1999-07-12 adj July 12, 1999 (Adjourned Meeting) 0t(~i~O3~L:'t
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A joint meeting of the Board of Supervisors and the School Board of Albemarle County, Virginia,
was held on July 12, 1999, at 4:30 p.m., Room 235, County Office Building, Mclntire Road, Charlottesville
Virginia.
BOARD OF SUPERVISORS MEMBERS PRESENT: Mr. David P. Bowerman;
_ Ms. Charlotte Y. Humphris; Mr. Walter F. Perkins; and Ms. Sally H. Thomas.
ABSENT: Mr. Forrest R. Marshall, Jr. and Mr. Charles S. Martin.
SCHOOL BOARD MEMBERS PRESENT: Mr. John E. Baker;
Mr. R. Madison Cummings, Jr.; Ms. Susan C. Gallion; Mr. Jeffrey D. Joseph (arrived at 5:15 p.m.);
Mr. Stephen H. Koleszar; Ms. Diantha H. McKeel; and Dr. Charles M. Ward.
OFFICERS PRESENT: County Executive, Mr. Robert W. Tucker, Jr.; Deputy County Attorney,
Mr. Mark Trank; Division Superintendent, Dr. Kevin C. Castner; Deputy Director of Human Resources,
Mr. Robert Brandenburger; Assistant Superintendent for Support Services, Mr. Frank E. Morgan; and
Assistant Superintendent for Instruction, Dr. Jean S. Murray.
Agenda Item No. 1. The Board of Supervisors was called to order at 4:45 p.m., by the Vice-Chair-
man, Ms. Thomas. The School Board was called to order by the Chairman, Mr. Baker.
Dr. Castner introduced Dr. Jean S. Murray as the new Superintendent for Instruction, replacing
Ms. Diane Ippolito.
Agenda Item No. 2. 'Discussion: Medical/Dental Contract.
Mr. Brandenburger summarized the executive summary, which states that both Boards had
previously received 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 (on file in the Clerk's office and a permanent part of the record). The procurement process this
year focused on a renewal with both current providers, QualChoice and Delta Dental. Next year the
County will solicit proposals from additional providers for its medical and dental plans through a formal
request for proposal (RFP) process.
In the analysis of the renewal proposals, the dental programs will remain the same with no change
in rates paid to Delta Dental, because there has been a high rate of participation by employees. Since the
Board contribution for dental has increased $0.92/month for a full-time employee, the proposed employee
rates will decrease compared to 1998-1999. The cost to maintain the current medical plan has risen 10.8
)ercent. Last fall the County budgeted based on an eight percent increase by funding half the increase
through a higher Board contribution and the remainder being funded from 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.
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
~ersons enrolling in the HIGH OPTION for the first time must still agree to stay 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 follow:
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 QuaIChoice of Virginia at the
following rates:
July 12, 1999 (Adjourned Meeting)
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EMPLOYEE QC II QC III QC III QC III POS POS
PREMIUM Current Proposed Current Proposed Current Proposed
Premium Premium Premium Premium Premium Premium
ACTIVE EMPLOYEE
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 current 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 contribut on 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.
The Healthcare Executive Committee conc usion is to raise employee premiums instead of
changing benefit designs or drawing from medical reserves.
Ms. Thomas said Alternative 1 would not have required using a large portion of medical reserves
nor raised the employee contribution, but it would have meant that employees would have to pay higher
co-pays if they used the benefit. Mr. Brandenburger said the Committee noted that co-payments had
been increased the previous year and the Committee did not want to do it again this quickly.
Mr. Bowerman said if there was an increase in co-payments, employees might go untreated for
illnesses, which could increase expenses overall. Mr. Brandenburger sa d QualChoice is examining goin
to .a "third level" of prescriptions for higher priced prescrk)tions sin'--, *~,~* ,~ ,..'- ........ g
- ,- ,
ex~st. He added that when the County rebids its medical plans, the Committee will discuss options with
employee focus groups.
Mr. Koleszar noted that the Committee recommended dropping the aggregate cap. He asked
how much the County received from the cap during the first year with QualChoice. Mr. Brandenburger
did not know the exact figure, but estimated it at approximately $200,000. Mr. Koleszar said removir~g the
aggregate cap puts the County in a pos?on of high r sk, being self-insured. Mr. Brandenburger said the
Committee examined the previous year s experience and said the County would have been fine without
the cap. The County has been self-insured for 25 years and did not have a cap while under Trigon.
