment and a greater continuity of care in dealing with personal,
emotional and financial issues. The EAP is a complement to services provided through the
County Health Plan at no cost to employees.
Staff surveyed a number of local jurisdictions and found the average number of counseling
sessions available to employees at no cost were 5 sessions a year. Organizations surveyed
provided a minimum of 3 sessions to an unlimited number of sessions per year. (See
Attachment 1.)
Health
Currently the County offers two fully insured health insurance plans. Both health plans are
contracted through the NCACC Health Insurance Trust and administered by CIGNA. Over 90%
of employees participate in the Health Maintenance Organization (HMO) plan, which requires
participants to use a vendor network of physicians and facilities. The second plan is a Preferred
Provider Organization (PPO) that allows both in and out of network services. When using out-
of-network services, the employee pays a higher portion of the cost. Both plans offer an in-
network wellness benefit at no cost which includes physicals, health screenings and
immunizations. The current number of employees enrolled in each plan, past rate changes and
past plan changes to the health insurance are shown on Attachment 3.
The County currently pays the entire monthly premium for employee and retiree only coverage
for both the HMO and PPO plans. The County also subsidizes the premium cost for the
employee's and retiree's dependent coverage at 52%, based on the lower priced plan (which
has been the HMO plan for the past several years). This pracfiice provides affordable and
accessible health insurance coverage for dependents (spouse, domestic partner, children, or
entire family) to employees, particularly lower salaried employees for whom dependent health
insurance coverage is a significant cost. Continuation of the subsidy at this level maintains a
"family friendly" feature that is highly valued by the 45% of employees with dependent coverage;
.However, this practice does present an equity issue for employees without dependent coverage.
By paying the dependent subsidy, total compensation for employees with dependents is greater
than for those without dependents.
An added component of the health insurance for all options is Health Advisor, a CIGNA program
which provides each healthy and at-risk employee with a health coach who can assist an
employee in improving his or her health. Additionally, Orange County has partnered more
closely with NCACC to enhance the Wellness Committee and wellness activities. Because
healthier employees have a higher quality of life, are more productive, and generally require less
costly health care, wellness activities will continue to be an important benefit for County
employees and retirees. Highly discounted membership rates for the Triangle Sportsplex
continue to be a popular wellness benefit for employees. Currently 155 employees are
members (based on payroll deductions).
Staff has considered several options for the 2009 plan year that are within the 8% increase
budgeted for FY 08-09. The health care trend (percentage increase . in claims costs that
actuaries expect to see in the next 12-month period) would have required a premium increase of
10-12% over the 2008 rates., Because Orange County's actual medical experience in health
care claims in FY 07-08 was under the 10-12% trend, staff was able to negotiate a rate lower
than the annual trend for a renewal of the current plan design with no changes in copays,
deductibles or coinsurance. Staff has provided information for renewal and two alternatives. A
comparison of plan designs is shown on Attachment 4 and the costs for the renewal and options
is provided in Attachment 5A. Attachment 5B shows total monthly premium costs per
employee; Attachment 5C shows employee monthly costs, and Attachment 5D shows County
costs. Advantages and disadvantages'ofthe renewal and options are shown on Attachment 6.
Renewal of Current Plan Design-HMO premiums are higher than PPO. Renewing with no
change to plan designs results in an increase to the County of approximately $199,700 for
seven months of FY 08-09 ($342,340 for 12-month plan year). In the past, premiums for the .
PPO plan have been higher than the premiums for the HMO. 2009 reverses that pattern and
the premiums for the HMO are thus more expensive because of the high volume of claims and
because it provides greater benefits to employees. PPO employees will continue to pay higher
out of pocket expenses because the PPO plan has a 10% co-insurance requirement up to
$1,000/year per member (to a maximum of $3,000 per family) for services such as
hospitalization and diagnostic medical services.
