HomeMy WebLinkAbout4.D.1. 2014 Employee Health Insurance (E) PConsent Business 4. D. 1.
SHA OPEE
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Kris Wilson, Assistant City Administrator
DATE: 10/01/2013
SUBJECT: 2014 Employee Health Insurance (E)
Action Sought
The Council is asked to authorize the appropriate officials to enter into contracts with Medica and
set the employer contribution rates for employee's 2014 health insurance options.
Background
The City currently offers employees health insurance through Medica. There are two plans to
choose from, and within each plan there are two provider networks. Medica has offered to
continue our existing plans for 2014 at the current rates, which are listed on Attachment A.
For many years, the City's policy has been to contribute 100% of the monthly premium cost for
single coverage, 88% of the cost for 2-party coverage and 72.5% of the cost of family coverage
under the less-expensive Elect network. Those employees desiring the larger, more-expensive
Passport network receive the same dollar amount contribution from the City and are then
individually responsible for the added costs associated with the larger network. This leads to
the employer/employee split outlined on Attachment A.
Additionally, since 2008, the City has contributed 50% of the cost of the annual deductible on the
high deductible plan to a Health Savings Account for employees selecting this plan. This equals
$750 for those selecting single coverage and $1500 for those with 2-Party or Family coverage.
The one proposed changed for 2014 health insurance is the addition of a third provider network--
Medica's Essential Network. There is no cost impact to this addition, and the monthly premiums
would be identical to those for the Elect Network. The benefit is that it makes the Fairview Clinic
system an option for employees, which is something several have requested.
Recommendation
I recommend that the Council accept the no increase offer from Medica and authorize
continuation of the City's long-standing contribution levels for calendar year 2014.
Other Benefits
In addition to health insurance, the City also offers dental, life and long-term disability insurance
to employees. The life and long-term disability policies are multi-year contracts and are not up for
renewal at this time. Renewal rates for dental insurance have not yet been received, but have
traditionally averaged about 3%. The Council will be asked to take action on dental insurance at a
future meeting, once the renewal data has been received.
Relationship to Vision
Providing employees with competitive insurance benefits helps the City attract and retain
well-qualified staff. It also allows employees to more easily meet their own medical needs and
those of their families, thereby improving attendance and productivity. This contributes to Goal
E: Deliver effective and efficient public services by a staff of well-trained, caring and
professional employees.
Requested Action
If the Council concurs, it should offer a motion to authorize the appropriate officials to enter into
contracts with Medica and authorize the continuation of current employer contribution levels for
2014 employee health insurance.
Attachments: Attachment A - Proposed Rates
ATTACHMENT A
Proposed Monthly Premiums
2014 High Deductible Plan
ELECT ESSENTIAL PASSPORT
NETWORK NETWORK NETWORK
Single $474.34 $474.34 $515.59
2-Party $948.67 $948.67 $1,031.18
Family $1,512.62 $1,512.62 $1,644.14
2014 Traditional Plan
ELECT ESSENTIAL PASSPORT
NETWORK NETWORK NETWORK
Single $578.43 $578.43 $642.71
2-Party $1,156.90 $1,156.90 $1,285.44
Family $1,844.61 $1,844.61 $2,049.58
Proposed Employer / Employee Split
High Deductible Plan
Elect or Essential Network Passport Network
Total Employer Employee Total Employer Employee
Single $474.34 $474.34 $0.00 $515.59 $474.34 $41.25
2-Party $948.67 $834.83 $113.84 $1,031.18 $834.83 $196.35
Family $1,512.62 $1,096.65 $415.97 $1,644.14 $1,096.65 $547.49
Traditional Plan
Elect or Essential Network Passport Network
Total Employer Employee Total Employer Employee
Single $578.43 $578.43 $0.00 $642.71 $578.43 $64.28
2-Party $1,156.90 $1,018.07 $138.83 $1,285.44 $1,018.07 $267.37
Family $1,844.61 $1,337.34 $507.27 $2,049.58 $1,337.34 $712.24
Proposed HSA Contribution (for employees selecting the High Deductible Plan)
Annual Employer's Annual
Deductible Contribution
Single $1,500 $750
2-Party $3,000 $1,500
Family $3,000 $1,500