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Number: Department Approval �}��4� - ��_, j � l J Rec�u�� 'r.�r Council Action Manager Approval .,�-� �1�' ��-�,.��. Item Description: Date: 10/15/0'T Item: 7.b Insurance Benefits Renewals �. U/8/47 Ite�t � l.e Agenda Section C{►nsicler ��IOS C'i#�r li�n��ts �ttsur��n� e T�� nrx� �J� � Cafetei'IS � tt7iL�lI] tk�iUtt� Medical Background and Renewal Recommendations: Each year the largest human resources expense aside from employee salaries is the cost of medical insurance and the gap is narrowing. This amounted to roughly $1.1 million in 2007. 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 n�aking this insurance as effective as possible. Roseville has traditionally provided a comprehensive plan with a co-pay and 100% coverage. In response to escalating health care costs, the City began offering higher deductible plans with additional tiers of coverage. In January 1, 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 raised the contributions to the health reimbursement account and added this account to the mid level plan to help staff control and minimize their risk. The City currently offers three medical options and three tiers through one provider, Medica. (Employees are eligible if they worlc a minimum of 20 hours per week and there are 161 total Full-time equivalents (F`I'E'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 31,2007. Staff issued an RFP for 2008 Health Insurance in August and received bid decline letters from Health Partners, Blue Cross, Preferred One, and LOGTS (the City consortium) due to the inability to compete with our Medica initial renewal rate of 42%. PEIP (the State Plan) bid, but at an increase of 46%. Following receipt of the renewal proposal from Medica, staff shared cost and coverage information with City staff and the City Benefits and Wellness Committee, a representative