HomeMy WebLinkAbout9.c. 2017 Employee Insurance Contracts
EXECUTIVE SUMMARY
City Council Regular Meeting: October 18, 2016
AGENDA ITEM: 2017 Employee Insurance Contracts AGENDA SECTION:
New Business
PREPARED BY: Emmy Foster, Assistant City Administrator
Dwight Johnson, City Administrator
Jackie Berg, HR Coordinator
AGENDA NO. 9.c.
ATTACHMENTS: Insurance Quotes & Informational Sheets APPROVED BY: ddj
RECOMMENDED ACTION: Motion to approve Blue Cross Blue Shield (fully insured),
Delta Dental, and NJPA/Sunlife bids for employee insurance in 2017.
Alternate Motion: Motion to approve Medica, Delta Dental, and NJPA/Sunlife bids for
employee insurance in 2017.
ISSUE
The City’s insurance committee has been meeting throughout the year with Britt Osterhues, our insurance
broker from Johnson McCann. The insurance committee is a group of employees from all departments
including some members on the City’s management team. This group has been in operation many years
and has acquired considerable knowledge about employee insurance policies. Employees share in the cost
of a number of our insurance offerings. This year, the committee is recommending changes to all of our
insurance plans for health, dental, life, long term and short term care insurance providers. The insurance
committee reviewed pricing, networks, and benefits of each plan with the help of our broker.
Members of the insurance committee represent various departments and bargaining units:
Administration: Dwight Johnson, Emmy Foster & Jackie Berg
Community Development: Amy Roudebush
Engineering & Public Works: Christine Watson & Joe Werden
Finance: Judy Miller
Police: Danielle Waage & John Winters
Parks & Rec: Lacelle Cordes
BACKGROUND
Health Insurance
The City is a member of the Southwest West Central Service Cooperative and received a 24.5% renewal
health insurance increase for 2017. The renewal is based on two years of experience, and claims through
February, 2016. Based on the claims experience of our group, the renewal called for a 33.8% increase.
However, because we are a member of the Coop, we received a final increase of 24.5% for our two
existing plans.
The committee directed the insurance broker to seek bids as is normal whenever we have a significant
2
increase.
Out of the five medical plan bids received, the committee recommends moving away from the SW/WC
Coop and recommends selecting one of the two lowest bids with the same benefit level. One is Blue
Cross Blue Shield of MN in a fully insured plan, with an average increase of 11.5% including a 2nd year rate
cap of 15% and Medica with an average increase of 4.3% for 2017 (but does not offer a 2nd year rate cap).
The attachments show the actual increase for each of the plans. While the committee is comfortable with
either BCBSM or Medica, the majority of the committee favors moving to the BCBSM fully insured plan.
Discussion included concerns about health care tends, another year of potential high usage, the 2nd year
rate cap and familiarity with the network.
Dental Insurance
The City was presented with a 14.8% renewal increase from our current dental provider, MetLife. After
seeking bids, four options were presented to the committee, and they recommend that the group move to
Delta Dental. We would see a -1% decrease in premiums with a two year rate guarantee. The attached
document shows the comparison.
Life, Long Term Disability, and Short Term Disability Insurances
The Committee reviewed four options for life, long term disability and short term disability insurances; the
committee is recommending switching from Lincoln to NJPA/Sunlife. We would see a -15% decrease in
life insurance and lower rates for the LTD and STD rates with a three year rate guarantee. See the
attached documents for specifics.
SUMMARY
Staff concurs with the Insurance Committee and recommends approval of Blue Cross Blue Shield (fully
insured), Delta Dental, and NJPA/Sunlife bids for employee insurance in 2017. As an option, the Council
could make an alternate motion to approve Medica in place of Blue Cross Blue Shield.
