Okaloosa County BOCC — August 18, 2015 — Florida Blue & Proshare Renewals — agenda request

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: August 18, 2015 TO: Honorable Chairman and Members of the Board FROM: Laura Porter SUBJECT: Florida Blue & Proshare Renewals DEPARTMENT: Risk Management BCC DISTRICT: All STATEMENT OF ISSUE: Request renewal of employee group health insurance, ProShare Agreement and Blue Medicare supplement with Florida Blue effective October 1, 2015. BACKGROUND: Although the County has offered health insurance as an employee benefit for many years, federal law now mandates health care coverage for most employees working an average of 30 hours per week. The County's group health plan is fully compliant under the federal Affordable Care Act regulations. The current County group health insurance contracts with Florida Blue expire on 9/30/2015. Further, the County currently has a ProShare contract in place through 9/30/2015. This agreement returns to the County a portion of premiums in excess of claims and administrative fees. Previous ProShare refunds have been $1.1 million in 2012 and $3.7 million in 2014. Under the terms of the ProShare agreement, if the County goes out to bid or changes healthcare insurers, the County would forfeit any refund they would be otherwise entitled to under the ProShare agreement. The next refund would be payable in 2016, and any refund due under the renewal ProShare contract would be payable in 2018. The new contract reflects a 3% rate increase in the employee group health plans, and a 4.6% decrease in the Blue Medicare rates as described in the attached rate sheet. The ProShare Refund Agreement will renew at the 100% refund level, and proceeds from the refund received in 2016 will be used to offset the $40 monthly employee contribution for another year. The Purchasing Manual, Section G.3.d(2) states, "Risk Management shall negotiate and recommend to the Board for approval, policies of insurance coverage for property, liability and special risk insurance that would be most advantageous to the County. These purchases shall qualify as a direct payment." Staff believes that it is in the best interest of the County to extend the Florida Blue contracts as these agreements provide cost effective insurance with the potential for a significant return of premiums in the future. OPTIONS: Approve the attached contracts or provide additional direction. RECOMMENDATIONS: Approve and authorize the Chairman to sign the renewal contracts with Florida Blue. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator