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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