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HomeMy WebLinkAboutMINUTES - 09272011 - SD.4PDF Return SD. 4 To:Board of Supervisors From:Ted Cwiek, Human Resources Director Date:September 27, 2011 Contra Costa County Subject:Employee Benefit Plan Contract Renewals - 2012 APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 09/27/2011 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact:Ted Cwiek, Human Resources Director 925-335-1766 cc:Christine Penkala, County Benefits Manager I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: September 27, 2011 David Twa, BY:June McHuen , Deputy RECOMMENDATION(S): AUTHORIZE the Director of Human Resources or designee to execute contract renewals with the Non PERS Health Plan, Dental Plan, Life Insurance Plan and Video Display Terminal Plan carriers listed below for the contract period January 1, 2012 through December 31, 2012. FISCAL IMPACT: Premiums for active and retired members are funded by a combination of employee/retiree/survivor contributions and charges to County Departments and Special Districts. The cost increase for calendar year 2012 premiums – to the County and Special Districts for Non PERS health Plans is 1.2% or approximately $1.3 million. For fiscal year 2011/2012 the impact is approximately $661,000. The fiscal impact is based on the Management Resolution and Memorandums of Understanding in effect as of September 13, 2011 and is included in the 2011/2012 adopted budget. BACKGROUND: Contra Costa County contracts for health, dental and life insurance coverage and video display terminal plan coverage for its employees, retirees and survivors on an annual basis. These contracts traditionally cover a calendar year (January 1 through December 31). Current contracts expire December 31, 2011. In order to ensure uninterrupted coverage for enrolled members (active employees, retired employees and survivors of retired employees) it is recommended that these contracts be renewed. Health care costs continue to receive a good deal of attention due to steep increases in premiums, increased retiree to active employee ratios, new requirements regarding reporting liabilities (GASB 45),the passage of the Patient Protection & Affordable Care Act as amended by the Health Care & Education Reconciliation Act of 2010, and Contra Costa’s documented other post-employment benefit (OPEB) liability. Due to its size, Contra Costa County is required to perform an other post-employment benefit actuarial evaluation every two years. The most recent evaluations were performed with data gathered in January 2010. These actuarial valuations cover a 30 year period and include several assumptions. One of the assumptions is the medical inflation rate. The actuarial assumed medical inflation rate for 2012 is 8%. The increases recommended in these contract extensions are 7.0%. With a 7% increase, the County and Special District's increased costs is 1.2%. If CalPERS plans are included, the percentages are 6.7% and 2.2% respectively. What this means is that these contracted increases are within the current OPEB liability calculated for Contra Costa County. (For more information regarding Contra Costa’s OPEB liability, please visit the County’s website at http//www.co.contra-costa.ca.us.) The following contracts are renewed in accordance with the following rate increases, effective January 1, 2012 (CalPERS plans will be addressed in a separate Board action): PLAN TYPE RATE INCREASE Non Medicare Plans Contra Costa Health Plan A 5.00% Contra Costa Health Plan B 5.00% Health Net HMO Plan A 9.82% Kaiser Permanente Plan A 5.55% Health Net CA & Nat’l PPO Plan A 3.98% Medicare Out-of-Area & Coordination of Benefit Plans Contra Costa Health Plan A 6.04% Contra Costa Health Plan B 5.92% Health Net COB Plan A 3.67% Kaiser Permanente OOA -0.98% Health Net CA & Nat’l PPO Plan A 3.98% Medicare Senior Advantage Plans Health Net Seniority Plus Plan A 5.00% Kaiser Senior Advantage Plan A -6.20% Dental Delta Dental Premier – ASO Fees 3.00% - guaranteed through 12/31/14 Delta Dental Claims Fees 0.0% DeltaCare PMI 5.32% - guaranteed through 12/31/14 Life Insurance No Change – guaranteed through 12/31/13 Video Display Terminal Plan - 4.00% The following contacts will not be renewed due to substantial premium increases and nominal participation: Health Net Exclusive Provider Plan (submitted increase of 87.4%, 2 active employee participants and 55 retiree participants; all are eligible for the PPO Plans; active employees are also eligible for alternate HMO plans) Health Net Flex Net Indemnity Plan (submitted increase of 136.8%, 0 active employee participants and 62 retiree participants; all are now eligible for the PPO Plans. Health Net PPO network has been expanded eliminating the need to offer an out-of- area indemnity plan). The following contracts are being added in accordance with the following rate increases effective January 1, 2012: Non Medicare Plans Health Net HMO Plan B -0.35% Kaiser Permanente Plan B -4.75% Health Net CA & Nat’l PPO Plan B -5.56% Medicare Out-of-Area & Coordination of Benefit Plans Health Net CA & Nat’l PPO Plan B -5.56% Medicare Senior Advantage Plans Health Net Seniority Plus Plan B -10.08% Kaiser Senior Advantage Plan B -28.92% Eligibility for these new offerings will be available to employees, retirees and retiree survivors who are either unrepresented or were unrepresented at the time of retirement. Eligibility will also be available to employees, retirees and retiree survivors who are represented or were represented by IPTFE, Local 21, AFL-CIO at the time of retirement. Eligibility to participate in the new offerings may be available to other employees, retirees and retiree survivors based on continuing collective bargaining negotiations. CONSEQUENCE OF NEGATIVE ACTION: In order to prevent the disruption of services for employee group benefits, it is necessary to execute contract renewals with Health, Dental, Life and VDT Plan carriers. CHILDREN'S IMPACT STATEMENT: None. AgendaQuick©2005 - 2021 Destiny Software Inc., All Rights Reserved