HomeMy WebLinkAbout2.f. 2011 Employee Insurance7
4ROSEMOUNTEXECUTIVE SUMMARY
CITY COUNCIL.
City Council Work Session: October 13, 2010
AGENDA ITEM: 2011 . Employee Insurance
AGENDA SECTION:
Update.-
PREPARED BY: Emmy Foster, Assistant ,City
Administrator
AGENDA NO. Z 4 ,
ATTACHMENTS: Insurance Options &
APPROVED BY:
Informational Sheets
DAJ
RECOMMENDED ACTION: Discussion
Background
The insurance committee has been meeting throughout the year with our insurance, broker Johnson
McCann representative Britt Osterhues to review and discuss our insurance options for 2011.
Members of the insurance committee represent various departments and bargaining units:
Administration: - Dwight Johnson & Emmy Foster
Community Development: Kathie Hanson
Engineering & Public Works: Christine Watson & Joe Werden
Finance: Judy Miller
Police: Debb Marthaler & John Sommers
Parks & Recreation:.: Lacelle Cordes
{
Health Insurance
We are a member of the Southwest West Central Service Cooperative and received an 18% renewal
increase for next year. The renewal is based on-two years of experience, and claims through
February, 2010... Based on the experience of the group, the renewal is calling fora 19.6% increase.
BlueCross is offering a final increase of 18% for our two in -force plans through the Coop. Our
insurance broker,put this out to bid to other carriers and 3 providers declined.to bid and one did
offer a slightly lower increase at 16.9 %. However, this is not comparable to the current plan for
reasons including: no Coop protection, no 4th quarter deductible carry over, -only a, 80% coverage of
non - formulary prescription medication, and a smaller network of medical professionals. Therefore,
the committee recommends that we stay with our current health insurance plan.
Dental Insurance
Our insurance broker provided us a few good options this year. We were given a 3% renewal
increase in premiums under our current provider, Delta Dental. The insurance committee reviewed
the best options including Guardian and Assurant and looked at the pricing, networks, and benefits
.of each. The insurance committee is recommending that the group move to Guardian. We would
have a 4% decrease in premiums our first year while receiving a higher percentage of services covered
under this plan. In addition, Guardian offers a roll -over feature that allows some unused eligible
expenses to carry over to the next year and also a Vision Services Plan (VSP) discount program is
included at no additional charge. While one option, Assurant, had a larger premium savings, the
committee was concerned about specific items including: no annual open enrollment, the size of the
network of dentists, the number of employees who would be out of network (therefore employees
who pay more out of pocket), no roll -over feature and no VSP discount program.
Life, LTD and STD Insurances
For life, long term disability and short term disability insurances,: we are in a multi -year plan and
have no rate adjustments or increases for 2011.
Waiver Option Recommendation
The insurance committee is recommending that the City Council allow individuals to waive health
insurance coverage with proof of coverage elsewhere. The committee has discussed potential risks
and is recommending that a portion of the single insurance premium be allowed to be put into
deferred compensation for those employees who waive coverage. The suggested amount is 50% of
the single insurance premium combined with the current VEBA /HSA contribution (since employees
that waive insurance coverage are no longer eligible for participation in the VEBA or HSA plans).
Employer "Paid Single Insurance Premium $440.00 /mo x 12 Months $5280.00
50% of Single Insurance Annually: $2640.00
Current Employer VEBA Contribution Annually: $ 530.00 .
Total of 50% Insurance Premium & VEBA Contribution Annually $3170.00
$3170.00/12 months $ 264.17
Recommended Amount for Employees Who Waive Coverage /Mo. $ 264.17
City Savings Per Person Waiving Coverage Annually $2640.00
Example: If 10 employees waived coverage, the annual savings would be $26,400
If 5 employees waived coverage the annual savings would be $13,200
Summary of Recommendations
1. Stay with Blue Cross Blue Shield of Minnesota plan through the Southwest West Central
Service Cooperative for health insurance.
2. Move to Guardian for dental insurance.
. 3. Allow option to employees who would like to waive health insurance coverage under the
City's plan as detailed above.
