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Chief Administrative Office, Risk Management Division, recommending the Board approve the following:
1) A revision to the 2014 rates for the Kaiser HMO for active employees and early retirees with implementation of the new rates beginning pay period 12 (starts on 5/17/14), 2014;
2) A refund of overpayment to current employees via a one-time payment in pay period 15 (starts on 6/28/14), 2014, to active early retirees via a one-time credit on the July 2014 Retiree Billing statement or via a one-time accounts payable check to employees or early retirees who have separated from the County who participated in the County Kaiser HMO plan in 2014; and
3) No change to the approved County contribution rate for the OE3 Trust Kaiser Plan participants.
FUNDING: Internal Service Fund - Risk Management Health Fund.
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Fiscal Impact/Change to Net County Cost
Internal Service Fund - Risk Management Health Fund
Background
On September 29, 2013, the Board approved the proposed health plan for January 1, 2014 through December 31, 2014. The approved plan called for the utilization of unblended plan rates, which were developed based on the actual costs of each individual plan, and were approved with the plan.
On October 24, 2013, Alliant provided the Kaiser HMO 2014 rates to the County’s third party administrator, EBS. On December 18, 2013, the County discovered that the rates provided to EBS were not the same as those presented to the County in August, 2013. EBS contacted Alliant to confirm the rates for the Kaiser HMO.
On December 18, 2013, in an exception to its usual internal review process, Alliant mistakenly updated the 2014 Kaiser HMO rates to match the rates presented in August, 2013 and communicated these incorrect rates directly to EBS. This mistake resulted in higher rates being charged for active employees and early retirees enrolled in the Kaiser HMO beginning in pay period 25, 2013.
In March, 2014, Alliant notified Risk Management that the rates being...
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