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HEALTH INSURANCE ADVISORY COMMITTEE / PERSONNEL - Personnel Director Coral Ferrin
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Requested Action(s)
recommendation
a) Request approval of the following recommendations from the Tehama County Health Insurance Advisory Committee:
1) Increase the medical insurance premiums by 10.9% for the renewal period of January 1, 2027, through December 31, 2027, for the EPO and PPO plans
2) Increase the dental insurance premiums by 34.96% for the renewal period of January 1, 2027, through December 31, 2027
3) Decrease the vision insurance premiums by -4.3% for the renewal period of January 1, 2027, through December 31, 2027
4) Schedule the 2027 Open Enrollment period for October 1-31, 2026
b) Request authorization for the Personnel Director and/or the Auditor to take the necessary steps to notify Alliant Insurance Services (broker), PRISM Health Insurance Program, and the third-party administrator, BCC
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Financial Impact:
The full County contribution per employee for calendar year 2027 will be $2,456.59 per month; $29,479.08 annually. This represents an increase of $250.73 per employee per month for approximately 654 County participants. The increase to the General Fund is approximately $386,280 and $511,628 to the Public Safety Fund, for a total of approximately $897,907 for the 26/27 fiscal year.
Background Information:
Tehama County participates in the Public Risk Innovation, Solutions, and Management (PRISM) Health Insurance Program, formerly known as CSAC-EIA. By participating in the PRISM Health Insurance Program, the cost of claims is pooled between the participating members. Pooling claims helps to provide stability while reducing the chance of large premium increases. Tehama County joined the CSAC EIA Health Insurance Program in 2003. In 2006, the EIA Health Program joined with Self Insured Schools of California (SISC), which further increased the pool size and therefore, provided more stability. Recently, it was determined the PRISM Health Insurance Program has grown stable enough to separate from SISC. Therefore, this partnership ended in October 2025 and the PRISM Health Insurance Program is now operating independently.
The Tehama County Health Insurance Advisory Committee (TCHIAC) meets annually, prior to the open enrollment period, to discuss the County's plans and premiums for the following year. TCHIAC is comprised of one or more representatives from each bargaining unit, plus a representative from the appointed Department Heads, a representative for retirees, a representative for unrepresented employees, and the Personnel Director. The Committee met on August 12, 2026, to discuss benefits for plan year 2027. Representatives from Alliant Insurance Services attended the meeting and gave a presentation to the Committee on the program renewal.
There are several market trend factors which are driving medical costs higher. For example, cancer and maternity related claims continue to be a growing and costly challenge for the PRISM Health Program. In addition, there were 22 claims exceeding one million dollars in the past year and one claim exceeded 7 million dollars, which is the largest claim in the PRISM Health Program’s history. Other contributing factors to higher health insurance premiums include the growing cost of prescription drugs, particularly GLP-1 medications used for weight management, as well as treatments for cancer, and healthcare provider costs continuing to rise in the aftermath of the pandemic. As a result, the overall total medical claims according to PRISM Health medical utilization increased an average of 11.43% per member per month and prescription (RX) costs increased an average of 26.33% per member per month between 2025 and 2026. PRISM Health has been actively deploying health care initiatives to contain costs. For example, the Digbi health program was launched in January 1, 2026. Digbi Health’s “Food is Medicine” program is a Precision Biology based care model which uses genetics, gut microbiome, and blood biomarkers to personalize nutrition and lifestyle strategies for chronic disease prevention and treatment. Further, the PRISM Health Program implemented a new pharmacy benefit manager on January 1, 2026, called Navitus. Navitus has improved pricing, formulary management and clinical programs with proven prescription drug inflation trend management. The goal with these programs is to focus on cost containment solutions alongside encouraging members to take advantage of the free point solutions available through the PRISM Health Program, while pursuing preventative care options which are proven to reduce the likelihood of chronic conditions and the overall well-being of program members.
