Department: Human Resources and Risk Management
Department Head/Elected Official: Shain Carrizal
Regular or Supplemental RCA: Regular RCA
Type of Request: Financial Authorization
Project ID (if applicable): N/A
Vendor/Entity Legal Name (if applicable): N/A
MWDBE Contracted Goal (if applicable): N/A
MWDBE Current Participation (if applicable): N/A
Justification for 0% MWDBE Participation Goal: N/A - Goal not applicable to request
Request Summary (Agenda Caption):
title
Request for approval of changes to health and related benefits effective January 1, 2025 including (1) implementing the KelseyCare ACO as a plan offering to employees, (2) modifying the premium structure with a self plus child(ren) tier, and (3) adopting Option 3 for premium rates charged to employees and retirees.
end
Background and Discussion:
The Base and Plus PPO medical plans would continue to be offered to employees and retirees in 2025 with no changes to the benefit plan designs. It is recommended that the KelseyCare ACO also be offered to employees with a plan design similar to the Plus PPO plan. Humana’s Medicare Advantage Prescription Drug (MAPD) plan was approved by Commissioners Court on June 25, 2024 and will be offered to retirees and their spouses who are Medicare eligible.
To align with other organizations and compliment Harris County as a family-friendly employer, it is recommended that the benefits premium structure be modified by changing the “self + child” tier to “self + child(ren)”. The “self + 2 or more” tier would change to “self + family”.
Three options are provided for employee and retiree premium rates for medical, dental, and vision for 2025:
Option 1
- No changes to current employee and retiree premiums for the Base and Plus PPO plans
- KelseyCare ACO premiums equivalent to Base PPO plan premiums
- MAPD plan premiums - no cost for the retiree and full MAPD premium for eligible spouses
Option 2
- Same as Option 1 but increase Plus PPO plan premiums 6% for employees and retirees to account for higher claims experience of this plan.
Option 3
- Same as Option 2 but increase the monthly Base PPO plan premiums $25 for Medicare eligible retirees for all tiers to assist with increasing enrollment into the MAPD plan.
To align premiums to actual medical claims costs for the Plus PPO plan and to assist with increasing enrollment into the MAPD plan, it is recommended Commissioners Court adopt Option 3. Supplemental information regarding health and related benefits and premiums is attached.
Expected Impact:
A number of factors point towards a substantial increase in medical costs. The County’s benefits consultant, Segal, is expecting the County’s medical plan costs to increase 7.6% in 2025 assuming no plan changes. Implementation of the KelseyCare ACO plan will assist in containing medical costs with the amount of savings being determined by member enrollment into the plan. If 10% of active employees enroll into the KelseyCare ACO, annual medical costs are projected to decrease $3.9M if Option 3 is adopted by Commissioners Court.
Adjusting the Plus PPO plan premiums 6% will increase revenue an estimated $2.2M. This will impact approximately 8,487 employees and 2,215 retirees increasing their premiums between $4.72 and $51.98 per month depending on the tier (self only, self plus spouse, etc.). The average increase will be $17.93 per month. This change should lower the claims loss ratio (claims/premiums), which is currently 121%.
Increasing the monthly Base PPO plan premiums $25 for Medicare eligible retirees will impact 3,763 retirees and will increase revenue approximately $1M. This change should assist with enrollment into the MAPD plan since there are approximately 2,777 Medicare retirees who pay $0 in monthly premiums because they are “self only”.
Changing the “self + child” tier to “self + child(ren)” will impact approximately 850 employees and retirees saving them between $2,205 and $2,835 annually.
Alternative Options:
Commissioners Court could choose to not implement the KelseyCare ACO or increase employee and retiree premiums in 2025 but diminishing reserves in the Health Insurance Fund would have to absorb substantial expected increases in medical costs. The flat rate charged to department budgets could also be increased but other County initiatives would be impacted.
Alignment with Goal(s):
_ Justice and Safety
_ Economic Opportunity
_ Housing
_ Public Health
_ Transportation
_ Flooding
_ Environment
X Governance and Customer Service
Prior Court Action (if any):
|
Date |
Agenda Item # |
Action Taken |
|
|
|
|
Location:
Address (if applicable): N/A
Precinct(s): Countywide
|
Fiscal and Personnel Summary |
|
Service Name |
Benefits & Wellness |
|
|
|
Current Fiscal Year Cost |
Annual Fiscal Cost |
|
|
Labor |
Non-Labor |
Total |
Recurring Expenses |
|
Funding Sources |
|
|
Existing Budget |
|
|
|
|
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Total Current Budget |
$ |
$ |
$ |
$ |
|
Additional Budget Request (Requires Fiscal Review Request Form) |
|
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Total Additional Budget Request |
$ |
$ |
$ |
$ |
|
Total Funding Request |
$ |
$ |
$ |
$ |
|
Personnel (Fill out section only if requesting new PCNs) |
|
|
Current Position Count for Service |
- |
- |
- |
- |
|
Additional Positions Request |
- |
- |
- |
- |
|
Total Personnel |
- |
- |
- |
- |
Anticipated Court Date: August 6, 2024
Anticipated Implementation Date (if different from Court date): January 1, 2025
Emergency/Disaster Recovery Note: Not an emergency, disaster, or COVID-19 related item
Contact(s) name, title, department: Shain Carrizal, Executive Director, Human Resources & Risk Management
Attachments (if applicable): Group Health and Related Benefits 2025