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HomeMy WebLinkAbout3.b. Receive update on Premium Rate adjustments for CALPERS medical plans for calendar year 2019 Page 1 of 2 Item 3.b. ,orVIOIN SAN July 9, 2019 TO: ADMINISTRATION COMMITTEE FROM: TEJI O'MALLEY, HUMAN RESOURCES MANAGER REVIEWED BY: ANN SASAKI, DEPUTY GENERAL MANAGER ROGER S. BAILEY, GENERAL MANAGER SUBJECT: RECEIVE UPDATE ON PREMIUM RATE ADJUSTMENTS FOR CALPERS MEDICAL PLANS FOR CALENDAR YEAR 2019 This memo is to provide information to the Administration Committee and Board of Directors regarding the annual changes to the CalPERS premium rates which will go into effect on January 1, 2020. CalPERS publishes renewal rates for all their plans in June of every year to be effective January of the following year. On June 18, 2019, CalPERS approved the rate adjustments as well as any other plan changes. Upon approval by CaIPERS, the rate adjustments, both increases and decreases, resulted in an overall average premium increase of 4.65 percent for all of their plans. On average, the HMO plans increased by an average of 5.98 percent, the PPO plans increased by an average of 3.28 percent, and the Medicare supplemental plans increased by an average of 1.52 percent. CalPERS also approved, going forward, the consolidation of their five-region service area into three regions and the addition of two new health plan options for several counties. There will be no changes to the plan designs (co-pays, benefit level, co- insurance, etc.). Effective July 1, 2019, the District transitioned all active employees and retirees to the CalPERS medical plans. Employees and retirees are eligible to choose any plan that is offered by CalPERS, however, Central San will only pay 100 percent of the premium cost, up to the family rate, of the "core plans". The core plans for active and non-Medicare eligible retirees are Kaiser Permanente and HealthNet SmartCare. For Medicare eligible retirees, the core plans are Kaiser Senior Advantage and United Healthcare. If a more expensive plan is chosen, the employee or retiree is required to pay the District the difference between the highest cost core plan and the chosen plan. As detailed in the table below, rate adjustments for the core plans within the Bay Area region increased by the reflected amounts. Core Plan Rate Adjustments Kaiser Permanente 0.03% Health Net SmartCare 10.98% Kaiser Senior Advantage 4.85% United Healthcare 9.24% July 9, 2019 Regular ADM IN Committee Meeting Agenda Packet- Page 11 of 21 Page 2 of 2 The following table reflects the new rates for calendar year 2020. Kaiser Health Net Kaiser Senior United SmartCare Advantage. Healthcare Single $768.49 $1000.52 $339.43 $327.03 2-Party $1536.98 $2001.04 $678.86 $654.06 Family $1998.07 $2601.35 $1018.29 $981.09 The rate adjustments would will result in an increase of approximately$330,000 in annual costs for employee and retiree medical benefits. Staff will be at the meeting to answer any questions and/or provide clarification. Strategic Plan Tie-In GOAL THREE:Be a Fiscally Sound and Effective Water Sector Utility Strategy 2- Manage costs July 9, 2019 Regular ADMIN Committee Meeting Agenda Packet- Page 12 of 21