4.5 SR 10-03-2022 - Laserfiche WebLink

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Request for Action To Item Number Mayor and City Council 4.5 Agenda Section Meeting Date Prepared by Consent October 3, 2022 Lauren Wipper, Human Resources Manager Item Description Reviewed by 2023 Flexible Benefits Plan Cal Portner, City Administrator Reviewed by Action Requested Approve, by motion, the 2023 Flexible Benefits Plan design. Background/Discussion Last year we became members of the Sourcewell Service Cooperative and began offering our medical insurance through that group. We had a 12% rate cap for our 2023 renewal and our premium increase came in at 10.7%. Again, we have a 12% rate cap for 2024 and if we offer all Smart Plans through Sourcewell in 2023, we will have a 9% rate cap for 2024. As Sourcewell grew, they designed Smart Plans to ease the administration of an abundance of plan designs. They encourage groups to use their Smart Plans by offering value adds with those plans. One of those value adds is no cost for many generic prescriptions. They also give a credit in their report card for groups that offer only Smart Plans. The report card equates directly to premium reductions at renewal. (Without the report card reduction, we would have had a 12% increase for this year.) Our current $500 Deductible plan is not a Sourcewell Smart Plan. We are proposing replacing that plan with a $1,500 High Deductible Health Plan (HDHP) which is a Smart Plan. This is also a Health Savings Account compatible plan. Although the deductible is increasing, the overall out of pocket costs, which includes the employee’s share of the premium and the maximum out of pocket medical expenses, is considerably lower to the 2022 costs of the $500 Deductible Plan. There are no changes to any of the other plans in our Flexible Benefits Plan. In this plan we offer medical, dental, additional life insurance, long-term and short-term disability, health care savings plans, and health and dependent care flexible benefits accounts. 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. We take the total budget available and determine the best way to allocate that among enrolled employees. Like last year, we feel very fortunate to be able to offer the two $3,000 HDHPs with city contribution funds left over to allocate to other coverage offered through the plan. As well, employees who contribute to an HSA will have an additional contribution made to their HSA each month. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020