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Depart�en p o ar Item Description: Back�round• ��JL�7� Request for Council Action Date: November 27,2000 Item Number: c- Manager Approval � �� Contract for Employee Health Insurance with HealthPartners Agenda Section Consent Agenda The City of Roseville two-year contract for health insurance will expire on December 3 1, 2000 withHealthPartners. Pursuant to Minnesota State Statute 471.616 l, city-provided group insurance to organizations of more than 25 employees require a written Request For Proposal (RFP) and public notice of 21 days prior to the final response. As such, the City published a legal notice on October 24 calling for insurance providers to submit proposals to provide health and dental insurance coverage for employees. The responses were due November 14, 2000. City staff sent seven copies of the RFP to providers and received one response from HealthPartners. Copies of the RFP are available for review in the Administration Department. HealthPartners proposal provides for a renewal of the City's current medical plan reflecting minor plan modifications at a 36% increase. Annually the staff monitors the metropolitan region to compare Roseville premiums and contributions to other communities. Of the ten communities surveyed, the current 2000 insurance plan places Roseville with the lowest costs. The 2001 proposed plan would keep Roseville close to this ranking with the second lowest costs. Therefore, although Roseville will experience an increased premium cost, the plan is quite competitive in the market. The City Council reviewed the HealthPartners one-year insurance proposal at the November 20, 2000 Work Session. At that meeting the City Council recommended that staff bring the proposal to the regular meeting of November 27, 2000 for formal action. Policy Implications: The City provides 141 employees health insurance: 62 with single coverage and 79 with family coverage. The HealthPartners Plus Plans (renewal rates reflect current benefit levels): 1. 1999/ 2000 Current Premiums a. Single $172.10 b. Family $429.77 2. 200 1 Proposed Premiums a. Single $233.84 b. Family $583.94 City's Contribution $200.60 $340.00 City's Contribution $262.34 $417.22 Employee Contribution $0 $89.77 Employee Contribution $0 $166.72 The proposed HealthPartners Plus Plan reflects a 36% increase in premium costs to the City from $535,464 in 2000 to $727,552 in 2001. On October 30, 2000 the City Council affirmed three union contracts. These contracts were agreed upon provided that the benefit levels for health and dental were to remain consistent. Therefore, substantial modifications to the current plan terms could trigger renegotiation of the three contracts. The HealthPartners Plus Plan is consistent with the current plan and does not substantively modify the current benefit level. As part of these