4.5. SR 10-15-2012 - Laserfiche WebLink

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tit REQUEST FOR ACTION River TO ITEM NUMBER Mayor and City Council 4.5 AGENDA SECTION MEETING DATE PREPARED BY Consent October 15,2012 Lauren Wipper,Human Resources Representative ITEM DESCRIPTION REVIEWED By 2013 Flexible Benefit Design Cal Portner, City Administrator REVIEWED BY ACTION REQUESTED 1) Approve changing long-term disability carriers from Assurant to Madison National Life Insurance Company. 2) Approve allowing employees to opt out of group health insurance. Employees who choose to opt out would receive$300 per month compensation. Employees would be required to carry group term life and single dental insurance which would be paid for from the$300. 3) Approve a 4%increase to the city contribution to employee's flexible benefits plans as found on the attached spreadsheet. 4) Approve a$492 annual contribution ($41 per month) to the health savings accounts of employees electing the high deductible health plan. 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. We are requesting approval to change to Madison National Life Insurance Company for this plan. POWERED H Y N:\Public Bodies\City Council\Council RCA\Agenda Packet\10-15-2012\2013 Flexible Benefit Design RFA 10-15.docx NATUR