Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michelle Kuka, Human Resources Director
Ann Parada, Benefits Division Manager
Subject: Vision Plan Agreement with Vision Service Plan (VSP)
RECOMMENDATION:
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Adopt a resolution authorizing the Human Resources Director or the Director’s designee to execute an agreement with Vision Service Plan (VSP) to provide vision insurance for County employees, retirees, and eligible dependents for a period of January 1, 2027 through December 31, 2031, with the aggregate amount not to exceed $9,420,000.
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BACKGROUND:
The County provides vision benefits to eligible employees, retirees, and dependents. Employee plans are self-funded, with the County paying claims and contracting with an administrator to process claims and manage the plans. Retirees may choose to enroll in a separate insured plan and pay the full premium.
Employees may enroll in the core plan or pay an additional cost for enhanced benefits. The retiree plan generally mirrors the core plan. Approximately 5,073 employees are enrolled in the core plan, 1,698 in the enhanced plan, and 1,381 retirees in the voluntary retiree plan.
The County has provided vision benefits through VSP for more than 30 years. VSP’s current agreement expires December 31, 2026.
In preparation for the expiration of the current agreement, Human Resources conducted a competitive Request for Proposals in partnership with the labor-management Benefits Committee and Alliant Insurance Services. The RFP was released February 16, 2026, with proposals due March 13, 2026. An evaluation committee representing County management, organized labor, and Employee Benefits recommended a vendor on April 7, 2026. The full Benefits Committee endorsed the recommendation on April 23, 2026.
DISCUSSION:
The County sought a vision plan administrator that could maintain or improve current benefits at a reasonable cost, provide convenient access to vision care providers, offer stable rates, and deliver strong customer service. Proposals were evaluated based on cost, provider access, benefits, and customer service.
The County received proposals from VSP, EyeMed, Cigna, MetLife, and Avesis. VSP offered both its current Signature option and a separate, lower-cost Choice option. Cigna, MetLife, and Avesis were eliminated because their proposals did not competitively meet the County’s requirements, including MetLife’s fully insured proposal instead of the requested self-funded arrangement. The evaluation committee ranked VSP highest and determined that finalist interviews were unnecessary.
Although VSP’s Choice option offered greater projected savings, its smaller discounts on certain lens options could increase participant costs. The evaluation committee determined that the savings did not outweigh these benefit differences that would increase participant costs, and recommended continuing with VSP’s current Signature option.
The primary reasons for the recommendation are:
• Minimal participant disruption. VSP’s network includes providers used by 89.1% of County participants and all 25 most frequently used providers. EyeMed’s network includes providers used by 58.9% of participants and 12 of the top 25.
• Convenient provider access. All participants in urban and suburban areas, and 99.2% in rural areas, have access to at least two VSP providers within 10 miles, outperforming the other proposals.
• Continuation of current benefits. VSP’s Signature proposal maintains the County’s current core, enhanced, and retiree benefits. Other proposals included changes that could increase out-of-pocket costs, while VSP’s lower-cost Choice option offers smaller discounts on certain lens options.
• Customer service and experience. VSP has experience serving large public agencies and demonstrated strong service and flexibility. Retaining VSP also avoids the administrative work and participant disruption of changing plan administrators.
The labor-management Benefits Committee reviewed the RFP results on April 23, 2026, and supported the recommendation unanimously.
This resolution would authorize the Director of Human Resources to execute the agreement. As an incumbent client, the County’s renewal contract is being drafted based on the existing contract and will take effect on January 1, 2027. We are requesting Board approval of this delegated authority to enter into the renewal contract because County staff must begin work with VSP now to prepare materials for the October Open Enrollment.
The agreement contains the County's standard provision allowing amendments that do not materially or substantially increase the County's obligations and authorizes fiscal amendments up to $25,000 in aggregate.
The County Attorney has reviewed and approved the resolution as to form.
PERFORMANCE MEASURES:
|
MEASURE |
FY 2025-26 Actual |
FY 2026-27 Projected |
|
County participants whose current provider is in the VSP network |
89.1% |
89.1% |
|
Urban and suburban participants with access to at least two providers within 10 miles |
100.0% |
100.0% |
|
Rural participants with access to at least two providers within 10 miles |
99.2% |
99.2% |
|
Vision Core - Plan Administration Cost Per Employee Per Month |
$1.31 |
$1.31 |
|
Vision Buy Up - Plan Administration Cost Per Employee Per Month |
$2.48 |
$2.48 |
FISCAL IMPACT:
The estimated 2027 cost of the agreement is $1,729,500, consisting of PPO administrative services of $130,500, Voluntary Vision plan premiums of $245,000, and projected claims of $1,354,000. The total contract amount over the five-year agreement term will not exceed $9,420,000 which includes a 5% contingency for workforce and retiree population growth and higher-than-anticipated claim. Funding is included in the Human Resources Department's FY 2026-27 Adopted Budget and will be incorporated into future recommended budgets.