5.9. SR 08-29-1994 - Laserfiche WebLink

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rll ~( ( II !lk River ITEM 5.9. MEMORANDUM TO: MAYOR & CITY COUNCIL FROM: LORI JOHNSON, FINANCE DIRECTOR DATE: AUGUST 25, 1994 SUBJECT: HEALTH INSURANCE At the last City Council meeting, I verbally updated the Council on recent developments with the employee health insurance issue. The Council requested that the issue be brought back for formal action on August 29. In that regard, I will again provide background information on this issue as well as cost comparisons for the various options available. . First let me give you a very condensed version of some of the developments that have taken place recently. The most important factor is that the Police Union voted not to accept the PEIP Plan which the Union felt constituted a decrease in the aggregate value of their benefits. This vote allowed the City to split its group into two smaller groups; the Union group consisting of fourteen members and the non-Union group consisting of forty-two members. Current law does not allow a group to split simply in order to obtain better insurance rates, however, a group can split if it is for other reasons such as a bargaining unit agreement. This split means that the Police Union group falls under the Minnesota Care Law affecting groups with between two to twenty-nine members. The Minnesota Care Law guarantees coverage and premiums which are determined by base rates with a maximum increase of up to 67 percent based on health histories. The final rates proposed for the Police Union will not be available until after all the health history information has been obtained. However, on the attached sheet, I have provided both the best and worst case Medica rates. In discussing the premium ranges with the City's insurance agent, it is our feeling that the rates will be closer to mid-point between the best and worst case scenarios. . Although the Minnesota Care Law applies to the Union employees, it does not, at this time, apply to the non-Union employee group. Effective July 1, 1995, the Minnesota Care Law changes so that groups of two to forty-nine members are covered. That means that on July 1, 1995, the non-Union group will also be eligible for coverage under the Minnesota Care Law. This means two things. First it means that we cannot be denied coverage by an insurance company. As you know, we had seven companies refuse to offer coverage to the City based on our outstanding medical conditions. Second, P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425