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)