HomeMy WebLinkAboutItem 09November 3, 2014 Item No.
Council Approval of Resolution Authorizing
Employee Health and Dental Insurance Rates for 2015
and Approving Letter of Agreement with HealthPartners
Proposed Action
Staff recommends adoption of the following motion: Move to approve letter of agreement and
resolution authorizing employee health and dental insurance rates for 2015.
Passage of this motion will provide health and dental insurance through HealthPartners.
Overview
Staff worked with the City's brokers at National Financial Partners to seek new insurance bids for
2015 and beyond. The lowest bid came from HealthPartners for both health and dental insurance
and provides a 7.4% increase to health insurance for 2015 and a not to exceed rate cap of 9% for
2016. They are also providing approximately $7,000 for wellness in both years and support those
dollars with a wellness program. The dental insurance will increase by 2% in 2015 and provides a
not to exceed rate cap of 4% in 2016.
The City's Personnel Committee has reviewed the proposals and recommends the agreement
with HealthPartners. City Attorney Roger Knutson has reviewed and approved the letter of
agreement.
PrimM Issues to Consider
0 What bids were received?
• What are the plan designs?
• How is the cost share determined?
• What is the employee wellness program?
Supporting Information
• Resolution Authorizing Employee Health and Dental Insurance Rates for 2015
• Letter of Agreement
Cindi joosten, uman Resources Manager
Financial Impact: $89,000(h) $1,600(d) Budgeted: YIN _Y_ Source: _,Various Funds_,.
Related Documents (CTP, ERP, etc.):
ANALYSIS OF PRIMARY ISSUES:
What bids were received?
Bids were received from :Medica, Blue Cross/Blue Shield, HealthPartners, PEIP and Preferred
One. Staff reviewed fully funded and self-funded plans. Ultimately, the lowest rates were
proposed by HealthPartners.
What are the plan designs?
The health insurance plan options provide opportunities for employees to elect from three
different plans:
• Co -pay
• High Deductible HRAIVEBA
• High Deductible H.S.A.
The rate structure provided will encourage employees to choose one of the two high deductible
plans. The structure of those plans is as follows:
•'• Prescription Drugs
➢ $15 generic, $30 preferred brand, $60 non -preferred brand.
:• Annual Deductibles
➢ HRA/VEBA deductibles are $2,500 per individual and $5,000 per family.
➢ H.S.A. deductibles are $2,600 per person and $5,200 per family.
•'• Co-insurance
➢ Expenses for non -routine care for both the HRA/VEBA and H.S.A. plans will require an
80/20 co-insurance once the deductible has been met. The employee will pay 20% of the
cost until the out-of-pocket maximum is met.
•'• Annual Out -of -Pocket Max
➢ HRA/VEBA total out of pocket will be $3,500 per person and $6,000 per family.
H.S.A. total out of pocket will be $3,600 per person and $6,200 per family.
How is the cost share determined?
In 2014, the City moved all employee groups to a design that applies the same dollars to the high
deductible plans based on the chosen tier; single, single plus spouse, single plus children or
family. We continue this rate structure for 2015 and have allocated additional dollars by
splitting the premium increase based on the high deductible HRA/VEBA plan.
What is the employee wellness pro rg am?
HealthPartners will incent employees to complete a health assessment. They'll also provide
telephonic outreach to participants at high-risk; online and mobile tracking programs related to
stress, sleep, tobacco cessation and 10,000 steps; health screenings at City of Lakeville facilities to
test blood pressure, glucose, total cholesterol and body mass index measures; and two seminars
to target specific healthy behaviors.
CITY OF LAKEVILLE
RESOLUTION NO.
RESOLUTION AUTHORIZING
EMPLOYEE HEALTH AND DENTAL
INSURANCE RATES FOR 2015
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 health and dental 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 HealthPartners health insurance plans
(A) and HealthPartners dental insurance (B) effective January 1, 2015:
A. Health Ins.
MONTHLY PREMIUM COSTS
Employee
Employer
Total Premium VEBAIHSA Funds
Co -pay
Employee
307.58
371.51
679.09
EE + Child(ren)
824.09
532.80
1356.89
EE + Spouse
899.10
563.66
1462.76
Family
1090.68
696.01
1786.69
High Deductible/VEBA
Employee
24.86
489.17
514.03
160.00
EE + Child(ren)
385.62
638.46
1024.08
185.00
EE + Spouse
413.93
693.28
1107.21
185.00
Family
480.39
872.02
1352.41
205.00
High Deductible/HSA - Passport network
Employee
0.00
458.07
458.07
160.00
EE + Child(ren)
276.81
638.46
915.27
185.00
EE + Spouse E
293.40
693.28
986.68
185.00
Family
333.16
872.02
1205.18
205.00
Wellness
Employee Only
Employer match
of wellness gift
cards up to $135 annually.
The 2015 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.
B. Dental Ins. MONTHLY PREMIUM COSTS
Employee Employer Total Premium
Employee 0.00 47.65 47.65
EE + 1 38.35 47.65 86.00
Family 93.61 47.65 141.26
DATED this 3rd day of November, 2014.
CITY OF LAKEVIUE
Matt Little, Mayor
ATTEST:
Charlene Friedges, City Clerk
LETTER OF AGREEMENT
HealthPartners and City of Lakeville
HealthPartners, Inc. (hereafter referred to as "we", "us", or "our") agrees to provide for the period of January 1,
2015 ("Effective Date") through December 31, 2016, the health plan coverage as is described in the proposal
received from us by City of Lakeville (hereafter referred to as "you", or "your") on August 6, 2014. This Letter
of Agreement ("Agreement") applies to the initial 12 -month term of coverage and one 12 -month renewal term,
for a total rate guarantee period of 24 months.