Option 1 Buy up Plan. This option provides the same plans as the Renewal Plan, but requires
employees to pay an additional premium (e.g., $20.48/month for employee only coverage) for
the higher priced plan. Because the HMO would be the higher priced plan, employees who
choose to remain in the HMO would be required to pay the difference (buy-up) between the
premium for the PPO and the HMO.
This option would result in an increase for the County of approximately $130,970 for FY 08-09
($224,500 for 12-month plan year). The increase in premiums for employees would be $79,500
($136,275 for 12-month plan year), assuming that only 25% of employees (based on NCACC
projections) chose to stay with the HMO and pay the additional monthly premium. Employees
who choose the PPO will have a smaller increase in premiums for dependent care, but they will
5
have .higher out of pocket costs for services compared to employees in the HMO. The cost of
buying up employee-only coverage would total $245.76/year for employees choosing the HMO,
which is below the cost of living salary increases for all employees received July 1, 2008.
The employee cost of $20.48 is the difference between the cost of Individual Coverage for the
PPO and the HMO, but the cost of "buying up" can be higher or lower than $20.48. If the cost of
buying up was reduced to $10.24 each month, .each employee choosing to buy up would pay
less than $5.00 per pay period for the HMO because the tax savings would reduce the total
cost. The cost of living salary increases which all employees received July 1, 2008 exceeds the
$10.24 cost per month ($122.88/year).
Option 2 One Plan. This option is a renewal with one plan for all--a PPO plan. All members
have access to providers both in and out of network. This plan would require all employees with
major medical expenses (surgery, hospitalizations, diagnostic services, etc.) to pay 5% (in-
network) co-insurance, to a maximum of $500 per member ($1,500 for a family) per year. Out
of network benefit requires 25% co-insurance to a maximum of $1,000 per member ($3,000 for'
a family). While this is an improved benefit for' current PPO members who currently have a
$1,000 (in-network) per member co-insurance maximum, it reduces the benefit for current HMO
members who have not had any co-insurance.
Option 2 would result in an increase for the County of approximately $230,910 for FY 08-09
($395,844 for 12=month plan year). The effect on employees with dependent coverage would be
a smaller increase than renewing the current plan with no change, $48,040 for FY 08-09
($82,350 for 12-month plan year). (See Attachment 5C.)
The option with the least negative impact on all employees and particularly lower-compensated
employees is the renewal of current plan with no changes. Although projections show the cost
for dependent coverage increases more with the renewal, employees with dependents can
choose the lower cost plan to reduce their premium cost. The renewal allows the County to
continue paying the full cost of coverage for employee only coverage, thereby impacting fewer
employees.
FINANCIAL IMPACT: The 2009 Benefit Recommendations all meet the County budget for FY
08-09. A chart showing benefit costs from FY 04-05 to FY 07-08 is on Attachment 7.
Dental: There is no budget impact in the FY 08-09 approved budget. Premiums will remain the
same for 2009. The proposed changes will reduce the balance in the dental account over time.
Projections for the use of funds for the next five years are provided in Attachment 2B. No
administrative increases are anticipated.
Flexible Spending Account: Cost is within the FY 08-09 approved budget. There is a potential
for tax savings, based on the amount of contributions employees make, of a minimum 7.65
cents savings for each $1.00 contributed for both the County and the employee. Losses are
possible when an employee claims and receives funds prior to making the full contribution and
then leaves County employment prior to fulfilling their obligation to the Flexible Spending
Account for the plan. year. The potential loss depends on the number of employees who enroll,
their level of participation, and how many employees left County employment prior to
contributing the amount of their reimbursement. Past experience indicates that funds not used
are substantially greater than losses.
Employee Assistance Program: The recommended changes are within the amount allocated in
the FY 08-09 budget. The contract renewal is at a rate of $1.61 per employee per month, which
includes 7 cents per month increase from the previous plan year. The estimated annual cost for
the EAP is $15,460, including a projected increase of $675 a year ($337.50 for FY 2008-09) for
the added services.
Health: The recommendation of renewing the current plan is within the FY 08-09 approved
budget.
