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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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Human Resources Department
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DATE:
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November 18, 2008
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BOARD MEETING DATE:
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December 16, 2008
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Donna Vaillancourt, Human Resources Director
Peter Bassett, Benefits Manager
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SUBJECT:
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Renewal of Agreements with Health Insurance Companies
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RECOMMENDATION:
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Approve a resolution waiving the Request for Proposal process and authorizing the Human Resources Director, upon approval by County Counsel, to sign an amendment to the current agreements with Kaiser, Aetna, Blue Shield, and Pacificare / Secure Horizons for provision of health plan benefits to County employees, retirees and their dependents for the period from January 1, 2009 to December 31, 2009.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government.
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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.
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Performance Measure(s):
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Measure
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2008
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2009
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Average annual County contribution to an active employee’s health premium
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$10,240
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$11,147
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BACKGROUND:
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Approximately 5,000 out of 5,600 County employees (or 89%) participate in one of the County’s medical plans. 53% of employees are with Kaiser, 25% with Aetna, and 22% with Blue Shield. Approximately 2,000 out of 3,842 County retirees participate in one of the County’s retiree medical plans.
Each year, the County aggressively negotiates health plan renewals in an effort to control increasing benefit costs to the County. National health care trends, however, continue to increase at double-digit rates due to increasing patient demand for services, an aging population, increasing medical technology costs, increasing price and utilization of prescription drugs, and poor lifestyle choices.
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DISCUSSION:
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Agreements with Kaiser, Aetna, Blue Shield and Pacificare / Secure Horizons are being recommended for continuation without a formal request for proposal process because no new health plan options have arisen which would represent less cost and less disruption of patient-physician relationships.
The average renewal rate increase for 2009 is: 8.47%. The following is a breakdown of rate increases for each health plan:
The County continues to work with each health plan on specific initiatives to help improve employee health. Kaiser has provided behavioral health and allergy/asthma workshops to County employees. Aetna is working with the County to offer pain management and diabetes weight management courses. Blue Shield offers financial incentives to employees who participate in its Healthy Lifestyle Rewards Program.
The contractors have 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.
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FISCAL IMPACT:
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The net County cost increase for 2009 is an estimated $4,690,177 (Kaiser: $2,478,824; Aetna: $1,368,321; Blue Shield: $831,291; Pacificare / Secure Horizons: $11,741). This cost has already been included in the FY 08-09 budget.
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