03-21-1990 CC MIN - SPECIAL - Laserfiche WebLink

Home Browse Search

City Council Minutes March 21, 1990 Page 3 e Finance Director, Lori Johnson, summarized four basic options for the City Council to review. These four options included making no changes; to the other end of the scale of offering complete equal benefits to all employees. An in-between step included increasing the payment by the City for family and single insurance and allowing the single insurance employees to select additional insurance items. A fourth option is to have the City contribute to the Section 125 Account for all employees which would benefit everyone provided that they had medical expenses. After discussion on the options and the pros and cons for each option, the Finance Director distributed a handout showing the history of the health insurance costs in Elk River and the City's current annual cost to provide insurance benefits; she then reviewed this with the City Council. It was noted that employee and dependent insurance costs have escalated far faster than the City's contribution to the employee insurance package. Additionally, it was noted that the City switched coverage in August of 1989, and this resulted in a dramatic decrease in the cost of insurance. It was noted that the financial impact to the City of changing benefits was a major concern. e Members of the Employee Benefits Committee reiterated to the City Council that they are not making a recommendation on which option should be selected by the City Council but were simply trying to present the facts as they see it and to provide options to the City Council to increase insurance options to all employees. e The Mayor indicated that a major concern for the City at this time is financial. It was noted that the State Legislature may withhold some previously committed State funds and this would have a significant bearing on whether or not funds would be available within the 1990 budget for increasing insurance options to the employees. Additionally, it was noted that the rising cost of insurance is a major problem, not only to the City of Elk River but also to all employers, and is not only a statewide problem but also a national problem. Mayor Tralle indicated that no decision can be made on increasing insurance options for employees at this meeting, but that he supports, if finances are available, some type of additional benefits for the single insurance people and also doing whatever is reasonable to keep the cost at an acceptable level for the dependent coverage employees. The City Administrator indicated that a significant concern to him was the discrimination factor and that the current practice of the City has not been determined by the courts to be discriminatory in nature. However, if the City starts providing additional benefits to the single coverage employee, which are financed by the City, and these insurance options have to be financed solely by the dependent coverage employee, then we may be entering into a discriminatory situation. The City Administrator likewise felt that the City could do something additional for all employees, but is uncertain at this point, without further review of the options, which method the City should adopt in order to provide better and more benefits to the employees.