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HSS approves Delta Dental stabilization reserve and 2016 renewals; retiree rates reduced
Summary
The board approved a claim‑stabilization amortization for Delta Dental's self‑funded PPO and endorsed Aon Hewitt—s renewal recommendations, including a 2.9% reduction in self‑funded PPO rates and reduced retiree rates with preservation of a retiree diagnostic & preventive waiver.
The Health Service System accepted Aon Hewitt—s recommendation to establish a Delta Dental stabilization reserve for the self‑insured PPO and approved a package of 2016 dental plan renewals.
Aon Hewitt reported a self‑funded PPO excess cost of approximately $3,860,572 and recommended amortizing that amount over three years per the board—s claim stabilization policy. The resulting amortization for 2016 is $1,286,857; the board approved an across‑the‑board reduction in self‑funded PPO rates reflecting that amortization.
On the broader dental portfolio, staff presented six recommendations covering DHMO and PPO plan renewals, retiree plan design and multi‑year guarantees for certain products. The board accepted the package by voice vote. Raymond Lee, Delta Dental account manager, emphasized that the retiree diagnostic & preventive (D&P) maximum waiver — covering two annual cleanings and two exams every 36 months — remains in place and is included in the recommendation.
Public comment included praise from SEIU retiree representatives for lower retiree rates, and questions about how SEIU contribution formulas interact with the headline percentage changes. Executive staff clarified that SEIU contribution levels differ (employer picks up a higher percentage) and that the headline 11.5% figure for other plans does not apply identically to those members.
Next steps: staff will complete implementation and communicate member‑level impacts to union representatives and retirees. Actuary and vendor materials will be posted and shared with member groups.
