Item H3 BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: October 16, 2013 Division: Employee Services
Time approx. 10:00 a.m.
Bulk Item: Yes _ No X Department: Employee Benefits
Staff Contact Person/Phone#:Teresa Aauiar Ext.4458
AGENDA ITEM WORDING: Discussion and Approval of Group Health Plan changes to become
effective January 1, 2014.
ITEM BACKGROUND: On April 17, 2013, Gallagher Benefit Services, the County's Health
Insurance Consultant, provided a presentation which showed that the Group Health Program would be
facing a deficit of approximately $1,647,182 next fiscal year (October 1, 2013 — September 30, 2014).
On June 18, 2013, the County Administrator provided a presentation which included recommended
plan changes to help offset the deficit. The recommended changes will offset the projected deficit by
approximately $752,792. Any remaining deficit (which is projected to be approximately $894,390)
will be taken from fund balance.
On August 21, 2013, the recommended changes were again presented to the BOCC. The BOCC
requested that staff bring back information which showed the approximate revenue if all employees
contributed towards their own health insurance. Currently, employees hired on or after 5/1/12
contribute $50.00 per month and those employees hired before that day contribute $0 towards their
health insurance.
On September 17, 2013, the additional information requested by the BOCC at the meeting of August
21, 2013 was presented to the BOCC. The BOCC requested additional information be brought back to
them for further discussion.
PREVIOUS RELEVANT BOCC ACTION: None
CONTRACT/AGREEMENT CHANGES: The Group Health Plan and the Summary Document will
be revised along with Resolution#354-2003 (Retiree Resolution) if appropriate.
STAFF RECOMMENDATIONS: Approval
TOTAL COST: N/A INDIRECT COST: BUDGETED: Yes No
DIFFERENTIAL OF LOCAL PREFERENCE:
Internal Service Fund
COST TO COUNTY: N/A SOURCE OF FUNDS:_ Primarily Ad Valorem
REVENUE PRODUCING: Yes_ No X AMOUNT PER MONTH Year
APPROVED BY: County Atty yo%/Purchasing Risk Management
DOCUMENTATION: Included X Not Required
DISPOSITION: AGENDA ITEM#
Ci iANGE C1.)RRim'I NT i)RQP SI1iD APPROX. SAVINGS
(1/1/1 —9/3 /1
Deductible increase $300 $500 $191,399
$200 per year
Deductible increase $300 $400 $120,901
$100 per year
Deductible increase $300 $450 6 ,244
$150 per year
Coinsurance increase 25%in network/55% 30%in network/60% $194,269
out of network out of network
ER Copay increase$25 $75 $100 $21,700
OV Copay increase$5 $20 $25 $47,534
per visit
OV Copay(PCP/SCP) per $20/$20 $25/$35 $89,459
visit
Pharmacy Copay $10/$25/$70 $10/$35/$70 $152,607
increase preferred tier
$10
Pharmacy Copay $10/$25/$70 $10/$30/$70 $85,249
increase preferred tier
$5
Chi iIE E RE Ei'-i"r ILIRREN I. PR0IIROSED
5%premium increase Employee (Hired $50 $53
for those who currently 5/1/12+)
contribute to individual
and dependent
coverage
Spouse only $353 $371
Spouse+1 child $470 $494
Spouse+2 children or $529 $555
more
1 child $238 $250
2 children $282 $296
3 children $351 $369
4 children $468 $491
5 children or more $529 $555
OEM SAVINGS / /
C11ANGE OENEF"i.r CURRENT PROPOSED
SED
10%premium increase Employee (Hired on or $50 $55
for those who currently after 5/1/12)
contribute to individual
and de
pendent
coverage
Spouse only $353 $388
Spouse+ 1 child $470 $517
Spouse+2 children or $529 $582
more
1 child
$262
2 children $310
3 children $351 $386
4 children $468 $515
5 children or more $529 $582
SAVINGS(1/1/14— / /1 ) —114,552
CHANGE (":EiRRi'"z;IRE 14101)OSED SAVE N GS(1/1/1 —
/ /14)
Retiree premium $50.00 $75.00 $82,845
increase$25 per month
Retiree premium $50.00 $100.00 $164,970
increase$50 per month
Retiree (10+YOS) age $50.00 $100.00
i
65 and older(Medicare
eligible, ESRD* and/or
Total Disability under
Medicare)
*end stage renal disease
Retiree (10+YOS) under $50.00 $150.00 $225,000
age 65 years old and
not eligible and/or
entitled to Medicare
Retiree (10+YOS) 65 $50.00 $75.00
years old and older
Retiree (10+YOS) under $50.00 $100.00 $112,712
65 years old
CHANGE" CIEIItREl' I PROPOSED SAVINGS(1/1/14—
)
$50 premium increase $0 $50 $490,950
for employees hired
prior to 5/1/12
$25 premium increase $0 $25 $245,475
for employees hired
prior to 5/1/12
Premium increase for $0(hired before $100 $1,048,500
all employees 5/1/12)
* $50(hired on or after
5/1/12)
Department rate $790 per employee per $830 per employee per $583,104(12 months)
increase 5% month month
Department rate $790 per employee per $869 per employee per $1,151,712 (12 months)
increase 10% month month
Total savings from cost-saving changes: $752,792
Contribution from fund balance: $894,390
Total amount of deficit to be covered: $1,647,182