4.6. SR 11-22-1999
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.ity of 1Y
Ell{ River
Item #4.6.
MEMORANDUM
TO:
Mayor & City Council
FROM:
Lori Johnson, Finance Director
DATE:
November 22,1999
SUBJECT: Health Insurance Contract Proposals
As many of you may be aware, health insurance contract renewals have been
averaging between 25 to 35 percent or more for most businesses, both large
and small, in Minnesota. In anticipation of a substantial increase, the city
requested proposals for the January 1, 2000, contract year. Proposals were
received from four companies offering ten different programs.
.
On Friday, November 19, 1999, informational meetings will be held with the
employees to discuss the health and dental insurance renewals. Final Medica
numbers were just received within the past week and information is still being
gathered regarding the dental program. Therefore, detailed information on
the recommended proposals is not included in the packet. However, attached
for your review is a list of the proposals received and the resulting increase
along with a sheet showing the cost to the employees for the various insurance
programs.
I will be at Monday's meeting to present additional information and answer
questions regarding the proposals. At this time staff and our insurance agents
are recommending that Medica provide health insurance to our employees and
that dental be provided by Delta Dental. Delta Dental's premiums are lower
than our current Met Life premiums and the coverage is slightly better. Also,
Medica's rates for health insurance may be lower for some employees
depending upon the type of coverage an employee elects. However the copay
has been increased from $10 to $15.
Action Requested
.
The City Council is asked to consider health insurance proposals for non-union
employees. Although both the union and non-union dental renewals were
earlier this fall, the council may consider changing to Delta Dental to improve
benefits at a decreased premium.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
HEALTH INSURANCE PROPOSALS
CONTRACT BEGINNING JANUARY 1, 2000
. Employee Employee
Employee Family & Spouse & Child(ren)
CURRENT
Blue Cross Blue Shield
Double Gold 194.32 582.97 446.95 408.08
CMM (Deductible) 164.85 494.85 379.39 346.40
QUOTES
BCBS Renewal
Double Gold 316.74 950.24 729.63 665.1 7
% increase 63.00% 63.00% 63.25% 63.00%
CMM (Deductible) 268.87 806.61 618.41 564.63
% increase 63.10% 63.00% 63.00% 63.00%
Medica
MSC7 Non-Elect 234.25 821.60 491 .90 433.35
% increase 20.55% 40.93% 10.06% 6.19%
MSC7 Elect 210.85 739.50 442.70 389.90
% increase 8.51% 26.85% -0.95% -4.46%
. Preferred One 278.82 863.00 629.68 570.00
% increase 43.48% 48.04% 40.88% 39.68%
League of Minnesota Cities
Health Partners Classic 337.15 774.37 774.37 774.37
% increase 73.50% 32.83% 73.26% 89.76%
Health Partners Plan 350.65 805.35 805.35 805.35
% increase 80.45% 38.15% 80.19% 97.35%
LMCIT Premier 397.84 913.76 913.76 913.76
% increase 104.73% 56.74% 104.44% 123.92%
$500 Deductible 333.81 823.59 823.59 823.59
% increase 71.78% 41.27% 84.27% 101.82%
$1000 Deductible 292.93 711.16 711.16 711.16
% increase 50.75% 21.99% 59.11 % 74.27%
PREMIUM HISTORY
August 1 994 Health Partners 158.89 503.05 No Office Co-pay
October 1 994 Health Partners 210.37 666.04 $1 0.00 Office Co-pay
July 1995 Medica 156.54 501.45 Average - Age Rated
Plan discontinued in 1 998
due to plan losses.
. The Media Elect January 1, 2000, rate reflects an increase of only 11.03%
over the October 1994 Health Partners rate. That is an increase of less
than 2% per year.
Hlthins
INSURANCE BENEFIT INFORMATION
NOVEMBER 19 EMPLOYEE MEETINGS
Current Renewal Increase .
Monthly Monthly (Decrease)
Premium Premium in EE Cost
Life Insurance 4.63 Life Insurance 4.63
Employee Dental - Met Life 19.50 Employee Dental - Delta Dental 18.90
Employee Hlth - Blue Choice 194.32 Employee Hlth - Medica Elect* * 210.85
City Cost 218.45 City Cost 234.38
Maximum City Contribution 355.00 Maximum City Contribution * 355.00
Cost of Additional Insurance Cost of Additional Insurance
Family - Blue Choice 388.65 Family - Medica Elect 528.65
City Cost 136.55 City Cost 120.62
Employee Cost 252.10 Employee Cost 408.03 155.93
Spouse - Blue Choice 252.63 Spouse - Medica Elect 231 .85
City Cost 136.55 City Cost 120.62
Employee Cost 116.08 Employee Cost 111.23 (4.85)
Children - Blue Choice 213.76 Children - Medica Elect 179.05
City Cost 136.55 City Cost 120.62
Employee Cost 77.21 Employee Cost 58.43 (18.78)
Family - $200 Deductible 300.53
City Cost 136.55
Employee Cost 163.98 .
Spouse - $200 Deductible 185.07
City Cost 136.55
Employee Cost 48.52
Children - $200 Deductible 152.08
City Cost 136.55
Employee Cost 15.53
Family Dental 33.79 Family Dental * * * 30.75 (3.04)
*Maximum City Contribution based on 1999 contribution. An increase in 2000 will
proportionately decrease the employee cost.
**Medica Elect was used for all comparisons. Employees may buy up to Medica
Choice; the premium is 11 % higher than Medica Elect.
* * * Delta Dental Rate
Current Demographics:
Employee only coverage
Employee and Children
Employee and Spouse
Family
Total
40
6 (1 with $200 ded.)
5
13 (6 with $200
64
.
11/19/99