Benefit Summary
Medica Medica BCBS BCBS
Network:Choice Passport Open Access Choice Passport Open Access Fully-Insured Fully-Insured
MIC PP/ MN 1200-0%MIC PP MN HSA - 1300-0%$1200 VEBA $1300 HS A
Deductible (Embedded)(Non-Embedded Deductible)(Embedded)(Non-Embedded Deductible)
Single $1,200 $1,300 $1,200 $1,300
Family $2,400 $2,600 $2,400 $2,600
4th Quarter Deductible Carryover Not Included Not Included Included Not Included
Preventive Services
Well child, prenatal, immunizations 100%100%100%100%
Routine Physicals, eye exams 100%100%100%100%
Cancer Screening 100%100%100%100%
Lab & X-Ray Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Office Visits Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Inpatient Hospital Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Outpatient Hospital Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Emergency Care
Emergency Room Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Urgent Care Center Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Ambulance Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Mental Health/Chem Dep
Inpatient Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Outpatient Services Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Prescription Drugs
Formulary Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Non-formulary Ded; 100%Ded; 100%Ded; 100%Ded; 100%
Out-of-Network Benefits*$2,400 / $4,800 Ded; 80%$2,600 / $5,200 Ded; 80%$1,200/$2,400 Ded; 80%$1,300/$2,600 Ded; 80%
$1,200 Single /$2,400 Family $1,300 Single / $2,600 Family $1,200 Single /$2,400 Family $1,300 Single / $2,600 Family
$3,500 Single /$7,000 Family $3,500 Single / $6,500 Family $3,500 Single /$6,500 Family $3,500 Single / $6,500 Family
* Out of network: Member must file own claims which are subject to usual and customary charges.
* Embedded deductible - one family member stops at single deductible amount, then 100% coverage
* Non -Embedded deductible - entire family deductible must be met before any family member receives 100% coverage
This is a brief summary of benefits. The actual contract will prevail.
Premium Summary - Rates Effective January 1, 2017
Medica Medica BCBS BCBS
Contract Type VEBA HSA Current Renewal Current Renewal $1200/100% Plan $1300/100% HSA Plan $1200 VEBA $1300 HS A
Single 27 14 $615.50 $766.50 $603.00 $750.50 $637.77 $636.63 $693.24 $662.23
Family 19 13 $1,892.50 $2,356.00 $1,854.50 $2,309.00 $1,960.97 $1,957.48 $2,130.81 $2,035.52
Monthly Premium 46 27 $52,576.00 $65,459.50 $32,550.50 $40,524.00 $54,478.22 $34,360.06 $59,202.87 $35,732.98
Annual Premium $630,912.00 $785,514.00 $390,606.00 $486,288.00 $653,738.64 $412,320.72 $710,434.44 $428,795.76
Increase over Current by Plan 3.62%5.56%12.60%9.78%24.5%24.5%
Out-of-Pocket Maximum (Out of Network - S\F)$3,500 Single / $6,500 Family $3,500 Single / $6,500 Family
VEBA 830 HSA - 1300/100%
Out-of-Pocket Maximum (In Network - S\F)$1,200 Single / $2,400 Family $1,300 Single / $2,600 Family
Ded; 100%Ded; 100%
$1,200/$2,400 Ded; 80%$1,300/$2,600 Ded; 80%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
Not Included
Ded; 100%Ded; 100%
Ded; 100%Ded; 100%
100%100%
100%100%
City of Rosemount
Medical Marketing Competitive Analysis (Medica and BlueCross Fully-Insured)
Plan Name:VEBA 830 HSA - 1300/100%
Carrier:BCBS Service Cooperative BCBS Service Cooperative
Current Medica Options BlueCross BlueShield, fully-insured
Medica Options BlueCross BlueShield, fully-insured
(Embedded)(Non-Embedded Deductible)
$1,200 $1,300
100%100%
$2,400 $2,600
Included
Johnson McCann
10/13/2016
Benefit Summary:
Benefit Summary:Lincoln National NJPA
Current Plan SunLife
Employee Life $15,000 $15,000
Employee AD&D $15,000 $150,000
Reduction Schedule:Reduce to: Reduce to:
Age 65 65%65%
Age 70 an add'l 25% of orig amt 40%
Age 75 an add'l 15% of orig amt 25%
Guarantee Issue Amount $15,000 $15,000
Accelerated Benefit Included Included
Waiver of Premium Included Included
Dependent Life (Plan 1)
Spouse $5,000 $5,000
Children-14 days to 6 mos $5,000 $5,000
6 mos to 19 or (FTS)$5,000 $5,000
Premium Summary - Rates Effective January 1, 2017
Lincoln National SunLife
Current
Life Rate per $1,000 $0.145 $0.123
AD&D Rate per $1,000 $0.02 $0.017
Estimated Volume $1,314,000 $1,314,000
Dep Life premium*$.74 per family unit $.63 per family unit
Monthly Premium $216.81 $183.96
Annual Premium $2,601.72 $2,207.52
Difference in Premium -15%
Annual Premium Savings $394.20
Rate guarantee 24 months to 1/1/2019 36 months
This is a brief summary of benefits. The actual contract will prevail.
