COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

 

DATE:

November 18, 2002

BOARD MEETING DATE:

December 17, 2002

 

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, EPS Director

Paul Hackleman, Benefits Manager

   

SUBJECT:

Waive a Request for Proposal Process and Authorize the EPS Director to sign an Agreement with Blue Shield

 

Recommendation

Approve a resolution waiving the Request for Proposal process and authorizing the EPS Director to sign an agreement with Blue Shield of California for the period from January 1, 2003 through December 31, 2003.

 

Background

In 1994, the County formed a Labor-Management Retiree Health Care Committee to oversee the Blue Shield Point of Service (POS) Plan. In 1998 and again in 2001, the Committee proposed and the Board adopted modification to the design of the Blue Shield Plans to reduce overall premium costs. These efforts have kept the Blue Shield premiums more than 8% lower for active employees and 23.5% for retired individuals over age 65 than they would have otherwise been without modifications.

 

Discussion

Health care services in California generally, and the Bay Area specifically, continue to deteriorate. Numerous smaller Independent Practice Associations (IPAs) in surrounding counties continue to close. The Health Plan of the Redwoods, for example, has terminated all coverage in Sonoma County. Lifeguard is also closing in Santa Clara County effective December 31, 2002.

The picture for retirees is even worse as Medicare Plans terminate coverage altogether or introduce significant changes in premiums or co-pays. Blue Shield remains one of the few providers that offers national, even international coverage.

Because of the significant changes made during the past several years in co-pays for both the active employee and retiree plans, the Labor-Management-Retiree Committee recommended no co-pay changes this year. An attached letter from Blue Shield confirms that benefits will remain unchanged except for those changes mandated by Blue Shield.

Blue Shield is being recommended for continuation without a formal request for proposal process because:

· They were initially selected in a Labor-Management-Retiree Request for Proposal process that specifically conformed to the County's previous self-funded plan,

· No new options have arisen which would represent comparable design, less cost or less disruption of patient-physician relationships and

· Labor requested the continuation of Blue Shield without changes in co-payments.

The Blue Shield agreement includes the non-discrimination language and Equal Benefits Ordinance requirements.

 

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

The 18% premium increase represents an estimated cost of $1,011,000 for 2003.