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Fi June 14, 2000 Recommendation for Contribution Levels for Benefits Program for 2000 — 2001 Background of Employee Contribution Level Our original review and report of the County's Benefit Plan dated February 2000 discussed the level of current employee contribution. The Report indicates that employees of the Board of County Commissioners of Indian River County currently pay S12.50 monthly as their share of the cost for their dependent coverage. This is considered quite generous compared to surrounding governmental bodies and with our knowledge of other governmental entities statewide. We believe the contribution levels should be changed to be more in line with similar employers. Findings It is reasonable for governmental entities to provide the majority or the entire single employee rate. Many also contribute some portion of the dependent and family rate. The attached chart shows Mat the surrounding governmental bodies vary in their connibutions for active employees and their dependents. In instances where employees contribute towards the single rate, it is higher than employee contributions in Indian River County. These results are consistent with our experience with governmental bodies in the State of Florida. For dependent and family coverage, employees contribute a portion of the rates in all of the trine bodies shown on the chart. Those amounts are also higher than what employees currently contribute in Indian River County. Elsewhere. it is common for employees to pay all or a portion of the dependent or family rate. Retiree information on the chart shows that retired individuals are frequently required to pay for or contribute towards their coverage. The amounts. where available. are considerably higher than what retirees cuurently pay in Indian River County. The amount presently paid by Indian River retirees does not cover the fixed charges the County has to pay to the self-insured plan. An adjustment is Deeded Retired county employees are eligible for direct subsidy for medical insurance premiums from the State of Florida based upon an amount of $5.00 per year of service. up to a maxirnum of S150.00. This subsidy is paid monthly and can be used to offset the cost of retiree paid premiums. The cost of health care is increasing at an annual rate of 8% - 12% while the general inflation rate remains at 2% - 3°/n. It is recommended that the County change its current contribution method to pay 100% of the employee rate and fix the amount of its contribution at $400.00 monthly for the family rate. This will result in employees with dependents contributing S37.50 instead of the current S 12.50 monthly. As rates increase, employees with dependents will be required to contribute the difference between the $400.00 county paid amount and the total family rate. The amount will vary depending upon the family annual rate. Over time. the amount of future increases paid by employees will adjust to place s.. 9 a76