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~i <br />Elk River -= <br />Municipal Utilities <br />13069 Orono Parkway • PO. Box 430 <br />Elk River, MN 55330-0430 <br />October 4, 2007 <br />To: Elk River Municipal Utilities commission <br />Jerry Takle <br />Jim Tralle <br />Jerry Gumphrey <br />From: Theresa Slominski <br />Subject: 2008 Health Insurance <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />As reported at the last commission meeting, our renewal for insurance costs was 12.7% <br />this year. The trend in the health insurance world is 12% - 15%, and the renewals ranged <br />from 7% - 22% for other insurance pool participants. Considering these two factors, our <br />renewal is very reasonable. <br />Presented for your review are two tables showing the premiums last year compared to <br />this year, and the cost sharing between the employee and the employer. The top table is <br />the dollar impact of leaving everything the same with the cost sharing at 25%/75%. The <br />bottom table is the dollar impact of changing the cost sharing to a 20%/80% ratio, as <br />requested. (The insurance task group was assembled again and reviewed the renewal <br />12.7% costs with the 25%/75% split. The group stated that they would like to stay with <br />the same BCBS Aware Gold plan. A copy of the benefit summary is attached.) <br />Also discussed with the insurance task group was an H.S.A. plan under a "dual coverage'' <br />scenario, which would give the employees the opportunity to choose between the Aware <br />Gold or an H.S.A. plan for their insurance coverage. H.S.A.s have been introduced to the <br />employees before and there is some interest but it's hard to say whether anyone would <br />choose to actually participate in such a plan, if offered. In order to have a dual coverage <br />option, at least one individual would need to participate in the other plan. <br />With an H.S.A., the premiums are lower, but the employee has to meet a deductible <br />amount and pay for all costs out of pocket themselves and then reimburse themselves out <br />of funds they have contributed into their account. Whatever dollars they don't actually <br />spend out of the account in a year accumulate and are available at any time in the future. <br />The idea is that the participants would contribute to their accounts the difference of what <br />