Okaloosa County BOCC — June 17, 2014 — Action Item Printout

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: June 17, 2014 TO: Honorable Chairman and Members of the Board FROM: Kay Godwin SUBJECT: Florida Blue Renewal DEPARTMENT: Human Resources BCC DISTRICT: All STATEMENT OF ISSUE: Renew employee group health insurance and Blue Medicare supplement with Florida Blue effective 10-1-14. Change the waiting period for new employees enrolling in the employee health plan to comply with the requirements of the Affordable Care Act. BACKGROUND: The current county group health insurance contracts with Florida Blue expire on 9/30/2014. There are no additional renewal periods available under the current contract. In addition to the existing Florida Blue policy, the County has a ProShare agreement with Florida Blue which is scheduled to expire on 9/30/2015. These contracts are tied together because 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. Though these two contracts were entered into at the same time, the expiration dates were not consistent. The ProShare agreement is very favorable to the County and returns 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. The next refund would be payable in 2016. If a new ProShare agreement was entered into, it is anticipated that the refund provisions would not be as advantageous as the current policy. Therefore Staff has been attempting to extend the Florida Blue contract for an additional year so that its expiration will be consistent with the ProShare contract. This would allow the County to obtain the favorable reimbursements for another year that is in the contract. Should the Board agree to extend the Florida Blue contract for an additional year, it would reflect a 1.84% rate increase in the employee group health plans, and the Blue Medicare rates are as described in the attached premium schedule. The ProShare Refund Agreement will remain in effect, and proceeds from the refund received in 2014 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. Additionally, under the County’s Purchasing Manual, Section G.3.d.(2) (1) it states: “The Board may approve purchases of over $50,000.00 without formal bids where it is deemed to be most advantageous to the County.” Further, the Affordable Care Act mandates any waiting period for participation in an employee health plan may not exceed 90 days. Currently new county employees are eligible to participate in the employee group health plan on the first day of the first month after 90 days of employment. Note: Directors are eligible to participate in the employee group health plan on the first day of the first month following the date of employment. There would be no change for this group. Staff recommends changing the waiting period for non-director employees to the first day of the first month after 30 days of employment. The new waiting period will be effective 10/01/2014. OPTIONS: Approve the attached contracts or provide additional direction. RECOMMENDATIONS: Approve and authorize the Chairman to sign the renewal contracts with Florida Blue and change the new employee waiting period for non-director employees as described above. RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator RECOMMENDED BY: APPROVED BY: Ernie Padgett, County Administrator