4.12. SR 11-18-2013 City of
Elk Request for Action
River
To Item Number
Mayor and City Council 4.12
Agenda Section Meeting Date Prepared by
Consent November 18, 2013 Lauren Wipper, Human Resource Representative
Item Description Reviewed by
2014 Flexible Benefit Design Cal Portner, City Administrator
Reviewed by
Action Requested
Approve by motion the 2014 Flexible Benefit Design.
Background/Discussion
Renewal/Premium Rates
Our renewal with Medica called for a 42%premium rate increase for 2014. Medica offered us 35%. Our
brokers,Financial Concepts Inc. (FCI),recommended we go out for bid to see how we would do in the
market. We received bids from three companies,B1ueCross/B1ueShield, Public Employees Insurance
Program (PEIP),and LOGIS. Armed with these bids, FCI went back to Medica and negotiated our
increase down to an average of 22.9%. This bid provided different percentage increases to each of our
three plans and when we requested for those to be evened out,they brought them all to 20%.
Medica also added a network option for our High Deductible Health Plan (HDHP). Employees may stay
with the open access network that we have been using or they may choose to participate in either the
Elect or Essential network. The network option provides an 8.4% savings in monthly premium. This
can only be added to one of our plans and, since our HDHP has the highest enrollment,we felt that was
the best option.
Our dental plan received a 4.8%premium increase making single dental coverage $37.31 per month and
family$98.75. The rest of the insurance coverage we offer in the flexible benefits plan, short-term
disability,long-term disability, term life insurance, and additional life insurance, have no change in
premiums. We are again offering the option for employees to opt out of medical insurance coverage with
the city if they certify that they have coverage elsewhere.
City Contribution
The preliminary budget includes a 5%increase in the city's contribution to employee's flexible benefits
plans. As well,we have funds available from the Early Retiree Reinvestment Program grant we received
in 2011. These grant funds are required to be used to offset the cost of insurance to employees and we
will be using them to do just that in 2014.
Since 2010,we have used a portion of the city's contribution to help fund the Health Savings Accounts
(HSAs) of employees electing the HDHP. Because of the high increase in premiums for 2014,we have
decided to provide all of the available funds to the monthly cost of premiums rather than fund HSAs. As
a result, even with the high increase in premium,the impact to employees ranges from -$2 to $30 for
P a w E R E U 6 Y
NaA f RE]
single coverage and from$97 to $200 for family coverage. (This is the additional cost to the employee
over 2013. Where they fall in the range depends on the insurance plan that they elect.) Employee
electing one of the new network options will see a premium savings.
The 2014 Flexible Benefits Plan Design is included as an attachment.
Financial Impact
The projected benefit renewal was accounted for in the preliminary budget. The ERRP grant funds were
received in 2011.
Attachments
■ 2014 Flexible Benefits Plan Renewal
N:\Public Bodies\Agenda Packets\l 1-18-2013\Final\x4.12 sr Flex Bene Plan Design.docx
2014 Flexible Benefits Plan Renewal
2014 Coverage Single +Spouse +Child(ren) Family
City Contribution + 549.00 801.00 801.00 1,076.00
ERRP (2011 Grant) + 13.00 19.00 19.00 26.00
Life Ins - 4.50 4.50 4.50 4.50
Single Dental - 37.31 37.31 37.31 37.31
Remaining for Health Ins = 520.19 778.19 778.19 1060.19
Medica Choice Passport Network
$25 Co-pay Mthly Premium 636.49 1,393.03 1,380.92 2,103.79
Monthly Employee Cost 116.30 614.84 602.73 1,043.60
Annual Employee Cost 1,395.60 7,378.08 7,232.76 12,523.20
$500 Ded Mthly Premium 551.10 1,206.16 1,195.69 1,821.60
Monthly Employee Cost 30.91 427.97 417.50 761.41
Annual Employee Cost 370.92 5,135.64 5,010.00 9,136.92
$2,500 HDHP Mthly Premium 446.96 978.23 969.73 1,477.33
Monthly Employee Cost -73.23 200.04 191.54 417.14
Annual Employee Cost -878.76 2,400.48 2,298.48 5,005.68
Medica Elect or Essential Network
$2,500 HDHP Mthly Premium 415.67 909.75 901.85 1,373.92
Monthly Employee Cost -104.52 131.56 123.66 313.73
Annual Employee Cost -1,254.24 1,578.72 1,483.92 3,764.76
Opt-Out 300.00
For 2014 we have decided to use all of the city contribution toward the monthly amount given to flex plan
elections and are not contributing any additional money to employee's HSAs.