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1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: March 18, 2025 <br /> Action Agenda <br /> Item No. 8-b <br /> SUBJECT: Recommendations for Rate Renewal of Employee Health and Dental Insurance <br /> and Continued Participation in the North Carolina Health Insurance Pool <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 /> 2025-26 <br /> PURPOSE: To approve the Manager's recommendations of employee health and dental <br /> insurance premium equivalent rates for plan year, July 1, 2025, through June 30, 2026, and to <br /> approve the County's continued participation in the North Carolina Health Insurance Pool. <br /> BACKGROUND: The County provides health and dental benefit plans for employees and their <br /> families, as well as health benefit plans for pre-65 retirees. The Board of Commissioners has the <br /> responsibility to approve the health and dental insurance rates each fiscal year. This approval is <br /> made in advance of the annual budget so staff can hold an open enrollment period prior to the <br /> beginning of the fiscal year—July 1. Open enrollment is scheduled for the period of April 28, 2025, <br /> through May 9, 2025. <br /> Health Insurance <br /> In FY 2019, the Board of County Commissioners approved Orange County's participation in the <br /> North Carolina Health Insurance Pool (NCHIP). Based on stable claims experience, from FY 2019 <br /> through FY 2022, the County maintained no increases in premium equivalent rates for health <br /> insurance and dental coverage for employees and pre-65 retirees <br /> In subsequent years, the Board approved 5% increases in premium equivalent rates for health <br /> insurance coverage each year through FY 2025, with no employee contribution rate increase for <br /> either active employees or pre-65 retirees. During these years, the Health Insurance plan <br /> experienced increases in the frequency and severity of large claimants, overall increases to gross <br /> claims and growth in plan enrollment. These factors have collectively contributed to the need to <br /> draw down reserves within the North Carolina Health Insurance Pool and have created the need <br /> to increase premium equivalent rates to both cover claims and build reserves. <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 helps to ensure <br />