HomeMy WebLinkAbout1999-07-12 adj ACTIONS
Joint Meeting with School Board and Board of Supervisors Meeting of July 12, t 999
August 31, 1999
1. Call to order.
AGENDA ITEM/ACTION
2. Discussion: Medical/Dental Contract. APPROVED the 1999-
2000 Dental Plan contract to be renewed with Delta Dental of
Virginia, and the 1999-2000 Health Care Contract to be renewed
with QualChoice of Virginia at the rates which appear in the
minutes of the meeting. The Committee was also asked to
reexamine Alternative 1 next year.
3. Other matters:
· Mr. Baker said he had prepared responses to four questions
posed by the Board of Supervisors (no details provided) at a
recent meeting, and he would forward his response soon.
Dr. Castner said the School Division would release second tier
data from the Standards of Leaming Report the end of this
month.
ASSIGNMENT
Meeting was called to order at 4:30 p.m., by the
Chairmen. All BOS members present except
Marshall and Martin. All School Board members
were present.
None.
None.
COUNTY OF ALBEMARLE
EXECUTIVE SUMMARY
AGENDA TITLE:
Health/Dental Contract 1999-2000
SUBJECT/PROPOSAL/REQUEST:
Recommendation to renew contracts for health and dental
coverage and set rates accordingly.
STAFF CONTACT(S):
Messrs. Tucker, Castner, Thompson, Morgan, Ms. White
AGENDA DATE:
July 12, 1999
ACTION: X
CONSENT AGENDA:
ACTION:
ATTACHMENTS:
REVIEWED BY:
ITEM NUMBER:
INFORMATION:
IN FORMATION:
Yes
BACKGROUND:
Attachment 1 presents a memo from the Health Care Executive Committee to the County Executive and Superintendent
which outlines the current year's process and recommendations for Health and Dental Insurance. The procurement
process this year focused on a renewal with both our current providers, QualChoice and Delta Dental. Next year we will
solicit proposals from additional providers for our medical and dental plans through a formal request for proposal (RFP)
process.
DISCUSSION:
In the analysis of the renewal proposals the dental programs will remain the same with no change in rates paid to Delta
Dental. Since the Board contribution for dental has increased $0.92/month for a fulltime employee, the proposed
employee rates will decrease compared to 1998-1999. The cost to maintain our current medical plan has risen 10.8%.
Last fall we budgeted based on an 8% increase by funding half the increase through a higher Board contribution and
the remainder being funded from our medical reserves. While there are some savings through negotiating the
re-insurance plans, other funding alternatives were needed to address the larger than expected increase.
RECOMMENDATION:
Dental: The Health Care Executive Committee recommends for the 1999-2000 Dental Plan that the contract be renewed
with Delta Dental of Virginia to retain a fully-insured plan. It should be noted that persons enrolling in the HIGH OPTION
for the first time mu~'t still agree to say in that plan for at least two years. This requirement was imposed as a condition
of continuing to offer the plan by Delta Dental. The Board contribution for the dental plan is budgeted at $84 annually
for full-time employees and the rates under this recommendation are as follows:
