COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

DATE:

August 24, 2006

BOARD MEETING DATE:

September 12, 2006

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Tim Sullivan, Assistant HR Director

Paul Hackleman, Benefits Manager

SUBJECT:

Approval of Agreement with Delta Dental Plan for Dental Benefits to Employees and Retirees

RECOMMENDATION:

Adopt a resolution waiving the RFP process and authorizing an agreement with Delta Dental for dental benefits for employees and retirees for the period from October 1, 2006 through September 30, 2009.

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

Contract Years 2005-06
Actual

Contract Years 2006-09
Projected

Customer satisfaction based on random surveys and reported annually

85% satisfied or very satisfied

85% satisfied or very satisfied

Average response time for incoming calls

<30 seconds

<30 seconds

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. During the first four years of the agreement there were no increases. Delta introduced a 2% increase in 2003 and 3% increases in 2004 and 2005.

DISCUSSION:

The renewal agreement calls for a three-year term without any premium increases or changes in benefits. We recommend renewal of the contract because:

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

• Delta offered the lowest premium and for the seven year period in which we have contracted with Delta they have raised premiums a total of 8%.

• If Delta were replaced it would represent 100% disruption among participants because of dentists’ contracts with Delta on an HMO basis.

Delta is the largest California provider and has approximately 15% County participation. This amount represents a significant savings to the County as the Delta premium is approximately 50% of the self-funded plan premium.

The contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.

FISCAL IMPACT:

There is no net increase cost to the County as the agreement calls for no premium increases during the three-year term of the contract.