5.2. ERMUSR 10-21-2014 - Laserfiche WebLink

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Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Wage and Benefits Committee: John Dietz — Chair John Dietz, Troy Adams, Mark Fuchs, Theresa Al Nadeau— Vice Chair Slominski Daryl Thompson — Trustee MEETING DATE: AGENDA ITEM NUMBER: October 21, 2014 5.2 SUBJECT: Wage and Benefits Committee Update: Health and Dental Insurance DISCUSSION: Health Saving Account Insurance Plan Employer Contributions At the September 9 Commission meeting, the Commission approved the 2015 renewal of the health insurance plans. The Wage and Benefits Committee met on September 18 to discuss details of the insurance renewal and the Health Saving Account (HSA) Insurance Plan employer contribution. In 2013 when the Commission approved the 2014 addition of an alternate health insurance plan, the HSA plan, they also approved an employer contribution. This contribution was approved for a minimum of two years at which time the contribution amount would be reviewed by the W &BC and then proposed to the Commission for approval. One of the reasons for the HSA employer contribution was to incentivize employees to migrate to the HSA plan from the more expensive traditional co -pay plan. The amounts for the contribution were determined such that the cost to ERMU would be the same regardless of which plan the employee chose. These amounts were: $1,885 for family; $1,230 for single plus one; and $600 for single. The incentive worked well as ERMU experienced a 53% conversion to the HSA plan. In 2013 when the employer contribution was approved, the conversion rate was anticipated to be lower. The contributions were based on company's insurance plan population and a projected savings of $33,000. Because of the high conversion rate and shift in the insurance plan population, ERMU realized a $43,000 savings from which the employer contribution was funded. The HSA renewal included a change to the deductible amounts for the plan. The family and single plus one deductibles increase by $100, and the single deductible increases by $50. In the HSA plan, the family and single plus one are actually the same plan with the deductible where as in the traditional co -pay plan these were separate. In evaluation of the migration statistics, the lowest migration group was found to be from the co -pay single plus one group. This is likely because the employer contribution was less than that of family yet the deductible was the same as family. The difference for the employer contribution was directly related to premium savings. The W &BC reviewed the higher savings resulting from higher conversion and reviewed calculations provided by staff that would increase the employer contributions to more closely match the premium 61 P 0 W F R E 0 B 1 WN-1. Page 1 of 2 A Power Provider P O W E R E D To S E R V E 61