Aon Hewitt recommends 4% renewal for Blue Shield; board endorses buy‑down method but delays final rate approval

The HSS board heard a full actuarial review from Aon Hewitt, which recommended a 4% renewal for the Blue Shield flex‑funded HMO for plan year 2015 and explained the drivers behind the number, including claims trends, increases in capitations and drug costs, and applicable taxes.

Actuary Anil Kosher said the 4% reflects anticipated paid and incurred claims and noted the planned $1,000,000 stabilization allocation. Kosher also outlined a 'buy‑down' option that would apply trust funds to reduce the top‑line premium so employer and employee contributions rise less sharply than the base rate. Commissioners pressed staff on whether buy‑downs differ materially from prior 'subsidy' practices and on charter and retiree baseline rules (the 10‑county survey) that constrain how retiree rates are calculated.

Because collective‑bargaining outcomes can change member migration between plans and materially affect rates, the board conceptually endorsed the buy‑down methodology and directed staff and the actuary to finalize rate cards after labor negotiations and MOU submissions are clearer. Director Catherine Dodd said staff will need a special meeting in May or June to finalize rate illustrations and to transmit final materials to the Board of Supervisors on a tight schedule.

Quote: "So that's what the basis is on page 1 of this document," said Anil Kosher, summarizing the reconciliation that supported the recommended allocation and the recommended approach.

Next steps: Staff will hold a special meeting and present final rate cards in June, after which the board will vote on any rate changes for 2015.