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2 Following the receipt of the renewal proposal from Medica, staff shared cost and coverage 3 information with City staff through email, the intranet, and the Benefit's Committee (a 1 4 representative committee of city employees). The Benefit's Committee was asked to gather 5 ideas for cost savings from their respective groups and a survey requesting design 6 suggestions was conducted. Staff also worked with Medica and Financial Concepts (our 7 benefit's broker), to find solutions to ease the increase. 9 The survey responses concluded that employees were not real open to much more in the way 10 of plan design changes, but some would be open to moving way from the open access plan I I and into a small preferred provider option. The committee felt that this should be an option 12 and not force people into it. Therefore, the Benefits Committee asked Medica to provide 13 this plan option along side our current plan for employees willing to accept the change. 14 15 The Committee also reviewed the differences between Health Reimbursement Accounts 16 (HRA) and Health Savings Accounts (HSA) as the trend in metro area cities seems to be 17 moving toward HSA's. I have enclosed a comparison chart of the two accounts for your 18 review in Exhibit A. After review of the variation between these accounts the committee felt 19 it important to offer staff both options allowing choice. Thus, the Committee recommended a 20 total of four plan options to be provided by the City in 2009 to allow the most choice for staff 21 during this economically difficult time. 23 Staff then went to the marketplace in search of the best banking administrator to house the 24 HSA plan for the City. Staff looked at factors such as location, fees, services, accessibility, 25 FDIC insured,, and interest baring rates. Staff went to nine local banks for proposals. The 26 Benefit's Committee reviewed the proposals and selected Premier Bank on the basis that they 27 provided the best current interest rates with the lowest fees and is FDIC insured. 29 The City and staff alike has been struggling for a number of years with substantial increases 30 in the cost of providing group health insurance coverage. The Benefit's Committee feels the 31 recommendations will reduce the cost of increases to the health care premiums while offering 32 a way for employees to fund payment of the deductible if necessary. The Benefits 33 Committee supports the proposed changes noted above. With these proposed changes, 34 Medica is willing to provide coverage at an overall premium cost that is 18% higher than 35 what the City is paying in 2008. Staff will still be taking on more premium costs and either 36 greater risk or a potential need to change doctors. Staff will need to change behaviors in 37 order to not be in the same place in 2010. Education and action will again be the focus for 38 the Benefits and the Wellness Committees in 2009. Open enrollment is scheduled to begin in 39 early November. I have included the final renewal worksheet (Exhibit B), for your review 4O and comparison. 41 4 City Contributions Backswound and Recommendations: 43 44 We have consistently over the years maintained a philosophy of paying 100% of the 45 premium for medical and dental insurance for the single plan. This also remains the trend in 4 the Stanton 5 group although the marketplace continues to move away from paying for 100% 47 coverage plans as Roseville has already done. 2