2008_1020_packet - Laserfiche WebLink

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1 2 9 10 11 12 13 14 15 lls�kspvlffi� Request for Council Action Department Approval Item Description: Date: 10120108 Item: 12.b Manager Approval Consider 2009 City Benefits Insurance Renewals & Cafeteria Contributions Medical Backswound and Renewal Recommendations:, Each year the largest human resources expense aside from employee salaries is the cost of medical insurance and the gap keeps narrowing. This amounted to roughly $,1.2 million in 2008. As this expense continues to rise with no end in sight all organizations are making changes to help ease the impact for both employees and the business. Over the last several years Roseville has made changes and additions in this area to minimize the increases and to share the burden while making this insurance as effective as possible. In response to escalating health care costs, the City began offering higher deductible plans with additional tiers of coverage. In 2004 we added a single-plus-one tier option to give employees and retirees the least expensive and most efficient alternatives. In 2005, the City even added a High Deductible plan with a Health Reimbursement Account for payment of deductible expenses. In 2006 the City raised deductibles but also increased contributions to the health reimbursement account and added this account to the mid level plan to help staff control and minimize their risk. In 2008 Roseville dropped the no longer sustainable, rich, 100% coverage plan. The City currently offers two medical options and three tiers through one provider, Medica. (Regular employees are eligible if they work a minimum of 20 hours per week and there are 1 163.5 total Full-time equivalents (FTE's). We also currently have 26 that are on the City's health plan due to COBRA events such as retirement.) The City of Roseville's contract with Medica for employee health insurance will expire on December 31, 2008. Staff issued an RFP for 2009 Health Insurance in August and received bid decline letters from Blue Cross,, Preferred One,, and LOGIS (the City consortium), due to the inability to compete with our Medica initial renewal rate of 28.7%. PEIP (the State Plan), and Health Partners bid,, but their rate increases were nearly as much as Medica providing no real benefit to switching providers.