TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: Annual Health Care Renewal Rates
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider authorizing the General Manager to enter into contracts and approve renewal rates for Kaiser Permanente, Health Net, Vision Service Plan, MetLife Dental and Standard Life Insurance.
Body
BUDGETARY/FISCAL IMPACT:
The execution of the health care renewals is anticipated to cost $56,824,986.00 which is included in the proposed FY 2019-2020 operating budget and is a $3,999,258.00 million increase over the previous year's cost.
BACKGROUND/RATIONALE:
Kaiser Permanente
Kaiser Permanente is offering a 11.38% increase in active Union employee rates and a 11.40% increase in Management rates for FY 2019-2020. An increase in outpatient and inpatient services are the main drivers for the rate increase. New and costly procedures linked to chronic conditions play a significant role in the utilization for AC Transit. Kaiser Permanente continues to support the District's Wellness program with workforce health consultation and wellness education.
Health Net
Health Net is offering the District a rate pass for FY 2019-2020. Health Net's initial proposed rate increase for active employee was 2.28%, however, Alliant, the District's Employee Benefits Broker, negotiated with Health Net to maintain current rates. Health Net premiums are provided in Attachment 2.
MetLife Dental
The District is currently self-funded for the MetLife Preferred Provider Organization (PPO) Plan. There are two renewal components for a self-funded dental plan: administrative costs, which are fixed and premium funding rates which are set each year depending on average utilization of dental services. The administrative monthly fee will remain the same at $5.66 per employee and is guaranteed until July 1, 2020. Based on Alliant's Underwriting Department analysis, Alliant recommends that the District maintain current funding ...
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