8.5. SR 11-13-2001 - Laserfiche WebLink

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MEMORANDUM Item 8.5. TO: FROM: DATE: SUBJECT: Mayor and Council Lori Johnson, Finance Director November 13, 2001 Consider January I, 2002, Health and Dental Insurance Contracts for Non-Union Employees Both the health and dental insurance contracts for non-union employees are up for renewal on January 1, 2002. Medica currently provides health insurance for these employees and has for the past two years. Delta Dental is the dental insurance provider. Medica has submitted a renewal quote that calls for a 24 percent increase in premiums. The dental renewal includes a 33 percent increase. The high cost of health insurance is an issue for all employers as they struggle to offer good insurance coverage at the lowest cost possible. As always, other options for health and dental insurance were explored, this time with good results. HealthPartners submitted a very attractive proposal for both health and dental insurance. Under HealthPartners' proposal, employees would have the same coverage as they now have with Medica. However, employees would have three different network options to choose from, Classic, Primary, and Open. Each employee would choose the network that best fits his or her needs; essentially employees would have the opportunity to buy up to a more broad provider network while other employees could save by choosing a smaller network. As many of you may have heard, either through radio or TV ads, HealthPartners no longer relies just on its own HealthPartners clinics. It now has a much more open system and all of the clinics in Elk River, including the new Allina clinic, would be covered by HealthPartners. In fact most of them are covered under the Primary network, so unless employees want the option of seeing specialists without referral, most employees will not need to buy up to the Open network. Although it is difficult to compare rates because the networks differ slightly, using the most comparable comparison of Medica Select to HealthPartners Primary clinic network, rates increase anywhere from two to four and a half percent. This is substantially less that the 24 percent Medica proposed. Based on the budgeted $10.00 per month increase in the city's contribution to the flexible benefits plan and a similar provider network, employees taking family coverage would pay $299.37 per month in 2002, an increase of $2.19 over the amount paid in 2001. The Medica and Delta renewals would have cost that