5.6. SR 11-03-2008REQUEST FOR ACTION
To Item Number
Ci Council 5.6.
Agenda Section Meeting Date Prepared by
Administration November 3, 2008 Lauren Wipper, Human Resource
Re resentative
Item Description Reviewed by
2009 Flexible Benefits Plan Contribution Lori ohnson, Ci Administrator
Reviewed by
Action Requested
Approve the City's contribution to the 2009 Flexible Benefits Plan.
Background/Discussion
Last week we received plan renewal information from HealthPartners. You may recall that when we
switched our health insurance to HealthPartners last year, they gave us good rates as well as a premium
rate guarantee for 2009. Although HealthPartners calculated our increased rates to be higher, our actual
premium increase for the $25 Co-pay and $500 Deductible plans will be 16% and for the High
Deductible Health Plan (HDHP), 18%. As well, the deductible amount for the HDHP is increasing from
$2,200 to $2,300 based on the IRS Cost of Living Adjustment calculation.
Last year our dental premitun rates did not increase. We are seeing a slight, 4.53%, increase in dental
premium rates this year.
Aside from the $100 increase in the deductible for the HDHP, health and dental plan designs are not
changing for 2009. We will again offer three options for health coverage and the employees will be able
to choose between single and family dental. The benefits covered (prescriptions, services, supplies) under
all of the plans will be covered in the same manner as in 2008.
The City's 2009 proposed budget includes a 5% increase to the City's contribution to the Flexible
Benefits Plan. Through the Flexible Benefits Plan, the City's contribution first pays for hfe, single dental,
and single HDHP coverage. Employees can use any money leftover and their own contributions to
purchase health insurance with greater coverage, family health or dental insurance, or a number of other
insurance benefits.
Financial Impact
As mentioned above, the proposed budget for 2009 includes a 5% increase to the City's contribution to
employee's Flexible Benefits Plans. Actual costs depend on the family level of coverage employees
choose. Employees choosing single coverage will receive $438.00 toward their plan each month.
Employees also covering either their spouse or children will receive $640.00. Employees who are
covering a spouse and children will receive $860.00.
Attachments
2009 Health Insurance Renewal
ACtlon Motion by Second by Vote
Follow Up
2009 Health Insurance Renewal
Single +Spouse +Child(ren) Family
City Contribution 438.00 640.00 640.00 860.00
Life Ins 4.50 4.50 4.50 4.50
Single Dental 34.58 34.58 34.58 34.58
Remaining for Health Ins 398.92 600.92 600.92 820.92
$25 Co-pay Mthly Premium
Monthly Employee Cost
$500 Ded Mthly Premium
Monthly Employee Cost
$2,300 HDHP Mthly Premium
Monthly Employee Cost
499.90 1,094.10
100.98 493.18
1,084.60 1,652.34
483.68 831.42
440.25 963.54
41.33 362.62
368.38 806.25
-30.54 205.33
HDHP ANNUAL COMPARISONS -Premium Savings
Savings over Co-pay 1,578.21 3,454.24
Savings over $500 Ded 862.45 1,887.55
Savings over 2008 Co-pay 984.79 1,997.32
Savings over 2008 $500 Ded 367.75 646.72
955.18 1,455.17
354.26 634.25
799.25 1,217.62
198.33 396.70
3,424.21 5,216.64
1,871.15 2,850.66
1,983.01 2,955.74
644.17 916.10