5.06 EMRUSR 11-12-2024�i
Elk River --�-
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
November 12, 2024
5.06
SUBJECT:
Health Insurance Update
ACTION REQUESTED:
Approve the 2025 ERMU employee benefits offering including a continued employer
contribution to health savings accounts.
BACKGROUND:
Four years ago, ERMU moved to a health savings account (HSA) qualifying, high deductible
health insurance plan (HDHP). With the move to the HDHP, the Wage & Benefits Committee
recommended that ERMU provide an 85% employer paid contribution to premiums and an
employer funded HSA in an amount that equates to 85% of an employee's deductible. At the
time of this change, it was agreed, the Commission would review the employer HSA
contribution annually.
DISCUSSION:
As part of our benefit broker's regular process, our group was reviewed by other top health
insurance companies in the small group market. Through the benefits renewal process, we
learned all three major carriers are increasing rates significantly. Our current health insurer,
HealthPartners, is increasing rates by 19.5%. The resultant budget impact of $147,800 was
included in the 2025 budget.
Blue Cross/Blue Shield (BC/BS) is increasing by 13.5% but has a higher deductible. Medica is
increasing by 9.4% but has a higher deductible, a significantly higher out-of-pocket maximum,
and copays on non -generic prescriptions until you reach your out-of-pocket maximum. See
chart below:
Company
HealthPartners
BC/BS
Medica
Deductible (Single/Family)
$2500/$5000
$2700/$5400
$2700/$5400
Out -of -Pocket Maximum
$5000
$5400
$6800
Increase
19.5%
13.5%
9.4%
Projected Budget Impact
$147,800
$102,500
$70,800
Advantages/disadvantages (pros/cons) to each plan are listed on the next page:
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HealthPartners
Pros: Most inclusive network for care and prescriptions
Offers the lowest deductible and the lowest out-of-pocket maximum
Includes vision and preventative dental care for children (ages 0-18)
Current provider so no impact to HR/Payroll or employees to change insurers
25% discount on dental insurance saves roughly $11K if bundled with health insurance
Lower deductible saves approximately $12K on HSA contributions.
Cons: Most expensive of the three plans
Blue Cross/Blue Shield
Pros: Represents middle ground on price and deductible/out of pocket maximum
Cons: Higher deductible and out-of-pocket maximum than HealthPartners
Does not include CVS Pharmacy Network
Includes vision but not dental care for children ages 0-18
Change in plans would require staff time to update HR/Payroll records
Does not offer a bundle discount for dental
Medica
Pros: Cheapest of the three plans
Cons: Highest deductible and significantly higher out of pocket maximum (family = $1800)
Most prescriptions continue to have a co -pay until the out-of-pocket maximum
Includes vision but not dental care for children ages 0-18
Change in plans would require staff time to update HR/Payroll records
Does not offer a bundle discount for dental
SUMMARY:
After reviewing the pros/cons listed above, staff recommend staying with HealthPartners for
our health and dental plans for another year. As our current provider, they have been easy to
work with and would minimize staff time needed for open enrollment updates. Blue Cross/Blue
Shield represents a middle ground in cost versus coverage but may not be worth the increased
deductibles and reduced pharmacy network, especially after accounting for HealthPartners'
savings on dental and HSA contributions. Lastly, although the cheapest plan, Medica represents
the most risk to those requiring specialty drugs as their annual costs would increase by $1800
due to Medica's higher out-of-pocket maximum and prescription co -pays after meeting the
deductible.
If HealthPartners is selected as our 2025 health insurer, the 2025 HSA contribution would
remain $2,125 for single coverage, and $4,250 for family coverage. The 2025 monthly
premiums for medical coverage would be $143 for single, $286 for single +1, and $429 for
family coverage.
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