5.3. ERMUSR 11-17-2009 - Laserfiche WebLink

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~j Elk River =~= Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 November 10, 2009 To: Elk River Municipal Utilities Commission John Dietz Jerry Gumphrey Daryl Thompson From: Troy Adams Subject: Review and Consider Health Care Savings Plan Policy Revision Phone: 763.441.2020 Fax: 763.441.8099 In April 2007, the commission voted to adopt a Health Care Savings Plan (HCSP) administered by the Minnesota State Retirement System (MSRS). This HCSP allows employees to contribute to a tax free savings plan for future use paying medical expenses. The current allocation is 1 of gross wages. This plan does require participation by all employees of a participating company. The saving plan is employee funded. The only cost incurred by the Utilities is related to payroll and recordkeeping. Attached is the letter from the commission packet from April 2007. Also attached is a current brochure for the I~CSP. Employees have requested researching the possibility of changing the amount employees contribute. A MSRS representative was brought in to ERMU answer staff questions. After much staff discussion, a proposed plan change was put to a vote of the employees. Essentially the proposed change plan would involve splitting into two groups, field staff and office staff. Also, the proposed change to the plan would create three years-of-service tiers for the field staff group. These three years-of-service tiers would have different employee contribution requirements increasing in amount with increased years-of-service. There was not enough interest from office staff to ixicrease the contribution amount from the minimum 1 % gross wages. Attached is a copy of the ballot. There is no proposed change to the current policy provision for severance payout of sick time to the HCSP and accrued sick time payout of sick time to the HCSP. Attached is the current HCSP policy. The result of the vote was not unanimous, but consistent with the 2007 vote. Of 35 employees, 30 voted to split into two groups. That is an 85.7% vote in favor of splitting. The second part to the vote pertained specifically to the groups if split. Of the 24 Field staff, 22 voted in favor of implementing a three tiered contribution structure. This is 91.7% in favor. Of the 11 Office staff, 8 voted in favor of remaining at the minimum 1 % contribution. This is a 72.7% share. In general, the employees support the proposed changes to the HCSP. As noted in the Apri12007 commission packet letter, anytime our employees are interested in investing in their future we should encourage them. Staff recommends adopting the proposed changes to the HCSP.