BASIC PLAN HIGH OPTION
EMPLOYEE PREMIUM Current Proposed** Current Proposed**
Employee $6.41 $5.49 $14.38 $13.46
Employee + one $15.11 $14.19 $28.62 $27.70
Employee + 2 or more $32.42 $31.50 $51.33 $50.41
** Proposed rates are $0.92 less than the current year.
Medical: As a result of this renewal process, the Health Care Executive Committee has recommended that the health
care contract for 1999-2000 be renewed with QualChoice of Virginia at the following rates:
EMPLOYEE PREMIUM QC II QC III QC III QC III POS POS
Current Proposed Current Proposed Current Proposed
Premium Premium Premium Premium Premium Premium
A C TIVE EMPL 0 YEE
Employee $68 $78 $25 $35 $0 $10
Employee + minor $157 $169 $75 $87 $24 $36
Employee + spouse $400 $413 $259 $272 $132 $145
Employee + family $482 $497 $324 $339 $177 $192
RETIREES
Employee $271.75 $281.75 $228.75 $238.75 $203.75 $213.75
Employee + minor $360.75 $372.75 $278.75 $290.75 $227.75 $239.75
Employee + spouse $603.75 $616.75 $462.75 $475.75 $335.75 $348.75
Employee + family $685.75 $700.75 $527.75 $542.75 $380.75 $395.75
$267,000 from medical reserves are anticipated to be used to fully fund the medical plan. The recommendation includes
a provision to continue the QC II and QC III plans only for currant enrollees. Retirees, under this recommendation,
would continue to pay the same total premium as active employees except they would not receive the Board contribution
but would pay the entire premium. The Committee also recommends the County continue to monitor retiree claims costs
for any adverse impacts to the plan. This recommendation contemplates a Board contribution of $2,608 per full-time
employee and retains the prescription drug coverage as it existed at the beginning of the plan year. Alternatives to the
current prescription plan will be reviewed next year.
99.115
MEMORANDUM
To:
Robert W. Tucker, Jr., County Executive
Kevin C. Castner, Superintendent
From: HealthCare Executive Committee
RE: 1999-2000 Medical and Dental Care Programs
Date: July 3, 1999
The County's HealthCare Executive Committee has completed a review of our medical and dental
plans for 1999-2000. The focus of our review has been to strive to offer employees medical and
dental plans that provide quality health care in a cost effective manner. This memorandum outlines
the current status of our medical and dental plans and the Committee's recommendations for these
programs for 1999-2000.
Background: Last year the County renewed our medical insurance with QualChoice of Virginia and
our dental insurance with Delta Dental of Virginia. There were three changes to the QualChoice
medical plan and one change to the Dental Dental plan.
QualChoice: Increased inpatient deductible from $0 to $100 per visit;
Increased Emergency Room visit deductible from $50 to $75;
Increased prescription co-pays from $5 to $6 for generic and $15 to $18
for name brand;
Dental: Added a HIGH OPTION that covered caps, crowns and sealants.
Medical Plan: QualChoice of Virginia has offered a three-tiered medical plan for the past three years.
Specifically, QualChoice II and QualChoice III and their managed care plan called Tdple Option
Point-Of-Service. Enrollments have continued to shift to the Point-of-Service plan pdmadly due
closing the QualChoice II and III plans to new enrollees.
QualChoice Enrollment
Point-Of- Service 2228 (99.1%)
QualChoice II 6 (0.3°,6)
QualChoice III 15 (0.6%)
Total 2249
Our medical plan is self-insured. To protect the plan against a single large claim, or unexpectedly
high total claims, the County purchased two reinsurance programs when we changed to QualChoice
of Virginia. One reinsurance limits our liability for a single claim to $100,000 (Specific Stop Loss)
and the other reinsurance limits our liability for total claims (Aggregate Cap). Our first year with
QualChoice resulted in total claims exceeding the Aggregate Cap with the excess being absorbed
by the reinsurance carder and by QualChoice. Claims during the second year were within
projections and did not exceed the Aggregate Cap. We are now seven (7) months into our current
plan-year and the 'year-to-date' financial information indicates total claims are running below
projections and will not exceed our Aggregate Cap. The premium to purchase Aggregate Cap
reinsurance for 1999-2000 is about $34,000. With the stability we are seeing in our claims
experience the Executive Committee no longer feels the Aggregate Cap reinsurance is warranted
as our claims would have to exceed our projections by 15% before the cap is triggered. Except for
our first year with QualChoice our claims have not exceeded 15% for at least the past 12 years.
Our actual claims and administrative costs have increased each year but the 'rate-of-increase' has
been relatively stable.