OPTIONS
Renewal with No Changes in Plan Design
(Recommended)
County Cost (Calendar Year)
$6,722,592
Option 1 Buy Up with Employees
contributing $20.48/month for Employee
Only Coverage
Option 1 Buy Up with Employees
contributing $10.24/month for Employee
Only Coverage
Option 2 One Plan
$6,604,767
$6,620,847
$6,776,097
RECOMMENDATION(S):
The Manager recommends that the Board of Commissioners approve the enhancements to the
dental insurance, flexible compensation plan, and employee assistance plans effective January
1, 2009. The Manager further recommends that the .Commissioners approve the renewal of the
current plan for health insurance with no changes in plan design for the plan year beginning
January 1, 2009.
0
COMPARATIVE BENEFITS INFORMATION
Attachment 1
Survey data compiled from Hill, Chesson Woody and The Archer Company 2008
HEALTH INSURANCE
Individual
Premium Employee
cost of
Employee
covers e Office Visit Co-
Pays
Primary/Spec.
Deductible
Co-Insurance (in
network only) Coinsurance
maximum (in
network only)
Prescription Co-
pays Per Tier
Emergency
Room Co-Pay
Chatham Co $ 591.00 $ 24.25 ' ' '
Guilford Co. PPO $ 531.28 $. 48.78 ' ' ' '
Cabarrus Co. $ 512.00 ' ' ' $ 150.00
Guilford Co. HMO $ 511.82 $ 29.50 0 ' '
Hillsborou h $ 450.00 $ 20/30 400 70 1500 5120/40 '
Union Co. $ 450.00 $ 750 ' '
Fors h Co. $ 447.34 $ 750 ' ' '
Oran eCo $ 445.00 $ - 15130 250 100 0 5115130 ' $ 150.00
Oran eCo 5522.08 $ 15/30 250 90 1000 5/15/30 $ 150.00
OWASA $ 433.00 $ 20/10 250 100 0 10120/30 $ 150.00
Person Co. $ 430.42 $ ' '
Carrboro $ 417.00 $ 10/10 0 90 1500 10/25/40 $ 100.00
Durham Co. (High
o lion
$ 383.00
20/40
0
90
1750
10125/40
'
Gaston Co. $ 378.90 $ 500 ' ' '
Ca $ 373.00 $ 20/40 50D 90 2000 0125/50 $ 150.00
Cha el Hill $ 372.00 $ 10/25 0 100 0 10125/40 '
Burlin ton $ 352.66 $ 1000 80 4000 10/45/60 '
UNC Hos $ 346.00 $ 20/40 300 80 1750 10/20140/50
Ralei h $ 345.00 $ 20/40 250 80 1000 10/25/40/75% $ 150.00
Durham Co. (Low
o lion
$ 319.00
No res onse
25/50
750
80
2750
10/35/50
(` Data not provided
EMPLOYEE ASSISTANCE PLAN
Type of Plan
Oran eCo Contracted
Service
3
Alamance Co. Contracted
Service
Unlimited
Burlin ton
Cabarrus Co. Contracted
Service
12
Carrboro
Ca
Cha el Hill Contracted
Service
5
Chatham Co Contracted
Service
3
Durham ci Part of Health
Plan
12
Durham Co. Part of Health
Plan
3
Fors h Co. Contracted
Service
Gaston Co. 5
Guilford Co. Part of Health
Plan
Hillsborou h
OWASA Contracted
Service
3
Person Co. Part of Health
Plan
1
Ralei h Contracted
Service 8 per family
er ear
UNC Hos 3
Union Co. Contracted
Service
6
Avers e 5
LONGEVITY
_
Effective At
Hillsborou h .75 rs.
Ralei h 5 rs.
Guilford Co. 5 rs.
Durham Co. 5 rs.
Cha el Hill 5 rs.
Carrboro 5 rs.
Burlin ton 5 rs.
Fors h Co. 7 rs.
