HomeMy WebLinkAbout08. Update on employee benefits for Plan Year 2016-178.
mimunim Central Contra Costa Sanitary District
May 9, 2016
TO: ADMINISTRATION COMMITTEE pp��
VIA: ROGER S. BAILEY, GENERAL MANAGER 1�
ANN SASAKI, DEPUTY GENERAL MANGER
FROM: TEJI O'MALLEY, HUMAN RESOURCES MANAGE
SUBJECT: UPDATE ON EMPLOYEE BENEFITS FOR PLAN YEAR 2016-17
This memo is to provide information to the Administration Committee regarding
the changes to the cost for employee benefits due to the completion of benefit
renewal negotiations. These changes are effective for the plan year beginning
July 1, 2016 through June 30, 2017.
CURRENT 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 upon evidence of coverage elsewhere receive a monthly
District contribution to the Section 401(a) plan in the amount of $400.00.
The table below reflects the current (2015-2016) monthly premium rates.
1 Single
Dual
1 Family
Kaiser HMO
$834.36
$1,668.71
$2,361.22
Health Net HMO
$1,088.67
$2,177.33
$3,157.14
Health Net PPO
$1,593.38
$3,191.35
$4,619.97
For informational purposes, below is a graph that illustrates the current
participation rates for the various health plans for all employees. The chart
includes both active employees and early retirees (pre -age 65).
Central Contra Costa Sanitary District
Update on Employee Benefits for Plan Year 2016-17
Page 2 of 4
Number of Employees
120
110
100
90
80
70
60
50
40
30
20
10
0
111
7 6 10
Kaiser Kaiser
(1) (2)
Kaiser HN HMOHN HMOHN HMO HN PPO HN PPO HN PPO Waiver
(3+) (1) (2) (3+) (1) (2) (3+)
Medical Carrier
CURRENT DENTAL COVERAGE
Dental coverage is provided through Delta Dental at no cost to the employees
and their dependents. The table below reflects the current (2015-2016) monthly
premium rates.
Delta Dental
Single $81.90
Dual $144.32
Family $234.09
ANCILLARY BENEFITS
The District also provides for additional benefits beyond medical and dental
coverage and their current (2015-2016) monthly premium rates are reflected
below:
Employee Assistance Life/Accidental Death and
Program Dismemberment (AD&D)
$4.00 per employee $0.41 per $1,000
Long Term Disability
$0.34 per $100
Central Contra Costa Sanitary District
Update on Employee Benefits for Plan Year 2016-17
Page 3 of 4
BENEFIT NEGOTIATIONS FOR PLAN YEAR 2016-2017
The District has concluded negotiations with all health benefit carriers. Effective
July 1, 2016, Kaiser premium rates will reflect an increase of 6.91 %, and Health
Net HMO and PPO rates will increase by 7.6%. These rates will remain in effect
from July 1, 2016 through June 30, 2017 and will be subject to renegotiation in
the spring of 2017.
The table below represents the medical premium rates that will become effective
July 1, 2016 through June 30, 2017:
Single
Dual
Family
Kaiser HMO
$892.01
$1,784.03
$2,524.40
Health Net HMO
$1,171.41
$2,342.81
$3,397.09
Health Net PPO
$1,714.48
$3,433.90
$4,971.10
For comparative purposes, the premium rate adjustments for the past six plan
years are outlined in the table below:
Health 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Plan
Kaiser 13.2% 13.9% 14.0% 2.8% 7.5% -2.8%
Health 12.5% 14.2% 5.8% 9.2% 9.8% 6.5%
Net
Delta 10.7% 0.0% -5.0% 0.0% 0.0% -1.0%
Dental
2016-17
6.9%
7.6%
-8.2%
As the table illustrates, there have been substantial rate increases for Kaiser and
Health Net over the past few plan years. The rate increases for Kaiser have
averaged 10.28% over the past six plan years, and the Health Net rate increases
have averaged 9.6% for the same time span.
Currently, the District contracts with both the Delta Dental Plan and the
Employee Assistance Program (EAP) directly with the carriers. However, as part
of the benefits renewal process, the District was able to procure lower monthly
premiums for both of these plans by joining the California State Association of
Counties Excess Insurance Authority (CSAC EIA). The CSAC EIA is a joint
powers authority and its sole purpose is to find cost-effective insurance solutions
and risk management services for their members. By joining CSAC EIA, the
District will realize an 8.2% decrease in cost of premiums for Delta Dental and a
2.0% decrease in cost of premiums for the EAP without making any changes to
the levels of coverage. This will result in an approximate decrease of $81,000
Central Contra Costa Sanitary District
Update on Employee Benefits for Plan Year 2016-17
Page 4 of 4
annually. Additionally, membership in the Authority will give the District access to
other cost-effective health and benefit plans for consideration in the future.
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.
The District's open enrollment period is scheduled to begin May 16, 2016 and
end on June 17, 2016.
I will be available to answer any questions or provide clarification during the
meeting.