After careful review of plan utilization, costs, and long-term sustainability, GLP-1 medications prescribed solely for weight loss or weight management will no longer be covered under the PRISM Health Program beginning January 1, 2027. PRISM understands this change may be disappointing and may have a significant impact on members who currently use these medications as part of their weight management journey. However, the significantly rising costs associated with these medications have made it increasingly challenging to maintain affordable and sustainable coverage across the health plan for all members.
PRISM recommended an overall increase to medical premiums for the pool of 10.77% for the plan year 2027. Based on the County’s claims experience over the past two years, PRISM recommended an increase of 10.9% to the Tehama County health benefit plan structure for the plan year 2027, which is equal to a premium total of $2,648.00 for EPO Plan Participants and $3,279.00 for PPO Plan Participants per employee per month.
Tehama County’s dental plan is self-funded. For plan year 2027, Tehama County received a recommended net rate increase of 34.96%. This percentage is higher than usual because the County has steadily built a reserve over the last several years. Meaning, the amount collected for premiums has been greater than the amount paid in claims. As a result, the California State Controller has been requiring the County to buy down the reserves over the last several years which resulted in a lower overall premium. However, the reserve balance is now below the minimum level recommended by the California State Controller, so there is no recommended buy down for plan year 2027. The rate increase to the dental plan for the benefit year 2027 is equal to a premium total of $88.67 per employee per month.
Tehama County’s vision plan is also self-funded. The proposed funding change percentage for the vision plan is a decrease of -4.3%. Committee members agreed with the rate decrease recommendation for the benefit plan year 2027, which is equal to a premium total of $12.49 per employee per month. There were no changes to the vision plan structure.
Tehama County has a rate guarantee for the VOYA life and AD&D plans from January 1, 2024 through December 31, 2027. There will be no change to basic Life/AD&D for the benefit plan year 2027.
In 2019, the County began offering a voluntary supplemental life insurance option at no additional cost to Tehama County. There is a rate guarantee from January 1, 2024, through December 31, 2027, so there will be no change to the voluntary life plan for the benefit year 2027.
2027 Premiums for all Full-Time County Employees/Impact:
|
EPO |
Monthly Premium |
County Contribution/Mo. |
Employee Cost/Mo. |
|
2027 Premiums: |
$2,755.24 |
$2,456.59 |
$298.65 |
|
Rate Change: |
$282.41 |
$250.73 |
$31.68 |
|
Net Impact: |
11.42% |
11.37% |
11.87% |
|
PPO |
Monthly Premium |
County Contribution/Mo. |
Employee Cost/Mo. |
|
2027 Premiums: |
$3386.24 |
$2,456.59 |
$929.65 |
|
Rate Change: |
$344.41 |
$250.73 |
$93.68 |
|
Net Impact: |
11.32% |
11.37% |
11.21% |
All rates shown are monthly and include medical, prescription, dental, vision and $30,000 life/AD&D. Part-time employees receive a pro-rated premium amount based on the number of hours worked.
The County has approximately $1,096,945.09 in a reserve/dividend account which is held by PRISM. The account is interest-bearing and can only be used for health insurance purposes. In the years of 2008 through 2011, the County utilized a portion of the funds in the dividend account to partially offset premium increases. In 2019, dividend funds were used to pay third party administrator fees. TCHIAC reviewed the funds held in the reserve/dividend account during the renewal meeting and did not propose to offset premium increases.
The Open Enrollment period is October 1 through October 31, 2026. Changes made during open enrollment will become effective January 1, 2027. Employees will receive information in September regarding changes to premiums and open enrollment processes. Information will also be provided to all retirees, COBRA participants, Superior Court employees and Special District employees who participate in the County’s plan.
The County transitioned to a new benefits administration vendor, BCC effective January 1, 2026. During the 2026 Open Enrollment, Tehama County employees will be provided with instructions on how to access the self-service benefits portal.
The Colonial Supplemental Insurance open enrollment period does not run concurrently with the health plan open enrollment. Employees will receive a Colonial flyer with a November paycheck with open enrollment dates and directions on how to schedule an appointment with the Colonial representative.