HomeMy WebLinkAbout186-07 RESOLUTIONRESOLUTION NO. 186-07
A RESOLUTION APPROVING THE PLACEMENT OF GROUP MAJOR
MEDICAL COVERAGE WITH BLUE CROSS/BLUE SHIELD OF
ARKANSAS TO RUN FROM JANUARY 1, 2008 THROUGH DECEMBER 31,
2008, WITH THE RIGHT OF RENEWAL FOR FOUR ANNUAL RENEWALS;
RENEWING COBRA AND SECTION 125 CAFETERIA PLAN
ADMINISTRATION WITH DATAPATH; HSA ACCOUNT
ADMINISTRATION WITH DELTA TRUST & BANKING CORP.;
EMPLOYEE -PAID DENTAL INSURANCE WITH DELTA DENTAL; AND
ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGE WITH ACE -
USA FOR PLAN YEAR 2008.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves
the placement of Group Major Medical coverage with Blue Cross/Blue Shield of Arkansas to run
from January 1, 2008, through December -31, 2008, with the right of renewal for four annual
renewals.
Section 2: That the City Council of the City of Fayetteville, Arkansas hereby approves
renewing with Datapath for COBRA administration and the administration of the Section 125
Cafeteria Plan; HSA account administration with Delta Trust & Banking Corp., Delta Dental for
employee -paid Dental Insurance; and Accidental Death and Dismemberment coverage with
ACE -USA for Plan Year 2008.
Section 3: That the City Council of the City of Fayetteville, Arkansas hereby approves
staffs recommendation that the City pay for all the monthly premium increase ($35.71) for the
family health coverage high deductible plan, pay half of the monthly premium increase ($47.44)
for the traditional family health insurance, pay the same as last year for the employee Health
Savings Accounts, and continue to pay all of the individual health coverage premium costs
(which declined from last year).
PASSED AND APPROVED this 16`h day of October, 2007.
APPROVED.
By:
DAN COOD , Mayor
ATTEST:
By:
SONDRA E. SMITH, Ci
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;FAYETTEVILLE•
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Clerk/Treasurer
•
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Missy Lefler, HR Division Mgr.
Submitted By
City of Fayetteville
Staff Review Form
City Council Agenda Items
or
Contracts
102007
City Council Meeting Date
Human Resources
Division
Action Required:
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eta add 59-
4th 525
Operations
Department
Staff requests approval of the following proposed employee benefits for 2008: health, health savings accounts,
accidental death & dismemberment, and Summary Plan Description/COBRA Administration services. Of these, the
proposed health carrier is the only provider that would change. Please refer to the attached memo.
$3,341,665 (Est. 2008)
Cost of this request
Account Number
Project Number
Budgeted Item
X
$3,355,327 (Est. 2008)
Category / Project Budget
Personnel Services
Program Category / Project Name
Citywide
Funds Used to Date Program / Project Category Name
Citywide
Remaining Balance Fund Name
Budget Adjustment Attached
4
Depa ment Dir ctor
ry.^)
City Attorney
Finance and Internal Service Director
Mayor
Date
/o l
Da
10 •107
Date
/0//7
Date
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
Comments:
aye evl e
ARKANSAS
CITY COUNCIL AGENDA MEMO
City Council Meeting, October 16, 2007
TO:
THRU:
FROM:
DATE:
SUBJECT:
•
Mayor Dan Coady and the City Council
Gary Dumas, Operations Director
Missy Leflar, Human Resource Division Manager
September 27, 2007
Employee Benefits for 2008
Recommendation
Staff recommends approval of the proposed City paid employee benefits for 2008.
Specifically, Council approval is requested for health, health savings accounts, accidental death &
dismemberment, and Summary Plan Description/COBRA Administration services. Of these, the proposed
health carrier is the only provider that would change.
As more fully explained below, the specific differences between the benefits offerings in 2007 and those
proposed for 2008 are:
• The City will return to Blue Cross, the previous carrier. Rates would increase (but would have
regardless of carrier). No one should lose coverage, which should be the same. Please refer to the
attached table.
