Agenda - 03-19-2019 6-c - Recommendations for Employee Health Insurance and Other Benefits

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2 In FY2017/2018, the Board of County Commissioners approved "carving out" pharmacy coverage from UnitedHealth Care and contracted with Envision Rx as the County's Pharmacy Benefit Manager (PBM). This resulted in an expenditure reduction of $141,000 annually for FY2017/2018. The FY2017/2018 total County budget for health insurance for employees and pre-65 retirees was approximately $11.6 million dollars. For FY2018/2019, the Board of County Commissioners approved the County's participation in the North Carolina Health Insurance Pool (NCHIP), which included Blue Cross Blue Shield as the health care provider, and approved increasing Health Insurance funding (County share) by $750,000 and the Dental Insurance funding (County share) by $125,521. The County maintained current premium equivalent rates for health insurance and dental coverage for employees and pre-65 retirees. The total FY2018/2019 budget was projected to be approximately $13.3 million (including health savings account contributions) based on increases to current enrollment of 1,068 employees and pre-65 retirees. The County contribution was projected at $11.9 million; representing a 5.9 percent increase. Health Insurance The total FY2019/2020 budget is projected to be approximately $13.3 million (including health savings account contributions) based on current enrollments for employees and pre-65 retirees. The County contribution is projected at $11.9 million assuming that no changes are made to the current employee contribution structure. This represents no increase to the FY2019/2020 budget. Through December 2018, Orange County is in a very good position from a reserve perspective with NCHIP. Reserve levels are recommended at 1.25 times total monthly claims; $6.4 million has been funded by Orange County through December 2018; $819,000 has been paid in fixed costs; and $3.9 million paid in claims which results in a $1.7 million reserve. This is well over the recommended reserve level. Comparatively, $21.4 million has been funded by all participants of NCHIP through December 2018. A total of $16.9 million has been paid for claims resulting in a $4.5 million reserve. Of these reserves, $1.7 million is tied to Orange County. The following represents total health care appropriations over the last five years (County and Employee shares): 2015-16 2016-17 2017-18 2018-19 2019-20 Health Insurance $11,082,953 $11,784,305 $12,585,606 $13,333,299 $13,333,299 Budget Health Budget% 6.33% 6.80% 5.94% 0.00% Increase It is recommended that the premium equivalent for the high-deductible plan be decreased by $118 per month for each plan tier. The $118 per month represents 1/12th of the Health Savings Account County funding of $1,416 annually. A total of $363,912 is funded for Health Savings Accounts for FY2018/2019 and is 100% paid by the County. These funds are currently not paid to NCHIP and therefore not necessary to include as part of the high-deductible premium equivalent. The Health Savings Account funding is budgeted separately in the Health Insurance 70 Fund.