5.2. SR 11-13-2007 - Laserfiche WebLink

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Option 3 -Different Percent City Contribution Increase for Each Insurance Plan This option would keep the 3% contribution increase to the co-pay plan, provide a 5% increase to the $500 deductible plan and 12% increase to the HDHP. Maintaining the 3% increase for the co-pay plan may encourage employees to move from this plan to one that encourages them to be more conscientious health care consumers. Having more employees on the deductible plans should help provide relief to the City's claims experience and escalating premium rates. Providing a 5% increase for the $500 deductible plan offers additional premium savings to employees moving from the co-pay plan. Monthly savings range from $59.42 for single coverage to $184.97 for families. A 12% contribution increase for the HDHP will provide significant premium savings to employees which they may use to contribute to their HSA. Single employees will have $95.23 remaining each month after paying for CORE benefits (life, dental and single health) and, under this option, all employees who choose the HDHP will see out of pocket premium savings of $633.72 to $3,361.44 as compared to 2007. This premium savings should make employees more comfortable with taking on the high deductible. Opp tion 4 -Same Increase fox Co-pay and $500 Deductible Plan with Larger Increase fox HDHP Option 4 is a variation of option 3 however it provides less incentive to move from the co-pay plan. It provides a 5% increase to both the co-pay and $500 deductible plans and an 11% increase to the HDHP. Providing a 5% increase for the co-pay and $500 deductible plans maintains equitable contributions for those two plans. This option will also provide an incentive to choose the HDHP; however the incentive will be smaller than in Option 3. Financial Impact It is very difficult to pinpoint the exact financial impact as employees have the ability to elect whichever plan fits their needs. The demographics will change and there is no way to know how they will change. The 2008 Plan Design Options and Costs spreadsheet attached calculates costs for each option listed above based on current demographics and further calculates to reflect how funds would be affected if half of the employees choose the HDHP and if all the employees choose the HDHP. I would anticipate enrollment would fall closer to the current demographics but it's impossible to know. Although it is highly unlikely that all employees will elect the HDHP, this figure is included to show the highest possible financial impact. Approximately 90% of any increase would come from the general fund with the rest applying to enterprise funds. Option 1 is making no change to the budgeted contribution so there is no financial impact fox option 1. The financial impact for options 2, 3 and 4 axe as follows: Current Demographics 1/z of Em~lo~ees All Emplo,~ ees Elect HDHP Elect HDHP Option 2 $20,220 $32,820 $50,820 Option 3 $15,084 $37,965 $68,520 Option 4 $20,940 $37,782 $60,744