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HEALTH INSURANCE / 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 14.20% for the renewal period of January 1, 2026, through December 31, 2026, for the EPO and PPO plans
2) Increase the dental insurance premiums by 8.22% (this includes proposed two-year buy down option outlined below) for the renewal period of January 1, 2026, through December 31, 2026
3) Increase the vision insurance premiums by 15.3% for the renewal period of January 1, 2026, through December 31, 2026
4) Schedule the 2026 Open Enrollment period for October 1-31, 2025
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 2026 will be $2,205.86 per month; $26,470.32 annually. This represents an increase of $271.70 per employee per month for approximately 653 County participants. The increase to the General Fund is approximately $172,801.20 and $249,420.60 to the Public Safety Fund, for a total of approximately $422,221.80 for January through June 2026.
Background Information:
Tehama County participates in the Public Risk Innovation, Solutions, and Management (PRISM) Health Insurance Program, formerly 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 and helps to reduce 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 will soon be ending and the PRISM Health Insurance Program will be 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. The Committee 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 July 31, 2025, to discuss benefits for plan year 2026. 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, obesity and cancer continue to be a growing and costly challenge for the PRISM Health program. In addition, million-dollar claims have increased by 8% in the past year, prescription drug costs have exploded, and healthcare provider costs continue 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 15% per member per month between 2023 and 2024. PRISM Health has been actively deploying health care initiatives to contain costs. For example, the Digbi health program will be effective January 1, 2026, and deploys clinically validated resources to help lower costs for members with diabetes, hypertension, hyperlipidemia, obesity, and gastro-intestinal issues. Further, PRISM Health is implementing 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.
PRISM recommended an overall increase to medical premiums for the pool of 14.24% for the plan year 2026. Based on the County’s claims experience over the past two years, PRISM recommended an increase of 14.20% to the Tehama County health benefit plan structure for the plan year 2026, which is equal to a premium total of $2,388.00 for EPO Plan Participants and $2,957.00 for PPO Plan Participants per employee per month.
Tehama County’s dental plan is self-funded. For plan year 2026, Tehama County received a recommended net rate increase of 31.2%. The County has steadily built a reserve over the last several years. Meaning, the amount collected for premiums is greater than the amount paid in claims. The State Controller is requiring the County buy down the remaining reserves by $208,170. Therefore, as done in previous years, TCHIAC is recommending the buy down occur over the next two (2) years, at a rate of $104,085 in the first year and $104,085 in the second year. Therefore, including the recommended two-year buy down, the Committee recommended an overall rate increase to the dental plan of 8.22% for the benefit year 2026, which is equal to a premium total of $65.70 per employee per month. Additionally, Alliant is recommending PRISM contracts align to follow AB1048 effective January 1, 2025, regarding dental benefits. As a result, TCHIAC is recommending removing procedural waiting periods and exclusions for congenital missing teeth. This proposed change is estimated to result in an overall dental plan increase of approximately 1.3%.
Tehama County’s vision plan is also self-funded. The proposed funding change percentage for the vision plan is an increase of 15.3%. Committee members agreed with the rate increase recommendation for the benefit plan year 2026, which is equal to a premium total of $13.05 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 2026.
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 2026.
2026 Premiums for all Full-Time County Employees/Impact:
|
EPO |
Monthly Premium |
County Contribution/Mo. |
Employee Cost/Mo. |
|
2026 Premiums: |
$2,472.83 |
$2,205.86 |
$266.97 |
|
Rate Change: |
$304.13 |
$271.70 |
$32.43 |
|
Net Impact: |
14.02% |
14.05% |
13.83% |
|
PPO |
Monthly Premium |
County Contribution/Mo. |
Employee Cost/Mo. |
|
2026 Premiums: |
$3,041.83 |
$2,205.86 |
$835.97 |
|
Rate Change: |
$375.13 |
$271.70 |
$103.43 |
|
Net Impact: |
14.07% |
14.05% |
14.12% |
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 $1,073,435 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, 2025. Changes made during open enrollment will become effective January 1, 2026. 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 is currently in the process of transitioning to a new benefits administration vendor, BCC. During the 2025 Open Enrollment, Tehama County employees will be provided with information regarding this transition and 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.