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<br /> <br />City of Elk River <br />REQUEST FOR COUNCIL ACTION <br />Agenda Section Meeting Date <br />Worksession November 13, 2006 <br />Item Description <br />Health Insurance U date <br /> <br /> <br />Administrator <br /> <br />Introduction <br />This is a discussion item only to inform the Council of the renewal rates for the non-union employee <br />health and dental insurance contracts and to get direction from the Council on the amount of the city's <br />contribution to the flexible benefit plan for 2007. <br /> <br />Discussion <br />Barry Rosenberg and Rick Nelson of Minnesota Insurance Services will be at the meeting to discuss the <br />renewal rates. Lauren Wipper and I have been working with Mr. Rosenberg for the past several months <br />on the renewal. In addition to reviewing the renewal rates and plans being offered by BlueCross <br />BlueShield, other companies and plan options were explored. Based on the group's claims experience, it <br />was determined that staying with BlueCross BlueShield was the best option at this time. The city <br />purchases this coverage through Resource Training and Solutions, a cooperative that offers insurance to <br />cities, counties, and school districts. An Employee Assistance Plan will be added in 2007 through <br />BlueCross BlueShield at a cost of approximately $1,200. This will be funded through the tobacco <br />settlement funds. <br /> <br />The original renewal increase for health insurance was approximately 27 percent. By adjusting the plans <br />slightly, the actual rate increases will be around 23 percent depending upon which plan the employee <br />chooses. Mr. Rosenberg and Mr. Nelson will go over this information in more detail at the meeting. <br /> <br />The 2007 budget currently includes a $15 increase in the city's flexible benefit plan contribution. Last <br />year when the city contribution was discussed, the Council directed staff to research this item so the <br />Council could consider different options for the 2007 contribution. Ms. Wipper has surveyed other cities <br />and found that there is no consistency in the contribution levels; the contribution in the cities surveyed <br />varied from $500 to $850 per month. Further, there was no direct correlation between the amount of the <br />contribution and the premium. The one item we were able to summarize from the data was that the city's <br />contribution to family coverage is slightly low. However, that may be because we offer a four tiered plan <br />with employee and spouse and employee and children plans in addition to just family coverage. We have <br />reviewed different contribution structures for the city's contribution with costs ranging as high as an <br />additional $70,000. Staff is looking for direction and input from the Council on the total amount the <br />Council is willing to spend to increase the 2007 contribution and whether the Council wants to adjust the <br />three contribution levels differently. <br /> <br />Financial Impact <br /> <br />S:\Council\Lori\2006\Health Insurance Update.doc <br />