Medical reserves serve the same purpose.
Dr. Ward asked aboUt expensive claims. Mr Brandenburger said last year the County
experienced three to four claims which individually totaled in excess of $100,000. Some organizations
have chosen to raise their cap in order to reduce premiums.
When Mr. Bowerman questioned the figures prov ded, Mr. Brandenburger explained that the
calculations included adding an additional $500 000 from medical reserves. Ms. Gallion noted that the
County currently has $2.0 million in reserves. Mr. Brandenburger said that is because claims are currently
running below projeCtions.
- Dr. castner asked about the eight percent projection for next year. Mr. Brandenburger said
QualChoice will conduCt a market study to determine the actual increase. Mr. David Morgan, principal
with QualChoice, said any excess could always go into reserves. He noted that prescription drug costs
have been escalating, and new drugs are expensive due to patent protections.
July 12, 1999 (Adjourned Meeting) '
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Mr. Bowerman asked how much of the increase is due to inflation, and how much is due to employee
claims. Mr. Brandenburger said there is now a higher number of dependents and a higher incident
of claims within that group.
Ms. Thomas said she has heard on the news that elderly people who are on Medicare are paying
more for their prescription drugs. She asked if County retirees face that problem. Mr. Morgan said
QualChoice provides enrollees a discount on drugs, and the County's retirees pay the same amount as
active employees.
Dr. Ward asked about the third tier for prescriptions. Mr. Brandenburger said third tier
prescriptions would require a $33 co-payment. Upon examination, it was shown that more prescriptions
are being utilized now, and by a small group of participants. Requiring such a high co-payment could
pass on significantly higher costs to those who can least afford them, and who may have no choice as to
whether to take the medications. However, this will be further investigated when the plans are
reexamined next year.
Mr. Bowerman asked if the County ever considered basing employee premiums on salaries so
that people earning more money are required to pay higher premiums. Mr. Morgan said some companies
do this, but it is difficult to manage. Mr. Brandenburger said the County has never considered such a plan.
He added that the "break even I~oint" is $4,500 before someone's premium increase would negate a pay
raise, based upon a four percent merit pool.
Ms. Thomas said she did not like to raise premiums, but would prefer doing that before increasing
employee co-payments.
With no further discussion, Dr. Ward moved that the School Board recommend to the Health Care
Executive Committee that the 1999-2000 Dental Plan contract be renewed with Delta Dental of Virginia,
and that the 1999-2000 Health Care Contract be renewed with QualChoice of Virginia, at the rates shown
above. The Health Care Executive Committee was also asked to reexamine Alternative 1 next year.
Mr. Cummings seconded the motion. Roll was called and the motion passed by the following recorded
vote:
AYES:
NAYS:
Mr. Baker, Mr. Cummings, Ms. Gallion, Mr. Joseph, Mr. Koleszar, Ms. McKeel, and
Dr. Ward.
None.
Mr. Bowerman moved that the 1999-2000 Dental Plan contract be renewed with Delta Dental of
Virginia, and that the 1999-2000 Health Care Contract be renewed with QualChoice of Virginia, at the
rates shown above. The Health Care Executive Committee was also asked to reexamine Alternative 1
next year. Ms. Humphris seconded the motion. Roll was called and the motion passed by the following
recorded vote:
AYES:
NAYS:
ABSENT:
Mr. Bowerman, Ms. Humphris, Mr. Perkins, and Ms. Thomas.
None.
Mr. Marshall and Mr. Martin.
Agenda Item No. 3. Other Matters Not Listed on the Agenda.
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
Learning Report the end of this month. He said County students showed a significant improvement in all
categories.
July 12, 1999 (Adjourned Meeting)
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Agenda Item No. 4. Adjournment.
At 5:25 p.m., with no further comments, Ms. Thomas adjourned the Board of Supervisors meeting
to July 14, 1999 at 7:00 p.m. Mr. Baker adjourned he School Board for a brief recess and then
reconvened it for its regular meeting.
Approved by' Board