4.8. SR 10-21-2019 - Laserfiche WebLink

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Request for Action To Item Number Mayor and City Council 4.8 Agenda Section Meeting Date Prepared by Consent October 21, 2019 Lauren Wipper, Human Resources Manager Item Description Reviewed by 2020 Flexible Benefits Plan Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, the 2020 Flexible Benefits Plan design and changing short-term disability carriers to Madison National Life. Background/Discussion Renewal/Premium Rates Our medical insurance renewal with the Public Employee’s Insurance Program (PEIP) was 5.2%. Slightly up from last year’s 3% but still below marked trend. We feel our relationship with PEIP has been successful and will remain with them for another two years. Plan design for the Value and Advantage plans changed to provide more cost sharing; increasing deductibles, co-insurance, co-pays, and the maximum out-of-pocket expenses. Out-of-pocket costs are dependent on the provider chosen by the employee so employees have some ability to manage these costs. Selecting a provider in Cost Level 1 provides lower deductibles, co-insurance, co-pays, and maximum out-of-pocket expenses than selecting a provider in Cost Level 2, 3 or 4. Employees have a lot of choices to accommodate their risk tolerance, provider choice, and need for medical care. We have a rate guarantee for dental, long-term disability and life insurance for 2020 so those rates are not changing. We asked our ancillary plan broker, Ochs, to check on a new provider for short-term disability as we’ve had some administrative difficulty with our current provider. We learned that we can provide better coverage at about the same premium rates by changing to Madison National Life which is the same provider we have for long-term disability. The action above includes a request to make this change effective January 1, 2020. City Contribution The city maintains a Cafeteria-style plan with a predetermined contribution for all insurance benefits. The annual budget is based on the last known enrollment, which is subject to change throughout the year. The plan is designed to provide a dollar amount to each employee based on the family level of medical coverage they elect. The 2020 preliminary budget includes a 5% increase to the city’s contribution to employee insurance benefits. Using a 5% increase across all family levels of coverage results in the employee cost of premium remaining fairly consistent with 2019. Depending on the plan and family level of coverage they choose, employees will see their out-of-pocket premium costs change from between an additional cost of $17.74 per month to a savings of $4.90 per month. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity