Title
Human Resources Department recommending the Board:
1) Take the following actions regarding Health Plan Programs and Ancillary Employee Benefit Programs for the 2026 Plan Year:
a) Approve the proposed 2026 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;
b) 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
c) Grant Human Resources the authority to correct any minor clerical errors or adjustments, if necessary, to the approved health plan rate cards for the 2026 health benefits plan year, as needed; and
2) Receive and file information regarding the Budget Ad Hoc Committee’s review of CalPERS Health Plans and provide direction, if necessary.
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 file 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 controlled costs of the health plans offered through PRISM Health.
On August 29, 2023, with Legistar file 23-1481, the Board of Supervisors authorized the Human Resources Director to execute an updated PRISM Health Program MOU which better represented the Health Program structure and requirements of participation, on behalf of the County of El Dorado.
On August 12, 2025, with Legistar file 25-1221, the Board of Supervisors authorized the Human Resources Director to execute a PRISM Health Vision Program MOU to confirm and continue participation in the PRISM Vision Program, ensuring continuation of a vision benefit for the 2026 plan year.
The Board authorized the County to pay Benefit Coordinators Corporation (BCC) for any Third Party Administrator (TPA) services received under the Master Agreement between PRISM and BCC, on July 21, 2020 with Legistar file 20-0949.
For the 2026 plan year, the following health plans are scheduled to renew with a 13.9% rate increase:
Blue Shield PPO 200 Standard
Blue Shield PPO 1700* ABHP Low
Blue Shield PPO 2000 ABHP High (ACA Compliant Plan)
Kaiser HMO Standard
Kaiser 1700* ABHP
*Account Based Health Plan (ABHP) minimum deductibles increased to stay in compliance with IRS regulations. Minimum deductibles increased per IRS from $1,650 to $1,700.
Medical premiums continue to trend upwards due to ongoing inflationary pressures, health care labor shortages, prescription drug spending, high-cost claims, and generally higher utilization for chronic disease management and behavioral health services. Senate Bill 729, a California law requiring large group health plans to provide certain coverage for the diagnosis and treatment of infertility, takes effect in 2026, further increasing medical plan premiums. Though this law only applies to “fully insured” plans (applicable to the County’s Kaiser HMO plans), PRISM Health is anticipated to voluntarily extend similar coverage to the “self-insured” Blue Shield PPO plans.
The Internal Revenue Service (IRS) identifies the Affordable Care Act (ACA) “affordability limit” annually. 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. To be considered affordable under the ACA, an employee’s contribution for self-only coverage under the lowest cost plan option available to all benefit-eligible employees cannot exceed 9.96% of the employee’s household income for the 2026 plan year. On November 5, 2024, with Legistar file 24-1825, the Board approved the County’s use of the Rate of Pay safe harbor to satisfy “affordability” under the ACA. As long as an offer of coverage satisfies an ACA safe harbor, the ACA employer shared responsibility will be met, avoiding penalties.
For the 2026 plan year, the following retiree Medicare Advantage supplement plans are scheduled to renew as follows:
Kaiser Permanente Senior Advantage (KPSA) pending
UnitedHealthcare (UHC) 21.0% increase
Retirees who are 65 or older are eligible to purchase health plans through UHC and KPSA. The KPSA rates have not been received; therefore, since these rates are included on the same retiree rate card, Human Resources will return to the Board at a later date for approval.
Industry-wide, Medicare Advantage supplement plans have continued to see larger rate increases the last few years both due to the general upward medical cost trend and as a result of Medicare payment adjustments and the Inflation Reduction Act (IRA) of 2022; Medicare’s lower payment rates to insurers (which make the primary Medicare plans more affordable) resulted in significant Medicare Advantage supplement plan rate increases.
Flexible Spending Account (FSA) and Health Savings Account (HSA) Contribution Limits
Health Care Reimbursement Account (HCRA) $3,050*
Dependent Care Reimbursement Account (DCRA) $7,500*
Health Savings Account (HSA) $4,400 individual/$8,750 family
*Contribution limits adjust to stay in compliance with IRS regulations. Current contribution limits are $3,050 for HCRA and $5,000 for DCRA; limits may be subject to change for 2026 should it be required by the IRS.
Ancillary Benefit Programs
Delta Dental 3.7% increase
VSP Vision 25.4% increase
Lincoln Financial Basic Life Rate guarantee
Lincoln Financial Long Term Disability Rate guarantee
EAP Concern PRISM Rate guarantee*
EAP ConcernPlus PRISM Pending*
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. For the 2026 plan year, PRISM Vision Program has adopted a new one-dollar service fee and ten cent underwriting fee premium component to our vision plan renewals with our vision plan carrier, “VSP," which are incorporated into the plan premium.
*The County’s Employee Assistance Program (EAP) provider, Concern EAP, has a three-year rate guarantee period ending 6/30/2026. The separate “ConcernPlus” EAP for first responders gives first responders generally the same benefits otherwise provided through our EAP to eligible employees, including emotional health and substance abuse, parenting and childcare needs, financial coaching, legal consultation, and eldercare resources, while providing law enforcement first responders with specific culturally competent short-term counselors. ConcernPlus renewal option and rates have not yet been received; therefore, Human Resources will return to the Board at a later date for approval to continue with the ConcernPlus EAP program.
