Item B1
Revised 3/99
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: September 4. 2002
Bulk Item: Ves D No X
Division: Manaaement Services
Department: Administrative Services
AGENDA ITEM WORDING: Discussion and approval of proposed chanaes to the Group
Insurance Proaram in order to reduce both ad valorem and non ad valorem costs.
ITEM BACKGROUND: Durina the preparation of the Fiscal Vear 2003 budoet. the Board was
advised of the larae increases necessarv in the aroup insurance fund in order to cover proiected
claims. Staff has recommended various chanaes to reduce the ad valorem impact of the risinq
cost of health care.
PREVIOUS RELEVANT BOCC ACTION: On Auoust 21.2002. the Board of County
Commissioners considered four items as possible cost containment measures. Thev requested
that the items be discussed in further detail on September 4. 2002.
-
CONTRACT/AGREEMENT CHANGES Not Applicable
STAFF RECOMMENDATION: Approval.
TOTAL COST: Fiscal Vear 2003 Ad Valorem
Tax Savinas- Varies by Proposal
BUDGETED: Ves D No D
COST TO COUNTY:
REVENUE PRODUCING: Ves D No D
AMOUNT PER MONTH
YEAR
APPROVED BY: COUNTY ATTY 0 OMS/PURCHASING 0 RISK MANAGEMENT 0
DIVISION DIRECTOR APPROVAL: J~~
DIVISION DIRECTOR NAME: James L. Roberts
DOCUMENTATION: INCLUDED: X TO FOllOW: D NOT REQUIRED: D
DISPOSITION:
AGENDA ITEM #:
~!? /
Agenda Item - September 4, 2002
Discussion and approval of proposed changes to the Group Insurance Program in order to reduce ad
valorem costs and non ad valorem costs.
On August 21, 2002, the Board of County Commissioners considered four items as possible cost
containment measures. They requested that the items be discussed in further detail at the meeting on
September 4, 2002, at Key West.
Proposal A - Rate Adjustments for Dependent Coverage
Adjust current rate schedule by $10 per pay period ($22 per pay month); for additional dependents
(up to three dependents) add $20 per pay period per dependent (about $43 per dependent per pay month).
Group Deductible at $300 per year per person, no family cap. Approval to annually increase dependent
rates the same percentage as the county departmental rate for group insurance. Implementation January I,
2003.
Dependents:
Currently per month
Proposed per month
One
Two
Three or more
$238
$282
$282
$260
$303
$347
Annual Savings $191,956
Annual ad valorem Impact $167,961
Fiscal Year 2003 ad valorem Impact $125,971
Proposal B - Mandatory Generic Program
Multi-Source Drugs with a generic available. Patient will be responsible for 100% co-pay if they
do not take the generic. Participant would not be penalized if medically necessary. Implementation
January 1,2003.
Annual Savings $36,000
Annual ad valorem Impact $31,000
Fiscal Year 2003 ad valorem Impact $23,000
Proposal C - Two alternatives
1. Change Participation Rate from 80/20 to 70/30
Participants would pay 30% of covered costs. At the Board of County Commissioner's meeting
on March 13,2001, the Board authorized the changing the $10,000 cap on the 20% portion by 10% a year
until we reach $20,000. We are currently at $11,000; Calendar Year 2003, we will increase to $12,100. .
Implementation January 1,2003. (There is an agenda item for the approval ofa nationwide network on the
Agenda to implement a greater disincentive for utilization of out of network providers).
Annual Savings $400,000
Annual ad valorem Impact $350,000
Fiscal Year 2003 ad valorem Impact $260,000
2. Change Participation Rate from 80/20 to 75/25
Annual Savings $200,000
Annual ad valorem Impact $175,000
Fiscal Year 2003 ad valorem Impact $130,000
Background Information
Number of Participants (includes actives, retirees and dependents)
2,592
Number of participants with dependents meeting family deductible of $600
(529 participants with 942 dependents = 1,462)
Number of participants with single coverage (1,130) meeting individual deductible
of$300
1,083
545
Number of participants exceeding $5,000
Out of pocket at $5,000 @70/30 Split
Out of pocket at $5,000 @75/25 Split
267
$1,800
$1,550
Number of participants exceeding 11,000
Out of pocket at $11,000 @70/30 Split
Out of pocket at $11,000 @75/25 Split
110
$3,600
$3,050
Number of participants that have not reached 11,000 cap.
2,482
Proposal D - Modify Benefits
Eliminate County Dental and Vision as a part of our program and replace with a Section 125 plan
where employees could purchase one or both options through payroll deduction. School Board, City
of Key West and Keys Energy Do Not Pay for Employee Dental and Vision. Implementation January 1,
2003. Approve waiving purchasing policy to allow stafIto negotiate with providers for best comparable
coverage at best price.
Annual Savings
Annual ad valorem Impact
Dental
Vision
$
600,000
90,000
690,000
$600,000
Fiscal Year 2003 ad valorem Impact $450,000
Additional Information
Previous quotations.
Vision Care
Employee Only
Employee plus one
Employee plus family
$5.98/month
11.96/month
20.04/month
Dental
Employee
Employee plus spouse
Employee plus family
Employee plus child(ren)
Cigna
$ 31.08
60.60
10 1.12
69.92
Delta Dental
$ 36.28
62.76
96.73
62.55
These quotations would need to be updated along with comparison of other possibilities.
BOARD OF COUNTY COMMISSIONERS
MAYOR Charles "Sonny" McCoy, District 3
Mayor Pro Tern, Dixie M. Spehar, District I
George Neugent, District 2
Bert Jimenez, District 4
Murray E. Nelson, District 5
Administrative Services Department
1100 Simonton
Key West, FL 33040
(305) 292-4537
MEMORANDUM
Date:
August 23, 2002
To:
All Active and Retired Employees
Constitutional Officers
From:
James L. Roberts
County Administrator
Subject:
Presentation on Group Insurance - September 4,2002
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The tentative budget we presented the Board of County Commissioners in July anticipated an
increase in group insurance costs in excess of $1,800,000 for claims and required reserves.
Group Insurance costs are primarily funded from ad valorem taxes. In an effort to control the
cost to the taxpayers of Monroe County and not severely impact our ability to recruit and retain
quality employees, we presented a number of changes to the Board at the regular Board meeting
on August 21, 2002, at Key Largo. No action was taken at that meeting. Those proposed
measures will be discussed in Key West at the Harvey Government Center on Wednesday,
September 4,2002, at 4 p.m.