COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

DATE:

November 9, 2005

BOARD MEETING DATE:

December 6, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, EPS Director

Paul Hackleman, Benefits Manager

SUBJECT:

Renewal of Agreement with Blue Shield Dental

RECOMMENDATION:

Approve a resolution waiving the Request for Proposal process and authorizing the President of the Board to sign an agreement with Blue Shield for provision of dental plan benefits to County employees, retirees and their dependents for the period from January 1, 2006 through December 31, 2008.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government

Goal(s) 20 and 21: Government decisions are based on careful consideration of future impact rather than temporary relief or immediate gain; and County employees understand, support and integrate the County vision and goals into their delivery of services.

Performance Measure(s):

Measure

FY 2004-05
Actual

FY 2005-06
Projected

Percentage of employees enrolled in a dental program within 30 days of employment

N/A

98%

Total percentage of enrolled employees

N/A

70%

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 approximately 1,400 preferred dentists in the Bay Area and 3) develop summary plan descriptions and plan document information.

Participants who use the preferred dental network received services at less cost, both for themselves and 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:

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

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

• 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, more frequent cleanings and higher maximum allowable benefits).

• Low administrative costs in administrating the benefit. Since 1998, the administrative costs have increased a total of 3% and the three-year proposed extension is at no additional cost for the term of the agreement.

The proposed agreement continues the current rate of $6.45 per participant per month for the period from January 1, 2006 through December 31, 2008

FISCAL IMPACT:

There is no additional net County cost increase for 2006 and the estimated cost has already been included in the FY 05-06 budget.