*Dependent life premium is not reflected in monthly and annual amounts.
City of Rosemount
Life and AD&D - Competitive Analysis
Johnson McCann
10/13/2016
PDP Plus
In-Network Out-of-Network PPO Premier Out-of-Network
Preventive Services
Oral Exam & Cleaning 100%100%100%100%100%
X-Rays 100% 1 100% 1 100% 1 100% 1 100% 1
Flouride 100%100%100%100%100%
Sealants 100%100%100%100%100%
Basic Services
X-Rays 100% 1 80% 1
Fillings, Amalgam 100%80%100%100%80%
Anterior Composite Resins (Front/White)100% 2 80% 2 100% 2 100% 2 80% 2
Oral Surgery - Basic Extractions 100%80%100%100%80%
Oral Surgery - Complex 100%80%100%100%80%
Endodontics 100%80%100%100%80%
Periodontics / Non-Surgical 100%80%100%100%80%
Periodontics / Surgical 100%80%100%100%80%
Major Services
Posterior Composite Resins (Back/White)100% 2 80% 2 60% 2 60% 2 50% 2
Crowns / Inlays / Onlays 60%50%60%60%50%
Bridges / Dentures / Repairs 60%50%60%60%50%
Implants 60%50%60%60%50%
Deductibles
Single $25 $25 $25 $25 $25
$75 $75 $75 $75 $75
Calendar Year Maximum $1,500 $1,500 $1,500 $1,500 $1,500
50%50%50%50%50%
$1,000 $1,000 $1,000 $1,000 $1,000
This is a brief summary of benefits and the contract will prevail. Frequency of services may vary by carrier.
Premium Rates- Effective January 1, 2017
Contract Type Current Renewal
Employee 48 $46.44 $53.31
Family 30 $132.31 $151.89
Monthly Premium $6,198.42 $7,115.58
Annual Premium $74,381.04 $85,386.96
Increase over current:
Annual Premium Difference
Rate Guarantee
Usual & Customary Reimbursement
Annual Open Enrollment
MetLife
1
2
Delta Dental Comprehensive Enhanced
1
2
$11,005.92 ($1,093.68)
X-Rays: Preventive services includes Bitewing, Full Mouth or Panoramic, Periapical and Occlusal.
Composite (white) fillings on front and back teeth paid at coinsurance level noted.
Major Services: Benefit for Inlays paid at the amalgam level. Patient responsible for any difference in cost.
Included Included
X-Rays: Preventive services includes Bitewing only at 100%. Basic Services includes Full Mouth after deductible.
Composite (white) fillings on front and back teeth paid at coinsurance level noted.
Preventive includes 2 Periodontal maintenance services in addition to regular teeth cleanings.
Plan includes a separate TMJ benefit of $500 lifetime maximum.
12 months 24 months
90th Percentile 90th Percentile
$6,107.28
$73,287.36
14.8%-1%
$45.76
$130.36
Orthodontia
Orthodontia Lifetime Maximum
MetLife Delta Dental of MN
Comprehensive Enhanced
Comprehensive Enhanced
(Covered in Preventive)
Family
City of Rosemount
MetLife - Delta Dental Benefit/Premium Comparison
MetLife Delta Dental of MN
North Risk Partners
10/13/2016
Benefit Summary
NJPA/SunLife
A.M.Best Rating A+
Monthly Benefit 60% to $7,000
Elimination Period 90 days
Social Security Integration Full Family
Duration of Benefit SSNRA
Definition of Disability Own Occupation to 36 months
Partial Disability Benefit Included
Mental Illness/Chem Dep Limitation 24 months Per Occurrence
Other limited conditions*None
Survivor Benefit 3 months
Pre-existing Conditions 3/3/12
Employee Assistance Program Included
Premium Summary - Rates Effective January 1, 2017
SunLife
Current Renewal
Rate per $100 of Covered Payroll $0.45 $0.450 $0.38
Volume $506,573 $506,573
Difference from Current 0%-16%
Rate guarantee 24 months 36 months
Participation Requirement n/a 50%
This is a brief summary of benefits. The actual contract will prevail.
