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In 2004 Council also discussed the possibility of the City moving to a more equal contribution per employee, regardless of the employee's family status and lifestyle choices. Some small steps were taken toward that by giving the singles on the health plan an additional $13.76 in cafeteria dollars above the cost of the plan. For 2005 the direction has been to split the cost of the premium increases. Therefore, other than the singles who receive 100% paid medical and dental, contributions would increase by 5%. The Stanton survey indicates that the average payment to those employees that do not take City benefits is approximately$221 in 2004 and Rosevillepays $284. Therefore, staff recommends holding this amount constant. In keeping this amount constant the City is afforded the ability to come within $5.00 of continuing the $13.76 stride toward equalization that was made in 2004 for singles. Thus staff recommends approving the following 2005 monthly cafeteria contributionlevels: ➢ Opt Out: $284 ➢ Single: $411 ➢ Single + 1: $525 ➢ Family: $735 Financial Impact: The Health Partners plan will probably cost the City — and its employees -- an additional $ $100,000 more in 2005 than in 2004. The Preferred One plan would have cost the City and its employees about twice that much. Dental insurance will have a$6,700 impact to the City. Sufficient funds are budgeted in 2005 to cover these premium costs. The total cost to the City for health insurance premiums should not exceed � 1�]�� 1�l for 2005. Staff anticipates a lower actual annual expense as more and more of our employees are expressing interest in the Deductible Plans to see premium savings. We will know the exact cost after Open Enrollment in November when employees choose the option they want. The 2005 PreliminaryBudget factors in a 20% increase in healthcarepremiums, with the City picking up one-half of the dollar increase. The table below shows the budget savings that would result in 2005 (i.e. the amount the budget could be lowered) with the healthcare premiums increases coming in at a rate that is less than 20% with the City still picking up one- half of the dollar increase for all other than the singles. Approx. Approx. City-wide Tax-supported Premium Cost of Budget Budget Increase Increase Savin�s Savin�s 10% 100,000 $38,200 $27,544 To explain further, assuming the renewal rate represents an increase of 10% (as opposed to the 20% that is currently budgeted), and assuming the City picks up one-half of the dollar increase, then the 2005 Budget could be reduced by $38,200 in total, of which $27,544 would be in the �