6.2. SR 10-08-2012 - Laserfiche WebLink

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Elk REQUEST FOR ACTION River TO ITEM NUMBER Mayor and City Council 6.2 AGENDA SECTION MEETING DATE PREPARED BY Work Session October 8, 2012 Lauren Wipper, Human Resources Representative ITEM DESCRIPTION REVIEWED By 2013 Flexible Benefit Design Cal Portner, City Administrator REVIEWED BY ACTION REQUESTED Review and discuss 2013 benefit renewals. 1) Provide direction for a health insurance opt out incentive 2) Provide direction on the city's contribution to employee's Flexible Benefits Plans and HSAs BACKGROUND/DISCUSSION Coverage Renewal Rates We recently received our health and dental insurance renewal from our insurance brokers, Financial Concepts Inc. (FCI). While the health claims experience for our group were quite good,we are not considered to be a fully credible group because of our group size and the short period of time we've been with Medica. Because we are not fully credible, our claims are combined with the Medica community claims when calculating our renewal. The initial renewal rate for our health insurance came back at 11.5%. Because this rate was impacted significantly by the community claims, FCI was able to negotiate our increase down to 5%. 2013 health plan premiums range from $372.47 (single high deductible) to $1,753.16 (family co-pay). On average, employees pay zero to 28% of the premium. Our initial renewal with Principal Life for dental insurance indicated a 15.4% rate increase due to a 94.5% loss ratio. FCI negotiated our dental rate increase down to 11.5%. Our group term life, additional life, and short-term disability insurance rates are unchanged for 2013; however; our long-term disability renewal came back with a 16%increase. Our brokers for that plan, Ochs Inc., suggested we go to the market for bids. Ochs received a bid from Madison National Life Insurance Company that matched our current plan in both rates and plan design. A request to change to Madison National Life Insurance will be included on next week's consent agenda. Health Insurance Opt Out It has been the city's policy to require all eligible employees to take three core benefits within our Flexible Benefits Plan. The core benefits are group term life insurance, single dental insurance, and single health insurance. The city's contribution to the Flexible Benefits Plan has always paid 100% of these core benefits for at least one of the health plans offered. By mandating employees to carry health insurance, some may be covered under two different plans. Often the economics of health care and plan design make it cheaper for one family member to carry F 0 W I R I a a r N:APublic Bodies\City Council\Council RCA\Agenda Packet\10-08-2012\2013 Flexible Benefit Design RFA.docx 11`4A U R E