5.8. SR 03-13-2006 - Laserfiche WebLink

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City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date Worksession March 13, 2006 Item Description Tobacco Settlement Pa ment Ex enditure Discussion Item Number 5.8. Prepared by Lori ohnson, Ci Administrator Reviewed by Introduction In December the City received $10,381.56 of tobacco settlement funds from BlueCross BlueShield (BCBS) of Minnesota. Guidelines for how to use these funds need to be established. Discussion The settlement funds are in the Insurance Reserve fund where they have been be set aside for programs that meet the requirements of the settlement. Generally, according the BCBS information, "these programs will focus on tobacco use, physical inactivity and nutrition." Several employees have requested that the City reimburse the cost for tobacco cessation programs, which clearly falls within the parameters of the settlement. If the Council agrees, that will be the first program funded with this money. In addition to tobacco cessation, I recommend that the funds be spent on programs that will help to control or reduce health insurance premiums and health care costs such as health awareness and screening, healthy eating, and other preventative health programs. Another important program that could be funded because it is currently not available to non-union employees is an employee assistance program (EAP). BCBS does not offer one with the health insurance plan through the consortium in which the City participates. The EAP would cost several thousand dollars per year. Many of the recommended programs can be offered to employees at minimal cost. Currently the Health Rewards Committee coordinates these programs for employees with a small annual allotment (approximately between $1,000 and $1,500 per year) from the consortium. However, these funds will not be available if the City changes insurance plans. Further, the annual allotment does not cover all of the costs of offering these programs to employees because union and Elk River Municipal Utilities employees participate in all of the programs while the funding from the consortium is based on the number of non- union City employees covered by BCBS. Perhaps the best way to ensure that settlement funds are spent appropriately is to allocate a set amount to the Committee each year for programs that promote healthy lifestyles and control or reduce health insurance costs. This would supplement the current funding and replace the consortium contribution if the City changes insurance plans. Financial Impact All programs and expenditures will come from the tobacco settlement payment from BlueCross BlueShield of Minnesota. Attachments BlueCross BlueShield of Minnesota letter on settlement. s: \ Council \Lori\2006 \ Tobacco Settlement. doc