Agenda - 05-10-2011 - 3 - Laserfiche WebLink

Browse Search

~t ~ Options for Lowering the Costs of Employee and Retiree Health Care The FY 2011-12 Manager's Recommended Budget includes funds for up to a 15.0 percent increase ($552,598) in the County's health insurance cost. Staff has identified the following options for addressing the projected increase. Additional information will be presented to the Board in the fall, at the time of the annual renewal process. Options for Employee Health Insurance Coverage 1. Create a Basic Plan and aBuy-Up Plan -The Basic Plan. would .provide a lower level of benefits at no cost to employees. Employees who prefer a higher level of benefits, and wish to pay for that coverage, would pay a higher premium for aBuy- Up Plan. The cost to the County would remain the same because employees who choose the Buy-Up Plan will assume the additional costs for this higher level of coverage. 2. Create a Single Plan with reduced benefits compared to the .County's existing health plans. The cost to the County and to the employee would remain neutral but employees would have more limited coverage compared to the current health plans and could not choose between a PPO and an HMO plan. The Single Plan could be either an HMO or PPO plan. 3. Develop a high deductible plan, utilizing a Health Savings Account (HSA) to handle employee out of pocket costs, as an option. HSA's provide coverage for current expenses and allow the option to save for future expenses with portable, tax- advantaged funds. This option has shown to reduce costs in other counties, but is very different from the traditional plans and would require extensive employee education. 4. Provide two plan options: one similar to current plans and the other a Health Savings Account/High Deductible Plan (HSA). The premium cost to employees would be the same in both plans, allowing employees to choose a plan that meets their needs without regard for premium cost. 5. Increase premiums for employees while keeping coverage as close to the current plans as possible. Employees would be required to assume. some of the cost of an increase in premiums. At a 15% overall percent increase in premiums, splitting the increase 50-50 with the County would add $40 per month to the current employee contribution, and more for employees with dependent coverage (up to a $160 per month increase for employees with family coverage). 6. Additional considerations that would reduce overall costs include: • Reducing the amount of the dependent subsidy, currently at 52% of the lower priced plan. • Increasing the waiting period for new employees. • Requiring participation in wellness activities, including biometric screenings. • Instituting a differential for smokers. • Requiring use of mail order for maintenance medications. 16