4.6. SR 11-03-2014 City of
Elk=' Request for Action
River
To Item Number
Mayor and City Council 4.6
Agenda Section Meeting Date Prepared by
Consent November 3, 2014 Lauren Wipper, Human Resource Representative
Item Description Reviewed by
2015 Flexible Benefit Design Cal Portner, City Administrator
Reviewed by
Action Requested
Approve,by motion,the 2015 Flexible Benefit Plan Design.
Background/Discussion
Renewal/Premium Rates
Our initial Medica renewal was a total premium increase of 2.7%,which is a fantastic renewal for our
group;however,the premium change was not consistent from plan to plan,ranging from -10.2% to
+6.0%. Our brokers,Financial Concepts Inc. (FCI),negotiated with Medica to rebalance the premium
change and a resulting premium impact of-0.5%. The copay and $500 deductible plans have no change
and the high deductible health plans are decreasing 0.7%.
A few employees have expressed dissatisfaction with our dental provider,Principal. FCI went to market
to find options from other providers. Principal quoted a renewal at 3%. We received quotes from
Assurant,Delta Dental, and MetLife. Assurant and MetLife's quotes provided premium savings;
however,they included significant benefit decreases for employees using out-of-network providers. FCI
further negotiated a 0%premium change from Principal for 2015 with whom we will renew for 2015.
Dental Opt-out
Two years ago,we implemented a Medical Coverage Opt Out option,which has been well-received by
employees who were either double covered under their spouses plan or benefitted from being covered
under their spouses plan. Employees opting out are required to provide proof of other medical coverage.
This year,we would like to add an opt-out option for dental coverage. Most dental plans offer only single
and family levels of coverage. Some employees may be double covered because their spouse elects to
carry family coverage or may benefit by taking coverage only on a spouses plan.
City dental coverage was previously required for all employees though our plan. With a dental opt-out
option,there is no additional cost to the city. Employees may elect medical coverage and opt out of
dental coverage or vice versa,with proof of coverage.
Adding the dental opt-out option requires an amendment to our Flexible Benefits Plan document. Scott
Wold, of Hitesman&Wold,is preparing the amendment which will be brought to Council for approval.
P a w E R E U 6 Y
NaA f RE]
City Contribution
The city maintains a Cafeteria-style plan with a pre-determined contribution for all insurance benefits.
We budget each year based on the last known enrollment,which is subject to change throughout the year.
The city contribution is a 5%increase over last year's total. As you may recall,last year we experienced a
steep (20%) premium increase from Medica,which was negotiated down from the initial renewal of 35%.
Health Savings Account (HSA) Contribution
Each year,the IRS reviews and adjusts the criteria it uses to determine if a health plan qualifies as a High
Deductible Health Plan (HDHP). For 2015, the deductible on our type of plan increases by$100 for
single coverage and $200 for family coverage. In this case, family means anything more than one person.
Typically,with the design of the Flexible Benefit Plan,we attempt to provide a contribution to the HSAs
of enrollees in the HDHP to offset the deductible. This amount has ranged from $240 to $672 per year.
Last year,we were not able to make this contribution due to the high premium increases,but would like
to resume these contributions this year. To offset the deductible increase and help with the annual
deductible,we propose to provide a $324 HSA contribution to employees electing a HDHP.
Financial Impact
The projected benefit renewal is accounted for in the preliminary budget.
Attachments
■ 2015 Flexible Benefits Plan Renewal spreadsheet
2015 Flexible Benefits Plan Renewal
Single +Spouse +Child(ren) Family
City Contribution 562.00 820.00 820.00 1,102.00
Life Ins 4.50 4.50 4.50 4.50
Remaining for Health Ins 557.50 815.50 815.50 1097.50
Medica Choice Passport Network
$25 Co-pay Mthly Premium 636.49 1,393.03 1,380.92 2,103.79
Monthly Employee Cost 78.99 577.53 565.42 1,006.29
Annual Employee Cost 947.88 6,930.36 6,785.04 12,075.48
$500 Ded Mthly Premium 551.10 1,206.16 1,195.69 1,821.60
Monthly Employee Cost -6.40 390.66 380.19 724.10
Annual Employee Cost -76.80 4,687.92 4,562.28 8,689.20
$2,500 HDHP Mthly
Premium 443.83 971.38 962.94 1,466.99
Monthly Employee Cost -113.67 155.88 147.44 369.49
Annual Employee Cost -1,364.04 1,870.56 1,769.28 4,433.88
Medica Elect or Essential Network
$2,500 HDHP Mthly
Premium 412.76 903.39 895.54 1,364.30
Monthly Employee Cost -144.74 87.89 80.04 266.80
Annual Employee Cost -1,736.88 1,054.68 960.48 3,201.60
Additional HSA contribution of$324 for the year, $13.50 per pay period.
Opt-Out of Medical 300.00
Dental
Single 37.01
Family 98.75