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Department Approval �� � REQUEST FOR COUNCIL ACTION Date: September 14, 2015 Item No.: 14.b City Manager Approval Item Description: Approve 2016 City Benefits Insurance Renewals & Cafeteria Contributions Background: Each year the largest human resources expense aside from employee salaries is the cost of beneftts, in particular medical insurance. City health benefit costs were just over $1.6 million in 2015. For more than ten years Roseville has made many changes in the health insurance area to minimize increases and to share the burden, while making health insurance as affordable, consumer driven, and as effective as possible. In response to escalating health care costs, the City began offering higher deductible plans coupled with Health Reimbursement Accounts (HRA) & Health Savings Accounts (HSA) and added more 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 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°/o coverage plan. Finally, in 2009 the City added a Health Savings Account (HSA) option. In 2015 the City increased the deductible on the High Deductible plan to $2,600. The City currently offers three medical options and three tiers through one provider, Health Partners, under the National Joint Powers Alliance (NJPA) consortium. The unique part of NJPA is that the pool is self-insured but under�vritten and administered by Health Partners so it operates like a fully insured plan. This is of interest to Roseville � for a couple of reasons. First, since our claims have declined and stabilized over the past six years due to wellness and consumer driven plan initiatives, we have seen increases much less than the trend. This saves money for the City and Employee. NJPA also provides a larger pool of buying power, allows Roseville to continue our current consumer-driven plan designs, achieve further savings due to their tax exempt status. The City of Roseville's contract with NJPA for employee health insurance through Health Partners will renew on January l, 2016. The initial renewal rate came in at a 9% increase this year which is substantially higher than what we have seen over the last Page 1 of 3