1S~ Year (96-97) 2na Year (97-98) 3r~Year(98-99~)** 4~n Year (99-00)**
Claims + Admin. $6,042,585 $6,635,784 $7,382,229 $8,185,960
Claims + Admin. Inc. -- $593,198 $746,445 $800,365
Rate of Increase m 9.8% 10.1% 10.8%
Board Contribution $145 $166.67 $203.75 $217.33
Employee Premium:
Single coverage $0 $10 $0 $10
Family coverage $135 $165 $177 $192
** Claims+Administration costs for 98-99 and 99-00 are projections
The cost of medical insurance continues to increase 9-10% each year. While prescriptions comprise
only 16.8% of our total medical claims these costs are increasing at 12-15%. These projected
increases in total claims directly impact the medical plan, necessitating at least one, or a
combination of four, courses of actiOn. Funding the medical plan requires (1) changing the benefit
design of the plan, and/or (2) increasing Board funding, and/or (3) increasing employee premiums,
and/or (4) drawing down on the plan reserves. In the past three years we have used all these
strategies in developing our medical and dental programs. Last fall we projected an 8% increase
in costs for 1999-2000 to be funded through two strategies. First, cover half the increase through
Board contributions with an increase from $2,445 to $2,608 per year. Second, cover half through
Medical Reserves. The actual increase to fully fund our current plan design is 10.8%, or 2.8% more
than we had considered. To fund the additional 2.8% increase requires other strategies as discussed
in section, 1999-2000 Renewal Process.
Dental Plan: Dental costs are more stable than medical costs but the impact of offedng a two-tiered
plan (BASIC and HIGH OPTIONS) this year resulted in two different premium structures. Claims-to-
date have been within expectations and Delta Dental is not projecting a rate increase for 1999-2000.
The Board's budgeted an increase in their contribution from $73 to $84. This increase should
encourage more participation by our employees, as the employee premium will decrease about $0.92
per month for next year.
Financial Status of the Medical Plan: The committee continues to recommend a goal of
maintaining a 20-25% reserve. Based on projected total medical plan costs for next year (through
September 30, 2000) of $8,185,960, reserves should be maintained between $1.6 - 2.0 million.
Medical reserves are projected to be $2,063,732 at the end of this plan-year (September 30, 1999).
The Executive Committee feels the use of medical reserves can be an appropriate strategy for
funding the medical plan but notes two cautions: one, not to drop below an acceptable reserve level
and two, the use of reserves is 'one-time' monies and if plan costs continue to increase in the
following year the only alternatives are to increase Board contributions, or increase employee
premiums, or reduce the benefit coverage.
1999-2000 Renewal Process: The Healthcare Executive Committee has worked with Mr. David
Morgan and other staff of Slabaugh Morgan White Associates in developing the proposal for next
year. The committee focused on stabilizing the benefit design for both medical and dental while
holding any employee premium increases to an acceptable level.
The committee considered the following alternatives for the 1999-2000 plan-year:.
Current Alternative 4 -
Options Plan Alternative I Alternative 2 Alternative 3 Recommended
Board Contribution $2,445 $2,608 $2,608 $2,608 $2,608
Employee Monthly
Premium Increase for -- No increase 10/7/7/10 10/10/10110 10112/131 15
single/minor/spouse/family
Eliminate Aggregate and $89,900 savings $89,900 savings $89,900 savings $89,900 savings
change carrier
Raise office visit co-pay
-- $88,300 savings $88,300 savings $88,300 savings Not used
from $10 to $15
Raise Rx co-pay
-- $23,900 savings $23,900 savings Not used Not used
$1 for generic/brand
Implement 3-tier Rx
-- $97,000 Not used Not used Not used
program
Decrease inpatient $147,200
co-insurance from -- Not used Not used Not used
100% to 90% savings
Use medical reserves $230,600 $224,800 $229,200 $267,000
The Executive Committee is recommending Alternative 4. This alternative maintains the current
benefit design and requires some increase in employee premiums.
HealthCare Executive Committee Recommendations for the 1999-2000 Medical Plan:
1. Award: QualChoice of Virginia; solicit proposals from other vendors for 2000-2001..
2. Fundin,q: Retain a self-insured plan, continue to purchase Specific Stop-Loss reinsurance, but
drop the Aggregate Cap reinsurance.
3. Reserve: Use $267,000 from the medical reserves.
4. Number Of Plan(s): Retain the 3-tier medical plan with no changes in benefit design. Continue
to only offer the Point-Of-Service plan to new enrollees.
5. Retirees: Continue to set retiree premiums the same as for active employee. Continue
to monitor retiree claims costs for any adverse impacts.
6. Rates:
a. Set the Board contribution at $2,608 as budgeted for each full-time employee;
b. Retain the current prescription drug coverage and reconsider the three-tier program next
year;, and
c. Increase employee premiums. The proposed rates for all three plans are shown
Appendix 1.
