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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: March 15, 2022 <br /> Action Agenda <br /> Item No. 6-b <br /> SUBJECT: Recommendations for Employee Health Insurance and Dental Insurance <br /> DEPARTMENT: Human Resources <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Attachment 1: Projected Health and Brenda Bartholomew, Human Resources <br /> Dental Insurance Rates Director, (919) 245-2552 <br /> for FY 2022-23 <br /> PURPOSE: To approve the Manager's recommendations regarding employee health and dental <br /> insurance effective July 1, 2022 through June 30, 2023. <br /> BACKGROUND: The County provides employees with a comprehensive benefits plan that <br /> includes participation in robust health and dental insurance plans for employees and their families. <br /> Each year, the Board of Commissioners is asked to review and approve health and dental <br /> insurance rates in advance of the annual budget so that open enrollment can be completed prior <br /> to the beginning of the plan year which starts on July 1. <br /> Health Insurance <br /> Since the Board of County Commissioners approved Orange County's participation in the North <br /> Carolina Health Insurance Pool in FY 2018-19, the County has maintained the same monthly <br /> premium equivalent rates for health insurance and dental coverage for employees and pre-65 <br /> retirees based on stable claims experience. <br /> Funding for the health plan is based on estimated premium equivalents rates that are necessary <br /> to pay for incurred claims, administrative costs and expected liability of claims incurred but not yet <br /> reported (IBNR). The plan also carries a reserve balance which ensures the County's ability to <br /> pay claims. A reserve policy or the fund ratio target should range between 1.5 and 3.0 over IBNR <br /> to ensure the ability to pay for future claims based on current claims experience which currently <br /> have been higher than expected. The current fund ratio is 1.9 through January 2022. In FY2022- <br /> 23, that reserve amount is recommended to be 2 to 2.5X of expected IBNR liability. <br /> In the current fiscal year, the Health Insurance plan experienced an increase in the overall number <br /> of claims, higher costs per claim, and two very high cost claims. Although the plan is projected to <br /> have a positive year-end balance of $1,380,254, additional funding is necessary to cover <br /> projected total plan costs for FY 2022-23 and to build reserve levels for future sustainability of <br />