REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
May 18, 2021
FROM
DIANE RUNDLES, Director, Human Resources Department
SUBJECT
Title v
Medical and Dental Premium Rates for Plan Year 2021-22
End
RECOMMENDATION(S)
Recommendation
1. Approve medical premium rates for Blue Shield of California and Kaiser Foundation Health Plan, Inc. for active employees, Consolidated Omnibus Budget Reconciliation Act participants, and their eligible dependents for benefit plan year 2021-22, as shown in Attachment A.
2. Approve dental premium rates for Delta Dental of California for active employees, Consolidated Omnibus Budget Reconciliation Act participants, and their eligible dependents for benefit plan year 2021-22, as shown in Attachment B.
(Presenter: Diane Rundles, Director, 387-5570)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). There is no additional cost to the County associated with the approval of this item as the County’s contribution to employee medical and dental insurance premiums is fixed pursuant to ordinances, compensation plans, and negotiated Memoranda of Understanding with individual labor unions.
BACKGROUND INFORMATION
Each year the Human Resources (HR) Department and the Employee Benefits Advisory Committee (EBAC) works collaboratively with the County’s contracted health and welfare consultants to review plan utilization and negotiate medical and dental premium rates for the new plan year. The EBAC is a labor-management committee, composed of individuals representing employee bargaining units, management and retirees.
The County’s contracted health and welfare consultant, Rael & Letson Consultants and Actuaries (Rael & Letson), conducted a comprehensive analysis of the data provided by Blue Shield of California (Blue Shield) and Kaiser Foundation Health Plan, Inc. (Kaiser). Upon review and completion of final negotiations on premium rates with Blue Shield and Kaiser, HR and the EBAC are recommending Board of Supervisors (Board) approval of the following for the 2021-22 plan year:
• Medical premium rates as shown in Attachment A
o 2.86% increase to the current Kaiser premiums
o 6.22% increase to the current Blue Shield health maintenance organization (HMO), preferred provider organization (PPO), Needles PPO, and Bronze premiums
§ During initial contract negotiations with Blue Shield in 2019, Blue Shield agreed to provide an annual wellness contribution of $1,000,000 per plan year ($500,000 towards wellness program and $500,000 in discretionary funding). For the current negotiations of the 2021-22 benefit plan year, EBAC requested that Blue Shield apply $500,000 ($250,000 wellness program and $250,000 discretionary funding) of the $1,000,000 annual wellness contribution towards lowering the rate increase. This resulted in the rate increase being reduced from 6.70% to 6.22%. EBAC unanimously voted to apply the $500,000 to reduce the rate and recommend approval of the 6.22% proposed offering.
Additionally, the County’s contracted health and welfare consultant, Segal Consulting (Segal), conducted a comprehensive analysis of the data provided by Delta Dental of California (Delta) for the Dental HMO and Dental PPO plans. The EBAC reviewed the comprehensive analysis of the current self-insured Dental PPO plan’s claims experience, including a three-year financial projection. Based on this review, HR and the EBAC recommend a rate pass to the current Dental PPO rates for the 2021-22 plan year.
During the original negotiation with Delta, the Dental HMO rates were negotiated to a rate lock for the first three years of the contract period (2017-20) and a not to exceed a rate cap of 5% for years four and five (2020-22). Upon review and analysis of the Dental HMO data provided by Delta, the EBAC, in conjunction with Segal, negotiated a rate pass for year five (2021-2022).
After concluding negotiations on premium rates with Delta, HR and the EBAC are recommending Board approval of the following for the 2021-22 plan year:
• Dental premium rates as shown in Attachment B
o Rate pass to the current Delta Dental DPPO premiums
o Rate pass to the current Delta Dental DHMO premiums
PROCUREMENT
On July 6, 2018, the Employee Benefits and Services Division (EBSD) issued an RFP (RFP HRD218-HR2-3001) for Active Employee Medical Benefits. On July 9, 2019, (Item No.17), the Board approved contracts with Blue Shield and Kaiser to provide medical benefits for active employees, COBRA participants, and eligible dependents for plan years 2019-20 through 2021-22.
On September 9, 2016, the EBSD issued an RFP (RFP HRD217-HR2-2187) for Active Employee Dental Benefits in order to obtain favorable dental premium rates and cost containment on its Dental HMO and PPO plans for employees. On May 23, 2017, (Item No.64) the Board approved contracts between the County and Delta to provide dental benefits for active employees, COBRA participants, and eligible dependents for benefit plan years 2017-18 through 2021-22. As this is the last remaining year in the Delta dental contract, EBSD will issue an RFP and award a contract for dental benefits prior to the end of the 2021-22 benefit plan year.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, Deputy County Counsel, 387-5455) on April 29, 2021; Purchasing (Bruce Cole, Supervising Buyer, 387-2148) on April 29, 2021; Finance (Jessica Trillo, Administrative Analyst, 387-4222) on April 29, 2021; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on April 29, 2021.