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3 <br />4 <br />6 <br />7 <br />9 <br />10 <br />11 <br />12 <br />13 <br />14 <br />15 <br />16 <br />17 <br />18 <br />19 <br />20 <br />21 <br />22 <br />23 <br />24 <br />25 <br />26 <br />27 <br />28 <br />29 <br />30 <br />31 <br />32 <br />33 <br />34 <br />35 <br />36 <br />37 <br />38 <br />39 <br />40 <br />41 <br />l�'�, <br />Jy <br />Request for Council Action <br />Department Approval <br />Item Description: <br />Date: 10/19/09 <br />Item Number: 12.b <br />Manager Approval <br />� / <br />Consider 2010 City Benefits Insurance Renewals & Cafeteria Plan Contributions <br />Medical Back�round and Renewal Recommendations: <br />Each year the largest human resources expense aside from employee salaries is the cost of <br />medical insurance and the gap keeps narrowing. This amounted to roughly $1.1 million in <br />2009. As this expense continues to rise with no end in sight all organizations are making <br />changes to help ease the impact for both employees and the business. Over the last several <br />years Roseville has made changes and additions in this area to minimize the increases and to <br />share the burden while making this insurance as effective as possible. However, the City has <br />come to a point where there are not many plan changes left available to make. <br />In response to escalating health care costs, the City began offering higher deductible plans <br />with additional tiers of coverage. In 2004 we added a single-plus-one tier option to give <br />employees and retirees the least expensive and most efficient alternatives. In 2005, the City <br />even added a High Deductible plan with a Health Reimbursement Account for payment of <br />deductible expenses. In 2006 the City raised deductibles but also increased contributions to <br />the health reimbursement account and added this account to the mid level plan to help staff <br />control and minimize their risk. In 2008 Roseville dropped the no longer sustainable, rich, <br />100% coverage plan. Finally, in 2009 the City added a Health Savings Account (HSA) <br />option. <br />The City currently offers three medical options and three tiers through one provider, Medica. <br />(Regular employees are eligible if they work a minimum of 20 hours per week and there are <br />164 total Full-time equivalents (FTE's). We also currently have 28 that are on the City's <br />health plan due to COSRA events such as retirement.) <br />42 The City of Roseville's contract with Medica for employee health insurance will expire on <br />43 December 31, 2009. Staff issued an RFP for 2010 Health Insurance in August and received a <br />44 bid decline letters from Preferred One, and no response from LOGIS (the City consortium) <br />45 due to the anticipated risk of our group. Medica's initial renewal rate was 15% which was <br />46 substantially better than recent years although did not seem to be fair in light of declining <br />