Oran o Co 10 rs.
OWASA 10 rs.
Person Co. '
UNC Hos 10 rs.
Union Co. None
Gaston Co. None
Chatham Co None
Ca None
Cabarrus Co. None
* Data not provided
COMPARATIVE BENEFITS INFORMATION
Funeral
Vacation/Holidays Leave
(Includes Personal Combined Total Days/Year
Leave) Minimum Maximum
Oran a Co -25 42.8 ': 3/occurrence
UNC Hos PTO-37.5 PTO-50 Included w/PTO
combines sick, vacation, holida s, funeral, etc.
Hillsborou h 24 38 3/ r
Ralei h 23 35 0
OWASA 23 38 5/ r
Chatham Co 23 36 0
Cha el Hill 23 37 3/ r
Carrboro 23 37 5/ r
Guilford Co. 24 35-36 0
Durham Co. 22-23 36 3/ r
Ca 22 36 3
Cabarrus Co. 21 31 0
Union Co. 20 29.3 0
Burlin ton 20 34 0
Gaston Co. 19 32 0
Person Co. 17 23 0
Forsyth Co. 16.5 33.5 0
PTO=Paid Time Off
Attachment 1
Survey data compiled from Hill, Chesson Woody and The Archer Company 2008
401 K Contribution
LEO=Law Enforcement Officer
Oran a Co 5% LEO/$715/ ear non-LEO
Burlin ton 5% LEO & non-LEO
Cabarrus Co. 5% LEO & non-LEO
Carrboro 5% LEO/3% non-LEO
Ca 5% LEO & non-LEO
Cha el Hill 5% LEO & non-LEO
Chatham Co 5% LEO/4.5% non-LEO
Durham Co. 5% LEO & non-LEO
Fors h Co. 0%
Gaston Co. No res onse
Guilford Co. 5% LEO & non-LEO
Hillsborou h 5% LEO/4.93% non-LEO
OWASA $40-$100 based on Ion evi
Person Co. 5% LEO & non-LEO
Ralei h 5% LEOl3% non-LEO
UNC Hos 5% LEO onl
Union Co. 5% LEO & non-LEO
DENTAL
Ee Only
Premium
Deductible
Max/Year
Orthodontics
Alamance Co.
Burlin ton $ 29.46 25 1000 Y
Carrboro $ 31.92 50 1500 Y
Ca $ 38.00 0 1500 Y
Cha el Hill $ 31.26 50 $1,500 Y
Chatham Co $ 33.72 50 1200 Y
Durham Ci
Durham Co. $ 29.00 50 2000 Y
Fors h Co. $ 26.46 1200 Y
Guilford Co. Basic 50 500 Y
Guilford Co. Enhanced 50 2000 Y
Hillsborou h $ 24.50 50 1000 Y
Oran a Co $ 24.30 50 1200 Y
OWASA $ 29.17 50 1000 Y
Person Co. $ 26.28
Ralei h $ 22.68 50 $1,500 N
UNC Hosp $ 33.26 50 1500 Y
Data not provided
TABLE OF ALLOWANCES Attachment 2A
Costs for most frequently reported dental procedures
DIAGNOSTIC AND PREVENTIVE Orange Co.
2006-2008 Recommended
Amount 2009 Difference
00120 Periodic oral exam $31 $37 $6
00140 Periodic oral exam $98 $98 $0
00150 Periodic oral exam $35 $65 $30
00210 Full Series x-ra s $109 $128 $19
230 X-ra s $11 $11 $0
00272 2 Bitewin s $30 $35 $5
00274 4 Bitewin s $39 $50 $11
00330 Panorex x-ra s $65 $88 $23
01110 Pro h taxis adult $62 $68 $6
01120 Pro h taxis child to a e 14 $43 $53 $10
01203 Fluoride Treatment $23 $27 $4
01351 Sealants limitation child $40 $45 $5
* These services were at or higher than the Usual & Customary Rates
and will remain at those levels.