If City Council agrees to the recommendation, staff will bring the item to the November 1 City
Council meeting for approval.
2
x
City of Rosemount
BCBS/ Southwest West Central Service Cooperative
• Y
Experience Illustration
F
Renewal Date: January 1, 2011
pe:,:ilte iid thru
Provider Eligible Charges (Incurred Claims)
Year -End Provider Settlement
Other (includes benefit adjustments)
Stop Loss Claims
Total Completed Claims
Cost Trend Factor
Trended Claims
Pharmacy Rebates
Projected Renewal Year Claims
/ Member Months
= PMPM
Weight to each experience period
Weighted Projected Renewal Claims PMPM
Total Projected Renewal Claims PMPM (100% experience)
Manual Incurred Claims at CDHP 830. Benefits PMPM
Credibility Weighted Incurred Claims
Total Projected ,Renewal ($360.94)
Manual Incurred Claims ($347.13)
Adjusted Credibility Incurred Claims
Current Contracts
Single 49
Family 32
Total Projected Renewal Year Incurred Claims*
$ 603,374 $ 400,476
9,180 3,642
8,468 5,378
$
621,022
$
409,496
Family
1.184
$
1.257
$
735,290
$
514,736
14.27
(6,092)
43.88
(6,008)
$
729,198
$
508,728
d) Fitness Discounts
1,827
3.10
1,795
$
399.12
$
283.41
$
67%
Total Additional Charges; Annualized
33%
$
267.41
$
93.53
$
360.94
$
347.13
50% $ 180.47
50% $ 173.57
$ 354.03
Additional Charges:
113,697
single
787,574
6'57,942
Family
a) Administrative Service Charge
$
48.87
$
71.60
b) Network Access Fee
$
14.27
$
43.88
c) Stop -Loss Rates
$
17.73
$
47.60
d) Fitness Discounts
$
3.10
$
3.10
e) Nurse Advice Line
$
0.35
$
0.79
Total Additional Charges; Annualized
$
84.32
$
166.97
Needed Income
Current Income
Increase calculated
Renewal Increase According to Formula Effective 01101/2011
100% Experience
$ 673,877
$
113,697
$
$
787,574
6'57,942
* For each plan, the annualized sum of the projected claims (pmpm) times the current member counts
19.7%
18.0%
Johnson McCann Benefits, LLC
e 8/23/2010
Medical Marketing Summary
for City of Rosemount
BCBS
South West/West Central Cooperative
Health Partners
HealthPartners
National Joint Powers Alliance (NJPA)
Medica
1 k-
PreferredOne
Incumbent
Decline -Uncompetitive
Decline- Uncompetitive
Decline — Uncompetitive
Included
e
I I.,
U
U)
C
0
CL
00
E a
02
0 0 CL
010
CL
7.
C
ee
F
a.
Lp
CL
pS
E to
E
U)
-cc E
10
E
U
0
X%
TL
:E-
-C-ki: tea?
:w..= 6--
e c> c� C, 0 0 o C,
S �! 000
c3 n
;�.-o o E
—
.8 `
'o7@
Oc
oo o
r a
o Z
a) a) Q) a) a) 4) a)
Q (D
4) a) w cj
NN O
69 69
cD
'o
c, c-:,
0
cq
Q
cD u.) o c> o o
O cD
a c� a
o
a
o
co
Lq
Ir to
cq cd
Y'4 E
:::.a:: w
(D (D Q) d)
(D (D
a) cl N
O
o
z
:m
❑ a
ci a
00 0 t2
Nan
cli
di
o
c4
0 o o o oon
a
V: LQ
N co
(S
0
w
N
(D cu Q) 4)
(D Q)
a) c�
a c o
o o
o Z
❑ ❑
(D
C-4
c_,t LQ
co
ba 6s
61)
c-i
O o o c, o CD o c,
oo
oo
S
m
ci
o
o 0.2
a o cn, .. .. ..
