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REQUEST FOR COUNCIL ACTION Date: October 8, 2012 Item No.: 7.d Department Approval City Manager Approval Approve 2013 City Benefits Insurance Renewals & Cafeteria Item Description: Contributions Medical Background: 1 Each year the largest human resources expense aside from employee salaries is the cost 2 of benefits, in particular medical insurance. The gap between the two keeps narrowing 3 nationwide. City benefits costs were near $1.4 million in 2012. Over the last ten years 4 Roseville has made changes and additions in the benefits area to minimize increases 5 and to share the burden, while making health insurance as affordable and effective as 6 possible. 7 8 In response to escalating health care costs, the City began offering higher deductible 9 plans coupled with Health Reimbursement Accounts (HRA) & Health Savings 10 Accounts (HSA) and added more tiers of coverage. In 2004 we added a single-plus- 11 one tier option to give employees and retirees the least expensive and most efficient 12 alternatives. In 2005, the City added a High Deductible plan with a Health 13 Reimbursement Account for payment of deductible expenses. In 2006 the City raised 14 deductibles but also increased contributions to the Health Reimbursement Account and 15 added this account to the mid-level plan to help staff control and minimize their risk. In 16 2008 Roseville dropped the no longer sustainable, rich, 100% coverage plan. Finally, in 17 2009 the City added a Health Savings Account (HSA) option. 18 19 The City currently offers three medical options and three tiers through one provider, 20 Health Partners, under the National Joint Powers Alliance (NJPA) consortium. The 21 unique part of NJPA is that the pool is self-insured but underwritten and administered 22 by Health Partners so it operates like a fully insured plan. This is of interest to 23 Roseville for a couple of reasons. First, since our claims have been declining over the 24 past four years due to wellness and consumer driven plan initiatives, we have been able 25 to achieve less than trend increases. NJPA allows Roseville to continue our current 26 consumer-driven plan designs while achieving further savings due to their tax exempt 27 status. 28 29 Regular employees are eligible on a prorated basis if they work a minimum of 20 hours 30 per week. We currently have 163.75 total Full-Time Equivalents (FTE’s). We also 31 Page 1 of 4