RESTORATIVE* (Increase by 25%, not to exceed MPA)
02140 Amal am Fillin s $97 $119 $22
02150 Amal am Fillin s $128. $151 $23
02160 Amal am Fillin s $155 $182 $27
02161 Amal am Fillin s $170
02330 Com osite Fillin s $100 $122 $22
02331 Com osite Fillin s $125 $149 ~ $24
02332 Com osite Fillin s $160
2330 Resin-One Surface Anterior $100 $122 $22
2720 Crown-Porcelain $370 $463 $93
6750 Crown-Resin fused w/High
Noble Metal
$632
$790
$158
*in verifying numbers, some of the Delta Dental MPAs had changed, which
changed this chart
ENDODONTICS
03310 One Canal, anterior $485
03320 Two Canals, bicus id $640
03330 Three Canals, molars $765
PERIODONTICS
04210 Gin ivectom $400 $500 $100
04341 Root Planin $200 $226 $26
04341 Periodontal scalin $200 $226 $26
ORAL SURGERY
07111 Deciduous tooth $90
07140 Extraction, eru ted tooth $102 $124 $22
DENTURE REPAIR
05610 Re air base $105
05630 Broken etas $150
05640 Re lace tooth $127
05650 Add tooth $155
05660 Add etas $150
GOLD AND CAST RESTORATIONS (Crowns)
02752 Porcelain/metal $753
02790 Full Cast $775
PROSTHODONTICS (Dentures)
05110 Com lete u er $950
05120 Com lete lower $950
05211 U er artial $550
05212 Lower artial $550
05213 U er cast artial $875
05214 Lower cast artial $875
to
Attachment 2B
Dental Projections Based on Modifications to
Table of Allowances
(Preventive and Diagnostic)
2007-2008
FY 2008-2009
Year 1
FY 2009-2010
Year 2
FY 2010-2011
Year 3
FY 2011-2012
Year 4
FY 2012-2013
Year 5
Increases in premiums are due to growth in membership.
Increases in claims are due to increased volume of claims
and increased Table of Allowance
Beginning Balance_ _$ _ 224,949.00
Earned
Premium $ 4_43,517.00
_
Interest ~~~~~ ~ $ 9,800.00
Claims/Fees Paid $ 368,807.00
Ending Balance $ 309,459.00
* Premium Earned_ $ 443,517.00
Interest __ _$_ 9,800.00
* Anticipated
claims/Fees
$
437,070.99
Ending Balance $ 325,705.01
Premium Ear_ned
__ $ 482,189.40
_
Interest $ 9,900.00
Anticipated
claims/Fees
$
480,778.09
Ending Balance $ 337,016.32
Premium Earned $ 506,298.87
Interest $ 9,000.00
Anticipated
claims/Fees
$
528,855.90
Ending Balance $ 323,459.29
Premium Earned $ 531,613.81
Interest $ 9,000.00
cipated
claims/Fees
$
581,741.49
Ending Balance $ 282,331.61
Premium Earned $ 558,194.50
Interest $ 9,000.00
_
Anticipated
claims/Fees
$
610,828.56
Ending Balance $ 238,697.55
This chart projects that dental claims will initially
increase as employees utilize more services, but
will generate savings long term because problems
will be handled at earlier and at less costly
stages.
15% increase for last 1/2 of FY08-09
5% increase
10% increase
5% increase
10% increase
5% increase
5% increase
5% increase
5% increase
* Does not reflect any actual FY 08-09 data
It
FY 07-08
FY 08-09
Year 1
FY 09-10
Year 2
FY 10-11
Year 3
FY 11-12
Year 4
FY 12-13
Year 5
Dental Projections Based on Modifications to
Table of Allowances
(Preventive and Restorative)
Attachment 2C
Increases in premiums are due to growth in membership.
