9.1. SR 11-05-2007 - Laserfiche WebLink

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REQUEST FOR ACTION To Item Number Ci Council 9.1. Agenda Section Meeting Date Prepared by Worksession November 5, 2007 Lauren Wipper, Human Resource Re resentative Item Description Reviewed by Health Insurance Update Lori ohnson, Ci Administrator Reviewed by Action Requested Approve termination of group health insurance contract with B1ueCross B1ueShield of Minnesota and enter into group health insurance contract with HealthPartners. Consider adding a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) beginning January 1, 2008. Discuss potential for partial funding of HSA. Background/Discussion In September, Council authorized staff to request bids for group health insurance. The City's 2008 renewal with B1ueCross B1ueShield of Minnesota increased monthly premium rates by 29%. The City's insurance brokers, Barry Rosenberg and Rick Nelson. of Minnesota Insurance Services, sought bids from other insurance companies. HealthPartners offered renewal of our current plan designs at the lowest premium rates, which are 16 to 20% increases over 2007. The 2008 City budget includes a 3% increase to the funds provided to employees for their flexible benefits plan. Details of 2007 and 2008 premiums as well as the City's contribution are attached. On October 25`'', Barry Rosenberg, Beth Luby from HealthPartners, and I held employee meetings to gauge interest in offering a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) as an option to the other traditional plans that we offer. Ms. Luby gave a brief overview of HSA's and HDHP's and how they work and then answered questions from employees. It appears there is great interest in this option; however enrollment will weigh heavily on financial viability for each employee. HDHP's are great tools for encouraging people to make responsible health care consumer choices. The City's premium rates increase significantly each year because of usage. With a HDHP, members are responsible for the cost of their medical care up to the deductible amount so they tend to seek care only when necessary and, in theory, look for quality care at a reasonable price. Many insurance companies offer tools to help consumers evaluate cost and quality and as HDHPs axe becoming more prevalent, these tools are continuing to be developed and refined. As well, the premium rates quoted by HealthPartners fora $2,200 deductible plan are 21.5% lower than the renewal rate for the $500 deductible plan we offer. A HDHP deductible can vary anywhere from $1,100 to $10,000 and more. At this time staff and our brokers feel offering a lower deductible will encourage more employees to participate. HSAs are designed to help offset the deductible and other out of pocket costs of a HDHP and help protect employees who are willing to take on more upfront risk. They also provide an incentive to save C:\Docuxnents and Settings\jmiller\Local Settings\Temporary Internet Files\OLK3E\Council Memo 11-05-07.doc