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Increase City Contribution to Family Coverage: This option reduces the cost to <br />employees who choose family coverage and increases the cost to the city. A significant <br />contribution increase would be needed in order to decrease the employee cost for family <br />coverage to a level these employees feel is appropriate. This option helps a small <br />percentage of the City's employees. It does not help in employee recruiting and hiring <br />situations unless the applicant wants family coverage. <br /> <br />Unilaterally Decrease Health Insurance Benefits: Unilaterally decreasing health <br />insurance benefits would decrease premium and increase out of pocket medical costs. <br />For some employees the out of pocket costs may exceed the reduction in premium. <br />Employees electing single coverage may be most upset by this option because these <br />employees would incur more out of pocket costs in order to reduce costs for employees <br />with family coverage. Although a decrease in benefits would reduce premiums, not all <br />employees with family coverage would see any reduction in cost; if there are on going or <br />sizable claims for a family, the cost would just convert to out of pocket costs instead of <br />premium payments. <br /> <br />Change the Way Benefits are Provided: Changing the way benefits are offered to <br />employees provides some direct benefit to all employees. There are several ways benefit <br />changes can be made. The cost to the employer for making these changes depends <br />entirely on what changes are made. The Committee focused on two different benefit <br />plans - a cafeteria plan and simply making minor changes to the current benefit structure. <br />Of course, each of these methods benefits different groups of employees. <br /> <br />IncreaseflexibiBty in current plan: Under this scenario the current benefits would <br />remain in place along with the City's contribution cap. However, employees would be <br />allowed to purchase family dental, for instance, if they had not used all of the City's <br />contribution. This option does not reduce the employee costs for family coverage unless <br />to City increases its contribution level. The cost to implement this plan is minimal unless <br />the City's contribution is increased to reduce costs for family premiums. <br /> <br />Cafeteria plan: A cafeteria plan allows employees to choose the benefits that best fit <br />their situation with money left after purchasing a minimum level (core) of benefits <br />required by the employer. Please refer to the attached Cafeteria Plan Overview for <br />information on how the plan functions. <br /> <br />This plan does benefit all employees, but to differing degrees depending upon how the <br />plan is structured. Employees with family coverage would have the option of choosing a <br />high deductible health insurance plan and putting the rest of the City's contribution into a <br />pretax medical reimbursement account or into deferred compensation. The premium for <br />medical coverage would not change because that is still determined by the insurance <br />company based on claim and demographic information; however, these employees at <br />least have the option to choose between paying the extra premium or applying that money <br />to something else - like a medical reimbursement account to pay the extra out of pocket <br />costs. Unless the City increases its contribution to family coverage, the employee share <br />for comprehensive coverage will not decrease. These employees decrease their cost by <br /> <br /> <br />