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employees in the HMO. The cost of buying up employee-only coverage would total <br />$245.76/year for employees choosing the HMO, which is below the cost of living salary <br />increases all employees received July 1, 2008. <br />The employee cost of $20.48 is the difference between the cost of Individual Coverage for the <br />PPO and the HMO, but the cost of "buying up" can be higher or lower than $20.48. If the cost <br />of buying up was reduced to $10.24 each month, each employee choosing to buy up would pay <br />less than $5.00 per pay period for the HMO because the tax savings would reduce the total <br />cost. The cost of living salary increases which all employees received July 1, 2008 exceeds <br />the $10.24 cost per month ($122.88/year). <br />Option 2 One Plan. This option is a renewal with one plan for all--a PPO plan. All members <br />have access to providers both in and out of network. This plan would require all employees with <br />major medical expenses (surgery, hospitalizations, diagnostic services, etc.) to pay 5% (in- <br />network) co-insurance, to a maximum of $500 per member ($1500 for a family) per year. Out of <br />network benefit requires 25% co-insurance to a maximum of $1000 per member ($3000 for a <br />family). While this is an improved benefit for current PPO members who currently have a <br />$1000 (in-network) per member co-insurance maximum, it reduces the benefit for current HMO <br />members who have not had any co-insurance. <br />Option 2 would result in an increase for the County of approximately $230,910 for FY 08-09. <br />The effect on employees with dependent coverage would be a smaller increase than renewing <br />the current plan with no change. <br />The option with the least negative impact on all employees and particularly lower-compensated <br />employees is the renewal of current plan with no changes. Although projections show the cost <br />for dependent coverage increases more with the renewal, employees with dependents can <br />choose the lower cost plan to reduce their premium cost. The renewal allows the County to <br />continue paying the full cost of coverage for employee only coverage, thereby impacting fewer <br />employees. <br />FINANCIAL IMPACT: The 2009 Benefit Recommendations all meet the County budget for FY <br />08-09. A chart showing benefit costs from FY 04-05 to FY 08-09 (projected) is on Attachment <br />7. <br />Dental: There is no budget impact in the FY 08-09 approved budget. Premiums will remain the <br />same for 2009. The proposed changes will reduce the balance in the dental account over time. <br />Projections for the use of funds for the next five years are provided in Attachment 2B. No <br />administrative increases are anticipated. <br />Flexible Spending Account: Cost is within the FY 08-09 approved budget. There is a potential <br />for tax savings, based on the amount of contributions employees make, of a minimum 7.65 <br />cents savings for each $1.00 contributed for both the County and the employee. Losses are <br />possible when an employee claims and receives funds prior to making the full contribution and <br />then leaves County employment prior to fulfilling their obligation to the Flexible Spending <br />Account for the plan year. The potential loss depends on the number of employees who enroll, <br />their level of participation, and how many employees left County employment prior to <br />contributing the amount of their reimbursement. Past experience indicates that funds not used <br />are substantially greater than losses. <br />