Manatee County Government Administrative Center Commission Chambers, First Floor 9:00 a.m. - September 22, 2015
September 22, 2015 - Regular Meeting
Agenda Item #25

2016 Medical and Dental Premium Rates - Active Employees and Retirees


Contact and/or Presenter Information
Kim Stroud, Division Manager-Employee Health Benefits

Action Requested
Approve the 2016 Medical and Dental premium rates

Enabling/Regulating Authority


Background Discussion

Annually, in conjunction with the new budget, the County Commission establishes health benefit and dental rates for employees.  The medical plan continues to perform significantly better than other Florida and National employers without reducing benefits or shifting costs to employees.  Again as a result of the continued effort on the part of our employees to work towards better health and the overall performance of the plan, the Administration is recommending the following changes to the premiums for 2016:

Four-Tier Premium Structure

Currently employees have two tiers to choose from for medical premiums:  Employee Only and Employee plus Family.  Manatee County has an opportunity to better align our revenues with our costs by moving from a two-tier structure to a four-tier structure:  Employee Only, Employee + Spouse; Employee+ Children, and Family coverage.  Commonly, children utilize less claim dollars than employees or spouses.  By adding an Employee + Children and Spouse tier, we are more accurately structuring the cost of the plan to the expenses as well as allowing our employees more variety in their premium elections. 

 Additionally, the move from two tiers to four tiers allows our employees an opportunity to save on their premium dollars by electing an employee + children or employee+ spouse tier as opposed to the family tier.   This is an important feature as it is critical to evaluate the cost of insurance as well as the plan design into an employees total compensation package.  These reductions in premiums along with value of the actual benefit design help to better align our employee's total compensation package. 

While the plan has performed well over the last several years, our population is aging and it is likely that we will begin to see a trend increase in the coming years.  Aligning the eligibility tiers with the costs now, while costs are contained, will minimize the impact of future premium increases for our employees. 

Flexible Spending Account (FSA) is a pre-tax benefit for employees for healthcare reimbursement account and a dependent care reimbursement account.  Aetna passed along a 3% increase in those rates to the County resulting in a $.15 increase in the monthly premium for FSA. 

Exhibit A outlines the recommendations of the medical and dental premiums for 2016.  

Prescription Drug Benefit

The Prescription drug costs for our self-funded plan as well as most others across the Country have been increasing at a significant pace.  Most of this is due to increase development and usage of a specific classification of medications (Specialty Medications) that are extremely expensive, but effective for many people with conditions such as cancer, arthritis, Hepatitis C, etc.  Additionally, the cost of generic drugs is increasing significantly unlike in the past when generic medications were an effective low cost alternative to Brand name drugs.

It is recommended for 2016 that the Board approve a change to the prescription drug benefit by increasing the generic tier of medication by $5 for preferred and non-preferred pharmacies.   This copay increase will assist in controlling some of the cost in the pharmacy plan which supports the opportunity to maintain reasonable premiums and continue the generous benefit of the medical plan. 

Exhibit B outlines the  recommended pharmacy benefit design for 2016. 

Retiree Medical Options

Due to the changes in tiers with the active employees, some of the retiree population will see a benefit with this change as well. As has consistently been done with the retiree population, a slight decrease in the County subsidy is being recommended for the self-funded plan.  The intention behind this is to ensure a solvent plan for our retiree population.  Medicare eligible retirees have two cost effective options for their supplement to Medicare with the group Transamerica product with Part D coverage and the individual options available with One Exchange. The Administration recommends a slight increase in the subsidy for the One Exchange product as an effort to encourage more retirees to consider this cost-effective and individualized option. 

Exhibit C outlines the proposal for the Retiree premiums for 2016. 

County Attorney Review
Other (Requires explanation in field below)

Explanation of Other
EHB consulted with Mr. Eschenfelder on the affects of the increase in the pharmacy copay on the County's Grandfathered status with the Affordable Care Act and he confirmed that a $5 copay increase will allow the County to continue to maintain the grandfathered status. 

Reviewing Attorney

Instructions to Board Records
Please provide Kim Stroud with documentation of Board approval via email:  kim.stroud@mymanatee.org

Cost and Funds Source Account Number and Name

Amount and Frequency of Recurring Costs

Attachment:  Exhibit A - Medical, Dental, Fees.pdf
Attachment:  Exhibit B - Prescriptions.pdf
Attachment:  Exhibit C - Retiree Rates.pdf