Agenda - 05-01-2012 - 7b - Laserfiche WebLink

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2 Orange County employees (45.7 years). With an older population of insured members, there is a greater likelihood of individuals incurring claims more frequently and at higher amounts because health care costs increase with age. These finro factors could result in an increase in premiums for all County employees and the other subgroup, Community Home Trust. If the County becomes self-insured, the ABC Board (and any other subgroup) will be accountable for their own claims. This will minimize the impact of non-County employees on the County's health insurance. Based on current analysis, the County would reserve the right to terminate the subgroup relationship with one year's notice to allow the ABC Board the time to identify other coverage. FtNANCIAL IMPACT: Because the Orange County ABC Board will be paying its own premiums, there is no financial impact on the cost of health insurance premiums for the current fiscal year. If claims paid on behalf of the ABC Board staff exceed the ratio of claims to premiums paid by Orange County members, the cost of premiums for all members will be negatively impacted and premiums could increase effective in the future. Likewise, if the ratio of claims to premiums paid is lower for the ABC members, the cost of all premiums could be positively affected. RECOMMENDATION(S): The Manager recommends that the Board approve the ABC Board's request to be added to the County's health insurance plan as a subgroup effective July 1, 2012. If the Board approves the request, the Manager further recommends that the Board direct the County Attorney to develop a finro-year Memorandum of Understanding befinreen the finro parties to be signed by the appropriate representatives of the ABC Board and the County. Such Memorandum should require the subgroup to pay for its own claims when the County's health coverage funding changes from fully-insured to self-insured. The Manager also recommends that the County reserve the right, with appropriate notification to the ABC Board, to terminate the option if analysis provides evidence that the subgroup's medical experience adversely impacts the County's overall cost of coverage. Should approval be granted, the ABC Board reserves the right to consider another option if during the interim period, the ABC Board identifies another option that is a better fit for its employees.