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TO: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Item 512. <br /> <br /> MEMORANDUM <br /> <br />Mayor and City Council <br /> <br />Lori Johnson, Finance Director <br /> <br />November 24, 2003 <br /> <br />Consider Non-Union Health and Dental Insurance Contracts <br /> <br />On Wednesday the final health insurance rate information for the non-union employee <br />insurance contract was received. The insurance agent and I started the renewal process in <br />August by discussing options available to our group. After receiving renewal rates from <br />HealthPartners, a decision was made to request rates from Medica. Although this carried <br />some risk because if Medica's rates were high, it took away any negotiating power we <br />had with HealthPartners, we felt it was worth the risk. We simply could not accept <br />HealthPartners' renewal with an increase of up to 22 percent for some plans. <br /> <br />In the end the risk paid off as Medica submitted rates that are almost the same as last <br />year's rates. This is great news in an environment where health care costs are increasing <br />approximately 15 percent and 20 percent rate increases are common. Although it is <br />difficult to make direct comparisons because of the differences in networks, Medica's <br />rates are very good. Medica's networks are broader so some employees may actually see <br />a decrease in their premiums because they now find that their doctor or clinic is included <br />in Medica's cheaper plan network (Elect/Essential) unlike HealthPartners where they had <br />to purchase a more expensive plan. Attached is a rate comparison spreadsheet with more <br />detailed information on the rates. <br /> <br />Plan options with Medica for 2004 will again include a $15 co-pay plan and a $500 <br />deductible plan. In 2003 32 percent of the employees took the basic $500 deductible plan <br />and the remaining 68 percent bought the more expensive plan. <br /> <br />Also, dental insurance is up for renewal on January 1. HealthPartners did not increase <br />rates for dental insurance so it is recommended that the dental contract be renewed. <br /> <br />Finally, I will be present at Monday's meeting to answer any additional questions you <br />may have. Employees will receive a copy of this memo prior to the meeting so they will <br /> <br /> <br />