9.1. SR 11-05-2007 - Laserfiche WebLink

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as funds deposited into an HSA roll over year after year and can be used for future health care costs. Funds deposited into an HSA are tax free going in and tax free coming out provided they are spent on qualified medical expenses. Barry Rosenberg, Rick Nelson and I will be present Monday night to discuss our options for 2008. We are looking for direction from council on offering a HDHP with an HSA. Financial Impact The brunt of the financial impact with this year's renewal will fall to employees. The City has budgeted a 3% increase to its contribution to employee's flexible benefit plans for 2008. This will increase total cost to the City by approximately $23,000 fora 2008 total of $785,000. If we maintain the same plan design for this year and employees continue with their current coverage, increased cost to employees will be about $139,000 fora 2008 total of $336,000. There is no way of knowing how many employees would choose a HDHP option if one is made available. With the $2,200 deductible plan, which is the one recommended by our brokers, employees would see significant savings in premium costs and the hope is that employees would invest that money into their HSA. To encourage employees to do so, staff would like to offer a matching contribution. This has the potential to be quite expensive as matching as little as $200 would result in additional costs to the City of $24,000 if all 120 employees participated. Unfortunately, this is not much of an incentive to each individual employee when they are looking at a $2,200 deductible although it is a great contribution on behalf of the City. If the council desires to provide additional funding either to encourage participation in a HDHP/HSA or to offset additional premium costs, staff will provide council with updated plan design for approval at the November 13, 2007 meeting. Attachments ^ 2008 Health Insurance Renewal Action Motion by Second by Vote Follow Up C:\Documents and Settings\jmillex\Local Settings\Tempoxary Internet Files\OLK3E\Council Memo 11-05-07 (2).doc