Agenda - 10-21-2002 - 4 - Laserfiche WebLink

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3 the Trust has provided a quote for the sole provider option. This would be a 13 percent increase rather than the 16 percent increase for Option 2. Budget for Health Insurance For each renewal option, Attachment 4 shows the estimated fiscal year 2002-03 County cost. It also shows the cost in comparison to the amount budgeted for health insurance for 2002-03. In summary, Option 1 - renewal with Blue Care Plan 1 - exceeds the amount budgeted for health insurance for fiscal year 2002-03 by about $85,000, Option 2 - renewal with Blue Care Plan 2 - is about $32,000 less than the amount budgeted and Option 3 - renewal with Blue Care Plan 2 and the sole provider option (eliminating CIGNA) - is about $71,000 less than the amount budgeted. County Contribution for Employee and Dependent Health Insurance In the past the County has established its contribution for employee health insurance as the: • Full cost for the individual employee only coverage and • 40 percent of the cost of dependent coverage based on the Blue Cross PCP rate. The County then has applied the dollar amount of the dependent contribution calculated on the Blue Cross PCP rate to the Blue Cross Preferred Provider rates and CIGNA Plan rates. Calculating the rates in the above way for 2003 will result in a significant increase in employee cost for dependent coverage. About 300 employees or 42 percent have dependent coverage. In the June Budget Work Sessions, the Board of Commissioners had expressed interest in taking steps to mitigate the impact on employees of the health insurance cost increase. As discussed in June, a way to accomplish this is to increase the County's subsidy for dependent coverage. Attachment 5 shows the three renewal options with the employee cost at the current subsidy level and the increase in the County subsidy necessary to fully mitigate the employee cost increase. It also shows the number of employees with dependent coverage by salary. The Board may enact a change in subsidy on a temporary basis for the 2003 health insurance rates only and then reconsider the subsidy in the process of setting health rates for 2004, based on any actions taken as to employee pay. Below are the County costs to mitigate the dependent cost increase for each renewal option. Option Subsidy Percent Annual County FY 2002-03 County Required Cost Increase Cost Increase 1 - Blue Care Plan 1 and Blue Options 52.0% $169,845 $99,076 Plan 1 with CIGNA 2 - Blue Care Plan 2 and Blue Options 48.5% $111,645 $65, 127 Plan 2 with CIGNA 3 - Blue Care Plan 2 and Blue Options 47.0% $89,565 $52,247 Plan 2 with Blue Cross as Sole Provider (Drop CIGNA) Looking beyond 2003, an option the Board may wish to consider for 2004 in lieu of the increased subsidy is providing an employer funded medical spending account contribution for