4.12. SR 11-06-2017 - Laserfiche WebLink

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Request for Action To Item Number Mayor and City Council 4.12 Agenda Section Meeting Date Prepared by Consent November 6, 2017 Lauren Wipper, Human Resource Representative Item Description Reviewed by 2018 Flexible Benefits Plan Cal Portner, City Administrator Reviewed by Action Requested  Approve, by motion, medical insurance carrier change to Public Employees Insurance Program.  Approve, by motion, the 2018 Flexible Benefits Plan Design. Background/Discussion Health Insurance Renewal/Premium Rates Because we had a number of large claims this year, we anticipated a high renewal with Medica. Our renewal called for a 44.2% increase however, Medica reduced that to 29%. Once the actual rates were assigned, the renewal ended up being 28%. We worked with Medica on plan design and network changes to try to reduce the increase. With higher employee shared costs and more narrow networks, the result was still expected to be increases ranging from 11.8% to 25%. Our broker, NFP, suggested we test the market to see what other health insurers would provide. BlueCross BlueShield came back with rates that were 58% higher than our 2017 Medica rates. HealthPartners, Preferred One, and the NJPA Consortium all declined to provide a quote. The Public Employees Insurance Program (PEIP) provided a quote with premium increases ranging from (-)12.1% for their HSA Compatible Plan to 27.7% for their Advantage Plan. They also offer a Value Plan which offers lower premium rates and higher out-of-pocket costs than their Advantage Plan. The rate increase for the Value Plan was 14.6%. In evaluating these plans we added the total cost of premium and the total maximum out-of-pocket expenses and compared overall potential costs. In general, the PEIP plans proved to be least expensive in the worst case scenario. The State of Minnesota developed PEIP to help combat the rising cost of health care for state employees. In 2007, they began offering PEIP to all public employers. Over the last 14 years, premium increases have ranged from 8% to (-)6.6%, averaging 2.3%. They have accomplished this by plan design and by pooling claims experience of the 26,000 members from the 175 public employers they insure. There are no changes to any of the other plans in our Flexible Benefits Plan. In this Plan we offer dental, additional life insurance, long-term and short-term disability, health care savings plans (HSA), and health and dependent care flexible benefits accounts. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity