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

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2 appropriately, to aid in developing a healthy and high performing workforce, and to provide useful information and direction to staff and employees. Retiree health insurance will become a greater cost to the County as more baby-boomers retire and live longer. Orange County has a generous retiree health package. As of April 2011, 10% (more than 80 individuals) of current Orange County employees are eligible to retire. The current Personnel Ordinance requires the County provide health insurance for post-65 retirees at the same level as active employees and pre-65 retirees, even though Medicare has gone through several changes, and costs for excellent Medicare supplements are two-thirds of the cost of the County Health Plan. Many other counties and cities require employees to pay for a portion of their health insurance premiums and do not fund dependent coverage to the extent that Orange County does. Orange County's benefits exceed the average health insurance benefit in North Carolina in terms of co-pays and deductibles. Attachment 2 provides a summary of employee health care benefits from a 2010 survey of local government employers. Health insurance is an important benefit for employees, and. the prospect of receiving retiree health insurance is a significant factor for many employees' choice to retire from Orange County. Employees who left County employment since 2010 and completed an Exit Interview overwhelmingly indicated the health insurance benefit was excellent (66%) or good (26%). A recent employee survey was conducted to obtain employee opinions related to health care coverage. The responses are summarized in Attachment 3. Overall, responses indicate employees value their health insurance and have made changes in the past year to use the plan wisely. Many employees indicated they have recently begun using preventive services, started exercising or taken actions that have long-term positive effects on an individual's overall health. Employees have stated there should not be any change to health insurance benefits while salaries remain at 2009 levels. Many have stayed with the County because they are counting on the retiree health benefit. The most frequent suggestion related to retiree health benefits (other than to keep it the same) was to increase the eligibility from ten years to twenty years service for new hires. Staff has identified a variety of options that lower the cost of employee and retiree health care. The options vary significantly and are summarized in Attachment 4. Each option does have impacts of varying degrees. FINANCIAL IMPACT: There is no financial impact associated with receiving information and providing feedback on options related to employee and retiree health care. RECOMMENDATION(S): The Manager recommends the Board receive information on employee and retiree health care for 2012 and provide feedback regarding options related to employee and retiree health care benefits. The FY 2011-12 proposed budget does not include any specific changes at this time, but does fund the projected increases (up to 15%) in premiums/costs through June 2012.