Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Rocio Kiryczun, Human Resources Director
Kim Pearson, Benefits Manager
Subject: Medical Plan Agreement with UnitedHealthcare Medicare Advantage PPO Plan for Retiree Health
RECOMMENDATION:
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Adopt a resolution authorizing the Human Resources Director or the Director's designee to execute agreements with UnitedHealthcare for the County Retiree Medicare health insurance plan for the period of January 1, 2025 through December 31, 2027, with the aggregate amount not to exceed $ 7.7 million in 2025 based on projected enrollment.
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BACKGROUND:
The County's current providers for its retiree Medicare insurance program are Kaiser and Aetna. The Kaiser Medicare Plan enrollment includes 910 total retirees, and enrollment in the Aetna Medicare plan includes 1,200 retirees.
The current agreement with Aetna expires on December 31, 2025. The County conducted a medical RFP in 2022 to explore alternative non-Kaiser options for healthcare. After reviewing proposals from several carriers, including the then-incumbent Blue Shield, the County's Labor Benefits Committee made the recommendation to move to Aetna, which had offered significant initial cost savings for both the County and retiree plan members for 2023. Under industry standards, even under the contract, the medical plan provider publishes updated costs before each calendar year, based on prior year plan enrollment and utilization. The County can break the contract without penalty if we do not accept the new costs.
The Human Resources Department received the County's 2025 Aetna Medicare insurance premium rate, and the rate was increased from $163.50 to $561.00 per retiree plan member for January 1, 2025.
Due to this large rate increase and recent access to care matters that have surfaced with retirees being denied care at Palo Alto Medical Foundation (PAMF), Sutter hospitals and UCSF Hos...
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