HomeMy WebLinkAboutResolutions - 2003.05.08 - 27255MISCELLANEOUS RESOLUTION # 03114
BY: PERSONNEL COMMITTEE — THOMAS F. MIDDLETON, CHAIRPERSON
IN RE: PERSONNEL DEPARTMENT - MODIFICATIONS TO EMPLOYEE AND RETIREE
MEDICAL PLANS
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS a flexible benefits plan was initiated in 1994 which gave employees a choice
between a number of benefits options; and
WHEREAS the price tags and credits that are a part of the plan have not been modified since that
time except for new hires in 1997; and
WHEREAS over the past several years the cost of medical care has been increasing at an
alarming rate nationwide and Oakland County has experienced a compound annual growth rate of 12%;
and
WHEREAS there was a 33% increase in cost for medical care for active employees in the last
year alone; and
WHEREAS Oakland County has absorbed the escalating health care cost increases in the past but
the County's ability to continue to absorb the escalating costs is no longer feasible.
NOW THEREFORE BE IT RESOLVED the Oakland County Board of Commissioners
authorizes that the flexible benefits plan be modified to reflect the changes in employee contributions as
shown on the attached April 30, 2003, proposal, effective with the pay check date of August 15, 2003.
BE IT FURTHER RESOLVED that the employee contributions for employees hired on or after
May 31, 2003, be as shown on the attached April 30, 2003 proposal.
BE IT FURTHER RESOLVED that these contribution amounts also be applied to part-time
eligible employees who remain on benefit plan "B."
BE IT FURTHER RESOLVED that the prescription co-payments be modified as shown on the
attached April 30, 2003, proposal for all medical plans for active employees effective August 1, 2003, and
for all retirees effective January 1, 2004.
BE IT FURTHER RESOLVED that medical plans offered and the contributions begin for
employees hired or rehired on or after May 31, 2003, are as shown on the attached April 30, 2003,
proposal.
BE IT FURTHER RESOLVED that these changes apply to all non-represented employees and to
represented employees whose bargaining agreement provides for these changes.
Chairperson, on behalf of the Personnel Committee, I move the adoption of the foregoing
resolution.
(ilPERSONNEL COMMITTE,u
7/21
Personnel Committee Vote:
Motion carried on a roll call vote
Middleton, Kowall, Douglas, Jamian, Long, Rogers, Coleman, Suarez — yes
Hatchett - no
MEDICAL PLAN PROPOSAL
April 30, 2003
• Modify employee medical coverage as discussed below effective August 1, 2003 or
as soon as practical thereafter during FY 2003:
A Implement the employee bi-weekly payroll contribution as shown on the attached
proposal.
A. Implement at the same time a modification to the current $5 prescription drug co-
payment for all current employees to the following: $5 generic; $10 brand name;
$25 non-formulary brand name.
• New hires on or after May 31, 2003 will be limited to a choice of only the Blue
Preferred Plan, Blue Choice Point of Service Plan or the Comprehensive Major
Medical Plan.
• Modify retiree medical coverage as discussed below effective January 1, 2004:
> Implement a modification to the current $5 and $3 (and the few at $2) prescription
drug co-payment for all current retirees to the following: $5 generic; $10 brand
name; $15 non-formulary brand name ($5/$10/$20 for HAP members).
\\OAKNWOZVOLaDEPT\F'ERSONEL\CLASSWERSCOMMTers03\BenefitsChange_sumsevised.doc
CURRENT >
PROPOSED >
CURRENT >
PROPOSED >
FLEX ANNUAL/BI-WEEKLYAMOUNTS
Regular type= Current Rates
BOLD = PROPOSAL AS REVISED APRIL 30
1 PERSON
HIRED PRIOR TO 1-1-97
2 PERSON FAMILY
TRADITIONAL
PPO
POS
CURRENT > 0 0 0
PROPOSED > 13 26 30 COST
338 676 780
3.85 7.69 11.54 EARNINGS
100 200 300
8 18 24 COST
208 468 624
5.77 11.54 17.31 EARNINGS
150 300 450
5 12 16 COST
130 312 416
CMM CURRENT > 7.69 15.38 23.08 EARNINGS
200 400 600
PROPOSED > 2 5 8 COST
52 130 208
CURRENT > 0 0 0
PROPOSED > 13 26 30 COST
338 676 780
HAP
NO COVERAGE
NO COVG SPOUSE
IS COUNTY EMPLOYEE
17.31 34.62 46.15 EARNINGS
450 900 1200
11.54 11.54 11.54 EARNINGS
300 300 300
Page 1 of 3 Revised: 4/8103
Worksheet: Employee Costs Printed: 04/30/2003 8:34 AM File: Revised Medical Rates - Apr 30.xls
PPO
POS
CMM
HAP
FLEX ANNUAL/BI-WEEKLY AMOUNTS
Regular type= Current Rates
