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Agenda Item
ASR
Control 19-000929 |
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MEETING DATE: |
09/10/19 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Renee Catanzariti (714) 834-2564 |
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Barbara Gondo (714) 834-7072 |
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Subject: 2020 Employee Self-Funded
PPO Affordable Care Act Health Plan Rates
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Consent Calendar |
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3 Votes Board Majority |
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Budgeted: Yes |
Current Year Cost:
$61 |
Annual Cost:
FY 2020-21 $61 |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 7/16/2019
#22, 7/17/2018 #30, 8/08/2017 #21, 7/26/2016 #42 |
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RECOMMENDED ACTION(S):
Adopt the updated 2020 Employee PPO Affordable Care Act Health Plan Rate for Employee Only for the self-funded Sharewell Choice PPO Plan.
SUMMARY:
Adoption of the employee PPO health plan 2020 Employee only rate for the self-funded Sharewell choice PPO Plans will allow the County to continue to provide affordable health benefits for all eligible County employees as required under the Affordable Care Act.
BACKGROUND INFORMATION:
Affordable Care Act (ACA) – County Provided Minimum Value Health Care Coverage
Under the ACA, Internal Revenue Code §4980H (see Attachment A), an employer with at least 50 full-time employees must offer health care coverage that meets certain minimum-value and affordability standards to at least 95 percent of full-time employees as defined by the ACA. While most employees qualify for County-provided coverage through existing contracts with labor organizations, there are some employees who do not qualify for these negotiated County benefits but should be offered minimum value and affordable coverage under the ACA.
In 2019, to meet the ACA’s minimum-value and affordability standard, Sharewell Choice was offered to this group of employees with a rate of $96 monthly for employee only coverage. Dependent coverage was offered with 100 percent of the premium paid by the employee. A total of 16 eligible employees elected this coverage.
On July 16, 2019, the Board of Supervisors (Board) approved the 2020 Sharewell ACA Minimum Value Coverage rates. At the time Human Resource Services (HRS) presented the rates to the Board, the employee and employer contribution amounts assumed that the affordability standard would increase as in prior years.
For 2020, the Internal Revenue Service (IRS) changed the methodology of calculating the annual affordability standard. The IRS has released the 2020 affordability safe harbor and ACA benchmark for determining affordability after approval of the 2020 health plan rates, which has resulted in a decline in the affordability standard. In 2020, ACA employer-sponsored minimum essential coverage will be considered affordable if the required employee contribution for employee only coverage does not exceed 9.78 percent of the employee’s household income. This is a reduction from 9.86 percent in 2019. Under ACA, the County uses the federal poverty line in lieu of the household income for its safe harbor affordability calculation.
In order to meet the ACA affordability standard, the 2020 employee contribution for the employee only rate cannot exceed $101.79 monthly. The previously Board approved rate was $102.64. Therefore, HRS requests that the Board approve the following updated Sharewell rate to meet the ACA affordability standard. The monthly premium and other Sharewell rates will remain unchanged.
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HEALTH PLAN AND ENROLLMENT STATUS |
2020 MONTHLY RATE |
MONTHLY COUNTY COST |
EMPLOYEE BIWEEKLY DEDUCTION |
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SHAREWELL CHOICE |
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EMPLOYEE ONLY |
$297.73 |
$195.94 |
$46.98 |
Prior Board Actions
On July 16, 2019, the Board approved the 2020 Employee Health Plan Rate Tables for Sharewell PPO Health Plans, including the ACA rates.
On July 17, 2018, the Board approved the 2019 Employee Health Plan Rate Tables for the Wellwise and Sharewell PPO Health Plans.
On August 8, 2017, the Board approved the 2018 Employee Health Plan Rate Tables for the Wellwise and Sharewell PPO Health Plans.
On July 26, 2016, the Board approved the 2017 Employee Health Plan Rate Tables for the Wellwise and Sharewell PPO Health Plans.
FINANCIAL IMPACT:
The estimated total FY 2019-20 County cost for this action is $60.48 (January 1, 2020 – June 30, 2020). The estimated annual 2020 cost is $120.96.
Appropriations are included in Fund 292 for FY 2019-20 Budget and will be included in the budgeting process for future years.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Internal Revenue Code Section 4980H