Increases in claims are due to increased volume of claims
and increased Table of Allowance
This projection includes higher premiums earned FY 08-09 compared to Attachment 2B
Beginning Balance $ 224,949.00
Premium Earned $ 443,517.00
Interest $ 9,800.00
Claims/Fees Paid $ 368,807.00
Ending Balance $ 309,459.00
Premium Earned $ 459,228.00
Interest $ 9,800.00
Anticipated claims/Fees $ 499,400.93
Ending Balance $ 279,086.07
Premium Earned $ 482,189.40
Interest $ 9,900.00
Anticipated claims/Fees 549341.03
Ending Balance $ 221,834.44
Premium Earned $ 506,298.87
Interest $ 9,000.00
Anticipated claims/Fees $ 604,275.13
Ending Balance $ 132,858.18
Premium Earned $ 531,613.81
Interest $ 9,000.00
Anticipated claims/Fees 664702.64
Ending Balance $ 8,769.35
Premium Earned $ 558,194.50
Interest $ 9,000.00
Anticipated claims/Fees $ 697,937.77
Ending Balance $ (121,973.92)
20% increase in claims
5% increase
10% increase
5% increase
10% increase
5% increase
10% increase
5% increase
5% increase
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Attachment 4
HEALTH INSURANCE PLAN DESIGN DESCRIPTIONS
Current, Renewal* and N_o__c_ h_a__nge __
Option 1 (Buy Up)** PPO HMO
Primary Care Provider Copay $15 $15
Specialist Copay $30 $30
Emergency Room Copay $150 $150
Individual Deductible (IN / OON) $250 /$500 $250
Coinsurance Maximum (IN / OON) $1,000 / $2,000 $0
Family Maximums 3 times 3 times
Coinsurance (IN / OON) 90% / 70% 100%
OP Lab & Mammograms (IN / OON) 100% 100%
Preventive Care Program (IN / OON) 100% / 0% 100%
Retail Drug Copay (30 Day Supply) $5-15-30 $5-15-30
Mail Order Drug Copay (90 Day Supply) $13-26-60 $13-26-60
Vision - E e Exam Deductible $15 $15
* Costs for HMO dependent coverage will increase more than PPO
dependent coverage.
** Employees will pay part of the premium for employee coverage
(plus dependent coverage).
Option 2 One Plan PPO
Primar Care Provider Co a $15
S ecialist Co a $30
Emer enc Room Co a $150
Individual Deductible IN / OON $250/$500
Coinsurance Maximum IN / OON $500/$1000
Famil Maximums 3 times
Coinsurance (IN / OON) 95%/75%
OP Lab & Mammo rams IN / OON 100%/75%
Preventive Care Pro ram IN / OON 100%/0%
Retail Dru Co a 30 Da Su I $5-15-30
Mail Order Dru Co a 90 Da Su I $13-26-60
Vision - E e Exam Deductible $15
la-
North Carolina Association of County Commissioners
Group Benefits Pool
Rates Effective January 1, 2009 to January 1, 2010 Attaohment•5A
for Orange County
Current Pro
ram Current Rates Current Membership Coun Pays ~ Emplo ee Pa s ~
g PPO HMO Total PPO HMO Total PPO HMO Total PPO HMO Total
Employee $522.08 $445.06 55 481 536 $522.08 $445.06 $0.00 $0.00
Employee /Spouse $1,101.52 $938.66 6 119 125 $823.39 $701.73 $278.13 $236.93
Employee /Child $730.90 $623.06 3 95 98 $630.67 $537.62 $100.23 $85.44
Employee /Children $1,007.54 $858.98 0 76 76 $774.52 $660.30 $233.02 $198.68
Family 1 566.18 1$ •335.18 1 106 107 1 065.01 9$ 07.92 501.17 427.26
Annual/Total $468,989 $7,101,320 $7,570,309 65 877 942 $439,341 $5,940,911 $6,380,253 $29,648 $1,160,409 $1,190,056
Renewal Rates Current Membershi Coun Pa s ~ Emplo ee Pa s ~
Renewal PPO Buy-Up PPO Buy-Up PPO Buy-Up PPO Buy-Up
HMO Total HMO Total HMO Total HMO Total
Employee $465.40 $485.88 55 481 536 $465.40 $485.88 $0.00 $0.00
Employee /Spouse $981.98 $1,025.20 6 119 125 $734.02 $734.02 $247.96 $291.18
Employee /Child $651.56 $680.22 3 95 98 $562.20 $562.20 $89.36 $118.02
Employee /Children $898.22 $937.74 0 76 76 $690.47 $690.47 $207.75 $247.27
Family 1 396.18 1$ •457.62 1 106 107 9$ 49.41 949.41 446.77 508.21
Annual/Total $418,077 $7,753,247 $8,171,324 65 877 942 $391,646 $6,330,946 $6,722,592 $26,431 $1,422,301 $1,448,733
Increase Overall -10.9% 9.2% 7.9% 5.4% 21.7%.