Increase In Employee Premium For A Full. time Employee
Increase Increase with
Old~ New
Post-Tax Pre-Tax ~ 25%
Employee only $0 $10 $10 $7.43
Employee + minor $24 $38 $12 $8.92
Employee + spouse $132 $145 $13 $9.66
Employee + family $177 $192 $15 $11.15
HealthCare Executive Committee Recommendations for the 1999-2000 Dental Plan:
1. Award: Delta Dental of Virginia; solicit proposals from other vendors for 2000-2001.
2. Fundin,q: Retain a fully insured plan.
3. Reserve: No offset required from the medical reserves.
4. Plan: Continue offering both the BASIC OPTION and the HIGH OPTION.
5. Retirees: Continue to set retiree premiums the same as for active employee.
6. Rates:
a. Set the Board contribution at $84 as budgeted for each full-time em ployee.
b. Reduce employee premiums. The proposed rates for both OPTIONs are shown in
Appendix 2.
Attachments
Appendix 1
Appendix 2
Proposed 1999-2000 Medical Plan Premiums
Proposed 1999-2000 Dental Plan Premiums
HealthCare Executive Committee:
Roxanne White
Frank Morgan
William Brent (ASCA)
Robert Brandenburger
Melvin Breeden
Michael Thompson
John Isom (Regional Jail)
Joe Johnson (CATEC)
Slabaugh Morgan White Associates: David Morgan, Principal
Tom Mackay, Consultant
Alison Porter, Consultant
Submi~ed by: ~~. ~~
Appendix 1
ALBEMARLE COUNTY 1999-2000 MEDICAL INSURANCE PLANS
RECOMMENDED PLANS AND PREMIUMS
The Executive Committee is recommending continuing the three medical plans for 1999-2000.
The three plans are QualChoice II, QualChoice III and QualChoice Point-Of-Service Triple
Option. Retiree total monthly premiums are the same as for an Active employee.
The following table reflects the recommended out-of-pocket premium each full-time active
employee will pay based on the Board's contribution of $2,608 per plan year. Retirees pay
the full premium.
QC il QC II QC III QC Iii POS POS
EMPLOYEE Current Proposed Current Proposed Current Proposed
PREMIUM Premium Premium Premium Premium Premium Premium
ACTIVE
Employee $68 $78 $25 $35 $0 $10
Employee + minor $157 $169 $75 $87 $24 $36
Employee + spouse $400 $413 $259 $272 $132 $145
Employee + family $482 $497 $324 $339 $177 $192
RETIREES
Employee $271.75 $281.75 $228.75 $238.75 $203.75 $213.75
Employee + minor $360.75 $372.75 $278.75 $290.75 $227.75 $239.75
Employee + spouse $603.75 $616.75 $462.75 $475.75 $335.75 $348.75
Employee + family $685.75 $700.75 $527.75 $542.75 $380.75 $395.75
Appendix 2
ALBEMARLE COUNTY 1999-2000 DENTAL INSURANCE PLAN
RECOMMENDED PLAN AND PREMIUMS - TOTAL PREMIUM
The Executive Committee is recommending continuing two options for 1999-2000, the Basic Option and
a High Option with Deltal Dental of Virginia.
The following table reflects the recommended total monthly premium for active employees and retirees.
The premium includes the employer and the employee combined cost of dental coverage.
BASIC PLAN HIGH OPTION
POLICY I PLAN CHARGES Current Proposed Current Proposed
Employee $12.49 Same $20.46 Same
Employee + one $21.19 Same $34.70 Same
Employee + 2 or more $38.50 Same $57.4i Same
RECOMMENDED PLANS AND EMPLOYEE PREMIUMS
The following table reflects the recommended out-of-pocket premium each full-time active employee
will pay based on the Board's contribution of $84 per plan year. Retirees pay the full premium.
BASIC PLAN HIGH OPTION
EMPLOYEE PREMIUM Current Proposed** Current Proposed**
Employee $6.41 $5.49 $14.38 $13.46
Employee + one $15.11 $14.19 $28.62 $27.70
EmploYee + 2 or more $32.42 $31.50 $51.33 $50.41
** Employee premiums decrease $0.92 due to an increase in Board contribution