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CITY OF ARDEN HILLS <br />MEMORANDUM <br />DATE: September 18 2001 <br />TO: Joe Lynch, City Administrator <br />FROM: Terrance Post, City Accountant <br />SUBJECT: Benefit Parity Recommendation <br />Background <br />The city paid employee insurance benefit is available to be applied against employee health and <br />dental insurance coverage. Employees currently electing family health coverage automatically <br />utilize all of the maximum city benefit of$400 per month by virtue of the fact that this coverage <br />alone costs $488.73 per month. However,employees electing single health and dental coverage <br />current total cost$255.13 per month)remain$144.87 per month under the maximum city <br />insurance benefit. <br />Issue <br />The city currently provides higher benefits to employees electing family health coverage than to <br />those electing single health and dental coverage. <br />Discussion <br />This item was discussed at the September 17,2001 City Council Worksession, and staff was <br />directed to bring it forward to a subsequent Council meeting for further discussion and/or action. <br />Staff has recommended that, effective October 1, 2001,the maximum city paid insurance benefit <br />definition be expanded to include a city paid ICMA 457(b)deferred compensation contribution <br />for those employees unable to utilize the maximum benefit for health and dental insurance <br />coverage. Any other additional elective coverage(i.e., supplemental and/or dependent life) <br />would remain the financial obligation of the employee. A 'Benefit Parity" analysis schedule is <br />attached,which identifies the 2001 financial impact of the recommendation at$3,615.33 and the <br />estimated 2002 financial impact(assuming the city paid benefit maximum increases from$400 to <br />420 per month)at$12,716.16. <br />Council should further note that non-bargaining unit employees cannot'opt out" of health and <br />dental coverage and must elect single coverage for both as a minimum. <br />Recommendation <br />Staff recommends that the Arden Hills City Council approve a personnel policy change by <br />expanding the definition of city paid benefit to include not only health and dental insurance <br />coverage,but also city paid contributions to the ICMA 457(b)deferred compensation plan, up to <br />the maximum city benefit,effective October 1,2001.