Agenda - 10-01-2003-8d - Laserfiche WebLink

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Budget for fiscal year 2003-04 The County budget for fiscal year 2003-04 provides funding for up to a 20 percent health insurance increase effective January 1, 2004. In dollars, this is about $376,000 budgeted for the projected increase. Based on the quoted renewal rates for 2004, the cost of the County contribution for individual coverage and dependent coverage are within the amount budgeted for health insurance for 2003-04. The estimated budget savings yielded by the actual renewal rates quoted over the amount budgeted in fiscal year 2003-04 are about $110,000. Sole Provider Option The County also requested the NCACC Trust provide a "sole provider" quote for the Blue Cross Plans through the Trust. If the County enters into a sole provider contract, this would mean discontinuing the current CIGNA plan effective January 1, 2004 and offering only the Blue Cross Plans. Employees enrolled in CIGNA would have to change to either the Blue Cross Blue Care Plan or the Blue Cross Blue Options Plan effective January 1, 2004. For the sole provider option, the NCACC Trust quoted rates indicating a 3 percent cost reduction in the renewal rates quoted for the Blue Cross Blue Care and Blue Options Plans. It is estimated this would yield a savings of about $55,000 in 2003-04 over the regular renewal quoted or about $94,000 on an annual basis. The Manager's recommendation provides for continuation of the CIGNA plan for 2004. This is based on the employee interest in maintaining choice in health insurance plans, the fact that once the County eliminates CIGNA it will not be able to restore that or another plan under the NCACC Trust's contract requirements and the fact that the three percent cost savings quoted for this year is a relatively small given the size of the County's health insurance contract. Next Steps With the Board's approval of the heath insurance renewal and rates, staff will proceed to develop the employee open enrollment packets, distribute these to employees in early October, hold the open enrollment period from October 10 through November 7 with the Benefits and Wellness Fair tentatively scheduled for Wednesday, October 22. The deadline for employees to submit any change forms to Personnel will be Friday, November 7. Payroll deductions at the new rates will begin in the pay period beginning November 24 for coverage effective January 1, 2004. FINANCIAL IMPACT: As noted, the County budget for 2003-04 provides funding for up to a 20 percent health insurance cost increase - or about $376,000. Attachment 2 shows the current costs for health insurance and the projected costs for renewal of the current plans or renewal with the Trust as the County's sole provider. Both options are within the amount budgeted. • The 2003-04 cost increase for the renewal of the current plans is about $266,282. This is about $110,000 less in cost than the amount budgeted. • Renewal with the sole provider option is about a $211,373 cost increase for 2003-04. This is about $165,000 less than the amount budgeted.