HomeMy WebLinkAboutItem 06.h
Date: Item No.
Resolution Approving 2021 Insurance Rates with HealthPartners
Proposed Action
Staff recommends adoption of the following motion: Move to approve for the health and dental
insurance rates for 2021.
Overview
The City entered into a two-year agreement with HealthPartners for 2020 and 2021. HealthPartners had
offered a guaranteed rate cap of 9% for 2021.
In September, the Insurance Committee met with NFP to review a summary of the claims utilization and
rate increases for 2021 health and dental plans with HealthPartners. HealthPartners evaluates the claims
paid year-to-date and estimated additional claims for the balance of the year based on our history.
Revenue (premiums) are compared against expenses (claims, administrative costs, and taxes). This
evaluation results in an increase of 6.11% for the HRA/VEBA medical plan and 6.48% for the H.S.A.
medical plan. The dental insurance increase for 2021 is 4%.
Primary Issues to Consider
• What are the health and dental plan designs?
• How is the cost share determined?
Supporting Information
• 2021 Health and Dental Insurance Information
• Resolution approving Health and Dental Insurance rates for 2021
Financial Impact: $ Budgeted: Y☒ N☐ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Tammy Schutta, Human Resources Manager
September 21, 2020
General Fund
2021 Health and Dental Insurance Information
What are the 2021 health plan designs?
• High deductible HRA/VEBA (57 employees currently enrolled)
• High deductible HSA (148 employees currently enrolled)
Annual Deductible – In Network
• HRA/VEBA deductibles are $2,500 per person and $5,000 per family
• HSA deductibles are $2,800 per person and $5,600 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 $3,800 per person and $6,400 per family
The employee will pay an additional 20% of 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 decrease with employees for the coverage tiers that include
spouse and/or dependent. Once these employer dollar values are established, they are applied to the
HRA/VEBA plan.
What is the 2021 dental plan design?
The City contributes 100% of the cost for 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 as
follows:
• Diagnostic and preventive – paid at 100%
• Basic services – paid at 80%
• Crowns – paid at 50%
CITY OF LAKEVILLE
RESOLUTION NO. ____
Resolution Approving Employee Health and Dental Insurance Rates for 2021
WHEREAS, the City Council will establish 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 is approved for the HealthPartners health insurance plans
(A) and Health Partners dental insurance plan (B) effective January 1, 2021:
A. Health Ins. MONTHLY PREMIUM COSTS
Employee Employer Total Premium VEBA/HSA Funds
High Deductible/VEBA
Employee 50.23 593.28 643.51 160.00
EE + Child(ren) 511.57 772.97 1284.54 185.00
EE + Spouse 547.22 838.90 1386.12 185.00
Family 643.18 1049.90 1693.08 205.00
High Deductible/HSA
Employee 0.00 593.28 593.28 160.00
EE + Child(ren) 411.30 772.97 1184.27 185.00
EE + Spouse 439.01 838.90 1277.91 185.00
Family 511.01 1049.90 1560.91 205.00
The 2021 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.
ADOPTED by the Lakeville City Council this 21st day of September 2020.
______________________________
Douglas P. Anderson, Mayor
_________________________________
Charlene Friedges, City Clerk
B. Dental Ins. MONTHLY PREMIUM COSTS
Employee Employer Total Premium
Employee 0.00 51.74 51.74
EE + 1 41.64 51.74 93.38
Family 101.65 51.74 153.39