Committee endorses health plan consolidations, modest employer rate rise amid shrinking trust fund

The Budget & Finance Committee reviewed changes to the Health Service System's benefit package and contribution rates and forwarded the ordinance and resolution with recommendation.

Bart Duncan, executive director of the Health Service System, said the board-approved package consolidates non-Kaiser HMO benefits into a single plan and discontinues one plan. He said the consolidation moves roughly 8,800 members to a new carrier and that Kaiser proposed a relatively modest premium increase that allowed the Kaiser plan design to remain unchanged this year. For Blue Shield HMO, Duncan said office visit copays will increase from $10 to $15 and some drug tier copays will rise modestly.

Controller's office staff provided fiscal context: Monique Smuda said rates across carriers rose between about 7% and 13.8%, but a combination of fewer employees enrolling in dependents and other factors results in an estimated employer cost increase of about "4.5%" for actives. Budget analyst Harvey Rose noted the trust fund has subsidized rates in the past and that the trust fund's balance is lower than in prior years; contingency margin policies tied to risk-based capital were discussed as buffers against adverse claims experience.

Supervisors asked about COBRA impacts for laid-off employees; Duncan said stimulus provisions may alter COBRA subsidies but legal and administrative details remain under review. Public comment included support and concern about service continuity.

The committee recommended approval of both the ordinance and the resolution and will forward them to the full Board with that recommendation.