Renewal Program - Renewal Rates Renewal Membership z Coun Pa s s Emplo ee Pa s'
Buy-Up W/Reduced PPO Buy-Up PPO Buy-Up PPO Buy-Up PPO Buy-Up
EE Contribution HMO Total HMO Total HMO Total HMO Total
Employee $465.40 $485.88 402 134 536 $465.40 $475.64 $0.00 $10.24
Employee /Spouse $981.98 $1,025.20 94 31 125 $734.02 $734.02 $247.96 $291.18
Employee /Child $651.56 $680.22 74 24 98 $562.20 $562.20 $89.36 $118.02
Employee /Children $898.22 $937.74 57 19 76 $690.47 $690.47 $207.75 $247.27
Family 1 396.18 1 457.62 80 27 107 949.41 9$ 49.41 446.77 508.21
Annual/Total $5,886,064 $2,044,646 $7,930,710 707 235 942 $4,956,013 $1,664,834 $6,620,847 $930,051 $379,812 $1,309,863
Increase Overall 4.8% 3.8% 10.1%
Renewal Program - Renewal Rates Renewal Membership z Coun Pa s a Emplo ee Pa s'
Buy-Up W/Full EE pp0 Buy-Up PPO Buy-Up PPO Buy-Up PPO Buy-Up
Contribution HMO Total HMO Total HMO Total HMO Total
Employee $465.40 $485.88 402 134 536 $465.40 $465.64 $0.00 $20.48
Employee /Spouse $981.98 $1,025.20 94 31 125 $734.02 $734.02 $247.96 $291.18
Employee /Child $651.56 $680.22 74 24 98 $562.20 $562.20 $89.36 $118.02
Employee /Children $898.22 $937.74 57 19 76 $690.47 $690.47 $207.75 $247.27
Family 1 396.18 1 457.62 80 27 107 949.41 949.41 4$ 46.77 508.21
Annual/Total $5,886,064 $2,044,646 $7,930,710 707 235 942 $4,956,013 $1,648,754 $6,604,767 $930,051 $396,278 $1,326,329
Increase Overall 4.8% 3.5% 11.5%
O tion 2 One Plan Rates Membership Coun Pas Emplo ee Pa s
PPO Total PPO PPO
Em to ee $477.50 536 $477.50 $0.00
Em to ee / S ouse $1,007.52 125 $753.11 $254.41
Em to ee /Child $668.48 98 $576.81 $91.67
Em to ee /Children $921.58 76 $708.42 $213.16
Family $1,432.50 107 $974.10 $458.40
Annualffotal $8,048,503 $8,048,503 942 $6,776,097 $6,776,097 $1,272,406
Increase Overall 6.3% 6.2% 6.9%
Footnotes
1. Assumes the county pays:
Core Plan: 100% of the employee cost and 52% of the dependent cost
Buy-Up Plan: 100% of the employee cost and the same amount as the core plan for the other type contracts (emp/sp, emp/child, etc)
2. Renewal Membership with shift assumes 75% of the employees will elect the "core" plan and 25% will elect the buy-up due to different contribution strategy.
