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 Pacificare

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 Pacificare 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 retirees

7%

9%

BACKGROUND:

Secure Horizons currently covers 125 retirees and represents the Independent Physicians Association (IPA) HMO model that is no longer offered by Aetna. The County conducted a formal Request for Proposal process in 2000. At that time, only two plans offered this kind of coverage, Secure Horizons and HealthNet. Secure Horizons was selected because its premium was less and its network more closely mirrored Blue Shield and Aetna retiree health networks which minimized disruption of participants.

DISCUSSION:

Secure Horizons 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,

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

• Secure Horizons has implemented multiple premium reductions during the prior two years.

The premium increase this year is 16%. Although this premium increase is the highest among all health plans, the actual premium equates to the premium in 2004 as both the 2005 and 2006 premiums represented reductions in cost.

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 is an estimated $7,600. This cost has already been included in the FY 06-07 budget.