4.5. SR 11-07-2016 EGty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 4.5
Agenda Section Meeting Date Prepared by
Consent November 7, 2016 Lauren Wipper, Human Resource Representative
Item Description Reviewed by
2017 Flexible Benefits Plan Design Cal Portner, City Administrator
Reviewed by
Action Requested
Approve,by motion, the 2017 Flexible Benefits Plan Design.
Background/Discussion
Renewal/Premium Rates
Medical
Our initial renewal with Medica called for a premium increase of 17.41%. Our brokers, NFP Corporate
Benefits,negotiated with Medica to reduce the premium increase to an average of 9.5%. We have
eliminated the Copay plan because enrollment was down to two employees. We have added another
High Deductible Health Plan (HDHP) that has an 80/20 coinsurance after the deductible. The premium
rates are lower than the other plans and we felt this would be a desirable option for employees who have
been able to build a balance in their Health Savings Account.
Dental
After receiving employee concerns regarding our dental provider,we circulated a survey to discern
employee satisfaction. The results showed that 30 of the 59 respondents were not happy with the city
plan. We went to market to find other options and selected Delta Dental. In-network coverage is the
same as our current plan and the premium rates are 4.9%lower with a 2-year rate guarantee.
Vision
In the dental survey we also asked employees if they would be interested in a vision plan. 78% of
respondents indicated they would so we went to market to find out what options were available. We
have decided to offer EyeMed's Voluntary Vision Plan.
City Contribution
The city maintains a Cafeteria-style plan with a predetermined contribution for all insurance benefits.
The annual budget is based on the last known enrollment,which is subject to change throughout the year.
The city contribution is a 5%increase over the last year's actual expenditure.
In previous years, the group term life insurance premium has been deducted from each employee's city
contribution amount. To accommodate the way this plan is set up in our new HRIS system,UltiPro,we
are accounting for the life insurance premium amount from the total budget prior to determining the
individual allocations to the plan.
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The plan is designed to provide a dollar amount to each employee based on the family level of medical
coverage elected. Employees taking single coverage or opting out of coverage all-together have money
left over to "buy" other benefits in the plan. Employees can also "buy" other benefits through payroll
deductions.
Employees electing single coverage will see anywhere from a$9.50 savings to a$17.62 increase in their
premium costs and families will have increase ranging from $14.96 to $104.62 monthly. Employees
wishing to enroll in the new 80/20 HDHP will see savings over the current HDHP in the Passport
network ranging from $66.40 to $219.46 per month.
Health Savings Account (HSA) Contribution
Typically, the Flexible Benefits Plan includes a contribution for HSAs for enrollees in the HDHPs to
offset deductibles. This amount has ranged from $240 to $672 per year. This year's plan design proposes
a $480 HSA contribution which is the same as the contribution provided in 2016.
Financial Impact
The pro)ected benefit renewal is accounted for in the preliminary budget.
Attachments
■ 2017 Flexible Benefits Plan Renewal Spreadsheet
2017 Flexible Benefits Plan Renewal
Single +Spouse +Child(ren) Family
City Contribution 624.00 910.00 910.00 1,223.00
Medica Choice Passport Network
$500 Ded 80/20 Mthly Premium 603.16 1,320.11 1,308.64 1,993.64
Monthly Employee Cost -20.84 410.11 398.64 770.64
Annual Employee Cost -250.08 4,921.32 4,783.68 9,247.68
$2,600 100% HDHP Passport 517.64 1,132.93 1,123.08 1,710.96
Monthly Employee Cost -106.36 222.93 213.08 487.96
Annual Employee Cost -1,276.32 2,675.16 2,556.96 5,855.52
$2,600 80/20 HDHP Passport 451.24 987.61 979.03 1,491.50
Monthly Employee Cost -172.76 77.61 69.03 268.50
Annual Employee Cost -2,073.12 931.32 828.36 3,222.00
Medica Elect or Essential Network
$2,600 100% HDHP Elect/Essential 481.40 1,053.62 1,044.47 1,591.19
Monthly Employee Cost -142.60 143.62 134.47 368.19
Annual Employee Cost -1,711.20 1,723.44 1,613.64 4,418.28
Additional HSA contribution $480 for the year, $20.00 per pay period.
Opt-Out of Medical 300.00
Delta Dental 35.48 93.90 93.90 93.90