Employee and Public Services
November 12, 2003
BOARD MEETING DATE:
December 2, 2003
Honorable Board of Supervisors
Mary Welch, EPS Director
Paul Hackleman, Benefits Manager
Approval of Amendment to Agreement with Kaiser
Approve a resolution waiving the Request for Proposal process and amending an agreement with Kaiser for provision of health plan benefits to County employees, retirees and their dependents effective January 1, 2004 through December 31, 2004.
The Kaiser plan currently covers about 48% of eligible employees and retirees which represent approximately 3,400 individuals. Since 1997, Kaiser has incorporated into the cost of premiums two factors beyond the control of employers. The first is the recovery program Kaiser initiated in 1999 to offset significant operating losses in 1997 ($262 million) and 1998 ($285 million). The second is the compliance with State mandated retrofitting of all hospitals and facilities for minimizing damage in the event of an earthquake.
The increase in the Kaiser premium for the County is 11.3% percent. By comparison, the Kaiser increase for PERS (Public Employees Retirement System) is 18%. In negotiations last year, the County modified co-payments to reduce future premium increases. Kaiser has developed a state-wide strategy to continue the process of examining and modifying co-payments annually to reflect inflationary increases and to keep their plan design comparable to other plans offered by each employer. Any modifications in plan design will continue to help keep overall premiums lower.
· Offer the lowest cost premium for employer provided health coverage (e.g. no other health plan has lower cost for both the employer and employee) and
· Provide a closed-panel network of physicians that, if changed, would cause 100% patient disruption because no new plan would be able to offer coverage through the Kaiser primary and specialist physicians.
The contract with Kaiser 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.
The net County cost increase for 2004 is an estimated $1,398,000 for active employees and $568,000 for retirees.