Agenda - 10-14-2008 - 1 - Laserfiche WebLink

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2 Staff reviewed the benefits survey conducted by The Archer Company and other local surveys and confirmed that Orange County benefits are, for the most part, comparable to nearby jurisdictions. This data shows Orange County health care provides some of the lowest deductibles and co-pays for office visits with the lowest co-pays for prescriptions. Where the data can be compared, Orange County dental benefits are comparable to other organizations. Orange County provides the highest number of paid days off (holidays, personal and vacation days) among surveyed groups. Employees must have more years of service to qualify for longevity payments than most of the surveyed organizations, and the maximum tuition reimbursement amount is below the average. 401(k) contributions are the lowest of all organizations surveyed because most organizations contribute 5%, while we contribute $27.50 for non-Law Enforcement Officers each pay period. Attachment 1 presents a comparison of benefits. Dental Insurance The County provides aself-insured dental plan with Delta Dental of North Carolina 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. This year there is no increase in Delta Dental's administrative fee of $2.02 per member per month. All claims are paid based on a Table of Allowances (TOA) which Orange County establishes. Although the County reimburses preventive 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 dental TOA and identified the most common preventive and diagnostic services. As a result, staff recommends increasing the amount -paid for preventive and diagnostic services from the current TOA to the Maximum Payable Amount (MPA) established by Delta Dental. Attachment 2A provides a comparison of the current and proposed amounts. Based on experience, this change in the amount paid for services will increase the County's claims by approximately $48,000 annually and can be absorbed by the current premiums earned over the next several years. Attachment 2B shows projections that assume there will be growth due to increased staff size and more participants in the dental plan. Staff will continue to regularly monitor the dental fund. Staff reviewed other options besides increasing preventive and maintenance reimbursements, such as also increasing restorative services by 25%. Increasing additional services would draw down the dental fund more rapidly. An example projection is on Attachment 2 C. Flexible Compensation Plan The County provides a Section 125 Flexible Compensation Plan administered by Tucker Administrators. This Plan provides tax sheltering of health and dental premiums and includes two Flexible Spending Accounts (a medical spending account and dependent/child care spending account). These accounts enable employees to save money and increase their take home pay by eliminating income taxes and Social Security taxes on contributions they make to the Spending Accounts. It also allows the County to reduce payroll taxes on employee contributions. Employees achieve these reductions in taxes by setting aside a specific amount