COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Resources Department

DATE:

November 7, 2006

BOARD MEETING DATE:

December 5, 2006

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Donna Vaillancourt, Human Resources Director

Paul Hackleman, Benefits Manager

SUBJECT:

Renewal of Agreement with Blue Shield

RECOMMENDATION:

Approve a resolution waiving the Request for Proposal process and authorizing the Human Resource Director, upon approval by County Counsel, to sign an amendment to the current agreement with Blue Shield for provision of health plan benefits to County employees, retirees and their dependents for the period from January 1, 2007 to December 31, 2007.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government

Goals 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 2005-06
Actual

FY 2006-07
Projected

Percentage of employees enrolled in a health plan within 30 days of employment

98%

98%

Total percentage of enrolled employees

21%

19%

BACKGROUND:

The Blue Shield plan currently covers approximately 1,052 active employees (21%) and 691 retirees.

The Blue Shield plan was designed by a Labor-Management-Retiree Health Care Committee in 1994. Modifications were made to the plan in 1998 and 2001. The changes kept Blue Shield premiums 8% lower for active employees and 23.5% lower for retired individuals over age 65 than they would otherwise have been without modification. Blue Shield provides a Point-of-Service option to active employees incorporating HMO, PPO and out-of-network. The plan provides world-wide coverage for retirees.

DISCUSSION:

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

• They were initially selected in a Labor-Management-Retiree Request for Proposal process that specifically conformed to the County’s previous self-funded plan,

• No new options have arisen which would represent comparable design, less cost or less disruption of patient-physician relationships and

• Blue Shield represents the only option for retirees who re-locate out of the coverage areas of Aetna and Kaiser.

The increase in Blue Shield’s premium is 8%. The PPO plan for out-of-area retirees is 6%.

Blue Shield will continue to offer the County its Health Rewards program at no cost. Additionally, the Medical Director for Blue Shield is proposing that the County and Blue Shield initiate new initiatives specifically targeting diabetes and weight management.

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:

The net County cost increase for 2007 is an estimated $785,558 and has already been included in the FY 06-07 budget.