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REQUEST FOR ACTION <br />TO ITEM NUMBER <br />Ma ox and Ci Council 6.4.A. <br />AGENDA SECTION MEETING DATE PREPARED BY <br />Worksession November 14, 2011 Lauren Wipper, Human Resource <br /> Re resentative <br />ITEM DESCRIPTION REVIEWED By <br />Flexible Benefits Plan Contribution Cal Portner, Ci Administrator <br /> REVIEWED BY <br />ACTION REQUESTED <br />Approve the 2012 Flexible Benefits Plan contribution. <br />• 1.5% increase to the city's contribution to employees' Flexible Benefits Plan <br />• A $56 per month contribution to the Health Savings Accounts of employees electing the <br />High Deductible Plan <br />BACKGROUND/DISCUSSION <br />The city received a great renewal from Medica for 2012. Initially, our renewal was quoted at a zero rate <br />change but our brokers, Financial Concepts, felt they could do better. Our revised renewal came back at <br />negative two percent. Last year's agreement with Principal (dental) and Standard (life) provide us with a <br />rate lock for 2012 so there are no changes for those plans. This renewal provides us an opportunity to <br />reduce out-of-pocket premium expenses to employees and further help fund employee's Health Savings <br />Accounts. <br />Currently, 68% of employees are enrolled in the High Deductible Health Plan with 91% of those <br />contributing to a Health Savings Account. This has been the most popular plan since it was added in <br />2008 with 55% of employees choosing this option the first year it was offered. <br />Over the past four years, the city has contributed to the funding of employee's Health Savings Accounts <br />as budget allows and this year, we are proposing to do the same. <br />Recommendation <br />Staff is recommending a three percent increase to the insurance budget for the city's contribution to <br />employee's flexible benefits plans. The three percent would be divided between dollars provided to the <br />flexible benefits plan contribution and additional contributions to employee's Health Savings Accounts. <br />Due to the premium reduction from Medica, all employees will have a savings in their out of pocket <br />expenses for medical insurance. Staff recommends a 1.5% increase to the contribution to each <br />employee's flexible benefits plan. The remaining 1.5% will be in the form of a bi-monthly contribution to <br />the Health Savings Account of employees choosing the high deductible plan. This proposal should help <br />encourage more employees to move to the high deductible plan which will continue to help our claims <br />f U ~ E~~"E~~ 6[[ 8 f <br />A ~! V <br />