SUBJECT:
Title
Request Approval of Group Healthcare Funding Increase (Budget Impact - Neutral; annual estimated expenditure of $28,148,162 as included in the proposed FY 21/22 budget)
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INITIATOR: |
DEPARTMENT: |
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Amanda Tart, Director |
Human Resources |
DESCRIPTION/BACKGROUND:
Marion County offers group health insurance to all full time employees and dependents of the Board of County Commissioners, Clerk of Court, Sheriff, Property Appraiser, Tax Collector and Supervisor of Elections. The County became partially self-insured effective October 1, 2020 with Florida Blue providing claims administration services and reinsurance.
This year’s actuarial funding recommendation with claims through February called for an 8.7% increase which included funding $4.5 million of required reserves over the next two (2) years. The County currently has $1 million in reserves, for a total required of $5.5 million. Total claims paid from March 2020 through February 2021 were $25.6 million. Out of this total, the County spent $2.4 million for COVID specific claims. On April 20, 2021, the Board approved using CARES Act dollars to put $2.4 million in reserves for the COVID specific claims which reduced the necessary funding increase to 6.4%.
With the implementation of self-insurance and in an effort to assist in mitigating long-term healthcare costs, the County entered a three (3) year Agreement with the Heart of Florida to provide an Employee Medical Center. Employees and their dependents can get services at the Medical Center at a reduced or zero cost. However, due to the COVID-19 national pandemic over the past year, member usage at the Medical Center has been limited. Heart of Florida has agreed to hold the second year cost at the current cost of $510,000 and revise the third year cost to the original Year 2 cost of $648,000. An amendment to the Agreement is presented in Procurement’s section of this Agenda.
Also, during the transition to self-insurance, the importance of employees being aware of and sharing in the County’s cost increases was discussed. Each Constitutional Officer has reviewed this year’s proposed health insurance cost and is in agreement to CARES Act funding the $2.4 million reserves for COVID specific claims and also for employees sharing in the County’s overall cost increase.
The total proposed health insurance cost includes the Employee Medical Center, Employee Assistance Program, and Wellness incentives for a total of $35.6 million, with employees and retirees having a 6.4% increase to their current contribution, for a total remaining cost to the County of $28.1 million.
BUDGET/IMPACT:
Neutral; the total estimated group healthcare cost is $35,679,953, with employee and retiree contributions of $7,531,791, leaving a total estimated impact of $28,148,162 to be included in the proposed FY 21/22 budget.
RECOMMENDED ACTION:
Recommended action
Motion to approve the 6.4% funding increase including cost for Employee Medical Center, Employee Assistance Program and Wellness Incentives, utilizing $2.4 million of CARES Act/COVID dollars for reserves, and employees sharing the 6.4% increase, with the County’s cost estimated at $28,148,162 to be effective October 1, 2021.
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