4.3 SR 10-05-2020
Request for Action
To Item Number
Mayor and City Council 4.3
Agenda Section Meeting Date Prepared by
Consent October 5, 2020 Lauren Wipper, Human Resources Manager
Item Description Reviewed by
2021 Flexible Benefits Plan Cal Portner, City Administrator
Reviewed by
Action Requested
Approve, by motion, the 2021 Flexible Benefits Plan design.
Background/Discussion
Renewal/Premium Rates
Our medical insurance renewal with the Public Employee’s Insurance Program (PEIP) is 9.7%. PEIP cited that
renewals based on 2019 and 2020 claims were the highest in the plan’s history and they have added about 200
groups over the last three years which increased the program’s loss ratio to 113% (claims/premiums). PEIP also
anticipates COVID-19 to result in significantly higher future claims. This is our third year with PEIP and last year
we committed to them for two years.
Our dental renewal with Delta Dental came in at a 2.72% increase for 2 years. Our insurance brokers, NFP,
requested a 0% increase for one year to which Delta Dental agreed. We are scheduled to go out for a formal RFP
next year.
All of the other plans in the Flexible Benefits Plan are on a rate hold for 2021.
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. The 2021 preliminary budget includes a 5% increase to the city’s contribution to employee insurance
benefits. Using a 5% increase across all plans and all family levels of coverage results in an increase in premium
cost to employees on the Value and Advantage plans and a decrease to employees on the High Deductible Health
Plan.
The Value Plan is our mid-level plan. Monthly employee premium for this plan ranges from $23.48 for single
coverage to $478.50 for family coverage. Employees may “buy up” to the Advantage plan which pays a higher
benefit for a higher premium cost, or they can elect the HSA Compatible plan and have additional funds available
to contribute to their Health Savings Account or use to “buy” other benefits in the plan. Employees can also
“buy” other benefits in the plan through payroll deductions. There is no additional city contribution to employee’s
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity.
Updated: August 2020
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.
Mission/Policy/Goal
The Elk River Mission Statement includes components to be responsible for every dollar – good stewards and to
be ethical, efficient, and responsible.
Attachments
2021 Flexible Benefits Plan Renewal Rates spreadsheet
N:\\Public Bodies\\Agenda Packets\\10-05-2020\\Final\\x4.3 sr 2021 Flex Bene Plan.docx
2021 Flexible Benefits Plan Renewal Rates
Single +Spouse +Child(ren) Family
City Contribution 668.00 1,284.00 1,231.00 1,765.00
Public Employees Insurance Program
Advantage Plan Monthly Premium 767.18 1,657.58 1,643.90 2,493.80
Monthly Employee Cost 99.18 373.58 412.90 728.80
Annual Employee Cost 1,190.16 4,482.96 4,954.80 8,745.60
Value Plan Monthly Premium 691.48 1,491.56 1,479.62 2,243.50
Monthly Employee Cost 23.48 207.56 248.62 478.50
Annual Employee Cost 281.76 2,490.72 2,983.44 5,742.00
HSA Compatible Plan Mthly Prem 541.84 1,164.98 1,155.02 1,748.98
Monthly Employee Cost -126.16 -119.02 -75.98 -16.02
Annual Employee Cost -1,513.92 -1,428.24 -911.76 -192.24
Opt-Out of Medical 300.00
DeltaDental Monthly Premium 40.80 107.98 107.98 107.98