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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: April 2, 2024 <br /> Action Agenda <br /> Item No. 6-b <br /> SUBJECT: Recommendations for Employee Health Insurance and Other Benefits <br /> DEPARTMENT: Human Resources <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Attachment 1: Projected Health and Dental Brenda Bartholomew, Human Resources <br /> Insurance Rates for FY Director, (919) 245-2552 <br /> 2024-25 <br /> PURPOSE: To approve the Manager's recommendations regarding employee health and dental <br /> insurance effective July 1, 2024, through June 30, 2025. <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 maintained the same monthly premium <br /> equivalent rates for health insurance and dental coverage for employees and pre-65 retirees <br /> based on stable claims experience until FY 2022-23. In both FY 2022-23 and FY 2023-24, the <br /> Board approved an increase of 5% to the Health Insurance Premium Equivalents for both active <br /> and pre-65 retirees as the Health Insurance plan experienced an increase in the overall number <br /> of claims and higher costs per claim compared to prior years. The higher cost of claims also <br /> resulted in a drawing down of reserves kept within the North Carolina Health Insurance Pool. The <br /> increased cost was paid entirely by the County and not passed on to employees through increased <br /> employee contributions. <br /> Funding for the health plan is based on estimated premium equivalent rates that are calculated to <br /> pay for incurred claims, administrative and reinsurance costs, and expected liability of claims <br /> incurred but not reported (IBNR). The plan also carries a reserve balance which ensures the <br /> County's ability to pay claims if the total cost of claims exceeds the total funding generated by the <br /> premium equivalents. <br />