HomeMy WebLinkAboutItem 06.dNovember 8, 2010
Proposed Action
Staff recommends adoption of the following motion: Move to approve a resolution
designating employee health insurance rates for 2011.
Passage of this motion will result in a continuation of the current plan with Health
Partners at renewal rates.
Overview
2011 HealthPartners health insurance premiums are increasing by 15 %. We are
proposing that the city continue to provide the same cost - sharing method that we have
used in the past.
The City will continue to educate employees on how to make good choices when it
comes to spending health care dollars in an effort to control future costs. The 2011
rates are disclosed on the attached resolution and will be effective for non -union
employees. Rates for union employees must still be negotiated but current benefits are
the same for union and non -union employees.
The Personnel Committee is recommending approval of this resolution.
Primary Issues to Consider
• What process was used to obtain insurance quotes?
6 Are there any new options being offered?
• How is the cost of the premiums determined?
Supporting Information
Human Reso
ces Manager
Council Approval of Resolution Designating
Employee Health Insurance Rates for 2011
Item No.
• Resolution Authorizing Renewal of Employee Health Insurance Rates for
2011
Financial Impact: $_129,000 Budgeted: YIN _Y Source: _Various Funds
Related Documents (CIP, ERP, etc.):
Notes: _Health care benefits apply to all funds in which benefit earning employees are
budgeted.
Analysis of Primary Issues:
What process was used to obtain insurance quotes?
The City's insurance brokers, Financial Concepts Inc, (FCI), pulled a utilization analysis
for our plan using claims from June 1, 2009 through May 31, 2010. Based on the
information gathered, they advised the city's insurance committee that it would be
helpful to solicit bids in an effort to receive a better price.
Four vendors responded to our requests. Two of them, Preferred One and Blue Cross
and Blue Shield declined to quote. Medica proposed an increase of 19.9% and refused
to provide a rate cap for 2012. HealthPartners proposed an increase of 15% with a rate
cap in 2012 of 23 %. The insurance committee decided that HealthPartners was our
best option based on the price quotes.
Are there any new options being offered?
FCI worked with HealthPartners and the insurance committee to determine if there were
any additional methods available which would provide a lower -cost option to our
employees. They suggested a new high deductible benefit which we have included in
our 2011 proposal.
The plan includes a deductible of $2,400 per individual or $4,800 per family.
Employees will be responsible for 100% of their prescription drug costs and any medical
treatment until they reach the deductible, excluding preventive care coverage which is
covered by the plan.
The plan is tied to a health savings account which will allow the employee to set aside
tax free dollars to better enable them to be prepared for medical expenses as they are
incurred. The plan is offered at a 0% increase over 2010 premiums and has the benefit
of saving the employer dollars as well.
How is the cost of the premiums determined?
Since 2000, the city has offered optional plans to our employees. We established a
practice of paying 100% of the single premiums for our employees and sharing the cost
of dependent coverage increases on a 50/50 basis.
In 2006, we began offering a high deductible plan. We elected to discontinue funding
additional dollars towards the Open Access co -pay plan, and instead put those dollars
towards the high deductible plan in an effort to encourage employees to choose the
high deductible plan.
We were successful in our attempts and now have over half of our employees electing
the high deductible option which ultimately saves money for both the city and its
employees.
We believe the new high deductible plan will be just as successful in encouraging our
employees to be smarter consumers. To incent this choice, we've taken some of the
money that would otherwise have been spent on the current plans and are including
those dollars as an additional contribution towards the new health savings account.
CITY OF LAKEVILLE
RESOLUTION NO.
RESOLUTION DESIGNATING
EMPLOYEE HEALTH INSURANCE RATES FOR 2011
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;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Lakeville that the following monthly cost responsibility be adopted for the Health
Partners health insurance plans effective January 1, 2011:
MONTHLY PREMIUM COSTS
Employee Employer Total Premium
Open Access
Family 793.15 696.01 1489.16
EE + Spouse 643.06 563. 1206.72
EE +Child(ren) 607.18 532.80 1139.98
Employee 193.50 371.51 565.01
Select Choice
Family 497.85 842.41 1340.26
EE + Spouse 403.38 682.69 1086.07
EE + Child(ren) 381.05 644.91 1025.96
Employee .00 508.51 508.51
High
DeductibleIHRA
Family 386.02 777.63 1163.65
EE + Spouse 331.80 611.15 942.95
EE + Child(ren) 318.98 571.81 890.79
Employee .00 441.51 441.51
High
Deductible/HSA
Family 311.99 703.60 1015.59
EE + Spouse 271.81 551.16 822.97
EE + Child(ren) 262.31 515.13 777.44
Employee .00 385.33 385.33
The 2011 HRAIVEBA and HSA funding will be deposited in January and July 1
employees choosing the High Deductibie /HRA or HSA plan. These
amounts will be prorated based on the eligibility date for new employees.
HRAIVEDA January July
Family 988.00 988.00
EE + Spouse 912.50 912.50
EE + Child(ren) 894.50 894.50
Employee 763.50 763.50
HSA
Family 1188.00 1188.00
EE + Spouse 1112.50 1112.50
EE + Child(ren) 1094.50 1094.50
Employee 963.50 963.50
APPROVED and ADOPTED by the City Council of the City of Lakeville
this 15th day of November, 2010.
ATTEST:
Charlene Friedges, City Clerk
CITY OF LAKEVILLE
BY:
Holly Dahl, Mayor