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 Kaiser

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 Kaiser 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

99%

99%

Total percentage of enrolled employees

53%

54%

BACKGROUND:

The Kaiser plan currently covers 2,657 employees and 846 retirees.

Kaiser is the sole “closed panel” HMO option available to employers. It also consistently provides the lowest premium cost as well as the lowest out-of-pocket cost for plan participants.

DISCUSSION:

Kaiser is being recommended for continuation without a formal request for proposal process because they:

• Offer the lowest cost premium for employer-provided health coverage,

• Provide a closed panel network of physicians that is not offered by any other health plan and

• Provide a network that, if changed, would cause 100% patient disruption because no new plan would be able to offer coverage through the Kaiser primary and specialist physicians.

The increase in Kaiser’s premium for the County plan for active employees and retirees under age 65 is 9.7%. There is no premium increase for retirees age 65 and older.

Kaiser continues to provide onsite health improvement programs for the County at no additional cost. Examples of program topics include allergy / asthma, weight management, and depression / anxiety.

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 $2,211,519. This cost has already been included in the FY 07-08 budget.