Agenda 03-05-2026; 6-a - Approval of Employee Health and Dental Insurance Renewal and Continued Participation in the North Carolina Health Insurance Pool

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 5, 2026 Action Agenda Item No. 6-a SUBJECT: Approval of Employee Health and Dental Insurance Renewal and Continued Participation in the North Carolina Health Insurance Pool DEPARTMENT: Human Resources ATTACHMENT(S): INFORMATION CONTACT: Attachment 1: Renewal Projection for Brenda Bartholomew, Human Resources Health Insurance Rates for Director, (919) 245-2552 FY 2026-27 PURPOSE: To approve employee health and dental insurance premium equivalent rates for the plan year July 1, 2026, through June 30, 2027, and to approve continued participation in the North Carolina Health Insurance Pool (NCHIP). BACKGROUND: The County provides health and dental benefit plans for employees and their families, as well as health benefit plans for pre-65 retirees. The Board of Commissioners has the responsibility to approve the health and dental insurance rates each fiscal year. This approval is made in advance of the annual budget so staff can hold an open enrollment period prior to the beginning of the fiscal year, July 1. Open enrollment is scheduled for the period of April 27, 2026, through May 10, 2026. Health Insurance In FY 2019, the Board of County Commissioners approved Orange County's participation in the North Carolina Health Insurance Pool. Based on stable claims experience, from FY 2019 through FY 2022, the County maintained no increases in premium equivalent rates for health insurance and dental coverage for employees and pre-65 retirees. In subsequent years, the Board approved 5% increases in premium equivalent rates for health insurance coverage each year through FY 2025 and a 6% increase in FY 2026. The County has absorbed the cost of these increases and has not increased the employee contribution to the health plan for active employees or pre-65 retirees since 2015. Funding for the health plan is based on estimated premium equivalent rates that are calculated to pay for incurred claims, administrative and reinsurance costs, and expected liability of claims Incurred but Not Reported (IBNR). The plan also carries a reserve balance which helps to ensure the County's ability to pay any claims that exceed the budgeted amount in any given year. Best practice recommends maintaining reserves between 1.5 and 3.0 times IBNR. Based on the December 2025 IBNR liability of $922,644, the recommended reserve range is between $1.4