Minutes 03-15-2022 Business Meeting

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24 VOTE: UNANIMOUS Ayes (Commissioners Richards, Fowler, Greene, Price, and McKee) Nays (Commissioners Bedford and Hamilton) Commissioner McKee left the meeting at 9:06 pm. b. Recommendations for Employee Health Insurance and Dental Insurance The Board considered approving the Manager's recommendations regarding employee health and dental insurance effective July 1, 2022 through June 30, 2023. BACKGROUND: The County provides employees with a comprehensive benefits plan that includes participation in robust health and dental insurance plans for employees and their families. Each year, the Board of Commissioners is asked to review and approve health and dental insurance rates in advance of the annual budget so that open enrollment can be completed prior to the beginning of the plan year which starts on July 1. Health Insurance Since the Board of County Commissioners approved Orange County's participation in the North Carolina Health Insurance Pool in FY 2018-19, the County has maintained the same monthly premium equivalent rates for health insurance and dental coverage for employees and pre- sixty-five retirees based on stable claims experience. Funding for the health plan is based on estimated premium equivalents rates that are necessary to pay for incurred claims, administrative costs and expected liability of claims incurred but not yet reported (IBNR). The plan also carries a reserve balance which ensures the County's ability to pay claims. A reserve policy or the fund ratio target should range between 1.5 and 3.0 over IBNR to ensure the ability to pay for future claims based on current claims experience which currently have been higher than expected. The current fund ratio is 1.9 through January 2022. In FY2022-23, that reserve amount is recommended to be 2 to 2.5X of expected IBNR liability. In the current fiscal year, the Health Insurance plan experienced an increase in the overall number of claims, higher costs per claim, and two very high-cost claims. Although the plan is projected to have a positive year-end balance of $1,380,254, additional funding is necessary to cover projected total plan costs for FY 2022-23 and to build reserve levels for future sustainability of rates. The actuarial analysis conducted by the North Carolina Health Insurance Pool is recommending an increase of five percent (5%). The Manager recommends that the County assumes 100% of the recommended 5% increase and that the employee contribution continues at current rates. This represents a total budget increase of $626,813.