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Home My WebLink AboutResolutions - 2024.10.10 - 41507 AGENDA ITEM: Exempting Oakland County Government From Public Act 152 of 2011 for Calendar Year 2025 DEPARTMENT: Human Resources MEETING: Board of Commissioners DATE: Thursday, October 10, 2024 7:10 PM - Click to View Agenda ITEM SUMMARY SHEET COMMITTEE REPORT TO BOARD Resolution #2024-4467 Motion to exempt Oakland County from the requirements of PA 152 for calendar year 2025, pursuant to the authority granted a county under Section 8 of Public Act 152 of 2011. ITEM CATEGORY SPONSORED BY Resolution Brendan Johnson INTRODUCTION AND BACKGROUND State of Michigan Public Act 152 of 2011, the "Publicly Funded Health Insurance Contribution Act," was enacted by the State of Michigan and given immediate effect on September 27, 2011. The Act sets forth various options that public employers may follow when providing healthcare benefits to their employees. Public Act 152 of 2011 requires public employers to observe a state-mandated "hard cap" on the cost of employee medical and prescription benefits, or limit the employer cost share to 80%, with an opt-out provision for public employers. Oakland County has exercised this opt-out right every year since PA 152 went into effect beginning with 2012. The Human Resources Department is again proposing that the Oakland County Board of Commissioners continue the opt-out for 2025. POLICY ANALYSIS Public Act 152 of 2011 created the Publicly Funded Health Insurance Contribution Act which requires that all public employees pay a certain percentage of the overall cost of health insurance. By April 1 of each year, the dollar amounts for the limits ("hard cap") are adjusted using the medical care component of the U.S. consumer price index for the most recent 12-month period for which data are available. The 2025 PA 153 hard-cap amounts increased by 0.2% over 2024 hard cap levels. They are currently set at $7,718.26 for single coverage; $16,141.28 for two-person coverage and $21,049.85 for family coverage. Based on employee enrollment figures (see attached memo), the total Oakland County contribution is $69,401,613, which is 25.1% above the hard cap of $55,474,313. Employer cost share ranges from 83.5% to 97.9%, which is above the PA 152 limit of 80%. • Oakland County has exercised its legal right to opt out every year since 2012 • The Human Resources Department is recommending that Oakland County again formally exercise its legal right to exempt itself from the Act for Calendar Year 2025 o Approval of this exemption preserves flexibility with compensation packages to meet county needs and objectives o Approval of this exemption provides cost-savings for county employees in their health benefits by allowing the county to offer plans with lower employee contributions • Pursuant to Section 8 of the Act, a 2/3 vote is required to exempt Oakland County from Public Act 152 BUDGET AMENDMENT REQUIRED: No Committee members can contact Barbara Winter, Policy and Fiscal Analysis Supervisor at 248.821.3065 or winterb@oakgov.com or the department contact persons listed for additional information. CONTACT Heather Mason, Manager Human Resources ITEM REVIEW TRACKING Aaron Snover, Board of Commissioners Created/Initiated - 10/10/2024 AGENDA DEADLINE: 10/20/2024 7:10 PM ATTACHMENTS 1. BOC Memo PA 152 2025 2. 2025 MI Publicly Funded Health Contribution Act_Exhibit_091924 COMMITTEE TRACKING 2024-10-01 Legislative Affairs & Government Operations - Recommend to Board 2024-10-10 Full Board - Adopt Motioned by: Commissioner Penny Luebs Seconded by: Commissioner Robert Hoffman Yes: David Woodward, Michael Spisz, Michael Gingell, Penny Luebs, Karen Joliat, Kristen Nelson, Christine Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson, Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman, Ann Erickson Gault (17) No: None (0) Abstain: None (0) Absent: William Miller III, Linnie Taylor (2) Passed 2100 Pontiac Lake Road | County Executive Building 41W | Waterford, MI 48328 | OakGov.com Sunil Asija, Director Human Resources TO: David T. Woodward, Chairman of the Board of Commissioners Brendan Johnson, Chairperson of the Legislative Affairs and Government Operations Committee FROM: Sunil Asija, Director of Human Resources Heather Van Poucker, Deputy Director of Human Resources RE: State of Michigan Public Act 152 for 2025 DATE: October 1, 2024 Attached for your consideration is a resolution to opt out of Public Act 152 (PA 152) for calendar year 2025 along with supporting detail and documentation. PA 152 requires public employers to observe a state-mandated “hard cap” on the cost of employee medical & prescription benefits or limit the employer cost share to 80%. PA 152 also provides an opt- out provision for public employers. Oakland County has exercised its legal right to exempt itself from this act each year since the act went into effect January 1, 2012. The 2025 PA 152 hard-cap amounts increased by 0.2% over 2024 hard cap levels. The table below shows how Oakland County contributions