2003_1013_packet - Laserfiche WebLink

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k .. " Qj= as A:E R,klequest for Council Actioa: Item Number: 111. B6 Department Approval Manager Approval Agenda Section • 1 2004 City Health Insuraace Program Back, %round: Presentations During the August 1 Sth Council meeting, staff presented at the Council's request the possibility of adding 4�single plus 1" tier to the current Health insurance plan. The motion for this addition was approved. Council also discussed the possibility of the City moving to a more equal contribution per employee, regardless of the employee's family status and lifestyle choices. This Memo provides the additional information Council requested on 8/18 and provides the final health insurance premium information offered by Preferred One for 2004. 'iscussion; Our health insurance costs are going up 6 %. Though 6% is significant, we had feared a much larger increase as the trend is about 15%. The shill and persistence of the City's health care consultant, Financial Concepts, and the goad loss experience of our employees are responsible for this relatively modest increase. We have incorporated a new "single + 1" tier in our program for 2004, as you requested. This helps retirees and, we estimate, 18 employees who may elect to use this tier. However, this new tier results in much higher premiums for employees with families. With the more modest 6% increase in rates instead of the budgeted 12%, we recommend you use the ` "savings" to help minimize the negative impact of the new single + 1 tier on employees with family coverage. Ater incorporating the new single + 1 tier into our health insurance program, we could now work toward achieving more equal city contributions for each employee's health insurance, if that continues to be the Council's policy preference. But you need to know that the addition in 2004 of the single + 1 tier is so negative toward employees with family coverage that we cannot achieve much in the way of equalizing city contributions to employees in 2004. As a start, we recommend that single employees receive, in addition, to City payment of their entire health care and dental insurance premium, more in- pocket cash than in prior years. Accordingly, the implementation plan for the new single plus one tier and for City contributions toward employee health insurance in 2004 are summarized below: