Title
Human Resources Department recommending the Board take the following actions regarding Health Plan Programs and Ancillary Employee Benefit Programs for the 2024 Plan Year:
1) Approve the proposed 2024 health plan rate cards (Attachment A) based on the cost sharing of health premiums in the current Memoranda of Understanding with all bargaining units, the Salary and Benefits Resolution for unrepresented employees and in accordance with the Patient Protection and Affordable Care Act;
2) Authorize the Director of Human Resources, or Assistant Director of Human Resources, to execute the updated operational MOU with PRISMHealth on behalf of the County of El Dorado;
3) Authorize the Director of Human Resources, or Assistant Director of Human Resources, to execute administrative health and benefit program plan renewals for services that otherwise fall under existing executed master agreements; and
4) Grant Human Resources the authority to correct any minor clerical errors or adjustments, if necessary, to the approved health plan rate cards for the 2024 health benefits plan year, as needed.
FUNDING: Countywide cost, shared between the County Departments (General Fund and Non-General Fund) and employees.
Body
DISCUSSION / BACKGROUND
Health Plans
On February 15, 2011, with Legistar 11-0121, the Board of Supervisors entered into a Memorandum of Understanding (MOU) with CSAC-EIA (EIA) to join the CSAC-EIA Health program (EIA Health). In 2020, EIA changed its name to PRISM. PRISM is a Joint Powers Authority (JPA) comprised of California counties, cities, and public agencies organized to jointly develop and fund insurance and related programs with the most favorable terms and costs. As a member of this organization, the County has successfully controlled costs of the health plans offered through PRISM Health.
In June 2023, the PRISMHealth Committee, which governs the PRISMHealth program, approved final amendments to the PRISMHealth MOU and directed staff to distribute to Members for execution no later than October 1, 2023. The PRISMHealth MOU was adopted in 2003 and was last amended in 2006; the County last executed this MOU in 2011 when it joined the PRISMHealth program. With the substantial and continued growth of the Program, the amended MOU language better represents the program structure and requirements of participation. In order to continue the County’s participation in PRISMHealth, Human Resources recommends the Board approves, and authorizes the Human Resources Director to execute, the PRISMHealth MOU on behalf of the County of El Dorado.
For the 2024 plan year, health plans are scheduled to renew as follows:
Blue Shield PPO 200 Standard 12.2% increase
Blue Shield PPO 1600* ABHP Low 12.2% increase
Blue Shield PPO 2000 ABHP High (ACA Compliant Plan) 12.2% increase
Kaiser HMO Standard 12.2% increase
Kaiser 1500* ABHP 12.2% increase
*Account Based Health Plan (ABHP) minimum deductibles increased to stay in compliance with IRS regulations. Minimum deductibles increased per IRS from $1,500 to $1,600.
For 2024, the IRS has not yet announced the ACA affordability limit. The ACA affordability limit is the maximum amount that an employee can be required to pay for their share of the premium for employee-only coverage in an employer-sponsored health plan. Because the Blue Shield PPO 2000 ABHP High plan is the County’s ACA Compliant Plan, the employee/employer share of premium rates for that plan cannot be established until after the IRS announces the ACA affordability limit. Therefore, staff will return to the Board to adopt the ACA Complaint Plan rate card once the affordability factor is announced.
The primary factors influencing the higher-than-normal renewal increases include:
- Healthcare inflation (healthcare industry labor shortages and wages escalating; hospital price inflation is the largest component of projected medical trend increases)
- High medical and prescription utilization/cost trend by County plan participants
- COVID impact (increase in utilization post-pandemic)
- Provider group consolidation and higher reimbursement for specialty services
Flexible Spending Account (FSA) and Health Savings Account (HSA)
Health Care Reimbursement Account (HCRA) No change*
Dependent Care Reimbursement Account (DCRA) No change*
Health Savings Account (HSA) $4,150 individual/$8,300 family
*Contribution limits adjust to stay in compliance with IRS regulations. Current contribution limits are $2,750 for HCRA $5,000 for DCRA; limits may be subject to change for 2024 should it be required by the IRS.
