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<br />/ ~\.( <br />( i! <br />Ill< River <br /> <br /> <br /> <br />ITEM 4.5. <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />MAYOR & CITY COUNCIL 0_.5\ <br />LORI JOHNSON, FINANCE DIRECTOR '"(Y:J'fV <br /> <br />FROM: <br /> <br />DATE: <br /> <br />JULY 21,1994 <br /> <br />SUBJECT: PRESENTATION ON EMPLOYEE <br />HEALTH INSURANCE <br /> <br />. <br /> <br />Due to a substantial rate increase from HealthPartners for the City's group <br />health insurance contract, the contract was re-bid for the 1994-95 contract <br />year. The bid information was provided to seven companies in the hope that <br />they would provide a quote to the City. Unfortunately, each of the seven <br />companies declined to quote. This means that the City must choose between <br />either HealthPartners or the Public Employees Insurance Plan (PEIP). <br /> <br />There are numerous issues regarding the insurance issue to be discussed <br />prior to deciding on which proposal to accept. I will try to address as many of <br />those issues as possible in this memo. Those issues include the following: <br /> <br />. Insurance cost to employees and the City <br />. Type of coverage <br />. The need for Union approval if the aggregate value of the coverage <br />is decreased <br />. Possibility of employees electing to obtain coverage elsewhere <br />. Options available to the City Council <br />. Review of PEIP and the related contract requirements <br />. Planning ahead for the 1995-96 renewal and beyond <br /> <br />Cost to Emplovees and Citv <br /> <br />. <br /> <br />The insurance costs will increase for both the City and employees no matter <br />whether the HealthPartners contract continues or the City changes to PEIP. <br />First, lets look at the costs associated with the HealthPartners contract. For <br />each single coverage employee, the City would pay an additional $57.04 per <br />month. The annual City cost for the 39 employees currently electing single <br />coverage is $26,694.74. Of this, $11,122.81 will come from the 1994 budget <br />year and the remainder from the 1995 budget year. The increased cost for <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />