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CONSENT ITEM – 5C City Council Meeting P:\Admin\Council\Agendas & Packet Information\2016\12-12-16-R\Sue\Benefits\2017 Benefit Contribution.doc Page 1 of 1 MEMORANDUM DATE: December 12, 2016 TO: Honorable Mayor and City Council Members FROM: Sue Iverson, Interim City Administrator Director of Finance and Administrative Services SUBJECT: Adoption of the 2017 City Contribution for Employee Benefits Background Each year in December, the City sets the monthly contribution rate for employee benefits for the next year. Discussion As part of the annual budget and levy adoption process, the Council is also asked to approve the 2017 City contribution for employee benefits. The City contribution rate was set by increasing the current contribution by 50% of the increase in premiums for the next year using the lowest cost medical plan at the family level plus dental. However, for 2017, the Council changed this to a 60/40 split in which the City will pay 40% and the Employee will now pay 60% of the increased cost. The increases to the Plans are as follows: medical (14.7%) and dental (5.6%) premiums. In 2016, the employer contribution rate was $728.62 per month per employee. For 2017, it has been proposed to increase the contribution rate by $52.84 for all employees with the exception that the maximum contribution to HSA accounts (those dollars that are not used to pay premiums for dental and medical by those choosing single medical) be capped at $1,650 per employee hired prior to June 29, 2015 and $500 for those employees hired June 29 or after. Council Action Motion to adopt Resolution 2016-041, a Resolution setting the City Contribution to Employee Monthly Benefits at the amount of $781.46 per month, per employee, with a cap of $1,650 or $500 of HSA contributions where applicable. Attachments: Attachment A: Resolution 2016-041