SunLife plan includes rider for Retro Disability. This feature provides a lump sum benefit when the
insured is continuously hospitalized for 14 days or more from onset of Total Disability and satisfies
the elimination period.
None
3 months
3/3/12
Included
Lincoln National
24 months Per Occurrence
City of Rosemount
Long-Term Disability - Competitive Analysis
Lincoln National
A+
60% to $7,000
90 Day
Full Family
Later of Age 65 or SSNRA
Own Occupation to 36 months
Included
Johnson McCann
10/13/2016
Benefit Summary:
Lincoln National NJPA/SunLife
Life Increments of $5,000 Increments of $5,000
Minimum $10,000 $5,000
Maximum
Maximum if over age 70 $50,000 n/a
Guarantee Issue Under Age 70 $80,000 Under Age 70 $100,000
Ages 70-74 $20,000 Ages 70-74 $20,000
Age 75+None Age 75+None
Accidental Death & Dismemberment same same
Reduction Schedule:
Reduction at Reduce by:Reduce to:
Age 65 35%65%
Age 70 an add'l 25% of orig amount 40%
Age 75 An add'l 15% of orig amount 25%
Age 80 n/a n/a
Portability Included Included
Conversion Included Included
Dependent Life
Spouse
Guarantee issue amount Under Age 60 $20,000 $25,000
Child
Two weeks to 6 months $250
6 months to 19 years (25 if FTS)
This is a brief summary of benefits. The actual contract will prevail.
Premium Summary - Rates Effective January 1, 2017
Lincoln National SunLife
Life Rates per $1000 Employee / Spouse Employee / Spouse
Under 35 $0.07 $0.06
35 to 39 $0.10 $0.09
40 to 44 $0.15 $0.13
45 to 49 $0.24 $0.20
50 to 54 $0.35 $0.30
55 to 59 $0.60 $0.51
60 to 64 $0.78 $0.66
65 to 69 $1.34 $1.14
70 to 74 $2.30 $1.96
75 to 79 $7.50 $6.38
80 plus $7.500 $6.38
AD&D
Child Life
Rate Guarantee 24 months 36 months
Participation Requirement n/a 45% (based on current participation)
NOTES:
Lincoln National: Spousal coverage terminates at age 70.
SunLife: Spousal coverage terminates at age 70. Includes a one-time Open Enrollment for all employees.
$1.30 per family unit $1.11 per family unit
$10,000
$.03 (EE /Spouse)$.03 (EE/Spouse/Child)
$250
$10,000
Increments of $5,000; to lesser of
50% of Employee amount or
$150,000
Increments of $5,000; to lesser of 50% of
Employee amount or $150,000
City of Rosemount
Optional Life and AD&D - Competitive Analysis
Lesser of 5x AE or $300,000 Lesser of 5x AE or $300,000
Johnson McCann
10/13/2016
Lincoln National NJPA
Benefit Summary Current SunLife
Weekly Benefit 60%60%
Maximum $1,000 $1,000
Benefits Begin
Accident 15th day 15th day
Illness 15th day 15th day
Benefit Duration 13 weeks 13 weeks
Pre-Existing Condition Limitation 12/12 12/12
This is a brief summary of benefits. The actual contract will prevail.
Premium Summary - Rates effective January 1, 2017
Rate per $10 of Benefit Lincoln National NJPA
Age Banded Rates Current/Renewal SunLife
Under 45 $0.31 $0.26
45-49 $0.36 $0.31
50-54 $0.43 $0.37
55-59 $0.56 $0.48
60-64 $0.68 $0.58
65-69 $0.78 $0.66
70-74 $0.85 $0.72
75+$0.93 $0.72
Rate Guarantee 12 months 36 months
Lincoln National: Weekly Disability benefits are reduced by 50% when the employee attains age 70.
City of Rosemount
Voluntary Short Term Disability - Competitive Analysis
Johnson McCann
10/13/2016