July 8, 2008

ORANGE COUNTY 2009 MEDICAL & DENTAL

PLAN CONTRACTS

PRESENTATION OUTLINE

•BACKGROUND

•MEDICAL \ PHARMACY RFP •DENTAL RFP

•ACTION REQUESTED

BACKGROUND

BACKGROUND - MEDICAL

• County moved to self-funded medical in 2007, and model is working well

- $7.9 million savings in plan year 2007

• Medical Plan Oversight Committee oversees plan

• Benefits Consultant RobinsonBush works with oversight committee and HR on key benefits initiatives

BACKGROUND - MEDICAL

• County is in 5th year of contract with UnitedHealthcare

• Formal procurement required every 5 years

• Oversight Committee worked with Consultant and Purchasing & Contracts on medical RFP development

BACKGROUND - DENTAL

• Dental Plan is fully insured and employee funded

• Employees are happy with current Dental plan

• Dental insurance provided by the Standard

BACKGROUND - DENTAL

• County is in 5th year of contract with the Standard

• Formal procurement required for plan year 2009

MEDICAL / PHARMACY RFP

MEDICAL / PHARMACY RFP

• Requested Administrative Services Only (ASO) proposals for self-funded medical

• Asked for both integrated medical / pharmacy and pharmacy carve out options

• Three providers proposed integrated programs – Aetna, Cigna and UnitedHealthcare (UHC)

MEDICAL / PHARMACY RFP

• Four Additional Pharmacy Benefits Managers (PBM) proposed pharmacy carve outs – Caremark, Express Scripts, Medco and Walgreens

• Benefits Consultant evaluated medical & pharmacy proposals and reported findings & recommendations

• Procurement Committee found:

– UHC’s claims pricing and admin fees lower than other two providers

- UHC has good reputation with County and other references checked

- UHC will provide employee wellness support to include $150,000 annual to fund DM / wellness programs

MEDICAL RFP

PHARMACY RFP

• Procurement Committee found:

Express Scripts - Estimated annual costs lower than all

other providers

- Largest pharmacy network

- Offers additional services – quarterly reports and enrollment support

- Offers employee education & support

DENTAL RFP

DENTAL RFP

• Benefits Consultant evaluated dental proposals and reported findings & recommendations

• Seven dental insurers provided proposals

- Aetna, Cigna, Delta Dental, UHC, Humana, Solstice and Standard

 

DENTAL RFP

• Procurement committee found:

Standard

- Proposed rates competitive with other providers

- Has largest # of top 100 providers

- Offered 2 year rate guarantee & potential for year 3

- Noted no disruptions to current plan design

ACTION REQUESTED

• Approve Procurement Committee’s recommendation to select UnitedHealthcare as the County’s self-funded medical ASO Provider

• Approve Procurement Committee’s recommendation to carve out Pharmacy and select Express Scripts as the County’s self-funded Pharmacy Benefit Manager

• Approve Procurement Committee’s recommendation to select Standard as the County’s Dental Insurance Provider

July 8, 2008

ORANGE COUNTY 2009 MEDICAL & DENTAL

PLAN CONTRACTS