• Delta Dental will be the same coverage but 15% less expensive, due to the efforts of the new brokers.
• GAP plan, a voluntary option, will be dropped.
• Short term disability insurance will be added as a new, voluntary option for employees wishing it.
Please note: The benefits that are paid by employees and completely voluntary on their part are discussed
below for informational purposes, as these do not require Council approval. The life and long term disability
(Reliance Standard) also do not require Council approval at this time, due to having been previously approved
for 2008 by this Council.
Background
The entire 2008 employee benefits package would consist of:
• Blue Cross Blue Shield health insurance (both traditional and high deductible).
• Delta Dental dental insurance.
• Starmount/Always Care vision insurance.
• Colonial supplemental medical insurance for cancer, critical illness, and accidents.
• Reliance insurance for life and long term disability.
• Short Term Disability (brokers are still accepting bids from carriers).
• ACE Accidental Death and Dismemberment.
• Flexible Spending Accounts for dependent care reimbursement and health care reimbursement.
• Health Savings Accounts (for those electing the high deductible health insurance option).
• Retirement Plan.
Of the above, the City would financially contribute to: Health insurance, life insurance, long term disability
insurance, accidental death & dismemberment, health savings accounts and retirement plan. In addition, the
1
City would continue to utilize the services of Datapath to provide its expertise at administering the legally
required Section 125 Summary Plan Description and COBRA Administration services.
The 2008 benefits offering is the same as the employee benefits offered in 2007, except for the specific
changes itemized below. -
Discussion
Health insurance: The City's new Benefits Broker, Stephens, Inc., took competitive bids for health insurance.
A Health Benefits Committee consisting of Alderman Ferrell and employee representatives from Building
Services, HR, Fire, Payroll, and Parks & Recreation was formed. Employees were notified several weeks in
advance of the decision making meeting to notify any committee member of their concerns regarding their
health insurance. Stephens, Inc. presented the health insurance bid information to the Committee. After
lengthy deliberations, which included the procurement of additionally requested information, a solid majority
vote selected Blue Cross Blue Shield as the City's health insurance carrier for 2008. As in 2007, both a
traditional and high deductible plan would be offered as options to employees.
The differences between the 2007 rates and 2008 rates are itemized in the attached table. The individual
coverage rates on both the traditional and high deductible plans went down $.90 and $5.33 per month,
respectively. Family coverage on both plans went up (and would have gone up regardless of which carrier was
selected). Staff recommends that the City follow its past practice of evenly splitting the percentage of increase
with employees with regard to the family coverage on the traditional health insurance, the total increase of
which would be approximately $47.44 per month. With regard to the increase in family coverage on the high
deductible plan ($35.71), staff recommends that the City pay the increase to keep the high deductible coverage
affordable for those most in need of it, i.e., those who might otherwise not be able to afford health insurance.
Staff recommends that the City's monthly contributions to employee Health Savings Accounts (HSAs) remain
the same as in 2007: $70.80 for individuals and $156.66 for family coverage.
GAP insurance: In addition, the Health Benefits Committee determined that the GAP insurance should be
dropped in 2008 due to it frequently causing confusion while rarely being actually purchased by employees
(2%, 2/3 of which were not those whom the City had identified as most potentially needing the benefit).
Dental insurance: The Committee also decided to keep the purchase of dental insurance tied to the purchase
of health insurance for the time being, due to a probable increase in costs if it is unbundled, but with the
understanding that employee focus groups will be conducted by the brokers in 2008. These focus groups will
not cost the City extra to conduct, but should provide useful information as to informational and other needs
'employees may have with regard to their insurance benefits. Included will be employee feedback on
willingness for higher rates associated with unbundling the dental insurance from the health insurance.
