To: The Board of Supervisors of Sonoma County, Board of Directors of the Sonoma County Water Agency, Board of Commissioners of the Community Development Commission, Board of Directors of the Sonoma County Agricultural Preservation and Open Space District
Department or Agency Name(s): Human Resources Department
Staff Name and Phone Number: Cheryl Thibault, Employee Benefits Manager, 707-565-3033
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Employee and Retiree Dental Benefits Agreement
End
Recommended Action:
Recommended action
Authorize the Director of Human Resources to execute an agreement with Delta Dental to provide fully insured dental coverage for County employees, retirees, and their eligible departments.
end
Executive Summary:
The Human Resources Department (HR) Benefits Unit is responsible for management and administration of the County’s health and welfare benefit programs provided to employees, retirees, and eligible dependents. The HR Benefits Unit contracts with fully insured providers and third-party administrators (TPA) who provide services, specialized skills, and expertise to public and private employers nationally.
The recommended action authorizes the Human Resources Director to execute a renewal agreement with Delta Dental. Delta Dental was selected through a Request for Proposal process to provide dental benefits for County employees, retirees, and their eligible dependents at a cost increase of .3% to active employee rates, with enhanced benefits, and a three-year rate guarantee effective June 1, 2023, through May 31, 2026. In addition, Delta has agreed to provide a three percent (3%) rate cap for years four (4) and five (5).
In FY 2022/23, the annual County budgeted cost to provide dental coverage is approximately $4,472,694. With a 0.3% rate increase, estimated annual costs may be approximately $4,486,112.
Discussion:
The Human Resources Department issued a Request for Proposal (RFP) for employee and retiree dental coverage in August 2022. Five proposals were received from Anthem Blue Cross, UnitedHealthcare of California, Metropolitan Life Insurance Company, United Concordia Companies, Inc., and Delta Dental. The proposals were evaluated by a Subcommittee of the Joint Labor Management Benefits Committee (JLMBC) with the assistance of the County’s benefit consultants, Segal Consulting. Following a thorough analysis of the data provided in the RFP responses, interviews were conducted, and the Subcommittee recommended Delta Dental, which was approved by the JLMBC, and forwarded the recommendation to the Director of Human Resources.
Dental coverage is provided to all eligible County employees and their dependents, with the County paying a major portion of the monthly premium. Total monthly premium cost is increasing $.32 per employee per month (PEPM) from $118.24 to $118.56. Monthly employee contributions are fixed by Memorandums of Understanding and the Salary Resolution. In addition, Delta enhanced the employee Preferred Provider Organization (PPO) Dental Plan increasing diagnostic and preventive services coverage from 80% to 100% and added a SmileWay Wellness Benefit that covers additional teeth and gum cleanings for members with specific chronic conditions.
As part of the agreement with Delta Dental, the County offers two retiree dental plans, DeltaCare USA and Delta Dental PPO, to County retirees which is fully paid by the participating retiree. Delta agreed to continue to provide the DeltaCare plan with a -2.0% rate reduction and the Delta Dental PPO with a 14.9% premium increase. This increase is due to the annual maximum increasing from $1,000 to $1,500 which was requested by the retiree members of the JLMBC, and the addition of the SmileWay Wellness Benefit. Contributions for this coverage are deducted from retiree pension checks and the County facilitates payment to Delta Dental.
Strategic Plan:
This item directly supports the County’s Five-year Strategic Plan and is aligned with the following pillar, goal, and objective.
Pillar: Organizational Excellence
Goal: Goal 1: Strengthen operational effectiveness, fiscal reliability, and accountability
Objective: Objective 1: Implement programs and identify opportunities to support employee work-life balance and a positive work environment, including a Telework Policy.
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
5/22/2018: Board authorized agreement with Delta Dental (Item 4)
Fiscal Summary
|
Expenditures |
FY 23-24 Adopted |
FY 24-25 Projected |
FY 25-26 Projected |
|
Budgeted Expenses |
$4,486,112 |
$4,499,570 |
$4,499,570 |
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
$4,486,112 |
$4,499,570 |
$4,499,570 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
$4,486,112 |
$4,499,570 |
$4,499,570 |
|
State/Federal |
|
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
$4,486,112 |
$4,499,570 |
$4,499,570 |
Narrative Explanation of Fiscal Impacts:
Benefit premium costs are funded by employer, employee and retiree contributions. The employer share of premium cost associated with Delta Dental benefits are budgeted in the County’s personnel budgeting tool “SC Labor” account 50307 and are included in the departmental adopted budget in FY 2022/23 and adopted budget for FY 2023/24.
Narrative Explanation of Staffing Impacts (If Required):
None
Attachments:
Renewal Agreement with Delta Dental (2023-2028)
Related Items “On File” with the Clerk of the Board:
None