COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

DATE:

September 4, 2003

BOARD MEETING DATE:

September 23, 2003

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, EPS Director

Paul Hackleman, Employee Benefits Manager

SUBJECT:

Approval of Delta Dental Contract

Recommendation

Adopt a resolution waiving a Request for Proposal process and approving a contract with Delta Dental PMI (Private Medical-Care, Inc.) for the period from October 1, 2003 through September 30, 2006

Background

The County offers two dental plans. One is a self-insured preferred provider organization (PPO) plan. The second is a managed care dental plan that includes orthodontia coverage.

Delta was selected in a competitive RFP process in 1999 for a four-year agreement. They provided the lowest proposed premium and were the only respondent willing to continue the County's "no employee co-pay option" in its managed dental care plan. Additionally, the original agreement called for no increases in the second and fourth year but a 6% increase in the third year. The 6% increase was waived. As a result, there have been no increases in the contract since 1999.

Discussion

Delta proposed a three year renewal with a 2% increase in 2003 and 3% increases each year in 2004 and 2005. We recommend proposing to the Board that this contract be renewed without a formal proposal process because:

· Delta was the only dental provider offering the type of plan that conforms to our negotiated agreements with labor organizations (employee no co-pay option),

· Delta offered the lowest premium four years ago and has not increased premiums since that initial selection and

· If Delta were replaced it would cause 100% disruption among participants because of dentists' contracts with Delta on an HMO basis.

Delta is the largest California provider and has approximately 26% County participation. This amount is twice the participation level of the previous managed dental care provider (Safeguard). This level of participation represents a significant savings to the County as the Delta premium is approximately 50% of the self-funded plan premium.

Vision Alignment

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

Fiscal Impact

The estimated annual increased cost would total $10,000 in 2003, $15,000 in 2004 and $16,000 in 2005 for a total annual estimated County cost of $543,264, $558,264 and $574,264 respectively.