Agenda - 09-09-2008- 4 - Laserfiche WebLink

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2 Benefits The Human Resources Department and other County staff annually review the County employee benefits package and advise the Manager regarding a recommendation to the Board on benefit plans that become effective for the next calendar year. In the past there have been relatively few design changes to employee benefit plans. The cost for benefits provided by the County such as dental care, term life insurance, employee assistance, flex spending and 401 k have remained fairly consistent. Costs associated with the County Health Care plan, currently with CIGNA provided through the North Carolina Association of County Commissioners (NCACC) pool, has consistently increased. Significant premium increases over the last several years have made it difficult for the County to continue coverage at the same plan level and employees face increased costs for dependent coverage. A driving factor in this increase is the County practice to pay the entire employee premium and a significant amount of dependent care coverage. Currently, the County pays $445.06 or $522.08 each month for Employee Only coverage. Because health insurance is such an essential part of the total compensation package that attracts and retains employees, input from Commissioners will assist in formulating recommendations for this year's plan as well as establish a direction for the future. The current County benefits include: Term Life/Accidental Death and Dismemberment Insurance The County has provided for many years an employer-paid life insurance benefit at the employee's annual salary (rounded to the next thousand dollars) with a maximum benefit of $50,000. An employee also has the option to purchase additional coverage. Effective January 2008, MetLife became the carrier for athree-year contract. The Plan design for 2009 has no changes. The County pays 22.5 cents for every thousand dollars of coverage per month for life and accidental death and dismemberment insurance. Dental Insurance The County provides aself-insured dental plan with Delta Dental of N.C. serving as the third party administrator. Premiums earned in FY 07-08 were $443,500 and claims and fees paid were $368,800. The dental plan's fund balance at the end of FY 07-08 was in excess of $300,000. There is no increase in Delta Dental's administrative fee of $2.00 per member per month. All claims are paid based on a Table of Allowances (TOA) which Orange County establishes. Although the County reimburses preventative services at 100% of the TOA, the current Table has lagged behind standard rates of reimbursement, causing employees to pay an increasing amount for services. This has reduced the value of the benefit and only a third of employees are taking advantage of the preventive and diagnostic care. Staff reviewed the TOA and identified the most common preventive and diagnostic services that could be reimbursed at the Maximum Payable Amount (MPA). Attachment 1 provides a comparison of the current and proposed TOA. Based on experience, this change will increase the County's claims by approximately $48,000 annually and can be absorbed by the current funding over the next several years. Attachment 2 is a projection showing that the Dental Fund will continue to be adequately funded over five years. Staff will continue to regularly monitor the dental fund.