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Home My WebLink AboutMINUTES - 08132013 - SD.4RECOMMENDATION(S): AUTHORIZE the Director of Human Resources or designee to execute contract renewals with the Non PERS Health Plan, Dental Plan and Life Insurance Plan carriers listed below for the contract period January 1, 2014 through December 31, 2014. 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 – of the calendar year 2014 premium increase – to the County and Special Districts for County (Non PERS) health Plans is 0.5% or approximately $471,614. For fiscal year 2013/2014, the impact is approximately $235,807. For calendar year 2014, the total cost for health and dental premium contributions for County and CalPERS plans is projected to be $177.1 million, of this amount $135.2 million is County cost. The fiscal impact is based on the Management Resolution, Memoranda of Understanding and census data in effect as of June 1, 2013 and is included in the 2013/2014 adopted budget. BACKGROUND: Contra Costa County contracts for group health, dental and life insurance coverage and video display terminal plan coverage on an annual basis. These contracts traditionally cover a calendar year (January 1 through December 31). Current contracts expire December 31, 2013. 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 participant ratios, new requirements regarding reporting liabilities (GASB 45),the passage of the APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 08/13/2013 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Christine Penkala (925) 335-1766 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: August 13, 2013 David Twa, County Administrator and Clerk of the Board of Supervisors By: Chris Heck, Deputy cc: Robert Campbell, Auditor-Controller SD.4 To:Board of Supervisors From:Ted Cwiek, Human Resources Director Date:August 13, 2013 Contra Costa County Subject:Contract renewals with the Non PERS Health Plan, Dental Plan and Life Insurance Plan carriers for 2014 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 2012. 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 2014 is 8%. The total increased costs associated with these health care contract extensions are 4.6%. This results in a 0.5% increase in the County's cost to subsidize health plan premiums. If CalPERS plans are included, the percentages are 5.2% and 2.2% respectively. For more information regarding Contra Costa’s OPEB liability, please visit the County’s website at http//www.co.contra-costa.ca.us. Buck Consultants National Healthcare Trend Survey shows national healthcare tends of roughly 8.8% increases for HMO and 9.2% for PPO plan designs similar to those offered by Contra Costa County. Northern California trend increases tend to be higher than the national average. The national trend increase for Medicare supplement plans with Rx coverage remains roughly 4.4%. The following contracts are renewed in accordance with the following rate increases effective January 1, 2014. BACKGROUND: (CONT'D) PLAN TYPE RATE INCREASE Non Medicare Plans Contra Costa Health Plan A 1.5% Contra Costa Health Plan B 1.5% Health Net HMO Plan A 12.0% Health Net HMO Plan B 4.0% Kaiser Permanente Plan A 3.94% Kaiser Permanente Plan B 3.94% Health Net CA & Nat’l PPO Plan A 11.98% Health Net CA & Nat’l PPO Plan B 11.98% Medicare Coordination of Benefit Plans Contra Costa Health Plan A 1.5% Contra Costa Health Plan B 1.5% Health Net COB Plan A 7.9% Health Net CA & Nat’l PPO Plan A 5.9% Health Net CA and Nat’l PPO Plan B 5.9% Medicare Senior Advantage Plans Health Net Seniority Plus Plan A 3.2% Health Net Seniority Plus Plan B 1.2% Kaiser Senior Advantage Plan A 9.7% Kaiser Senior Advantage Plan B 9.7% Dental Delta Dental Premier – ASO Fees No change - guaranteed through 12/31/14 Delta Dental Claims Fees No change Delta Care PMI 1.0% Life Insurance No change – guaranteed through 12/31/15 Video Display Terminal Plan The current Video Display Terminal (VDT) Plan program through Vision Service Plan (VSP) will be discontinued by VSP 12/31/13. VSP's Computer VisionCare Plan will be offered in place of the VDT Plan. The new program is provided at a cost of $4.64 per covered employee per month through 12/31/15. The 2014 VisionCare Plan premium is 14% ($24,008) more than the 2013 VDT plan. CONSEQUENCE OF NEGATIVE ACTION: In order to prevent the disruption of services for employee group benefits, it is necessary to execute contract renewals. CHILDREN'S IMPACT STATEMENT: None.