HomeMy WebLinkAbout06. Update on Employee Benefits for Plan Year 2014-15V Central Contra Costa Sanitary District May 13, 2014 TO: ADMINISTRATION COMMITTEE VIA: ROGER S. BAILEY, GENERAL MANAGER�� DAVID HEATH, DIRECTOR OF ADMINISTRATION E} FROM: TEJI O'MALLEY, HUMAN RESOURCES MANAGER SUBJECT: UPDATE ON EMPLOYEE BENEFITS FOR PLAN YEAR 2014 -15 This memo is to provide an update to the Administration Committee and Board regarding the changes to employee benefits due to the completion of benefit renewal negotiations. These changes are effective for the plan year beginning July 1, 2014 through June 30, 2015. MEDICAL COVERAGE The District offers three options for health coverage: Kaiser, Health Net HMO, and Health Net PPO. Currently, Kaiser and Health Net HMO coverage is provided at no cost to the employees and their dependents. Employees selecting the Health Net PPO plan pay the difference in premiums between the PPO plan and the highest cost HMO plan. Employees who elect to waive District group medical coverage receive a monthly District contribution to the Section 401(a) plan in the amount of $400.00. The table below reflects the current (2013 -2014) monthly premium rates: Kaiser HMO Health Net HMO Health Net PPO Single $798.65 $933.54 $1,352.37 Dual $1,597.32 $1,867.06 $2,708.64 Family $2,260.19 $2,707.25 $3,921.17 Administration Committee Update on Employee Benefits for Plan Year 2014 -15 Page 2of4 For informational purposes, below is a graph that illustrates the current participation rates for the various health plans for all employees: 100 # 90 80 0 70 60 f 50 40 e 30 20 e 10 S 0 _u 0 -� �\ Q �, a\\ •,JQ Q Q�OJ J� ;N Q Qo.` ,\ Ae\ 4 !a` I \ a\t otiCo �� � � �� e� a le Health Plans DENTAL COVERAGE Dental coverage is provided through Delta Dental at no cost to the employees and their dependents. The table below reflects the current (2013 -2014) monthly premium rates: BENEFIT RENEWAL NEGOTIATIONS FOR PLAN YEAR 2014 -2015 The District had been re- marketed during the 2013 benefit renewal negotiation process and all carriers that had been contacted declined to provide medical coverage to the District, due to the large amount of Kaiser participation and the large amount of early retirees (under the age of 65) covered by the District's health plans. Since the number of Kaiser participants and early retirees did not change significantly, the District was not re- marketed to medical carriers this year. However, the District was re- marketed to several group life, Accidental Death and Dismemberment (AD &D), and long term disability carriers to see if any had interest in providing these services to the District. The following major carriers were contacted: Delta Dental Single $82.73 Dual $145.78 Family $236.45 BENEFIT RENEWAL NEGOTIATIONS FOR PLAN YEAR 2014 -2015 The District had been re- marketed during the 2013 benefit renewal negotiation process and all carriers that had been contacted declined to provide medical coverage to the District, due to the large amount of Kaiser participation and the large amount of early retirees (under the age of 65) covered by the District's health plans. Since the number of Kaiser participants and early retirees did not change significantly, the District was not re- marketed to medical carriers this year. However, the District was re- marketed to several group life, Accidental Death and Dismemberment (AD &D), and long term disability carriers to see if any had interest in providing these services to the District. The following major carriers were contacted: Administration Committee Update on Employee Benefits for Plan Year 2014 -15 Page 3 of 4 1. Principal Financial 2. Guardian Insurance 3. Cigna 4. Lincoln National 5. Unum 6. Met Life 7. Standard Insurance 8. Aetna 9. Mutual of Omaha 10. The Hartford Four of the carriers declined to quote and the others provided rates that the District determined were not