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| ARF- 4297 |
Regular Agenda Item 3. H.
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| Regular BOS Meeting |
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| Information |
| Request/Subject |
| Establish employee contribution rates and benefit changes for employee and family coverage for FY 2018 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 18 years there have been various changes and modifications to the plan and to the County’s responsibility for administering of the plan. New and future changes mandated with Health Care Reform 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. Additionally, Gila County established one contribution rate for all employees, with the exception of freezing the lowest of the old rates (Tier I) for the ten employees at that rate at that time. It was determined that those ten employees would automatically move to the standard rate when their pay exceeded $21,611.20 per year. There is currently one employee left in this closed group. 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%, or $29.19 per month for employee only coverage and 4.81% or $59.77 per month for family coverage, 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.
For FY 2018, there is a $0.37 cent increase to employee premiums and a $1.47 increase in family coverage. These represent less than a 1% increase in total premium costs. |
| Evaluation |
For FY18 there will be an increase to deductibles, co-pays and out of pocket maximums as follows:
PPO Plan
• Increase In-Network Deductible from $400 to $500 - per participant
• Increase Out-of-Network Deductible from $1,000 to $1,500 - per participant
• Increase In-Network Out-of-Pocket Maximum from $5,000 to $5,500 – Employee
• Increase In-Network Out-of-Pocket Maximum from $13,700 to $14,300 – Family
• Increase Copay from $25 to $30
- PCP Office Visits
- Chiropractic Visits
- Out-Patient Lab Costs Under $500
- In-Office Lab Costs by PCP
- Out-Patient X-Rays
- In-Office X-Rays by PCP
- Hearing Exams & Testing
• Increase Copay from $35 to $45
- Specialist Office Visits
- In-Office Lab Costs by Specialist
- X-Rays by Specialist
HDHP
• Increase In-Network Deductible from $3,500 to $3,750- Employee
• Increase In-Network Deductible from $7,000 to $7,500- Family
PRESCRIPTION DRUGS - No Changes
DENTAL - No Changes
VISION - No Changes
LIFE- No Changes
There are two new added benefits for employees; adding an Employee Assistance Program (EAP) 3 visits per issue, and adding Teladoc for a $25 copay for PPO, and $45/visit until deductible is reached for the HDHP. These two new benefits will be introduced and discussed in a presentation to the Board of Supervisors in May, during Open Enrollment.
Once again, Open Enrollment for the AZLGEBT plan will take place in May and will be a ''passive enrollment" utilizing the SmartBen 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. Staff from Erin Collins and Associates (ECA) and Gilsbar will be on site in Gila County on May 9 and 10, 2017 during open enrollment to meet with employees and answer questions. Staff from ECA and staff from Holman Frazier (Employee Assistance Program) will be on site in Gila County on May 22, 2017, for further training and support. |
| Conclusion |
As health care continues to become more complex, AZLGEBT has continued to strategically expand options for members, while continuing the commitment to provide an affordable benefit package to Gila County employees and their families.
To remain fair and consistent with the health insurance plan, and since employees who use the insurance plan will be paying additional for deductibles and office visits, staff believes that the small increase in premiums should be absorbed by the County as a prudent financial step for the County. While other government employers in the area have experienced 15% increases year over year, the average 5.24% increase in AZLGEBT speaks to how well the plan is managed. One of the cornerstones of a well managed plan is the shared cost between employers and employees. |
| Recommendation |
Staff recommend the following for FY 2018:
- No increase to premium rates for employees. Combined rates will remain at $68.50 per month for employee only coverage, and $320.50 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, 2017, as follows: Adopt Schedule A - Employee Insurance Contributions FY 2018 (attached to the agenda item). (Jacque Sanders) |
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