The benefits offered will be the equivalent of what is currently described below. The monthly base rates are
Table 1— Guaranteed Rates
Empower HSA
Single
2015
2016
Empower HRA
$986.68
$1,075.48
Single
$514.03
$560.29
Single + Spouse
$1,107.21
$1,206.86
Single + Child(ren)
$1,024.08
$1,116.25
Family
$1,352.41
$1,474.13
Empower HSA
Single
$458.07
$499.30
Single+ Spouse
$986.68
$1,075.48
Single + Child(ren)
$915.27
$997.64
Family
$1,205.18
$131-3.65
$30 Copay Plan
Single
$679.09
$740.21
Single+ Spouse
$1,462.76
$1,594.41
Single + Child(ren)
$1,356.89
$1,479.01
Family
$1,786.69
$1,947.49
We guarantee that, the lesser of these rates or the standard. HealthPartners renewal calculation rate need, will
hold for the duration of this Agreement, with the following exceptions:
■ The actuarial value of any new or increased premium taxes, assessments, other taxes, or changes in
eligibility or benefits mandated as a result of healthcare reform legislation (including but not limited to
the Patient Protection and Affordable Care Act enacted on March 23, 2010 [for example, the insurance
industry fee, the excise tax on high cost plans, the comparative effectiveness fee]) or other plan terms or
conditions required to be changed by law, may be added above and beyond the increase limit above.
■ Any enrollment change of more than 10% from the initial enrollment due to merger, acquisition, sale, or
other reason will allow us the opportunity to revise this rate guarantee.
■ In the event the product initially sold is no longer being offered, the program that most closely
resembles the initial product in terms of benefits will be offered at the renewal with appropriate actuarial
values of any changes added to or subtracted from the increase above.
■ HealthPartners may terminate this Agreement if we are unable to perform our obligations as a result of
events beyond our reasonable control, including, but not Iimited to, acts of God, natural disaster, war,
pandemic, or destruction of service facilities.
HealthPartners has entered into this two-year rate commitment within the context of establishing a long-term
relationship. We will release a standard HealthPartners renewal calculation prior to the end of each contract
period. In exchange for our rate guarantee, you must remain directly contracted with us on a fully insured basis
as the only carrier offered to your employees through this or any other medical benefit offering. In the event you
HealthPartners-
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terminate the contract with us before the two-year term expires or offer any other health carrier during the two-
year term you will pay us the Rate Differentials (as outlined in Table 3 between the Guaranteed Rates and the
Standard Rates) times the last month's enrollment times the number of months remaining in the contract. In the
event State or Federal law requires you to terminate the contract, HealthPartners may waive some or all of Rate
Differentials.
Table 2 - Standard Rates
Empower HSA
Single
2015
2016
Empower HRA
$1,065.61
$1,161.52
Single
$555.15
$605.12
Single + Spouse
$1,195.79
$1,303.41
Single + Child(ren)
$1,106.01
$1,205.55
Family
$1,460.60
$1,592.06
Empower HSA
Single
$494.72
$539.24
Single + Spouse
$1,065.61
$1,161.52
Single + Child(ren)
$988.49
$1,077.46
Family
$1,301.59
$1,418.74
$30 Copay Plan
Single
$733.42
$799.42
Single+ Spouse
$1,579.78
$1,721.96
Single + Child(ren)
$1,465.44
$I,597.33
Family
$1,929.63
$2,103.29
Table 3 - Rate Differentials
2015
2016
Empower HRA
Single
$41.12
$44.82
Single + Spouse
$88.58
$96.55
Single + Child(ren)
$81.93
$89.30
Family
$108.19
$117.93
Empower HSA
Single
$36.65
$39.94
Single + Spouse
$78.93
$86.04
Single + Child(ren)
$73.22
$79.81
Family
$96.41
$105.09
$30 Copay Plan
Single
$54.33
$59.22
Single + Spouse
$117.02
$127.55
Single + Child(ren)
$108.55
$118.32
Family
$142.94
$155.80
You agree to comply with the HealthPartners' contribution and participation requirements and maintain the
current employer premium and fund contribution strategy and plan offerings for the duration of this Agreement.
If these terms and conditions are not met, HealthPartners has the option to make an actuarially appropriate
adjustment to the rates up to and including not releasing renewal rates. You acknowledge that this Agreement is
subject to all the terms and conditions of the Master Group Contract, which will be issued to you upon
acceptance of your application for coverage.
*1 HealthPartners-
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In order for this Agreement to be valid, it must be signed and returned to HealthPartners within 6 months after
the group's initial effective date. If it remains unsigned for six or more months, it is null and void. If this
agreement is not signed and returned within 30 days after the initial effective date, then the guaranteed rates
will be increased by 1% for each month thereafter. The parties to this Agreement agree to proceed with the
steps necessary to ensure a successful implementation of this program.
City of Lakeville
Signature to Accept Date
HealthPartners, Inc.
Douglas N. Smith Date
Senior Vice President, Health Solutions, Sales &
Account Service
I have read and understand the above agreement however; I am declining the rate guarantee.
(Print Name)
?_.
HealthPartners-
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ealthPartners-
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(Signature)
Date
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