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REQUEST FOR COUNCIL ACTION Date: October 6, 2014 Item No.: 13.a Department Approval City Manager Approval Approve 2015 City Benefits Insurance Renewals & Cafeteria Item Description: Contributions 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 health benefit costs were nearly $1.6 million in 2014. Over the last 4 ten years Roseville has made many changes in the benefits area to minimize increases 5 and to share the burden, while making health insurance as affordable, consumer driven, 6 and as effective as 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-one 11 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. In 2015 the City will 18 increase the deductible on the High Deductible plan to $2,600 in order to meet 19 compliance with the Affordable Care Act. 20 21 The City currently offers three medical options and three tiers through one provider, 22 Health Partners, under the National Joint Powers Alliance (NJPA) consortium. The 23 unique part of NJPA is that the pool is self-insured but underwritten and administered 24 by Health Partners so it operates like a fully insured plan. This is of interest to Roseville 25 for a couple of reasons. First, since our claims have declined and stabilized over the 26 past six years due to wellness and consumer driven plan initiatives, we have seen 27 increases much less than the trend. This saves money for the City and Employee. 28 NJPA also provides a larger pool of buying power, allows Roseville to continue our 29 current consumer-driven plan designs, achieve further savings due to their tax exempt 30 status. 31 32 The City of Roseville’s contract with NJPA for employee health insurance through 33 Page 1 of 3