BOLD = PROPOSAL AS REVISED APRIL 30
1 PERSON 2 PERSON FAMILY
HIRED ON OR AFTER 1-1-97 AND PRIOR TO 5-31-03
CURRENT > 5 10 15 COST
130 260 390
PROPOSED > 8 18 24 COST
208 468 624
CURRENT > 5 10 15 COST
130 260 390
PROPOSED > 5 12 16 COST
130 312 416
CURRENT > 0 0 0
PROPOSED > 2 5 8 COST
52 130 208
CURRENT > 5 10 15 COST
130 260 390
PROPOSED > 13 26 30 COST
338 676 780
NO COVERAGE 200 400 600 EARNINGS
7.69 15.38 23.08
NO COVG SPOUSE 100 100 100 EARNINGS
IS COUNTY EMPLOYEE 3.85 3.85 3.85
Page 2 of 3 Revised: 4/8/03
Worksheet: Employee Costs Printed: 04/30/2003 8:34 AM File: Revised Medical Rates - Apr 30.xls
PPO
POS
CMM
NO COVERAGE 200 400
7.69 15.38
600 EARNINGS
23.08
• FLEX ANNUALIBI-WEEKLY AMOUNTS
Regular type= Current Rates
BOLD = PROPOSAL AS REVISED APRIL 30
1 PERSON 2 PERSON FAMILY
HIRED ON OR AFTER 5-31-03
CURRENT > 5 10 15 COST
130 260 390
PROPOSED > 32 65 75 COST
832 1690 1950
CURRENT > 5 10 15 COST
130 260 390
PROPOSED > 26 52 60 COST
676 1352 1560
CURRENT > 0 0 0
PROPOSED > 2 5 8 COST
52 130 208
NO COVG SPOUSE
IS COUNTY EMPLOYEE
100 100 100 EARNINGS
3.85 3.85 3.85
Page 3 of 3 Revised: 4/8/03
Worksheet: Employee Costs Printed: 04/30/2003 8:34 AM File: Revised Medical Rates - Apr 30.xls
FISCAL NOTE (MISC. #03114) May 8, 2003
BY: FINANCE COMMITTEE - CHUCK MOSS, CHAIRPERSON
IN RE: MODIFICATIONS TO EMPLOYEES AND RETIREE MEDICAL PLANS
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XII-C of this Board, the Finance Committee has
reviewed the above referenced resolution and finds:
1) Over the past two years, fringe benefit costs have sharply
increased, particularly health care costs, which have risen
33% just in the last fiscal year. Combined with reduced
revenue as a result of decreased investment income and a
decreased employee base, the result has been a reduction in
the Fringe Benefit fund balance from $20.6 million at the
end FY 2001 to a projected deficit of $(12.3 million) at
the end of FY 2004.
2) In order to prevent a deficit in the Fringe Benefit fund
balance, the County average fringe benefit rate would have
to be increased to 50.36% of salary for FY 2004 if no
changes were made to the existing program.
3) Implementation of the proposed changes would bring partial
relief to the projected deficit in the Fringe Benefit fund.
Changes are anticipated to be $1.5 million as a result of
contributions from active employees to offset health care
costs if all active employees were included. An additional
$.5 million will come from employees hired after May 31,
2003. The level of actual savings will depend on
selections made by current employees and the number of new
hires. Further, an additional $1.7 million of savings in
prescription savings is anticipated in the Fringe Benefit
fund for both active employees and retirees as a result of
the changes in the prescription co-pay. The combined
effect would help to reduce the projected County average
fringe benefit rate to 49.29% of salary.
4) The FY 2004 and FY 2005 Executive Recommended Budget will
reflect the appropriate Fringe Benefit rate.
FINANCE COMMITTEE
FINANCE COMMITTEE
Motion carried on a roll call vote with Moffitt voting no.
kyr) Dato rSOn, L Pa
\V' r :
Resolution #03114 May 8, 2003
Moved by Middleton supported by Douglas the resolution be adotped.
Discussion followed.
Moved by Hatchett supported by Coleman the resolution be postponed until the June 12, 2003 Board
meeting.
Vote on postponement:
AYES: Gregory, Hatchett, Suarez, Zack, Coleman, Coulter. (6)
NAYS: Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moss, Palmer, Patterson,
Potter, Rogers, Scott, Webster, Bullard, Crawford, Douglas. (17)
A sufficient majority not having voted therefore, the motion to postpone the resolution failed.
Discussion followed.
Vote on resolution:
AYES: Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moss, Patterson, Potter,
Rogers, Scott, Webster, Bullard, Crawford, Douglas. (16)
NAYS: Hatchett, Palmer, Suarez, Zack, Coleman, Coulter, Gregory. (7)
A sufficient majority having voted therefore, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true
and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on May 8, 2003,
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the_seal of he County of Oakland at
Pontiac, Michigan this 8th day of May, 2003.
G. William Caddell, County Clerk