competitive. The Hartford rates were the most competitive and came in below the rates of the District's current carrier, Reliance Standard. Since the proposal from Hartford came in below the rates of the District's current carrier while maintaining the same level of coverage for employees, the District has agreed to a three -year contract with Hartford. This will result in an annual cost savings of approximately $30,000, for a total net savings of $90,000 over the three -year term. The District negotiated the medical plan rates with all three health plans and, effective July 1, 2014, Kaiser premium rates will increase by 7.5 %, Health Net HMO will increase by 9.5 %, and Health Net PPO will increase by 10.6 %. These rates will be effective July 1, 2014 through June 30, 2015 and will be subject to renegotiation in the spring of 2015. The table below represents the medical premium rates that will be effective July 1, 2014 through June 30, 2015: The District also negotiated with Delta Dental and was able to maintain the 2013 -14 rates premium rates with no net increase in premiums. For comparative purposes, the premium rate increase for the past six plan years are outlined in the table below: Health Plan Kaiser HMO Health Net HMO Health Net PPO Single $858.59 $1,022.23 $1,496.13 Dual $1,717.19 $2,044.44 $2,996.57 Family $2,429.81 $2,964.45 $4,338.00 The District also negotiated with Delta Dental and was able to maintain the 2013 -14 rates premium rates with no net increase in premiums. For comparative purposes, the premium rate increase for the past six plan years are outlined in the table below: Health Plan 2008- 09 2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 Kaiser 5.0% 2.0% 13.2% 13.9% 14.0% 2.8% 7.5% Health Net 21.7% 9.5% 12.5% 14.2% 5.8% 9.2% 10.1% Delta Dental 5.0% 8.0% 10.79% 0.0% -5.0% 0.0% 0.0% Administration Committee Update on Employee Benefits for Plan Year 2014 -15 Page 4 of 4 As the table illustrates, there have been substantial rate increases for Kaiser and Health Net over the past few plan years. The Kaiser rate increase this plan year came in lower than the average of 8.5% for the past six plan years, and the Health Net rate increase came in lower than the average of 12.2% for the same time span. For further comparison, attached is a copy of the premium rates of five comparable public agencies (Attachment A). Due to the confidentiality of the information that is utilized to determine rate increases, other agencies or healthcare carriers cannot provide detailed information on how the premiums are calculated for the agencies included in the attachment. Staff will be available to answer any questions or provide clarification during the meeting. Attachment A 2014 Medical Premium Comparison CalPers Health Participants * CCWD and EBMUD's PPO plan is offered through the Association of Clean Water Agencies Joint Powers Insurance Authority (ACWA /JPIA) Kaiser (single) Kaiser (Dual) Kaiser (Fam) HMO (Single) HMO (Dual) HMO (Fam) PPO (Single) PPO (Dual) PPO (Fam) Central Contra Costa Sanitary District (CCCSD) 858.59 1,717.19 2,429.81 1,022.23 21044.44 2,964.45 1,496.13 2,996.57 4,338.00 Contra Costa Water District (CCWD)* 749.19 1,498.37 2,120.20 1,153.72 2,322.01 3,301.55 720.57 1,645.36 1,971.45 Delta Diablo Sanitation District (DDSD) 744.72 1,485.44 1,931.07 766.24 11528.48 1,988.02 720.04 1,440.08 1,872.10 Dublin San Ramon Services District (DSRSD) 744.72 1,485.44 1,931.07 766.24 11528.48 1,988.02 720.04 1,440.08 1,872.10 East Bay Municipal Utility District (EBMUD)* 598.61 1,197.22 1,694.06 854.51 11709.03 2,418.24 664.29 1,567.48 1,816.11 Union Sanitary District (USD) 1 744.721 1,485.441 1,931.07 766.241 1,528.481 1,988.021 720.041 1,440.081 1,872.10 CalPers Health Participants * CCWD and EBMUD's PPO plan is offered through the Association of Clean Water Agencies Joint Powers Insurance Authority (ACWA /JPIA)