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�� � Request for Council Action � U/23/06 Item Number: 10. Department Approval Manager A�ppro�vai Agenda Section � � Item Description: Consider 2007 City Benefits Insurance Renewals & Cafeteria Contributions Medical Back�round and Renewal: 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 million in 2006. As this expense continues to rise with no end in sight all organizations are malting 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 making this insurance as effective as possible. Rosevillehas traditionallyprovided a comprehensive plan with a small 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-onetier 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 work a minimum of 20 hours per week and there are 158 total FTE's. There are eligible employees comprising of 151 full-time and 13 part-time. We also currently have 21 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 31,2006. Staff issued an RFP for 2007 Health Insurance in August and received bid decline letters from three companies Health Partners, Blue Cross and Preferred One) in October due to the inability to compete with our Medica renewal rate. Open enrollment is scheduled to begin on November 14th. Following receipt of the renewal proposal this year, staff shared cost and coverage information with City staff and conducted a survey with results being shared with the City Benefits and Wellness Committee, a representative committee of city employees. Medica came in with an