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Regular Agenda Item 2. G.
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| Regular BOS Meeting |
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| Information |
| Request/Subject |
| Establish employee contribution rates for employee and family coverage for FY 2020 for Arizona Local Government Employee Benefit Trust (AZLGEBT) plans. |
| Background Information |
Gila County joined AZLGEBT on July 1, 1999. AZLGEBT provides medical, prescription, dental, vision, disability and life insurance coverage, as well as a wellness program for eligible Gila County employees and dependents. Over the past 20 years there have been various changes and modifications to the plan and to the County’s responsibility for administering of the plan. Changes in federal law along with increasing costs associated with changes in the industry, limited options in rural Arizona and specialty medications will continue to add layers of complexity to our administration of our self-insured trust.
In FY 2015, the AZLGEBT added a High Deductible Health Plan (HDHP), Health Savings Accounts (HSAs), and a buy-up dental plan. In FY 2016, AZLGEBT added a Flexible Spending Account (FSA) option to the plan. In FY 2017, the total cost of the health insurance premiums increased approximately 5.66%, and the County and employees shared this increase, which resulted in an increase in premiums to employees of $3.50 per month for employee coverage and $14.50 per month for family coverage. There was an increase of $5.00 in the prescription co-pay and no increase to deductibles or medical co-pays. In FY 2018, there was no increase in premiums to employees; however, there was an increase in medical deductibles and co-pays. In FY 2019, there was a 10% increase in premiums, and the County and employees shared this increase, which resulted in an increase in premiums to employees of $7.00 per month for employee coverage and $34.60 per month for family coverage.
For FY 2020, there is a 6% increase in premiums to cover the rising cost of claims to the Trust. The increase in premiums will be shared between the County and the employees to maintain the cost split percentages that are currently in place. This split in the cost will mean that employee premiums will increase $6.00 per month for employee coverage and $19.20 per month for family coverage. The County portion of employee premiums will increase $29.15 per month for employee coverage and $60.50 per month for family coverage. |
| Evaluation |
For FY20, there will be an overall 6% increase to premiums and administration for all member counties in the AZLGEBT Trust.
Once again, open enrollment for the AZLGEBT plan will take place in May and will be a ''passive enrollment" utilizing the web portal. Employees who wish to change their benefit selections or add other options will be able to make those changes during open enrollment. The Human Resources Department will be providing information to all benefit eligible employees about open enrollment. AZLGEBT reviewed and requested bids for third party administration for claims processing this year, and AmeriBen was chosen as the new third party administrator (TPA). Employees will be receiving new insurance cards to reflect this change.
Other coverage changes are as follows:
- Decrease in the Teledoc copay from $25 to $10
- Dental and vision coverage for dependents increasing up to age 26 ( matching medical coverage age limits)
No changes in deductibles or medical and prescription co-pays.
Staff from Erin Collins and Associates (ECA) and AmeriBen will be on site in Gila County on May 15th in Payson and on May 16th in Globe, during to open enrollment to meet with employees and answer questions. |
| Conclusion |
The 6% increase in premiums is lower than the anticipated 10% increase. Currently, the County subsidizes the premium costs at approximately 90% for single coverage and 75% for family coverage when the employee chooses to participate in the annual Health Risk Assessment (HRA). Without HRA participation, the County subsidizes the premium costs at 87% for single coverage and 74% for family coverage.
To remain fair and consistent with the health insurance plan, staff believes that the increase in premiums should be shared between the County and employees as a prudent financial step for the County to maintain the existing cost sharing percentages. One of the cornerstones of a well managed plan is the shared cost between employers and employees. |
| Recommendation |
Staff recommend the following for FY 2020:
- Increase premium rates for employees. Combined rates will increase by $6.00 for a total $81.50 per month for employee only coverage, and by $19.20 for a total of 374.50 per month for family coverage, with a continuation of the $20 per month discount for all employees who participate in the annual Health Risk Assessment (HRA).
- Reconfirm the Gila County base contribution rates for the Health Savings Account (HSA) system at $10 per month for single coverage and $25 per month for family coverage.
- Reconfirm the dollar-for-dollar matching contribution into the HSA system up to an additional $40 per month for single employee coverage, and $75 per month for family coverage.
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| Suggested Motion |
| Information/Discussion/Action regarding premium rates in the Arizona Local Government Employee Benefit Trust for Gila County's employee insurance and benefit plans to be effective as of July 1, 2019, as follows: Adopt Schedule A - Employee Insurance Contributions FY 2020 attached to this agenda item. (Jacque Sanders) |
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