Agenda - 09-15-2009 - 6c - Laserfiche WebLink

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Employee Waiver of Health Insurance The FY 2009-10 approved budget included an increase in the amount provided to employees who waive health insurance coverage to be effective January 1, 2010. Orange County currently compensates employees $25 or $50/month (depending on the date an employee first waived coverage) if they waive Orange County health insurance. Employees must provide proof of other coverage. According to the recent employee survey, 18 employees out of 260 respondents would consider waiving County insurance. Eleven specified an amount (shown below) for which they would consider waiving County insurance. If these are representative of the entire employee population, potentially 30-40 additional employees would be able to waive coverage. Amount of Incentive # of em to ees $50-$100 g $125-$200 2 $200-$400 1 A $100 incentive will result in $4,800 not paid for health insurance per employee annually. Eight new waivers will result in a $0 net gain from offering the higher incentive. If an additional 16 (beyond the 8) employees opted to waive coverage, overall personnel expenses would be reduced by $60,000 for the remaining six months of FY 2009-10. If there were only 16 total new waivers, the reduction would be $38,400 for the remainder of FY 2009-10. Dental Insurance The County provides aself-insured dental plan through Delta Dental of N.C. The County pays all premiums for employee coverage and an administrative fee to Delta Dental. Dental claims are paid according to a Table of Allowances (TOA) which Orange County sets and reviews annually. In January 2009, the County increased the amount it reimburses for preventive, diagnostic and maintenance services to the maximum amount allowed by Delta Dental (based on participating providers' charges). Despite these efforts, the TOA still lags behind standard rates of reimbursement for restorative services, which are paid at 85% or 50% of the County's TOA. Because of the difference between County reimbursements and actual charges, employees pay an increasingly higher portion of charges for these services. Staff reviewed the TOA and identified basic restorative services where the reimbursement could be increased without negatively affecting the Dental Fund balance. Attachment 4 provides a comparison of the current and proposed TOA. This change can be absorbed by the current funding over the next several years. Total contributions for the first half of 2009 were approximately $224,500 and claims and fees paid were $226,500. Claims for the same period in 2008 totaled $213,250, showing that costs increased $13,250 (6.2% increase) in a six month period. This anticipated increase is due to the adjustment of reimbursement rates for preventive, diagnostic and maintenance services effective January 1, 2009, and a greater number of procedures performed. As described in the FY 2009-10 budget documents, the dental plan's fund balance at the end of FY 2008-09 was in excess of $300,000, and the fund continues to be robust. The administrative fee of $2.02 will increase to $2.25 per member per month (approximately $2,550/year for all employees), effective January 2010, after two years of remaining static. The 4