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HomeMy WebLinkAboutMINUTES - 08052014 - D.6RECOMMENDATION(S): AUTHORIZE the County Administrator 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, 2015 through December 31, 2015. 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 2015 premium increase – to the County and Special Districts for County (Non PERS) health Plans is 0.1% or approximately $72,858. For fiscal year 2014/2015, the impact is approximately $36,429. For calendar year 2015, the total cost for health and dental premium contributions for County and CalPERS plans is projected to $182.5 million, of this amount $134.9 million is County cost; the $47.6 million is the projected cost to employees, retirees and survivors of retired employees. The fiscal impact is based on the Management Resolution, Memoranda of Understanding and census data in effect as of June 1, 2014 and is included in the 2014/2015 adopted budget. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 08/05/2014 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) 335-1746 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 5, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: D.6 To:Board of Supervisors From:David Twa, County Administrator Date:August 5, 2014 Contra Costa County Subject:Contract renewals with the Non PERS Health Plan, Dental Plan and Life Insurance Plan carriers for 2014 BACKGROUND: Contra Costa County contracts for group health, dental and life insurance coverage and computer vision care coverage on an annual basis. These contracts traditionally cover a calendar year (January 1 through December 31). Current contracts expire December 31, 2014. In order to ensure uninterrupted coverage for enrolled members (active employees, retired employees and survivors of retired employees) it is recommended that the Board of Supervisors (BOS) approve renewal of these contracts at the rates listed in this material. Health care costs continue to receive a good deal of attention due to steep increases in premiums, increased retiree to active employee participant ratios, requirements regarding reporting liabilities (GASB 45), the requirements 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 2012. The Board of Supervisors will receive the January 2014 valuation in September, 2014. 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 that will be included in the January 2014 valuation for 2015 is 5.25% – 6.0% based on Plan elections. The total increased costs associated with these health care contract extensions are 4.6%. This results in a 0.1% increase in the County's cost to subsidize health plan premiums. If CalPERS plans are included, the percentages are 4.5% and .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 trends of roughly 8.7% increases for HMO and 9.0% 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 is 3.7%. The County is able, for 2015, to offer employees, retirees and survivors a number of health insurance plans at rates that will increase below national rate increase averages. In addition, there are no proposed cost increases or program changes in the dental, life insurance or computer vision care coverage available to employees, retirees or survivors of employees. Carriers have documented their proposed rate increases or decreases based on actual experience in providing coverage to enrollees during 2014. All contracts continue to offer essential health benefits and coverage compliant with the requirements of the Affordable Care Act. The following contracts are renewed in accordance with the following rate increases effective January 1, 2015. PLAN INCREASE Non Medicare Plans Contra Costa Health Plan A 6.8% Contra Costa Health Plan B 6.8% Health Net HMO Plan A 10.99% Health Net HMO Plan B -1.46% Kaiser Permanente Plan A 5.58% Kaiser Permanente Plan B -5.69% Health Net CA & Nat’l PPO Plan A 11.32% Health Net CA & Nat’l PPO Plan B 10.35% Medicare Coordination of Benefit Plans Contra Costa COB Health Plan A 7.8% Contra Costa COB Health Plan B 7.8% Health Net COB Plan 7.97% Health Net CA & Nat’l COB PPO Plan A 3.5% Health Net CA and Nat’l COB PPO Plan B 3.5% Medicare Senior Advantage Plans Health Net Seniority Plus Plan A 2.5% Health Net Seniority Plus Plan B 2.5% Kaiser Senior Advantage Plan A -1.77% Kaiser Senior Advantage Plan B -1.77% Dental Delta Dental Premier ASO Fees guaranteed through 12/31/17 No change Delta Dental Claims Fees No change Delta Care (Formerly PMI) guaranteed through 12/31/17 No change Life Insurance ING Basic and Supplemental Life Program guaranteed through 12/31/15 No change Computer Vision Care Program VSP's Computer Vision Care Plan guaranteed through 12/31/15 No change If the BOS approves the contracts and rates as presented, Open Enrollment will begin on September 15, 2014 and end on October 10, 2014 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. CLERK'S ADDENDUM The County Administrators Office provided Local 1 with information they had requested on this matter. By unanimous vote, the Board accepted this additional material into the record (attached).