5.4. SR 04-24-2000 - Laserfiche WebLink

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Tity of TO: FROM: DATE: SUBJECT: Item #5.4. iver MEMORANDUM Mayor & City Council Lori Johnson for the Benefits Committee - Marc Nevinski, Joan Frick, Cheryll Edinger, Bob Mahutga, Steve Tillman, Lauren Wipper, Scott Harlicker, Lori Johnson April 24, 2000 Update: Benefits Committee Introduction The Council requested that a Benefits Committee be formed to review the City's benefit package in response to hiring and retention issues related to the City's current benefit package and the high cost of health insurance. The Committee has been meeting since January and is now reporting to the Council on the Committee's progress, possible options the Council may consider, and its recommendation. Council direction is requested so the Committee can proceed. Background Several weeks ago you received minutes from the Benefits Committee meetings as background for our March 22 Council discussion. Attached are minutes from the last two Committee meetings held after March 22. This memo will briefly highlight only the major issues; please refer to the minutes for additional information. If you need another copy of the minutes distributed in March, please contact me. The Committee's first task was to determine why benefit changes were being considered. The Committee identified two main reasons: 1. The high cost of insurance and the amount paid by employees for family coverage. 2. Recent problems with employee recruiting because the City's benefit package was not at a level comparable to the applicant's current employer and employee retention issues. Next the Committee discussed what the City could do to address these two issues. The Committee identified items over which the City has control and others that are out of the City's control. Unfortunately, the most important component of the benefit package, health insurance premiums, is not something the City can change. The City can change the level of benefits and the type of insurance, but it cannot change the premium charged by the insurance company. The City's rates are determined by claims history and demographics. The company reviews past claims, estimates future claims, reviews current demographics, estimates future demographics and develops rates based on this 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425