COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

 

DATE:

August 27, 2002

   

BOARD MEETING DATE:

September 24, 2002

 

TO:

Honorable Board of Supervisors

   

FROM:

Mary Welch, EPS Director
Paul Hackleman, Benefits Manager

   

SUBJECT:

Approval of Administrative Agreement with Blue Shield

 

Recommendation

Adopt a resolution waiving the Request for Proposal process and authorizing the President of the Board to execute an agreement with Blue Shield of California for dental services to the County for the period from October 1, 2002 through December 31, 2005.

 

Background

The County Self-Funded Dental Plan uses the administrative services of Blue Shield to: 1) process dental claims, 2) obtain discounts on services provided by a network of over 1,400 preferred dentists in the Bay Area and 3) develop summary plan description and plan document information.

Participants who use the preferred dentist network receive services at less cost, both for themselves and for the plan. This design allows the County to offer richer benefits at reduced cost. Participants may, however, elect any dentist on a non-preferred basis although their out-of-pocket expenses will be higher because non-preferred dentists will balance-bill (e.g. expect patients to pay the difference between the Blue Shield amount and their regular fees).

 

Discussion

There is no increase in administrative services cost under this new agreement for the period from October 1, 2002 through December 31, 2003 which represents a period of six years without an increase. The current fees are $6.45 per participant per month and are incorporated into the overall premium which includes the claims cost associated with the participants' use of services. The agreement specifies a per participant per month increase effective January 1, 2004 of $.10 and an increase effective January 1, 2005 of $.10.

Blue Shield is being recommended to continue administrative services for the Self-Funded Dental Plan without a request for proposal process because of their:


1. Significant discounts from providers which are approximately 20% better than other administrators like Delta Dental and CIGNA. The deep discounts allow the plan to offer richer benefits at lower cost to both participants and the County. The network currently contains over 1,400 dentists in the six counties of the Bay Area.

2. Familiarity with the County and its employees which allows Blue Shield to administer the unique characteristics of the plan (including domestic partner and young adult dependent coverage and more frequent cleanings for individuals with gum disease).

 

Vision Alignment

The contract with Blue Shield represents Vision Statement # 20 which focuses on careful consideration of future impact and #21 incorporating the County's vision and goals into delivery of services.

 

Fiscal Impact

There is no additional impact on County cost for the first fifteen months of the agreement since there is no increase in administrative fees. The increases in January 1, 2004 and January 1, 2005 represent an annual additional cost of approximately $3,600.