Title
Human Resources Department recommending the Board take the following actions regarding Health Plan Programs and Ancillary Employee Benefit Programs for the 2025 Plan Year:
1) Approve the proposed 2025 Affordable Care Act compliant health plan rate card (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; and
2) Grant Human Resources the authority to correct any minor clerical errors or adjustments, if necessary, to the approved health plan rate cards for the 2025 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 August 27, 2024 (Legistar file 23-1481), the Board of Supervisors adopted the 2025 health plan rate cards for active employees, outside agencies whose benefits are administered through the County, and Operating Engineers, Local 3 (OE3)’s Health Trust plans for their members in our Trades and Crafts (TC) and Corrections (CR) bargaining units.
The Internal Revenue Service (IRS) had not yet announced the Affordable Care Act (ACA) “affordability limit”, and thus the ACA compliant health plan rate card was not available to be presented to the Board on that date. 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 could not be established until after the IRS announced the ACA affordability limit.
To be considered affordable under the ACA, an employee’s contribution for self-only coverage under the lowest plan cost option available cannot exceed 9.02% of the employee’s household income for the 2025 tax year. The IRS acknowledges that the employer is typically not aware of an employee’s household income, thus permits the employer to measure the affordability of their coverage using an ACA affordability safe harbor. Under the Rate of Pay Safe Harbor, the maximum amount an employer can charge for self-only coverage is the percentage of affordability factor (affordability limit) times the employees’ lowest hourly rate of pay times 130 hours. To comply with the Rate of Pay Safe Harbor, the County calculates the employee share of premium based on California’s lowest minimum wage, which currently (and as used for the 2025 ACA compliant health plan rate card) is $16.00 per hour. As long as an offer of coverage satisfies an ACA safe harbor, the ACA employer shared responsibility will be met, avoiding penalties.
As a summary from the August 27, 2024 Board item, for the 2025 plan year, the Blue Shield PPO 2000 ABHP High plan is scheduled to renew as follows:
Blue Shield PPO 2000 ABHP High (ACA Compliant Plan) 6.2% increase
Consistent with the Next Steps identified in Legistar file 23-1481, Human Resources is returning to the Board for the adoption of the 2025 ACA compliant plan rate card.
ALTERNATIVES
As this rate card complies with the provisions for affordability under the ACA, there are no recommended alternatives.
PRIOR BOARD ACTION
02/15/2011 Legistar file 11-0121: County joined CSAC-EIA Health program (now PRISM Health)
07/21/2020 Legistar file 20-0949: BCC approved as County’s third-party benefits administrator under PRISM Health
08/27/2024 Legistar file 24-1397: Board adopted 2025 health plan rate cards for active employees and outside agencies, and authorized Human Resources to execute administrative health and benefit program plan renewals for the 2025 health benefits plan year.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
N/A
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
There is no new or additional financial impact of adopting the ACA compliant rate card.
CLERK OF THE BOARD FOLLOW UP ACTIONS
N/A
STRATEGIC PLAN COMPONENT
Workforce Excellence
Priority: Focus on Employee Development & Well-Being
Action Item: Continue to implement wellness initiatives and activities for El Dorado County employees.
CONTACT
Joseph Carruesco, Director of Human Resources