Agenda - 08-30-2011 - 3 - Laserfiche WebLink

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4 a-IEALTH INSURANCE Currently the County offers two fully insured health insurance plans contracted through the NCACC Health Insurance Trust and administered by CIGNA. Over 90% of employees participate in the Health Maintenance Organization (HMO) plan, which requires participants to use a vendor network of physicians and facilities. The second plan is a Preferred Provider Organization (PPO) that allows both in and out of network services. These two plans are very similar to each other in benefits. The maximum out-of-pocket cost an employee can incur with the HMO is $1,000 less than with the PPO. Consequently, most employees select this plan, particularly if they have individual coverage and anticipate needing any major health care. A history of employees enrolled in each plan, past rate changes and past_ plan changes- to the health insurance are on the-following pages. Both current health insurance plans provide excellent benefits in the event of illness or accident, but offer little incentive for employees to improve their health and avoid illness. Strategies undertaken by the County, e.g. incentive programs to improve employee health, are discussed in the Wellness Section below. Changing health- insurance companies and plan designs provides the County- an opportunity to encourage healthy behaviors that can lead to lower long- term health insurance costs. Details of any new plan will vary slightly from the NCACC plans, regard-less of insurance provider. Initial insurance provider quotes for renewal of the current PPO and HMO- plans ranged from 117.86% to 131.0% of current premiums. Proposed alternate plans for a PPO and .Health Savings Account ranged -from 104.58% to 115.63% of current premiums, with- significant changes to the current plan designs. The Board approved a funding level of 115% of 2011 premiums-for the health insurance renewal for FY 2011-12. In determining-the tjrpes of plans that would be most appropriate for County employees, staff considered how each combination of plan designs would: 1. Meet the FY 2011-12 budge#; 2. Minimize impact on employees with and without dependents; 3. Offer employees a choice of two plans; 4. Enable the County to pay the- same individual anal dependent share regard-less of plans; and 5. Minimize future increases so health insurance can remain sustainable and provide continuity of coverage. The- following options for achieving a 15.0% increase in County. costs for employee health care in FY 2011-12 were included in the Manager's budget recommendation: • Provide two plan options: one similar to the current traditional plans and the other a Health Savings Account/High Deductible Plan, often referred to as an HSA. HSA's provide coverage for current expenses and allow the option to save for future expenses with portable, tax-advantaged funds. 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. The HSA option has reduced costs in other counties, but this type of plan is different from the traditional plans and would require extensive employee education. A-2