Open Enrollment: Pending Council approval, the proposed enrollment schedule is for employees to be sent
their benefits packets with the October 26th paychecks, followed by voluntary attendance educational meetings
within two weeks, followed by on site Open Enrollment to begin the week of November 12`h.
Budget Impact
This planned item has been budgeted for in the City's 2008 budget.
Staff is available to answer any questions you may have.
2
RESOLUTION NO.
A RESOLUTION APPROVING THE PLACEMENT OF GROUP
MAJOR MEDICAL COVERAGE WITH BLUE CROSS/BLUE
SHIELD OF ARKANSAS to run from January 1, 2008 through
December 31, 2009, with the right of renewal for four annual
renewals; RENEWING COBRA AND SECTION 125 CAFETERIA
PLAN ADMINISTRATION WITH DATAPATH; HSA ACCOUNT
ADMINISTRATION WITH DELTA TRUST & BANKING CORP.;
EMPLOYEE -PAID DENTAL INSURANCE WITH DELTA
DENTAL; AND ACCIDENTAL DEATH AND DISMEMBERMENT
COVERAGE WITH ACE -USA FOR PLAN YEAR 2008
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas
hereby approves the placement of Group Major Medical coverage with Blue
Cross/Blue Shield of Arkansas to run from January 1, 2008, through December
31, 2009, with the right of renewal for four annual renewals.
Section 2. That the City Council of the City of Fayetteville, Arkansas
hereby approves renewing with Datapath for COBRA administration and the
administration of the Section 125 Cafeteria Plan; HSA account administration
with Delta Trust & Banking Corp ; Delta Dental for employee paid Dental
Insurance; and Accidental Death and Dismemberment coverage with ACE -USA
for Plan Year 2008.
PASSED AND APPROVED this 16th day of October, 2007.
APPROVED: ATTEST: •
By: By:
DAN COODY, Mayor SONDRA SMITH, City Clerk/Treasurer
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RESOLUTION NO.
A RESOLUTION APPROVING THE PLACEMENT OF GROUP
MAJOR MEDICAL COVERAGE WITH BLUE CROSS/BLUE
SHIELD OF ARKANSAS to run from January 1, 2008 through
December 31, 2008, with the right of renewal for four annual
renewals; RENEWING COBRA AND SECTION 125 CAFETERIA
PLAN ADMINISTRATION WITH DATAPATH; HSA ACCOUNT
ADMINISTRATION WITH DELTA TRUST & BANKING CORP.;
EMPLOYEE -PAID DENTAL INSURANCE WITH DELTA
DENTAL; AND ACCIDENTAL DEATH AND DISMEMBERMENT
COVERAGE WITH ACE -USA FOR PLAN YEAR 2008.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
•
Section 1. That the City Council of the City of Fayetteville, Arkansas
hereby approves the placement of Group Major Medical coverage with Blue
Cross/Blue Shield of Arkansas to run from January 1, 2008, through December
31, 2008, with the right of renewal for four annual renewals.
Section 2. That the City Council of the City of Fayetteville, Arkansas
hereby approves renewing with Datapath for COBRA administration and the
administration of the Section 125 Cafeteria Plan; HSA account administration
with Delta Trust & Banking Corp ; Delta Dental for employee -paid Dental
Insurance; and Accidental Death and Dismemberment coverage with ACE -USA
for Plan Year 2008.
PASSED AND APPROVED this 16th day of October, 2007.
APPROVED: A l 1EST:
By: By:
DAN COODY, Mayor SONDRA SMITH, City Clerk/Treasurer
(10.19.07 Clarice Pearman - Res. 186-07
Page 1
From:
To:
Date:
Subject:
Attachments:
CC:
Missy:
Attached is a copy of
anything else needed
Thanks.
Clarice
Clarice Pearman
Leflar, Missy
10.19.07 11:31 AM
Res 186-07
186-07 Blue Cross -Blue Shield 2008.pdf
Audit
the above resolution passed by City Council, October 16, 2007. Please let me know if there is
for this item. Have a good day.
•