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<br />. <br /> <br />would equal an added contribution of $41.51 per paycheck, bringing <br />the family contribution down to $174.25 per paycheck. This option <br />would cost the same as providing a cafeteria plan for all employees. <br />The difference would be that this plan would benefit employees <br />with family coverage versus employees with single coverage. <br />. Accept one of the quotes and make no changes to the current <br />benefit plan - The Council could approve either the PEIP or the <br />HealthPartners proposal and make no changes to the insurance <br />benefit package. If the HealthPartners quote is accepted, this <br />would mean that employees with family coverage would pay <br />$431.52 per month for family coverage if they did not elect to get <br />coverage elsewhere. If those employees elect to get coverage <br />elsewhere, the City's premiums will increase substantially in future <br />years to make up for the loss of revenue. If the City were to <br />approve the PEIP Plan, all employees would incur out of pocket <br />costs. Additionally, the Union would need to approve this decrease <br />in benefits. If the Union did not approve, the City may need to <br />enter into group insurance contracts. <br /> <br />Review of PEIP Contract <br /> <br />. <br /> <br />There are several items of concern relating to the PEIP contract. First, <br />PEIP requires a two year contract. As I have already mentioned, the PEIP <br />coverage is lesser and more restrictive than the HealthPartners coverage <br />and, as a result, the premiums are somewhat lower. However, the premiums <br />can increase up to 50 percent in the second contract year and the City cannot <br />get out of the contract. In other words, those premiums could increase to <br />approximately $259.00 for single coverage and $877.00 for family coverage <br />before the City could get out of its second year contract. Given the City's <br />experience history, it would not be unreasonable to assume that this may <br />happen; especially given the quality of the risk pool we would be joining. In <br />contrast, the HealthPartners could increase by 130 percent in 1995 and the <br />premiums would be only slightly more ($280.00 for single and $888.00 for <br />family) than the PEIP premiums, even though the PEIP Plan would require <br />substantial out of pocket costs while the HealthPartners plan would not. <br /> <br />Planning: Ahead for the 1995-96 Renewal and Bevond <br /> <br />. <br /> <br />When making a decision regarding the contract renewal effective August 1, <br />1994, it is very important that not only this contract year but future contract <br />years be considered. Continuity is very important to employees when it <br />comes to health insurance so that they do not need to continue changing <br />clinics and doctors. In addition, it takes a tremendous amount of staff time to <br />go through the bidding, evaluation, and change over process. It is probably <br />not prudent to enter into a contract with low premiums that will not cover <br />