-o -o
6, m a9
cv E
W
0 (D (D Q) Q) d) (D
G) ID
Q) (D
0 im
❑0 coq
In
CQ'
:5
en
OI
CA
0
Z
E
I z
z
O
m x m
c 0
4) (D
S2
2
E —
E E
'S
E> w
Lu Q
m
E Q
Im
'i
E'
x —
x w x
o m
(D
, 2, o m
- I f
(L o u) :E .
-6
E 4)
-9?
o 1L o
C6
15 m QL) a, 25
75
(L L a.
L o
W, E :S
E 4' E eE
c�
R -5-
o
83
E Lu S < z
0 _ o e
s 0 uj
n
a.
Lp
CL
pS
E to
E
U)
-cc E
10
E
U
0
X%
TL
:E-
U c
J �
J N
yy. C
y O
G �
(d
r
U
O
N
r
0
-a
_
.
L
0 0 0 0 0
0 o
o
O Lo
O
o
O
O
N
to
0 `_
@
iSC
O
o
O° 0 0 0 0 0
O O
O
N N
0?
O
C
,N N p'
@
r,
o 20 w w w m m
LO u>
v> vs
1n
C >- a O
LO <-
M �.;...
:6:.'_.:.....
.............................
......
:.pp.;.e
Q -'
m
VI
CL
O
O
o
O
>
m
O
0 0 O 0 0 0 0 0
O O
O t0
O
0
N
A ER
O
O
U
Q
0
r r r r
60
619,
_
0
Lr-
c
m a>
•
0)
Q @
U
N E O
L
@
....
X C CU
O
O
�N
d°
o
O
0 'm 0 0 0 0 0
0 0
0
LO O
O
0
LQ
0
o
O
O
3
'''d'
v,
:oo. e
w a
N
, ,•;Z
w_
O 0 0 0 0 0
co 00 00 O m 00
O O
O O
O
O
N 1--
EA 6q
O
O
::'G
M r
�' 'M: 2M:
N.. �.
U 0) C
::::W:
vi
.vi:
N 'C O
..�
4
c
tH. v►
3 a@i
o
Z:
fa .�
...:
U 'O
;.;
..
�,
:'.
= G L
3 3
v o
N .G
°? y
gr...
d..
0 0 O
CL
i
LL
LO
O
0
.. '•
°
o m o 0 0 0 0
0 0
0
0 0
0
o
O
U
CD
O 0 0 0 0 0
co 00 00 co W 00
O O
tO O
O
O
N I--
0)
LQ
O
O.
Q
,;:;0
CL O
(A
M
1
i:a
c
N
C a)
4ma
{J''7'
Y r a) ,O
0
U
_
L
N
° m
V MbO:ii:".i
C l@ w
= E c
w
O
a7
100
C
Q 00 '0
EO
d
N
a)
E
'C
5 ,�
N
ti>
.
d
U a>
p
L CO
D
G
.'•'
;
N O
r
a'.
9
N
a)
7
O o
£
Gay:
a m
c Co
y
c CO x �6
a
M..�.
w
al
N
N @ .N
U
In O C
0 N
N
N
£
3
.:; �';'C.
.y'. �'.'.,.
0 ::
Q C w
ul C
Q > f6
N O
cn
al a) (D .0
U Q W Y rn rn c c
U U 0
Y
m
m
}
m
,.,
w
fA
'.
a)
a d ai.
y
Y a 3 m
V
G 0.. c
N N C O O O
a) rn rn m U) v) o o
Z 41 N
m c
30
m
N
�' ?
m
o
A
>
.IL -'Q.
?':::', c
m O @
a oiS =
•U
a) C @
D m
a1
U 'C 'C N f0 C '�
(o
.'O
a
CI m
'=
O
N
_3
•£
p >'
' .'':::4i'
3 m a1
ca 'a N
y
>y
0) LL u cnOOwa
°Um`
�inw
m
r
°?
t
�::
E
: m c uu) m
a
m
�'
o
v
0
�
a.
':'
cEao
w w
I
C��
U c
J �
J N
yy. C
y O
G �
(d
r
U
O
N
r
0
-a