To: Board of Supervisors
From: Ann Elliott, Human Resources Director
Report Title: Approve 2027 Rate Renewals for NonPERS Health and Welfare Plans
Recommendation: Recommendation of the County Administrator
RECOMMENDATIONS:
AUTHORIZE the County Administrator, or Designee, to approve rates and the County’s contributions for insurance with the NonPERS Medical, Dental, Vision, Computer Vision Care Program and Life Insurance Plan carriers for the period of January 1, 2027, through December 31, 2027.
FISCAL IMPACT:
Premiums are funded by a combination of charges to County Departments, Special Districts, and employee/retiree/survivor contributions.
For the 2027 plan year, there will be a decrease of 5.01% to the Delta Dental HMO plan. The premiums for existing Delta Dental PPO, VSP Computer Vision Care, Voluntary Vision and the VOYA Life Insurance plans will not increase. The CCHP plan premiums will increase by 86.83% for Plan A, and by 50.64% for Plan B, Health Net SmartCare HMO Plan A and Plan B by 29.60%, Health Net PPO plan by 15.03%, Kaiser Plans A, B and HDHP will increase by 3.17%, and Teamsters Local 856 Trust Kaiser Plan tiers (Employee, Employee +1, Employee +2 or more) by 4%, 2%, and 6% respectively.
Projections of the fiscal impact for 2027 are based on 2026 census data with no adjustment for future migration between plans. The 2027 projected total premium cost for active employees is approximately $243.6 million; the projected total premium cost for 2026 is expected to reach $210.8 million by year’s end. The currently negotiated cost to the County is $227.9 million of that total ($203.9 million in 2026).
BACKGROUND:
Insurance coverage is an important benefit and a valuable recruitment and retention tool. To ensure that high quality insurance is available for eligible Contra Costa County employees and retirees, the County offers group medical, dental, life insurance, voluntary vision insurance, as well as computer vision care coverage, on an annual basis with a number of carriers/providers. The County's existing insurance and coverage plans are for the calendar year and expire December 31, 2026.
To assist the County in negotiating the best possible health care terms for our active and retired employees, the County contracts with a consultant who has expertise in public sector employee benefit plan design and rate structure. All medical insurance plans continue to offer essential medical benefits and coverage compliant with the requirements of the Affordable Care Act.
Beginning January 1, 2027, the County subsidy, for most employees eligible for NonPERS medical plans, will be 80% of the second lowest priced non-deductible HMO plan for all tiers (Employee, Employee +1 and Employee +2 or more). Based on the 2027 proposed rates, Health Net SmartCare Plan B will be used for subsidy calculations.
|
Coverage Type |
HN SmartCare Plan B Premium |
% _ |
County Subsidy |
|
Employee Only |
$1,803.10 |
80% |
$1,442.48 |
|
Employee +1 |
$3,606.20 |
80% |
$2,884.96 |
|
Employee +2/More |
$5,409.30 |
80% |
$4,327.44 |
Based on the County subsidy calculation the employee contribution for the Three-Tier Kaiser A plan will be no cost for all tiers (Employee, Employee +1, Employee +2 or more) for Plan Year 2027.
To ensure uninterrupted coverage for enrolled members (eligible active employees, retired employees and survivors of retired employees), staff request authorization from the Board of Supervisors to renew existing insurance coverage at the rates provided in Attachment 1. The chart reflects the different premium structures-either Two Tier or Three Tier-based on what subsidy has been negotiated with various bargaining groups. Rate sheets by bargaining group for actives and retirees, for the 2027 plan year reflecting County subsidies and employee/retiree costs, will be available in October prior to the Open Enrollment period. These rate sheets will be posted on the Employee Benefits website and a sample draft is provided in Attachment 2.
The County continues to provide competitive rates for our benefits plans through dedicated persistence and collaboration with the County’s consultant and the Joint Labor Management Benefits Committee (JLMBC). The Delta HMO plan premium will decrease and the Delta PPO, VSP Computer Vision Care, Voluntary Vision and the Voya Supplemental & Basic Life Insurance plans will not increase in 2027. With the renewals and County subsidy for 2027, approximately 77% of County employees enrolled in NonPERS medical plans will see the same or reduced rate in their monthly contributions and 100% of employees enrolled in the Dental and Vision plans will see the same or a decreased amount in their monthly contributions.
The County is proud of the collaboration and results achieved with our consultants and the JLMBC.
CONSEQUENCE OF NEGATIVE ACTION:
To prevent the disruption of services for group benefits that are offered to eligible active employees, retirees, survivors and dependents, it is necessary to accept rate renewals prior to open enrollment which is planned for October 12, 2026 - October 30, 2026, for the 2027 plan year.