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Agenda - 10-14-2008 - 1
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Agenda - 10-14-2008 - 1
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10/15/2008 4:27:57 PM
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10/15/2008 4:24:07 PM
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BOCC
Date
10/14/2008
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Work Session
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Agenda
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1
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Minutes - 20081014
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\Board of County Commissioners\Minutes - Approved\2000's\2008
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entire family) to employees, particularly lower salaried employees for whom dependent health <br />insurance coverage is a significant cost. Continuation of the subsidy at this level maintains a <br />"family friendly" feature that is highly valued by the 45% of employees with dependent coverage; <br />.However, this practice does present an equity issue for employees without dependent coverage. <br />By paying the dependent subsidy, total compensation for employees with dependents is greater <br />than for those without dependents. <br />An added component of the health insurance for all options is Health Advisor, a CIGNA program <br />which provides each healthy and at-risk employee with a health coach who can assist an <br />employee in improving his or her health. Additionally, Orange County has partnered more <br />closely with NCACC to enhance the Wellness Committee and wellness activities. Because <br />healthier employees have a higher quality of life, are more productive, and generally require less <br />costly health care, wellness activities will continue to be an important benefit for County <br />employees and retirees. Highly discounted membership rates for the Triangle Sportsplex <br />continue to be a popular wellness benefit for employees. Currently 155 employees are <br />members (based on payroll deductions). <br />Staff has considered several options for the 2009 plan year that are within the 8% increase <br />budgeted for FY 08-09. The health care trend (percentage increase . in claims costs that <br />actuaries expect to see in the next 12-month period) would have required a premium increase of <br />10-12% over the 2008 rates., Because Orange County's actual medical experience in health <br />care claims in FY 07-08 was under the 10-12% trend, staff was able to negotiate a rate lower <br />than the annual trend for a renewal of the current plan design with no changes in copays, <br />deductibles or coinsurance. Staff has provided information for renewal and two alternatives. A <br />comparison of plan designs is shown on Attachment 4 and the costs for the renewal and options <br />is provided in Attachment 5A. Attachment 5B shows total monthly premium costs per <br />employee; Attachment 5C shows employee monthly costs, and Attachment 5D shows County <br />costs. Advantages and disadvantages'ofthe renewal and options are shown on Attachment 6. <br />Renewal of Current Plan Design-HMO premiums are higher than PPO. Renewing with no <br />change to plan designs results in an increase to the County of approximately $199,700 for <br />seven months of FY 08-09 ($342,340 for 12-month plan year). In the past, premiums for the . <br />PPO plan have been higher than the premiums for the HMO. 2009 reverses that pattern and <br />the premiums for the HMO are thus more expensive because of the high volume of claims and <br />because it provides greater benefits to employees. PPO employees will continue to pay higher <br />out of pocket expenses because the PPO plan has a 10% co-insurance requirement up to <br />$1,000/year per member (to a maximum of $3,000 per family) for services such as <br />hospitalization and diagnostic medical services. <br />Option 1 Buy up Plan. This option provides the same plans as the Renewal Plan, but requires <br />employees to pay an additional premium (e.g., $20.48/month for employee only coverage) for <br />the higher priced plan. Because the HMO would be the higher priced plan, employees who <br />choose to remain in the HMO would be required to pay the difference (buy-up) between the <br />premium for the PPO and the HMO. <br />This option would result in an increase for the County of approximately $130,970 for FY 08-09 <br />($224,500 for 12-month plan year). The increase in premiums for employees would be $79,500 <br />($136,275 for 12-month plan year), assuming that only 25% of employees (based on NCACC <br />projections) chose to stay with the HMO and pay the additional monthly premium. Employees <br />who choose the PPO will have a smaller increase in premiums for dependent care, but they will <br />
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