Historically, PRISM did not offer a life insurance product but has now contracted with Lincoln Financial (Lincoln). Currently the County’s life and long-term disability (LTD) insurances are received directly through Lincoln. For 2026, the Human Resources Department recommends the County switch to PRISM Lincoln. This would have no effect on our existing premium rates or coverage, and we would retain our existing rate guarantee period through 12/31/2026. The only effect of the change is a one-time special enrollment period for all County employees to elect up to the “guarantee issue” for voluntary (fully employee paid) life insurance coverage. For entrants enrolled within 31 days of initially becoming eligible, the guarantee issue amount (generally up to $250,000 for employee and $50,000 for spouse) is available without any Evidence of Insurability (EOI) requirement. An EOI is required for any amounts above the guarantee issue, or “late” enrollees (after the initial 31-day eligibility) such as during open enrollment. Should the County convert to PRISM Lincoln, it would trigger a new, one-time only, 31-day special enrollment; thereafter, only employees newly in their initial 31-day period (i.e., new hire) would be eligible for guarantee issue. Should the Board adopt this change, Human Resources would work with the TPA, BCC, to set up the one-time special enrollment period; in order to minimize the benefits administration (BCC’s BenXcel.net) web application development costs (which would normally be charged hourly and otherwise estimated to be a one-time cost up to $1,000) and provide time for employee outreach, it is currently anticipated that this one-time special enrollment, for voluntary life insurance coverage only, would occur in late spring 2026.
OE3 Health Trust Rate Card
The Operating Engineers, Local 3 (OE3) labor organization offers two health plans (Anthem Platinum “Plan A” and Kaiser “Plan B”) to their members in our Trades and Crafts (TC) and Corrections (CR) bargaining units through its OE3 Health Trust, in addition to what is offered by the County. The County contributes to those plans equal to what is contributed to the comparable County-sponsored health plans.
The OE3 Health Trust has provided the County with their plan rates; the County then applied the County contribution per the applicable Memoranda of Understanding (MOUs) to create the published rate cards for employees.
While the County does not have any responsibility for the OE3 Health Trust health plan or programs, the County does have a responsibility to the Employer and Employee contribution for the applicable OE3 Health Trust plans based on the MOUs with the OE3 represented bargaining units.
The Human Resources Department is requesting the Board review and approve the attached 2026 OE3 Health Trust health rate card for the two plans available to our employees.
Next Steps
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 and affiliated agencies prior to open enrollment in October 2025, with an effective date of pay period 25 for active employees and December 1, 2025 for all other participants;
2. Human Resources will return to the Board with the 2026 Retiree KPSA benefit plan and ConcernPlus EAP rates;
3. Human Resources will secure health insurance carrier and other ancillary benefit program contract renewals; and
4. The Director of Human Resources, or Assistant Director of Human Resources, will sign health and other ancillary benefit contracts for services that otherwise fall under existing executed master agreements.
CalPERS Health
In 2023, Human Resources reviewed the CalPERS Health Plan to determine if it was a more cost-effective way of providing County health benefits. At that time, it was determined to not be more cost-effective than PRISM Health due to the requirement in CalPERS Health to offer eligible retirees contributions towards health benefits at a rate equal to active employee contributions.
The Budget Ad Hoc recently requested a review of the CalPERS Health Plan to analyze its viability as an option to provide County health benefits. After a preliminary analysis and discussions with CalPERS Health, the Ad Hoc determined that CalPERS Health is not a feasible option at this time due to the retiree health contribution requirement. The attached Fact Sheet summarizes the preliminary analysis. Human Resources will continue to assess health plan offerings periodically to determine the most cost-effective method of delivery in providing quality health benefits to its employees.
ALTERNATIVES
The PRISM Health Program operates on a calendar basis, with the plan year spanning January 1st through December 31st. Members must notify PRISM of their intent to withdraw by July 1st (180 days) prior to the close of the plan year in which they are terming; as this deadline has passed and PRISM Health medical plans will automatically renew through December 31, 2026, there are no recommended medical plan alternatives for the Board for the 2026 plan year.
For dental and vision plans, Members must notify PRISM of their intent to withdraw 60 days prior to the close of the plan year in which they are terming. The Board could choose to override the recommendation to renew the 2026 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. As this would result in loss of these ancillary benefits for 2026, non-renewal (withdrawal) is not a recommended alternative. The Board could choose to not make a change from Lincoln to PRISM Lincoln and maintain status quo.
Regarding the 2026 OE3 rate card, because the County both offers the two OE3 Trust health plans and makes County Contributions pursuant to the terms of the negotiated MOUs with OE3 represented bargaining units, there is no recommended alternative.
Regarding the CalPERS Health Plan analysis, the Board could choose to direct staff to perform further analysis and return to the Board with the information.
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.
08/29/2023 Legistar file 23-1481: Board authorized HR Director to execute an updated PRISMHealth Program MOU.
11/05/2024 Legistar file 24-1825: Board approved County’s use of the Rate of Pay safe harbor to satisfy “affordability” under the ACA.
08/12/2025 Legistar file 25-1221: Board authorized HR Director to execute a PRISM Vision Program MOU.
OTHER DEPARTMENT / AGENCY INVOLVEMENT
Budget Ad Hoc Committee
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
The total percentage change from the 2025 rates (excluding KPSA and ConcernPlus EAP rates, which are not yet available) is 13.4%. The overall increase in annual premium from last year (excluding the KPSA and ConcernPlus plans) is approximately $5,418,306 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
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