Ancillary Benefit Programs
Delta Dental 4.6% decrease
VSP Vision 1.3% decrease
Lincoln Financial Basis Life Rate guarantee
Lincoln Financial Long Term Disability Rate guarantee
EAP Concern PRISM No change*
* In January 2023, the County’s Employee Assistance Program (EAP) provider, MHN, notified PRISM that their parent company, Centene, had purchased another EAP provider, and that MHN would exit the EAP marketplace effective June 30, 2023. PRISM subsequently conducted a comprehensive Request for Proposal (RFP), evaluating vendors based on their experience working with public entities overall, EAP capabilities, provider network, digital platform attributes, and service model. Ultimately, PRISM approved the replacement of MHN by Concern, with Concern EAP coverage and rates effective July 1, 2023. The change from MHN EAP to Concern EAP will initially result in reduced Per Enrolled Participating Member rates during the initial three-year term/rate guarantee period. Human Resources informed the Board of Supervisors of the EAP provider and associated premium rate change on June 27, 2023 (Legistar #23-1094), at which time the Board approved an updated 2023 COBRA rate card (the only rate card that lists the EAP premium).
The annual funding contribution for dental and vision are used to maintain sufficient funds in the self-insured plans, and funds are used to pay submitted claims. The annual funding contribution serves as the basis for determining monthly “premium” rates.
Next Steps
Retirees who are sixty-five (65) or older are eligible to purchase health plans through UnitedHealthcare (UHC) and Kaiser Permanente Senior Advantage (KPSA). The UHC and KPSA rates have not been received; therefore, since these rates are included on the same rate card, Human Resources will return to the Board at a later date for approval.
Employees in the Corrections (CR) and Trades & Crafts (TC) bargaining units represented by Operating Engineers, Local 3 (OE3) are eligible to purchase health plans offered through the OE3 Health Trust rather than through the County. Human Resources has not yet received official rates from the OE3 Health Trust, therefore will return to the Board at a later date for approval.
Upon Board approval, the next steps will consist of the following:
1. Human Resources will post and distribute renewal plans and corresponding rates to employees, retirees, COBRA participants, and affiliated agencies prior to open enrollment in October 2023, with an effective date of pay period 25 for active employees and December 1, 2023, for all other participants;
2. Human Resources will return to the Board with the 2024 OE3 Health Trust, ACA compliant plan, and Retiree KPSA/UHC benefits plan rates;
3. Human Resources will secure health insurance carrier and other ancillary benefit program contract renewals; and
4. The Human Resources Director, or Assistant Director of Human Resources, will sign health and other ancillary benefit contracts for services that otherwise fall under existing executed master agreements.
ALTERNATIVES
The Board could choose to override the recommendation to renew the 2024 Employee Benefits Insurance Program Renewal as recommended; however, if the Board chooses to not approve the recommendations as listed herein, the County would not meet the deadlines required by the vendors for the plan year.
PRIOR BOARD ACTION
Each year, Human Resources brings this item to the Board for approval. The Board adopted 2023 rate cards on August 16, 2022 (Legistar 22-1240), retiree and updated ACA rate cards on September 13, 2022 (Legistar 22-1567), and OE3 Health Trust rates October 11, 2022 (Legistar 2-1767). The Board adopted an updated 2023 COBRA rate card corresponding to the change in the EAP provider and associated premium rate on June 27, 2023 (Legistar 23-1094).
The Board authorized the County to pay BCC for any Third Party Administrator services received under the Master Agreement between PRISM and BCC, on July 21, 2020 (Legistar 20-0949).
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel review of the updated operational MOU with PRISMHealth.
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
The total percentage change from the 2023 rates (excluding UHC and KSA rates, which are not yet available) is 11.0%. The overall increase in annual premium from last year (excluding the UHC and KSA plans) is approximately $3,502,441 for all listed benefit programs. Costs are shared between employees and salary and benefits budgets for each County department. It is anticipated that most departments can cover the six months of increased costs with Salaries and Benefits savings from vacancies. Departments will assess these costs with the mid-year budget report and request a budget transfer to address any increases that cannot be covered with savings.
CLERK OF THE BOARD FOLLOW UP ACTIONS
None
STRATEGIC PLAN COMPONENT
Good Governance
CONTACT
Joseph Carruesco, Director of Human Resources