HomeMy WebLinkAboutItem 06.mNovember 5, 2012
Council Approval of Resolution Authorizing
Employee Health Insurance Rates for 2013
Item No.
Proposed Action
Staff recommends adoption of the following motion: Move to approve a resolution authorizing
employee health insurance rates for 2013.
Passage of this motion will provide health insurance to employees through Medica.
Overview
In 2012, the City sought bids for health insurance and ultimately elected to move from
HealthPartners to Medica. At that time, Medica offered a rate cap guarantee of 9% for 2013, and
12% for 2014. The actual rates for 2013 are increasing by 5.4%
The City's Insurance Committee and staff have reviewed the renewal data with our insurance
brokers, Financial Concepts Inc. The proposed rates continue to intent the employees to select
the most cost effective plan and assist in employee wellness. The City's Personnel Committee is
recommending approval of the proposed rates.
Primary Issues to Consider
• How is the cost of the premiums determined?
• What is the employee wellness program?
• What is the estimated financial impact?
Supporting Information
• Resolution Authorizing Employee Health Insurance Rates for 2013
Human Reso ces Manager
Financial Impact: $41,987 Budgeted: YIN Y Source: ,,,Various Funds
Related Documents (CIP, ERP, etc.):
Notes:
ANALYSIS OF PRIMARY ISSUES:
How is the cost of the premiums determined?
Prior to 2012, the City paid 100% of the single premium and split the cost of the increase or
decrease of dependent coverage with the employee with the exception of the Open Access co -pay
plan. We discontinued providing additional dollars towards the Open Access co -pay plan in
2006.
Medica's experience shows an ability to save money through network providers who have agreed
to deliver services to members for less than their usual fees. Those providers are members of the
Elect or Essential networks. We are therefore continuing to propose rates that will incent
employees to choose either the Elect or Essential network for the health care.
We propose to continue the same cost sharing initiated in 2012:
• Paying 100% of the single premiums and sharing the increase /decrease to those plans that
use specific providers.
• Paying limited dollars towards the high deductible plans that utilize open networks.
• Paying no additional dollars towards the open network co -pay plan.
What is the employee wellness program?
Medica offers a wellness program entitled My Health Rewards. The goal of the program is to
reward employees and family members to continue healthy behaviors by providing cash
incentives to eligible members 18 years or older. To assist the City in promoting this program,
Medica provided us with $50,000 to be used towards wellness.
For 2012, employees were able to receive a matching gift card, up to $135.00, for the completion
of the following activities:
o Health assessment
o Reviewing on -line health topics
o Completing appropriate coaching as recommended by Medica
For 2013, the program adds a biometric screening requirement as well as completion of the
appropriate cancer screenings based on age and gender. If we are able to encourage the majority
of our employees to complete these activities, we have the ability to lower our rate cap guarantee
for 2014 by up to 6%
We have matched approximately $4,000 of gift cards so far in 2012. We recommend continuing
this program through 2013 using the $50,000 provided by Medica to continue to fund employee
wellness.
What is the estimated financial impact?
The City has traditionally offered identical insurance rates to all eligible employees including
both union and non - union. We have current labor agreements with the Teamsters and the ILLS
Police Sergeants unions through 2013. We have not yet achieved an agreement with the Police
Officers union. The following estimate assumes a final settlement that is identical to the other
groups.
Source
General Fund
Storm Water Fund
Utilities Fund
Liquor Fund
Cable Fund
Communications Fund
TOTAL Est. Increase
Financial Impact
$33,243.00
180.00
3,674.40
3,806.04
616.32
467.52
41,987.28
CITY OF LAKEVILLE
RESOLUTION NO.
RESOLUTION AUTHORIZING EMPLOYEE HEALTH
INSURANCE RATES FOR 2013
WHEREAS, the City Council will establish from time to time the insurance plans that will be
provided; and
WHEREAS, the City Council will establish the costs the City will pay for employee and
dependent coverage under City group hospital, medical and surgical insurance programs; and
WHEREAS, the City Council chooses to promote employee wellness;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville that the
following monthly cost responsibility be adopted for the Medica health insurance plans effective
January 1, 2013:
MONTHLY PREMIUM COSTS
Employee
Employer
Total Premium
VEBA /HSA Funds
Co -pay - Passport network
Employee
247.83
371.51
619.34
EE + Child(ren)
716.78
532.80
1249.58
BE + Spouse
759.07
563.66
1322.73
Family
936.33
696.01
1632.34
Co - pay - Elect or Essential network
Employee
.00
557.40
557.40
EE + Child(ren)
430.38
694.24
1124.62
EE + Spouse
455.58
734.89
1190.47
Family
562.27
906.83
1469.10
High Deductible /VEBA - Passport network
Employee
27.44
456.51
483.95
127.25
EE + Child(ren)
384.61
591.81
976.42
149.08
EE + Spouse
402.44
631.15
1033.59
152.08
Family
467.87
807.63
1275.50
164.67
CITY OF LAKEVILLE
RESOLUTION NO.
RESOLUTION AUTHORIZING EMPLOYEE HEALTH
INSURANCE RATES FOR 2013
WHEREAS, the City Council will establish from time to time the insurance plans that will be
provided; and
WHEREAS, the City Council will establish the costs the City will pay for employee and
dependent coverage under City group hospital, medical and surgical insurance programs; and
WHEREAS, the City Council chooses to promote employee wellness;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville that the
following monthly cost responsibility be adopted for the Medica health insurance plans effective
January 1, 2013:
High Deductible /HSA - Passport network
Employee
18,67
400.33
419.00
160.58
EE + Child(ren)
310.27
535.13
845.40
182.42
EE + Spouse
324.27
571.16
895.43
185.42
Family
370.74
733.60
1104.34
198.00
High Deductible /HSA - Elect or Essential network
Employee
.00
377.11
377.11
160.58
EE + Child(ren)
254.02
506.84
760.86
182.42
EE + Spouse
263.02
542.38
805.40
185.42
Family
301.15
692.77
993.91
198.00
High Deductibl
Employee
EE + Child(ren)
EE + Spouse
Family
w etiness
Employee only
e /VEBA - Elect or Essential network
.00
312.98
325.45
378.18
DATED this 5th day of November, 2012.
ATTEST:
Charlene Friedges, City Clerk
MONTHLY PREMIUM COSTS
Employee Employer Total Premium VEBA /HSA Funds
435.55
565.81
604.79
769.79
435.55
878.78
930.24
1147.96
Employer match of Medica wellness gift cards up to $135.
CITY OF LAKEVILLE
Mark Bellows, Mayor
127.25
149.08
152.08
164.67
The 2013 VEBA and HSA funding will be deposited in two installments. The first six months of
funding will be deposited in January and the second six months of funding will be deposited in
July. Deposits for new employees will be prorated.