COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Resources Department

DATE:

November 27, 2007

BOARD MEETING DATE:

December 18, 2007

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, 2008 to December 31, 2008.

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 2006-07
Actual

FY 2007-08
Projected

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

98%

98%

Total percentage of enrolled employees

22%

20%

BACKGROUND:

The Blue Shield plan currently covers approximately 1,097 active employees (22%) and 770 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 14%. The increase in the PPO plan for out-of-area retirees is 9.9%.

Blue Shield continues to offer the County its Healthy Lifestyles Rewards program at no cost. This online program helps employees adopt and maintain healthy lifestyle habits like healthy eating, stress management and regular exercise.

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 2008 is an estimated $1,756,845 and has already been included in the FY 07-08 budget.