City Council Packet 09-15-2025 - Laserfiche WebLink

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Request for Action City of Elk River To City Council Meeting Date September 15, 2025 Item Description 2026 Flexible Benefits Plan Item Number 4.6 Prepared By Lauren Wipper, Human Resources Manager Reviewed by Cal Portner Tina Allard Action Requested Approve, by motion, the 2026 Flexible Benefits Plan design. Background/Discussion The city provides a cafeteria plan for employees to make insurance elections. Each eligible employee receives a set dollar amount to spend on the plan, which is based on their elected family -level of medical insurance coverage. If any city contribution money remains after employees make their medical election, those funds can be spent on other benefits within the cafeteria plan. We had better medical claims experience this year than in the recent past, but still reported a 108.2% Claims Loss Ratio. The targeted Claims Loss Ratio is 80 to 85%. The Better Health Collective actuary study showed 19% increase in premiums for us, and is roughly what we received (18.8%). The good news is that our rate cap for next year dropped from 19% to 16%, so it looks like they recognize that we're moving in the right direction. Despite the large increase, we decided to stay with the plans we've been offering and add one more. The plan we added has a higher deductible with an 80/20 co-insurance, thus providing a lower premium cost. This allows employees to reduce their guaranteed annual cost (the premium) by taking on additional risk with the higher deductible and co-insurance. Our life and dental rates are not increasing this year, and life has a 2-year rate hold. Other Insurance With the start of MN Paid Leave on January I, 2026, we have moved our long-term and short-term disability plans to a new broker, Integrity Insurance. Our long-term disability insurance will stay with Madison National Life for coverage, and our short-term disability will switch to MetLife. MetLife will also be our MN Paid Leave carrier. This will allow for seamless coordination between MN Paid Leave and short-term disability. The need for short-term disability should be largely curtailed as MN Paid Leave will take much of its place. With that, the rates for short-term disability have also been greatly reduced. MetLife also offers ancillary benefits very similar to the ones we offer through Aflac. We have decided to The Elk River Vision A avelcoming community with revolutionary and spirited resourcefulness, exc ptional service, and community p p W E R E U A Y engagement that encourages and inspires prosperity 556