3. Assumes the county pays:
Core Plan: 100% of the employee cost and 52% of the dependent cost
Buy-Up Plan: $475.64 (or $465.64) of the employee cost and the same amount as the core plan for the other type contracts
(emp/sp, emp/child, etc)
This information is confidential and cannot be reproduced, distributed or printed without written permission from NCACC.
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Attachment 6
ADVANTAGES
DISADVANTAGES
RENEWAL OF CURRENT PLAN
No change to plan design. Continues to increase the cost to the County
and to the 45% of employees with dependent
covera e.
No cost for employees with employee only Requires HMO participants with dependent
covera e. covera e to a hi her remiums than in ast.
Addresses inequity between the cost of two
plans (employees pay for the increased
benefits rovided by the HMO)
May shift employees with dependents to the
PPO plan because cost of dependent coverage
in PPO is less than HMO.
OPTION 1 "BUY UP PLAN"
Addresses inequity between the cost of two Requires employees to choose whether or not
plans (employees pay for the increased to pay for employee only coverage
benefits rovided by the HMO
Allows choice of plan best meeting employee Affects 877 HMO employees who must all
needs pay for the HMO or change to the PPO at no
cost.
Controls claims by cost sharing (paying fora The employees' benefits are reduced in the no-
premium or co-insurance) because more cost option.
attention is aid to out of ocket costs.
Saves approximately $102,000-$118,000 for Increases the costs for HMO dependents more
the County compared to the renewal than the renewal rate.
(annualized).
OPTION 2 "ONE PLAN"
Only one rate for dependent coverage(s). Affects all employees.
PPO would have decrease in co-insurance 877 employees/retirees in HMO would have a
from $1,000 to $500. 5% co-insurance to a maximum of $500 vs.
current $0 co-insurance. This will affect
members with medical claims other than office
visits/prescriptions. (Projections indicate 10-
14% of members would be affected.
Cost increase to employees with dependents is Cost to County is $54,000 more than the
the lowest of all options. Renewal (annualized).
877 HMO members would gain access to out
of network roviders.
Cost of increases to employees is lower than
renewal rate.
IQ
COUNTY BENEFITS COSTS
FY 2004-2008
County Health Plan
Premiums Paid
General Fund All Employees
Attachment 7
Retirees
FY 2004-05 $ 3,799,997.00 $ 4,146,985.00 $ 692,031.00
FY 2005-06 $ 4,097,032.00 $ 4,482,758.00 $ 760,362.00
FY 2006-07 $ 4,586,662.00 $ 4,846,663.00 $ 841,110.00
FY 2007-08 $ 4,831,395.00 $ 5,344,430.00 $ 846,175.00
Dental Insurance
Premiums Earned -Administrative Fees + Claims Paid
FY 2004-05
FY 2005-06 _ _ _ _
FY 2006-07 ~ ' ~ •~°•__,....,._.,..,_.___
FY 2007-08
Life Insurance
Premiums Paid
$ 358,952.00
$ 362,890.00
$ 366,048.00
$ 368,807.00
FY 2004-05 $ 93,180.00 $ 100,589.00
FY 2005-06 $ 92,833.00 $ 100,957.00
FY 2006-07 $ 97,961.00 $ 100,561.00
FY 2007-08 $ 104,161.00 $ 114,519.00
Employee Assistance Program
Contract Service Fees
FY 2004-05
FY 2005-06 _
FY 2006-07
FY 2007-08
$ 13,490.00
$ 13,490.00
$ 14,784.00
$ 14,784.00
Flexible Spending Account
Contract Service Fees -Unexpended Employee Contributions
FY 2004-05 $ 8,561.00
FY 2005-06 -...._._..............,._,,,..,.,.,.._,,..._.,,._ $ 9,594.00
FY 2006-07 , ......__........,.,__ ..............._ $ 9,100.00
FY 2007-08 $ 8,767.00