State of California M E M O R A N D U M REFERENCE CODE: 99-042 DATE: September 29, 1999 TO: Personnel Officers Personnel Transactions Supervisors Personnel Transactions Staff FROM: Department of Personnel Administration Benefits Division SUBJECT: Delta Dental Plan Premium Rate Adjustment for 1999, New Delta Dental Contract and Premium Increase for 2000, and CoBen Allowance Increase CONTACT: Bryan Bruno, Benefits Program Analyst (916) 445-9841, CALNET 485-9841 FAX: (916) 322-3769 OFFICE VISION: DPA(BryanBruno) INTERNET: BryanBruno@DPA.CA.GOV The purpose of this memorandum is to provide departments with information regarding the Delta Dental Plan (Delta) premium rates and the Consolidated Benefits (CoBen) benefit allowance amounts. As a result of collective bargaining agreements between the State and all Exclusive Representatives except for Bargaining Units 5, 6, and 13, the State has increased its contribution for both represented and excluded employees' dental benefits. Following is important information regarding the impact of this increase. Adjustment to Employees' Share of Delta Premium Rate PML 99-032 dated July 21, 1999 provided departments with information regarding a Delta dental premium increase effective August 1, 1999. The increased premium was shared by the State and the employees, with the State paying approximately 75 percent of the premium increase and employees paying approximately 25 percent. As a result of the recent collective bargaining process, the State's contribution for dental benefits has increased retroactively to August 1, 1999. This has resulted in a retroactive decrease in the employees' out-of-pocket premium. Attachment I provides an explanation of the Delta premium increase and the employer contribution adjustment. For represented employees, the State Controller's Office (SCO) will retroactively adjust the State's and the employees' share of the Delta premium when the bargaining agreements have completed the ratification process. For excluded employees, SCO will adjust the employer and employee contribution amount in the September pay period. Delta Premium Rates Effective January 1, 2000 The State has concluded the bid process for the indemnity dental plan and a three year contract has been awarded to Delta Dental effective January 1, 2000. Two important changes have been made to the benefit design for this plan effective January 1, 2000: (1) Sealants have been added as a basic benefit for children age 14 and under; and (2) the contract language has been changed to allow cleanings twice in a calendar year rather than twice in a twelve month period, which we hope will be less confusing to participants. The attached revised Dental Plan Premium Rates Chart (Attachment II) and COBRA Rates Chart (Attachment III) reflects the revised Delta Dental rates that will be effective January 1, 2000 (December 1999 pay period). Note: There will be no change in 2000 to the current dental premium rates for the State's prepaid dental plans (DentiCare, PMI, Safeguard, Smilesaver). The State contribution for the prepaid plans continues to be 100 percent paid with no premium copay cost to those employees enrolled in a State-sponsored prepaid plan. Additionally, in the third or fourth quarter of 2000 the State will be introducing a new Delta Dental Preferred Provider Option (PPO) Dental Plan in addition to the current Delta Indemnity Plan and the current Prepaid Dental Plans. Under the PPO Plan, employees will be able to experience a higher level of benefits by receiving services from a Network Provider. After the first of the year, you will receive more information regarding this new plan and a future special open enrollment period. Employees Participating in CoBen Excluded employees and represented employees in Bargaining Units, 8, 16, 18, and 19 are currently participating in CoBen. Additionally, as a result of the recent bargaining agreement between the State and the California Union of Safety Employees Association (CAUSE), employees in Bargaining Unit 7 (BU 7) will be automatically enrolled into CoBen effective January 1, 2000 (December 1999 pay period). This change is subject to the ratification of the bargaining agreement by the members of CAUSE. In early October, a letter will be sent to the home address of BU 7 employees giving them information about their CoBen enrollment. During the current Open Enrollment Period, BU 7 employees may make CoBen elections that will become effective January 1, 2000. Information about CoBen and a CoBen Calculator can be found on the Department of Personnel Administration's website at WWW.DPA.CA.GOV. Impact to Employees in CoBen As a result of the State's increased contribution for dental benefits, the CoBen Benefit Allowance Amount has been changed retroactive to August 1, 1999. Following are the revised CoBen Allowance Amounts for represented employees and excluded employees in CoBen effective August 1, 1999: Represented Employees Excluded Employees Party Code 1 $214 $215 Party Code 2 $397 $408 Party Code 3 $522 $536 For excluded employees, the new Benefit Allowance Amount will be established in the October 1, 1999 pay warrant (September pay period) and will include the retroactive adjustments for the July and August pay period. This means that in the September pay period only excluded employees will see the following Benefit Allowance amounts: Excluded Employees October 1, 1999 Pay Warrant Party Code 1 $225 Party Code 2 $424 Party Code 3 $562 In the October pay period the Benefit Allowance amounts for excluded employees will reflect the new rates of $215, $408, and $536, depending on the employee's party code. For represented employees in CoBen, the new CoBen rates will be implemented retroactively by SCO after the bargaining agreements have completed the ratification process. There will also be new CoBen Benefit Allowance amounts effective on January 1, 2000 (December 1999 pay period). Following are the revised CoBen benefit allowance amounts for represented employees in CoBen and all excluded employees effective January 1, 2000: Represented Employees Excluded Employees Party Code 1 $214 $215 Party Code 2 $411 $422 Party Code 3 $542 $556 In order to assist you in providing information to your employees regarding the above changes, attached is a memorandum to all State employees (Attachment IV) that should be duplicated and provided to your employees. The attached letter to all State employees is also available on the DPA website at WWW.DPA.CA.GOV. in the Dental Program area and is available for viewing and downloading by departments and employees. There may be additional benefit changes as the result of the collective bargaining process and we will notify you as soon as we have information regarding further changes. Personnel Office staff requiring assistance or clarification of the information contained in this memo should call Bryan Bruno, Benefits Program Analyst, at (916) 445-9841. Kathie Vaughn, Chief Benefits Division cc: SCO, Butch Massoni, Bob Curry, Dennis Duarte CALPERS, John Rice JRS/LRS, Rae Gamble STRS, Pat Sidhu CAHP BENEFIT TRUST, Terri Westbrook CCPOA BENEFIT TRUST, Lou Ohls Attachments will be distributed via mail.