HomeMy WebLinkAboutItem 06.tNovember 2, 2015 Item No.________
RESOLUTION APPROVING
HEALTH AND DENTAL INSURANCE RATES FOR 2016
Proposed Action
Staff recommends adoption of the following motion: Move to approve health and dental
insurance rates for 2016.
Passage of this motion will provide insurance coverage through HealthPartners.
Overview
City Consultants from National Financial Partners assisted the employee insurance committee
in evaluating the claims and plan designs for 2016. The initial proposal for health insurance
was for a 23% increase; however, we have a rate guarantee of “no more than 9%”. The
proposal for dental insurance is 2%.
The City Administrator and Human Resources Manager are recommending approval of
HealthPartners plans with no design changes for 2016 and have proposed the attached rate
structure. The Personnel Committee has reviewed and approved the proposal.
Primary Issues to Consider
• What are the plan designs?
• How is the cost share determined?
Supporting Information
• Analysis of Primary Issues
• Resolution approving Employee Health and Dental Insurance rates for 2016
Cindi Joosten
Human Resources Manager
Financial Impact: $__79,643 (all funds)_______Budgeted: Y/N ____ Source: __Various______
Related Documents (CIP, ERP, etc.): ________________________________________
Community Values __Good Value for Public Services_________________________________
_____________________________________________________________________________
ANALYSIS OF PRIMARY ISSUES
What are the health plan designs?
• Co-pay (2 employees enrolled)
• High deductible HRA/VEBA (79 employees enrolled)
• High deductible H.S.A. (97 employees enrolled)
The City has not provided additional contributions towards the co-pay plan since 2006. This
rate design has encouraged employees to choose one of the two high deductible plans.
Annual Deductible – In Network
• HRA/VEBA deductibles are $2,500 per person and $5,000 per family
• HSA deductibles are $2,600 per person and $5,200 per family
Annual Out-of-Pocket Max – In Network
• HRA/VEBA maximum is $3,500 per person and $6,000 per family
• HSA maximum is $3,600 per person and $6,200 per family
The employee will pay an additional 20% of the cost of care after the annual deductible is met
until they meet the out-of-pocket maximum.
Prescription Drugs – Formulary
• HRA/VEBA requires a co-pay of $15 for generic, $30 for brand, and $60 for non-
preferred drugs.
• HSA does not include prescription drug coverage until after the deductible is met.
Cost share
The base plan (HSA) provides minimum essential coverage at the lowest cost; therefore rates
are determined off of this plan. Employer premiums are established by providing 100% of the
single coverage and splitting the cost of the increase with employees for the coverage tiers
that include spouse and/or dependents. Once these employer dollar values are established,
they are applied to the HRA/VEBA plan.
What is the dental plan design?
The City contributes 100% of the cost for the single coverage. Any additional costs for
dependents are paid by the employee. The plan provides up to $1,500 of coverage for in-
network expenses each year as follows:
• Diagnostic and preventive – paid at 100%
• Basic services – paid at 80%
• Crowns – paid at 50%
CITY OF LAKEVILLE
RESOLUTION NO._________
RESOLUTION AUTHORIZING
EMPLOYEE HEALTH AND DENTAL
INSURANCE RATES FOR 2016
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, 2016:
A. Health Ins. MONTHLY PREMIUM COSTS
Employee Employer Total Premium VEBA/HSA Funds
Co-pay
Employee 368.70 371.51 740.21
EE + Child(ren) 946.21 532.80 1479.01
EE + Spouse 1030.75 563.66 1594.41
Family 1251.48 696.01 1947.49
High Deductible/VEBA
Employee 60.99 499.30 560.29 160.00
EE + Child(ren) 439.87 679.65 1119.52 185.00
EE + Spouse 469.18 737.68 1206.86 185.00
Family 547.87 926.26 1474.13 205.00
High Deductible/HSA
Employee 0.00 499.30 499.30 160.00
EE + Child(ren) 317.99 679.65 997.64 185.00
EE + Spouse 337.80 737.68 1075.48 185.00
Family 387.39 926.26 1313.65 205.00
Wellness
Employee Only
Employer match of wellness gift cards up to $135 annually.
The 2016 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.
DATED this 2nd day of November, 2015.
CITY OF LAKEVILLE
___________________________
Matt Little, Mayor
ATTEST:
_____________________________
Charlene Friedges, City Clerk
B. Dental Ins. MONTHLY PREMIUM COSTS
Employee Employer Total Premium
Employee 0.00 48.60 48.60
EE + 1 39.12 48.60 87.72
Family 95.48 48.60 144.08