4.5 SR 10-03-2022
Request for Action
To Item Number
Mayor and City Council 4.5
Agenda Section Meeting Date Prepared by
Consent October 3, 2022 Lauren Wipper, Human Resources Manager
Item Description Reviewed by
2023 Flexible Benefits Plan Cal Portner, City Administrator
Reviewed by
Action Requested
Approve, by motion, the 2023 Flexible Benefits Plan design.
Background/Discussion
Last year we became members of the Sourcewell Service Cooperative and began offering our medical insurance
through that group. We had a 12% rate cap for our 2023 renewal and our premium increase came in at 10.7%.
Again, we have a 12% rate cap for 2024 and if we offer all Smart Plans through Sourcewell in 2023, we will have a
9% rate cap for 2024.
As Sourcewell grew, they designed Smart Plans to ease the administration of an abundance of plan designs. They
encourage groups to use their Smart Plans by offering value adds with those plans. One of those value adds is no
cost for many generic prescriptions. They also give a credit in their report card for groups that offer only Smart
Plans. The report card equates directly to premium reductions at renewal. (Without the report card reduction, we
would have had a 12% increase for this year.)
Our current $500 Deductible plan is not a Sourcewell Smart Plan. We are proposing replacing that plan with a
$1,500 High Deductible Health Plan (HDHP) which is a Smart Plan. This is also a Health Savings Account
compatible plan. Although the deductible is increasing, the overall out of pocket costs, which includes the
employee’s share of the premium and the maximum out of pocket medical expenses, is considerably lower to the
2022 costs of the $500 Deductible Plan.
There are no changes to any of the other plans in our Flexible Benefits Plan. In this plan we offer medical, dental,
additional life insurance, long-term and short-term disability, health care savings plans, and health and dependent
care flexible benefits accounts.
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.
We take the total budget available and determine the best way to allocate that among enrolled employees. Like last
year, we feel very fortunate to be able to offer the two $3,000 HDHPs with city contribution funds left over to
allocate to other coverage offered through the plan. As well, employees who contribute to an HSA will have an
additional contribution made to their HSA each month.
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
Financial Impact
Funds for the 2023 Flexible Benefits Plan are included in the 2023 preliminary budget.
Mission/Policy/Goal
The Elk River Mission
Attachments
2023 Flexible Benefits Plan Renewal Spreadsheet
N:\\Public Bodies\\Agenda Packets\\10-03-2022\\Final\\x4.5 sr 2023 Flexible Benefits Plan.docx
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Single+Spouse+Child(ren)Family
City Contribution 604.001,262.001,253.001,770.00
HealthPartners through Sourcewell
$1500 HDHP Open Access642.211,392.471,382.022,004.24
Monthly Employee Cost38.21130.47129.02234.24
Annual Employee Cost458.521,565.641,548.242,810.88
$3000 HDHP Open Access569.241,236.021,226.911,769.56
Monthly Employee Cost-34.76-25.98-26.09-0.44
Annual Employee Cost-417.12-311.76-313.08-5.28
$3000 HDHP Achieve540.521,173.141,164.571,674.67
Monthly Employee Cost-63.48-88.86-88.43-95.33
Annual Employee Cost-761.76-1,066.32-1,061.16-1,143.96
Opt-Out of Medical 300.00
40.80
DeltaDental 107.98
Add'l Monthly HSA Contribution 90.0090.0090.0090.00