Title
Approval of Amendment No. 1 to General Services Agreement AGR20-04, with Delta Dental of New Mexico, in an Amount Not to Exceed $173,000.00, plus Applicable Gross Receipts Tax, for the Initial Term Plus this First Renewal Term, for the Purpose of Providing Dental Insurance Benefits for Los Alamos County Employees
Recommended Action
I move that Council approve Amendment No. 1 to General Services Agreement AGR20-04, with Delta Dental of New Mexico, in the form included as Attachment A, for the Purpose of providing Dental Insurance Benefits to Los Alamos County employees, in the form attached which has been approved by the County Attorney.
County Manager's Recommendation
The County Manager recommends that the Council approve this Amendment for General Services as requested.
Body
The County's group insurance benefits plans, including dental insurance, are renewed at the beginning of the calendar year.
On June 9, 2019, the County issued Request for Proposal ("RFP") 20-04 for Dental Insurance Benefits for Los Alamos County employees. Delta Dental was awarded the contract effective January 1, 2020.
The County self-funds dental insurance for its employees. Delta Dental of New Mexico administers the benefit for the County and charges an Administrative Service Only (ASO) fee in the form of fixed fee per employee per month (PEPM). The current Per Employee Per Month (PEPM) fee is $4.63, This PEPM fee was guaranteed through the end of calendar year 2023.
This, Amendment No. 1, renews the Agreement through December 31, 2024, with a slight increase to Administrative Fees from $4.63 PEPM to $4.95 PEPM which constitutes a total annual increase of approximately $1,116.00 or .3 percent.
Funding of Plan expenses, including claims and ASO fees, is achieved by collecting bi-weekly premiums from both the County and Employees. The County pays 80% of the premiums for a full-time eligible employee, 60% for a three-quarter-time eligible employee, and 40% for a half-time eligible employee.
The dental insurance plan has very high participation. 587 eligible regular and limited-term employees have elected to enroll. 242 employees have "employee only" coverage. 113 have "employee plus one" coverage. 232 have "employee plus two or more" (family) coverage.
In recent years, the County has been able to offer dental insurance to its employees with covered services and premiums that have remained remarkably stable. Dental insurance rates last changed in 2013.
Alternatives
Should Council choose not to approve Amendment No. 1 to Services Agreement AGR20-04 with Delta Dental of New Mexico, possible alternatives would include issuing an RFP for the same services or discontinuing dental coverage for Los Alamos County employees.
Fiscal and Staff Impact/Planned Item
Employee benefits are included in the County's biennial budget. The estimated total annual cost for dental insurance benefits, including ASO fees and Claims, based on current enrollment, is approximately $460,000.00. County employees pay approximately 20% of these costs and the County pays approximately 80%. Provided that the County does not experience an extraordinary increase in enrollments, the current/anticipated budgets for fiscal year 2024 is adequate to pay for the County's portion of dental insurance benefits included in this contract.
Attachments
A - General Services Agreement No. AGR20-04 Amendment No. 1
B - General Services Agreement No. AGR20-04