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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: February 6, 2018 <br />Action Agenda <br />Item No. 6 -b <br />1 <br />SUBJECT: Resolution Authorizing the Participation in the North Carolina Health Insurance <br />Pool (NCHIP) <br />DEPARTMENT: Human Resources <br />ATTACHMENTS: <br />1. Draft Resolution Authorizing the <br />Participation in the North Carolina <br />Health Insurance Pool (NCHIP) <br />INFORMATION CONTACT: <br />Brenda Bartholomew, Human Resources <br />Director, (919) 245 -2552 <br />PURPOSE: To approve the Manager's recommendation to join the North Carolina Health <br />Insurance Pool (NCHIP) effective July 1, 2018. NCHIP is a new health risk pool coordinated <br />through Gallagher Benefit Services, which provides economies of scale and risk pooling to <br />provide greater financial stability among participating North Carolina counties, cities, and towns. <br />BACKGROUND: The County provides health insurance coverage for employees and pre -65 <br />participating employees. With North Carolina healthcare costs trending at 7.5 percent annually, <br />it is imperative that the County provides financial stability and predictability in funding healthcare <br />costs over the coming years. Orange County can anticipate, based on continued good <br />experience and stable enrollment, a five year projection of $17.3 million dollars for July 1, 2022. <br />The NCHIP projects a 3.3 percent increase based on proven statistical findings from Illinois, <br />Missouri and Florida co -op programs, representing a five year projection of $14.7 million dollars <br />(not including additional savings for return of dividends). <br />With a 7.5 percent medical trend increase from year to year; the annual budget will double by <br />2027. The County's health insurance budget has cumulatively increased by 12 percent in the <br />past 4 years compared to a 9 percent cumulative increase in the overall County budget, <br />demonstrating the importance of planning stability in future budgets. <br />North Carolina State Law allows local governments to enter into contracts to establish health <br />insurance pools as a means of providing health insurance to employees. NCHIP operates with <br />a Board of Directors with members having a voice and vote in how the Pool operates. Each <br />2014 -15 <br />2015 -16 <br />2016 -2017 <br />2017 -18 <br />Health Insurance Budget <br />$10,900,000 <br />$11,082,953 <br />$11,784,305 <br />$12,265,000 <br />Health Budget % Increase <br />1.68% <br />6.33% <br />4.08% <br />North Carolina State Law allows local governments to enter into contracts to establish health <br />insurance pools as a means of providing health insurance to employees. NCHIP operates with <br />a Board of Directors with members having a voice and vote in how the Pool operates. Each <br />