4.6. SR 10-15-2018
Request for Action
To Item Number
Mayor and City Council 4.6
Agenda Section Meeting Date Prepared by
Consent October 15, 2018 Lauren Wipper, Human Resources Manager
Item Description Reviewed by
2019 Flexible Benefits Plan Cal Portner, City Administrator
Reviewed by
Action Requested
Approve, by motion, the 2019 Flexible Benefits Plan design.
Background/Discussion
Renewal/Premium Rates
Our medical insurance renewal with the Public Employee’s Insurance Program (PEIP) was the best we’ve
seen in years with a 3% premium rate increase. Due to education during last year’s open enrollment,
employees seemed prepared for the primary care clinic design and the required referrals and few
problems have been brought forward.
As you may recall, we switched to Delta Dental in 2017 and had a two-year rate guarantee for 2017 and
2018. This is our first renewal with Delta Dental and it called for a 38% rate increase. Delta Dental came
back with a 15% increase with another two-year rate guarantee.
We have not received 2019 rates for our short-term disability plan but do not anticipate changes. The
other plans in our Flexible Benefits Plan are not changing. These plans include vision, additional life
insurance, long-term disability, health care savings plans (HSA), and health and dependent care
reimbursement accounts.
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 plan is designed to provide a dollar amount to each employee based on the family level of medical
coverage they elect. When designing the plan this year, we based our city contribution amounts off of
current employee costs for the value plan, which is PEIP’s mid-level plan. With an approximate 3%
increase to the city contribution, the out-of-pocket premium costs for the value plan are approximately
the same as they were in 2018. PEIP’s high-level plan, Advantage, has slightly higher out-of-pocket
premium costs and the HSA Compatible plan has slightly lower out-of-pocket costs.
In keeping with plan design from previous years, employees may “buy up” to the Advantage plan or they
can elect the HSA Compatible plan and have additional funds available to contribute to their Health
Savings Account or “buy” other benefits in the plan. Employees can also “buy” other benefits through
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
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payroll deductions. There is no additional city contribution to employee’s HSA plans although employees
at each family level have additional funds available from their city contribution that they can contribute to
their HSA.
Financial Impact
The projected benefit renewal is accounted for in the preliminary budget.
Attachments
2019 Flexible Benefits Plan Renewal spreadsheet
2019 Flexible Benefits Plan Renewal Rates
Single +Spouse +Child(ren) Family
City Contribution
606.00 1,165.00 1,116.00 1,601.00
Public Employees Insurance Program
Advantage Plan Monthly
Premium 673.06 1,451.66 1,439.70 2,182.88
Monthly Employee Cost 67.06 286.66 323.70 581.88
Annual Employee Cost 804.72 3,439.92 3,884.40 6,982.56
Value Plan Monthly Premium 606.26 1,305.18 1,294.74 1,962.00
Monthly Employee Cost 0.26 140.18 178.74 361.00
Annual Employee Cost 3.12 1,682.16 2,144.88 4,332.00
HSA Compatible Plan Mthly Prem 465.48 997.84 989.32 1,496.74
Monthly Employee Cost -140.52 -167.16 -126.68 -104.26
Annual Employee Cost -1,686.24 -2,005.92 -1,520.16 -1,251.12
Opt-Out of Medical
300.00
DeltaDental Monthly Premium
40.80 107.98 107.98 107.98