Agenda - 10-07-2008 - 6b - Laserfiche WebLink

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4 accessible health insurance coverage for dependents (spouse, domestic partner, children, or entire family) to employees, particularly lower salaried employees for whom dependent health insurance coverage is a significant cost. Continuation of the subsidy at this level maintains a "family friendly" feature that is highly valued by the 45% of employees with dependent coverage; However, this practice does present an equity issue for employees without dependent coverage. By paying the dependent subsidy, total compensation for employees with dependents is greater than for those without dependents. An added component of the health insurance for all options is Health Advisor, a CIGNA program which provides each healthy and at-risk employee with a health coach who can assist an employee in improving his or her health. Additionally, Orange County has partnered more closely with NCACC to enhance the Wellness Committee and wellness activities. Because healthier employees have a higher quality of life, are more productive, and generally require less costly health care, wellness activities will continue to be an important benefit for County employees and retirees. Highly discounted membership rates for the Triangle Sportsplex continue to be a popular wellness benefit for employees. Currently 155 employees are members (based on payroll deductions). Staff has considered several .options for the 2009 plan year that are within the 8% increase budgeted for FY 08-09. The health care trend (percentage increase in claims costs that actuaries expect to see in the next 12-month period) would have, required a premium increase of 10-12% over the 2008 rates. Because Orange County's actual medical experience in health care claims in FY 07-08 was under the 10-12% trend, staff was able to negotiate a rate lower than the annual trend for a renewal of the current plan design with no changes in copays, deductibles or coinsurance. Staff has provided information for renewal and two alternatives. A comparison of plan designs is shown on Attachment 4 and the costs for the renewal and options is provided in Attachment 5A. Attachment 5B shows total monthly ,premium costs per employee; Attachment 5C shows employee monthly costs, and Attachment 5D shows County costs. Advantages and disadvantages of the renewal and options are shown on Attachment 6. Renewal of Current Plan Des~n-HMO premiums are higher than PPO. Renewing with no change to plan designs results in an increase to the County of approximately $199,700 for FY 08-09. In the past, premiums for the PPO plan have been higher than the premiums for the HMO. 2009 reverses that pattern and the premiums for the HMO are. thus more expensive because of the high volume of claims and because it provides greater benefits to employees. PPO employees will continue to pay higher out of pocket expenses because the PPO plan has a 10% co-insurance requirement up to $1,000/year per member (to a maximum of $3000 per family) for services such as hospitalization and diagnostic medical services. Option 1 Buy up Plan. This option provides the same plans as the Renewal Plan, but requires employees to pay an additional premium (e.g., $20.48/month for employee only coverage) for the higher priced plan. Because the HMO would be the higher priced plan, employees who choose to remain in the HMO would be required to pay the difference (buy-up) between the premium for the PPO and the HMO. This option would result in an increase for the County of approximately $130,970 for FY 08-09. The increase in premiums for employees would be $79,500, assuming that only 25% of employees (based on NCACC projections) chose to stay with the HMO and pay the additional monthly premium. Employees who choose the PPO will have a smaller increase in premiums for dependent care, but they will have higher out of pocket costs for services compared to