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
Authorization for EPS Director to sign an Agreement with Secure Horizons
Approve a resolution waiving the Request for Proposal process and authorizing the EPS Director to sign an agreement with Secure Horizons (PacifiCare) upon approval by County Counsel for provision of health plan benefits to eligible County retirees and their dependents effective January 1, 2004 through December 31, 2004.
In July, 2000 the County was notified by Blue Shield and Aetna that they were terminating their managed care health benefits for retirees over age 65. As a result, a Labor-Management-Retiree Committee was formed to solicit proposals to replace the two plans that were terminating coverage. Proposals were received from Secure Horizons and HealthNet.
Retiree healthcare continues to be very volatile. The 1997 Balanced Budget Act continues to limit annual Medicare increases to 2% even when actual cost increases for hospitals and physicians are consistently in double digits. This federal legislation forces health plan providers to terminate coverage or increase premiums. Since the passage of the Balanced Budget Act a total of 3.2 million retirees have been forced off of managed care and back onto Medicare (which does not cover prescription drugs). Another 300,000 retirees are expected to lose coverage in 2004.
Secure Horizons is being recommended for continuation without a formal request for proposal process because they:
· Offered the best proposal for 2001 coverage in a formal process and
· No new options have arisen which would represent less cost and less disruption of patient-physician relationships.
The contract with Secure Horizons 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 estimated increased annual cost to the County is $13,000 reflecting a 26.9% increase over the current premium.