4.5. SR 07-25-1994 - Laserfiche WebLink

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. Emplovees Opting: to Obtain Familv Coverag:e Elsewhere It is very likely, given the amount that employees pay for family coverage, that many employees will choose to obtain coverage elsewhere; either through a spouse or an individual plan. Many employees have already gotten quotes on individual plans and some have already been approved for coverage under those plans. Although the coverage includes co-pays and deductibles, in many instances the savings exceed the maximum out of pocket expense. . If employees do elect to get coverage elsewhere, the City will suffer through increased premiums in the next contract year. Both the single and family premiums would increase substantially to offset the loss of premium revenue. Of the seventeen employees with family coverage, it is estimated that ten or more of those may drop the City's coverage a get coverage elsewhere. This will force premiums up substantially for the employees remaining on the City's group health contract as there will be fewer premium dollars to pay for the high utilization and large ongoing claims. This will mean that employees with family coverage will pay even more in the future as will the City because single premiums will also increase substantially. It is obvious that it is in the group's best interest to try to retain as many family premiums as possible. Options Available to the Citv Council During our earlier discussion on health insurance, several employer options were presented. In addition, the Employee Health Insurance Advisory Committee (members include Mark Thompson, Cheryll Edinger, Steve Miller, Gary Schmitz, Darrell Mack and Lori Johnson) also discussed various options available to the City in order to deal with the insurance issue. Because the City did not receive as many quotes as it had hoped, some of those options no longer apply. The items discussed by the Committee include: . . Offer a cafeteria plan to all employees - The main reason for discussing this option was to provide an incentive for employees with single coverage to agree to lesser coverage, thereby reducing the premiums for employees with family coverage. If the City approves the HealthPartners contract for 1994-95, a cafeteria plan based on the current mix of single and family coverage would cost the City $16,936.92. If the City were to change to the PEIP Plan, this program would cost $37,145.16. This option would benefit the single employees by allowing them to select from a menu of benefits, but would benefit the employees with family coverage only if this allows for a change from comprehensive to an 80/20 plan.