compare to the hard-caps. Coverage 2025 State Hard-Cap 2024 County Contributions PPO1 PPO2 HMO HDHP (includes County Contribution to HSA) Traditional Single $7,718.26 $8,773.50 $8,043.75 $8,860.16 $8,099.47 $8,159.64 Two-Person $16,141.28 $19,852.75 $18,684.62 $21,716.64 $17,859.91 $19,021.32 Family $21,049.85 $27,485.15 $25,811.22 $27,178.36 $23,477.89 $26,708.63 Modeling Oakland County enrollment figures and illustrative rates, total employer contribution is $69,401,613, which is 25.1% above the hard cap of $55,474,313. In 2024 Oakland County was 18.9% above the hard-cap. Employer cost share ranges from 83.5% to 97.9% above the PA 152 limit of 80%. OAKLAND COUNTY EXECUTIVE DAVID COULTER PPO1 Medical & Prescription Drug Single 2-Person Family SUM 2025 County Annual Contribution $8,773.50 $19,852.75 $27,485.15 n/a Employee Enrollment (as of February 2024)693 591 1,324 2608 County Total Annual Contribution by Enrollment $6,080,034 $11,732,974 $36,390,334 $54,203,342 % MI Hard Cap Allowance by Enrollment $5,348,754 $9,539,496 $27,870,001 $42,758,252 Difference Difference $731,279 $2,193,478 $8,520,332 $11,445,090 26.8% PPO2 Medical & Prescription Drug Single 2-Person Family SUM 2025 County Annual Contribution $8,043.75 $18,684.62 $25,811.22 n/a Employee Enrollment (as of February 2024)176 124 243 543 County Total Annual Contribution by Enrollment $1,415,701 $2,316,892 $6,272,126 $10,004,719 % MI Hard Cap Allowance by Enrollment $1,358,414 $2,001,519 $5,115,114 $8,475,046 Difference Difference $57,287 $315,374 $1,157,013 $1,529,673 18.0% Traditional Medical & Prescription Drug Single 2-Person Family SUM 2025 County Annual Contribution $8,159.64 $19,021.32 $26,708.63 n/a Employee Enrollment (as of February 2024)19 11 8 38 County Total Annual Contribution by Enrollment $155,033 $209,235 $213,669 $577,937 % MI Hard Cap Allowance by Enrollment $146,647 $177,554 $168,399 $492,600 Difference Difference $8,386 $31,680 $45,270 $85,337 17.3% BCN HMO Medical & Prescription Drug Single 2-Person Family SUM 2025 County Annual Contribution $8,860.16 $21,716.64 $27,178.36 n/a Employee Enrollment (as of February 2024)94 39 75 208 County Total Annual Contribution by Enrollment $832,855 $846,949 $2,038,377 $3,718,181 % MI Hard Cap Allowance by Enrollment $725,516 $629,510 $1,578,739 $2,933,765 Difference Difference $107,339 $217,439 $459,638 $784,416 26.7% HDHP Medical & Prescription Drug Single 2-Person Family SUM 2025 County Annual Contribution $8,099.47 $17,859.91 $23,477.89 n/a Employee Enrollment (as of February 2024)20 7 26 53 County Total Annual Contribution by Enrollment $161,989 $125,019 $610,425 $897,434 % MI Hard Cap Allowance by Enrollment $154,365 $112,989 $547,296 $814,650 Difference Difference $7,624 $12,030 $63,129 $82,784 10.2% Aggregate Medical & Prescription Drug Single 2-Person Family Aggregate SUM County Total Annual Contribution by Enrollment $8,645,612 $15,231,070 $45,524,931 $69,401,613 % MI Hard Cap Allowance by Enrollment $7,733,697 $12,461,068 $35,279,549 $55,474,313 Difference Difference $911,915 $2,770,002 $10,245,383 $13,927,299 25.1% In aggregate, Oakland County contributions are 25.1% above the hard cap limit. - $16,141.28 times the # of employees with two-person coverage - $21,049.85 times the # of employees with family coverage 2025 MI Publicly Funded Health Contribution Act (PA 152) For the period 1/1/2025 - 12/31/2025 For medical benefit plan coverage year beginning on or after January 1, 2025, sets a limit on the amount that a public employer may contribute to a medical plan to the SUM of: - $7,718.26 times the # of employees with single coverage Source: www.michigan.gov/treasury/local/share/evip/hica/publicly-funded-health-insurance-contribution-act Disclaimers and Disclosures: This is a general outline of covered benefits and does not include all the benefits, limitations, and exclusions of the benef it programs. If there are any discrepancies between the illustrations contained herein and the benefit proposals or official benefit plan documents, the benefit proposals or official benefit plan documents prevail. See the official benefit plan documents for a full list of excl usions. Actual monthly and annual premium amounts may vary due to fluctuations in the enrollment counts and/or ages of covered persons over the previous and next year. This analysis is for illustrative purposes only, and is not a guarantee of future expenses. Th ere are many variables that can affect future health care costs including utilization patterns, catastrophic claims, changes in plan design, health care trend increases an d more. Retention and Pooling Charges are based on most recent carrier renewal and ar e subject to change. HIPAA Privacy Rule Disclosure: This report may contain Protected Health Information (PHI). The Privacy Rule requires that we limit the disclosure of PHI to your plan administration “workforce.” Marsh & McLennan Agency relies on your discretion to ensure this information is only being shared with your “workforce” and will be safeguarded in the manner required by The Rule.